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OCTOBER 2004
Economic Lesson #1: Work harder, earn less
by Rick S. Bender, President of the Washington State Labor Council, AFL-CIO

I’m often asked: What’s a living wage? As we try to find ways to create good family-wage jobs and maintain our minimum wage standards, the questions of how much money does it take these days to make ends meet are always asked. Well, there’s some new information out that might surprise you.

A new study in our state found that on average, a single adult needs to earn $10.07 an hour, working full time, to meet basic needs and have some ability to deal with emergencies.

Even more surprising, the study, co-authored by a business professor at Seattle University, found that 75 percent of current jobs being offered don’t pay enough for a family of three or more to get by on. Professor Paul Sommers says that there are so many low-wage jobs in our state now that people end up having to work more than one job just to cover the basics.

In his 2004 Northwest Job Gap Study, Sommers also found that more than a quarter of all jobs openings pay less than the $10.07 an hour a single adult needs to earn to live decently.  Sommers’ study doesn’t deal with one of the major questions for working families these days:  How to pay for health care?  Most of these low-wage jobs have little or no health care insurance, and working families face terrible choices when they need health care.

Another major concern is that these new low-wage jobs don’t allow working families to save up any nest eggs for a major purchase or even a decent retirement.  How can these families help their kids achieve the education and training they will need to succeed?  How can these families manage a big repair bill for their car or home?  Is this why our state is now covered with “Payday Loan” shops where working people pay high interest rates and fees for short-term loans to make ends meet for the month? 

Of course, in some areas of our state, housing is extremely expensive and finding a one-bedroom apartment for less than $600 a month is a real challenge.  In other areas, housing is still reasonable.  Child care costs vary a lot too, not only by region but by age.  Infants are much more expensive to provide quality child care for than a 10-year old.  

Many of these lower cost areas are in rural parts of our state where the study found a single adult would need to earn $8.68 an hour, 40 hours a week to earn enough to cover basic living expenses. A single adult in a Puget Sound area city would need to earn at least $10.88 an hour, forty hours a week, to make ends meet. The statewide average comes to $10.07 an hour. The full report can be found at www.nwfco.org.

These numbers are new evidence that the monthly unemployment rate or job creation rate isn’t a very good benchmark anymore.  What we really need to watch more carefully is what is happening to our working families who are the backbone of our country and our economy.  These days, working families are being stressed out and pressed into working more hours for less income and fewer benefits. 

Some are saying, goodbye to health care coverage, goodbye to vacations and goodbye to retirement.  I say that’s the wrong way for us to go.  We need to turn around our economy so that our work pays for a decent American life.  We need the political leadership that understands the value of the working families who contribute so much to our state.

Rick Bender is President of the Washington State Labor Council, AFL-CIO,
the largest labor organization in the state.

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Copyright © 2004  Washington State Labor Council, AFL-CIO