PR Living Wage 2005
Alternatives Federal Credit Union updates the Living Wage
Ithaca, NY - June 3, 2005. Joined by a panel of speakers interested
and active around the issue of paying a living wage, Leni Hochman, Chief Operations
Officer of Alternatives Federal Credit Union, announced the updated figures
for a living wage in Tompkins County. "Starting with the bottom line, we
found that an annual living wage for an individual rounds out to $19,102. That
compares to $18,061 in 2002. It translates to an hourly wage of $9.18, up from
$8.68 an hour for a 40 hour week." The increase comes is 5.77%. The rate
of inflation for that period was 5%. Hochman notes that this figure represents
the living wage for someone receiving health insurance from their employer.
Hochman says the reason for paying a living wage is simple. "Someone who works full time deserves to "earn a living." That does not mean earn a partial living plus a government subsidy. When an employer does not pay a living wage and an employee receives public assistance, that business is, in effect, being subsidized by tax dollars."
Bill Myers, CEO of Alternatives, explained how the study came about. "A dozen years ago, one of our new staff casually mentioned that in order to work at Alternatives, she had to ask her parents to help with rent. She lived in a modest apartment on Center Street, just a bare minimum. This didn't seem right. Full time work should earn a living. Was this staff person's predicament typical? We determined to ask the question, ‘Is the wage we pay our Full Time staff enough to live on in Tompkins County?' Alternatives was certainly paying a competitive salary but was that enough to live on? As we set about to build a local household budget, we quickly found that our starting salary did not support a sustainable financial life. The difference between what we paid and a living wage had to come out of somewhere: family, government, loans."
Joining Hochman on the panel were:
Bill Myers, Chief Executive Officer at Alternatives,
Carolyn Peterson, Mayor of Ithaca,
Linda Smith, Aide to New York State Assemblywoman Barbara Lifton,
Jeff Furman, Board Member, Ithaca City School District,
Tim Joseph, Chair, Tompkins County Legislature,
Carl Feuer, Co-director of the Tompkins County Living Wage Coalition/
Workers Rights Center.
Carolyn Peterson pointed out that the city uses the living wage as a benchmark for the city payscale. "We use this information," Peterson said, "to make sure anyone who works full time for the city earns a living wage."
"A livable wage is what an employer needs to pay to get a job done," Tim Joseph stated. "If an employer pays less, the county picks up the slack in government services. That's not okay."
Jeff Furman agreed. "We have big-box stores moving into Ithaca whose owners make 100 Billion Dollars, and they refuse to pay there employees a living wage. For the owners, the issue is whether to buy a boat, or another home...while their employees decide whether to pay for food or heat. We must," Furman continued, "demand a living wage from rich enterprises."
Carl Feuer saluted Alternatives for not only doing the research for the living wage, but for paying their own staff a living wage. "Big-box stores, like Wal-Mart, hotels like the Hilton Garden and employers like the George Junior Republic all give the same answer when asked if they pay a living wage. Their answer: We pay a competative wage. Alternatives shows us a different response is possible. They are to be saluted for making the living wage a moral value."
Since the Living Wage Study was first released by Alternatives in 1994, paying a living wage has been a controversial topic in Tompkins County, and a veritable grassroots movement around the country. The study was originally done for internal use by Alternatives, but its release to the public was encouraged by the Board of Directors. It has stimulated important discussion about the meaning of earning a living wage and provided a benchmark for others to use in Tompkins County.
The Alternatives Federal Credit Union Board of Directors has expressed its commitment to paying a living wage since 1994. At their last Board meeting, Directors approved a new hourly starting wage for Alternatives employees of $9.67/hour, which is the new annual living wage divided by a 38 hour work week. 38 is the average number of hours worked by full time starting level employees.
Hochman thanked Ali Holstein, a sophomore studying Policy Analysis and Management in the School of Human Ecology at Cornell University, for her work in gathering the data. Hochman also thanked the Alternatives Federal Credit Union Board of Directors for their commitment to paying staff a living wage, and to the Living Wage Coalition for their work in educating the public and business community on the virtues and benefits of paying a living wage.
Myers points out that paying staff a living wage has its own rewards: "There's less turnover meaning lower cost in training new staff. There are more applications for employment. We can ask more of our staff. A dedicated staff that feels appreciated."
Notes about the Study:
Rent in Tompkins County increased significantly more than the rate of inflation, or 14% for a single bedroom apartment according to HUD (Housing and Urban Development.)
Transportation. We used a weighted average of people who drive, use public transportation, bike and walk. While gas prices went up, the weighted average had fewer people driving, and for public transportation we switched to an annual bus pass, which saved some money.
Food, we used the same source, USDA, and the same low-cost plan. The increase was 3.87%
Health Care is figured by adding the premium paid for health insurance by Alternatives staff plus out of pocket expenses, found in the Bureau of Labor Statistics Consumer Expenditure Survey. Alternatives offers individual coverage and the staff pay 25% of the premium, or $816/year. Then they added for costs not covered by insurance at $399/year. She noted that if an employer doesn't offer Health Insurance, the wage would need to be quite a bit higher to offset sky rocketing health care costs.
Recreation and Entertainment is a line missing from some other studies, but we consider a quality of life issue. $1271 covers television, radio and sound equipment, reading materials and sports and recreation, as reported in Consumer Spending Patterns.
Savings was increased by the rate of inflation to $52.50/month. Savings is another area that some other studies don't include, but Alternatives considers encouraging savings a core part of our mission and a necessity in moving along the Credit Path® towards financial security.
The Miscellaneous category, comes in at $1310 and includes clothing and footwear, small appliances/housewares, misc. household equipment and personal care products and services.