Ahead of his Making Sen$e story on the living wage, Paul Solman speaks with Diana Pearce, creator of the Self-Sufficiency Standard, in this web exclusive video about the bare minimum it takes to survive on your own. Monday on the PBS NewsHour, senior correspondent Hari Sreenivasan follows a New York City fast-food worker to get a sense of what it’s like to live paycheck-to-paycheck. But just how much is enough to survive on? For our Making Sen$e segment on the living wage, which is slated to air Tuesday, we found out what goes into a bare-bones budget for self-sufficiency.
We spoke with Dr. Diana Pearce, founder and director of the Center for Women’s Welfare at the University of Washington School of Social Work, and creator of the Self-Sufficiency Standard. As she explains in this web exclusive video, above, she created the Self-Sufficiency Standard as a geographic-specific yardstick for how much is enough to live on while remaining independent of public or private assistance. At MIT, Amy K. Glasmeier has created a user-friendly calculator based in large part on Pearce’s work that makes it easy to find what it takes to be self-sufficient in your area.
Tuesday is also Election Day, and on the ballot in the SeaTac area of Pearce’s home state of Washington is a local initiative to increase the minimum wage to $15 an hour. Noor Aden, a security guard in downtown Seattle, tells us how his friends and families would benefit from such a minimum wage hike in order to remain self-sufficient.
Below, we turn it over to Pearce to explain in her own words, in more depth, how the Standard works and why it’s important for folks like Aden and men, women and children around the country. Keep reading to find out what’s a livable standard in your state.
Diana Pearce: How do you know what a living wage is? The cost of living across the United States varies greatly by area, and not surprisingly, so does the living wage. One way to assess the minimum you need to survive where you live is what I call the “Self-Sufficiency Standard.” It’s a no frills budget designed to get you by on your own.
The Standard grew out of my early work on “the feminization of poverty”– that is that women are disproportionately bearing the burden of poverty. Researching workforce training programs, I saw that the performance standard of “self-sufficiency” consisted of a single wage threshold: the wages of all the participants in job training programs were averaged together, and if they exceeded the threshold, they had performed successfully. Since whites and males regularly command higher wages than women and people of color, the workforce systems were tempted to “cream,” serving more whites and males at the top of the wage scale.
Dismayed by this finding, and with welfare reform pushing some women into the workforce without sufficient training and education, I was asked by women’s advocates to devise a “performance” measure that was specific to individuals. Since many of the women (but few men) were single parents, this measure would then make clear that they needed enough to support a family, not just a single person. Many women would also need child care, so that was a key component not included in previous “basic needs” budgets (or if it was, it was constrained to a minimal amount). If child care costs more than housing, as it does in some places, then that is what is in the Standard.
Since I developed it in 1996, the Standard has evolved as an alternative to the official federal poverty measure, which is outdated. At $19,530 for a family of three, the current official poverty measure is too low, no matter where one lives, and it does not vary geographically.
But how much is enough? The Self-Sufficiency Standard specifies for job trainers and other policymakers working at the local level what the minimum you need is for food, housing, child care, transportation, health care and miscellaneous expenses. It also takes into account taxes, net of tax credits.
The costs of those expenses vary by where you live and your family composition — how many adults, plus the number and age of children. But it does not include any public or private assistance; it does not take into account help from food stamps or food banks. Instead, the Standard tells you how much it will cost you to buy your own groceries and pay your own rent or leave your children in the care of a licensed child care provider.
At the same time, the Standard represents the lowest amount still adequate: rent and utilities are set at the level families with housing assistance receive, as is the level for child care. The food budget includes no takeout or restaurant food, not even a pizza or a cup of coffee. There is no allowance for savings, recreation, entertainment or education.
You can find out how much the real cost of living is two ways. First, you can go to www.selfsufficiencystandard.org and click on the state in which you live to get the information on what the Standard is for your family in your state. It’s available in 37 states plus Washington, D.C.
For example, an adult with a teenager who lives in southern Manhattan would need to earn almost twice as much, about $29 per hour, as an adult with a teenager in Washington State (and if the child were younger, upwards of $33 per hour). In contrast, in Elkhart, Indiana, this family requires a wage of only about $10, and with younger children adding child care costs, about $13 or $14 per hour.
Alternatively, if you live in Washington State, you can go to the online calculator, conveniently named www.thecalculator.org. Simply indicate where you live and your family composition, and it will give you your Self-Sufficiency Standard, including how much you need for each basic need like food and housing. While there, you can also check on how adequate your income is compared to your costs. If your earnings fall short, you can test your eligibility for aid like food stamps, child care subsidies and tax credits.
Want to find out what an adequate wage is in your area — or conversely, which wages are low enough to qualify for such assistance? Similar online calculators are available for California, Illinois, Indiana, New York City, Ohio, Oregon, Pennsylvania and Washington, D.C.
By the way, online calculators also tell us that even at $15 per hour and working full time, the single parent with two children qualifies for a partial food stamp benefit that covers about a third of her food costs. Even the adult with one teenager qualifies for a small food stamp benefit. So the question may be, is $15 per hour high enough to be a “living wage”?
The Self-Sufficiency Standard is used in many ways: as a job training and counseling tool to help people chart a path to economic self-sufficiency, as a benchmark to evaluate program effectiveness and economic development proposals, as a research measure to analyze which jobs have adequate incomes and as an aid to efforts to raise wages and improve policy.
The organizations and offices that use the Standard are widespread — both in terms of objectives and geography. They include, to name just a few, the Women’s Center for Education and Career Advancement (in New York City), the Office of the Governor of Wyoming, the Ohio Community Action Agencies Association, New Jersey Legal Services, the Connecticut Permanent Commission on the Status of Women, the Heartland Alliance (in Illinois), the Mississippi Economic Policy Center of the Enterprise Corporation of the Delta, the Women’s Foundation of Southern Arizona and the United Way of the Bay Area (in California). Many of these partner organizations have entire networks with which they work that also use it. I’ve also discovered that community colleges use the Standard and/or the calculators with their students, while foundations use the numbers in their reports or grant proposals.
This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions