Why is living wage in Monroe County estimated at $60K?
The Monroe on a Budget column runs Tuesdays in The Monroe Evening News. Here is this week’s installment:
One of the most startling details in a recently published study about poverty and family economics in Monroe County, Mich., is a chart that the living wage for a family of four should be calculated at $60,507.
That’s significantly above Monroe County’s median household income, which the U.S. Census Bureau had estimated at $53,744 for 2011.
Both statistics are part of the 2012 Community Needs Assessment compiled by the Monroe County Opportunity Program as part of its requirements for managing certain grants. MCOP is the Community Action Agency for Monroe County, administering a variety of programs intended to help the area’s “most vulnerable and underserved” residents.
The report discusses the jump in poverty rates, the increase in school lunch program participation and related statistics since the recession began. It has been the topic of presentations across the area, including the keynote program at the Making Connections workshop March 14.
While the idea of a living wage is not new, the MCOP study takes the idea a step further by considering family size. Therefore, its definition is:
“The living wage shown is the hourly rate that an individual must earn to support their family, if they are the sole provider and working full time.”
The examples include:
- Michigan minimum wage: $7.40. That works out to $15,392 a year.
- Living wage for 1 adult, according to MCOP: $8.95. This works out to $18,612 a year.
- Living wage for 1 adult, one child, according to MCOP: $17.41. This works out to $36,205 a year.
- Living wage for 2 adults, 2 children, according to MCOP: $29.13. This works out to $60,507 a year.
The list of budget categories in the formula are: taxes, transportation, medical, housing, food, child care if children were in the family, and an “other” category.”
The calculations rely heavily on federal economic studies such as the U.S. Department of Housing and Urban Development Fair Market Rent study, the Energy Information Administration’s research into retail gas prices, and the U.S. Department of Agriculture’s Center for Nutrition Policy and Promotion’s research into medical expenses. And here are two examples:
Housing, was listed at $647 to $779 a month in the living wage chart. As supporting data for those price ranges, MCOP’s report states that among the occupied rentals in Monroe County, the median gross rent in 2010 was $733 a month.
And food costs were estimated high from my perspective at $756 for a family of four. But I expected that. Most studies on this topic estimate grocery costs from “low cost” bracket on the USDA Cost of Food Study, instead of the “thrifty” bracket I teach in grocery budget discussions. “Thrifty” was most recently calculated at $554.90 for a family of four.
Readers may contact Paula Wethington at email@example.com or (734) 240-5745.