MEMBER PROFILE

NorthStar House - Elliot Martin, Lee Hamilton and Jed Ashton

At NorthStar House, we use as many local, organic vegetables and meats as we can, so you have our word that we will do all we can to help the community grow in the healthiest way possible. Naturally we bank at Alternatives, not only because they share our goals of community development, but they also provide the tools to make those goals a reality. Alternatives has been there for us from the beginning, helping us develop a business plan in the Business CENTS program, and continues to support us as we grow and have new financial needs.

Ithaca, NY, 3/2/01- "...Pride, motivation, good role modeling, hope, and a path into a better future." What can make this happen? According to an op-ed in a recent issue of the Ithaca Journal, assets. For people to accumulate assets, they need to be paid a wage that sustains them above the poverty level and leaves some money for building assets.

How much is enough to do that? Alternatives says in the newest update of its livable wage study that it is $17,540.39, or $8.43/hour for 40 hours per week.

To determine the livable wage, the Credit Union started from the basic costs of living in Tompkins County: rent, clothing, food, utilities, and then put in savings and entertainment. Finally, it calculated and added taxes to arrive at its final, gross estimate. Data for the new study were collected by Chris Chiambalero, a VISTA volunteer at the Credit Union.

Figures for each category came from a variety of research sources. The U.S. Department of Housing and Urban Development, the U. S. Department of Agriculture, Verizon, the Self-Sufficiency study done by Wider Opportunities for Women (WOW), and The Total Expenditures Report compiled by Claritas all contributed to the study.

In 1994, Alternatives Credit Union did its first livable wage study to address internal staff concerns about compensation levels. Rather than looking at what competitors paid, or what the statutory minimum wage was, the Credit Union wanted to look at what it took to support a person above the poverty level. Recently, the Board of Directors at the Credit Union passed a resolution to increase entry-level wages to agree with the latest study.

"Minimum Wage has to do with a power relationship between the employee and employer," said Bill Myers, Manager of Alternatives. "Minimum Wage limits the employer/employee relationship to protect the weaker party, the employee. It seeks to answer, 'Can an employer earn enough from an employee's labor to pay a Minimum Wage'? Livable Wage is about the life situation of the employee. The research behind Livable wage asks 'how much income does it take to live in our community'"?

The livable wage study was updated in 1996 and in 1998, when the livable wage was calculated to be $16,514.37. The new livable wage is about a 6.2% increase over the last one, which is consistent with inflation (which was about 6% according to the Consumer Price Index).

There has been a strong response to the study from the community. Alternatives received many requests for copies of the study, Leni Hochman, Assistant Manager, says, "I was not surprised to receive many calls from people in low wage jobs interested in seeing the study. But when I received my first call from an employer, I felt heartened. It was a day care provider who felt it was her duty to pay her staff a livable wage."

The first livable wage ordinance was legislated in Baltimore in 1994. Ordinances have been passed in 53 cities including St. Louis, Boston, Los Angeles, Tucson, San Jose, Portland,

Milwaukee, Detroit, Minneapolis, and Oakland. Rochester City Council passed a Living Wage Ordinance on January 17. The ordinance will require organizations with City Service

Contracts of $50,000 or more to pay their workers at least $8.52/hr with health care benefits or $9.52/hr. without health care.

Similar studies to Alternatives' have been done around the country, notably by ACORN and Wider Opportunities for Women (WOW). According to ACORN, more than 75 living wage campaigns are underway in cities, counties, states, and college campuses across the country. "Taken collectively, these impressive instances of local grassroots organizing is now rightfully dubbed the national living wage movement, which syndicated columnist Robert Kuttner has described as 'the most interesting (and underreported) grassroots enterprise to emerge since the civil rights movement … signaling a resurgence of local activism around pocketbook issues.'"

(See ACORN's web site, www.livingwagecampaign.org. Also, the Economic Policy Institute's web page, www.epinet.org, has Frequently Asked Questions about living wage ordinances and excerpts from the book How Much Is Enough? Basic Family Budgets for Working Families).

WOW, who published Self Sufficiency Standards in several states around the country recently examined New York State. Their estimate for what it takes for an individual to live without public assistance in Tompkins County was $15,468. This estimate is virtually the same as Alternatives' proposed figure, except WOW did not include recreation or savings. Alternatives added savings and recreation that, while some might argue are not necessary to live, it feels workers deserve to earn. The Credit Union feels savings are especially important for people who are low-income. The brochure for Alternatives' Individual Development Account program states that "...assets, not income maintenance, will act as a ladder out of poverty." And accruing savings is the only way to purchase assets.

Undoubtedly, personal choices and lifestyles make this amount insufficient for some and generous for a few. While Alternatives Credit Union does not claim that the figures are either absolute or scientifically exact, there is much merit in this approach to employee salary. "Our Board has made a commitment to paying a livable wage," says Leni Hochman, Assistant Manager. "A person working full time should not have to get a second job or get public assistance in order to make ends meet." Hochman points out that an employer who doesn't pay a livable wage and has employees who receive public assistance is in effect being subsidized by tax dollars. "I understand that not all employers can suddenly raise wages and survive. But that employer can embrace the concept of livable wage, make a plan, and work towards it," says Hochman. She adds that there are ways it pays off in unexpected ways. "A livable wage fosters good morale and less employee turnover." Higher wages may also result in increased spending and sales tax revenue, while reliance on public assistance and other social services decreases.

The figure represents the livable wage for one individual adult. Childcare costs vary greatly based on the age of the child and the provider. Infant child care costs, according to the WOW study, are about $422/month. Preschool child care costs are about $459/month. Rent, food, and health care would also substantially increase.

Alternatives Federal Credit Union is a non-profit, member-owned financial institution, and a community development credit union dedicated to offering economic opportunities to everyone in the community.