Should We Be Talking About Living Wages Now?


By Jeannette Wicks-Lim
March/April 2009
Dollars & Sense: Real World Economics


The Department of Labor announced in January that the U.S. economy shed 2.8 million jobs in 2008, bringing the national unemployment rate to 7.2%—its highest level in 16 years. In today’s economic climate, the worst since the Great Depression, are the raises demanded by living-wage campaigns a luxury? Should living-wage campaigns take a back seat to pulling the economy out of recession?

For many, the answer is no. Campaigns across the country continue to build on the widespread success of a movement that has put into place more than 140 living-wage laws since the mid-1990s. Take the Hartford Living Wage Task Force in Connecticut, which is trying to expand the number of workers guaranteed a living wage under its original 1997 law. Or Santa Fe’s Living Wage Network, which fought for, and won, a cost-of-living increase to its living wage rate for 2009. Or the Nashville Movement in Tennessee, a group laying the groundwork for a campaign to establish a brand new ordinance.

They are right. Today’s economic turmoil challenges us to create practical policies to meet the heightened imperative of living wages, not to abandon them.

Why do we need living-wage campaigns? Let’s consider first the current legal wage floor. At $7.25 per hour, the federal minimum wage as of July 2009, a full-time year-round worker will bring home $15,080—less than the official poverty threshold of $17,330 for a family of three.

Moreover, poverty experts roundly criticize that official poverty line as too severe. According to the National Survey of American Families, nearly two-thirds of people in households with incomes above the poverty line but below twice that level reported serious economic hardships—failing to pay their rent, having their phone disconnected, worrying about running out of food, or relying on the emergency room for routine medical care.

Consider a more realistic poverty line: the “basic budgetâ€