What's a living wage, really?



A Feb. 23 Independent cover story about the latest skirmish over the city's affordability problem ("On the Riverfront") reported a so-called living wage as $10.30/hour for a single adult who works full time. After the story ran, one of its subjects emailed us a 2015 analysis that pegged the living wage at $14.36/hour.

That's a big difference—nearly $8,500 a year. What gives?

The answer turns on what sorts of things "living" requires, says Bryce Ward, associate director of the University of Montana's Bureau of Business and Economic Research. Takeout food? Home internet? Vacation? Savings for retirement or emergencies?

Forget about it. The Massachusetts Institute of Technology living wage calculator, which produced the $10.30/hour figure, doesn't allow for life's little luxuries, or emergencies. Rather, Ward says, the model tallies the most basic expenses—food, child care, medical, housing, transportation and clothing—to estimate how much full-time, tax-paying workers must earn to subsist without government assistance.

"It's what you need to survive, not survive in the standard of what we would consider having a nice life," Ward says.

That isn't to say a Missoula resident earning $14.36 /hour is much better off. That living wage was developed by the Alliance for a Just Society, an economic justice advocacy group. Like the M.I.T. model, it also assumes that workers adhere strictly to the U.S. Department of Agriculture's "low-cost" meal plan (which costs an adult woman $205 per month, and an adult male $237). No home internet, either. But the $14.36/hour wage does include stashing away 10 percent of earnings—just over $200 each month—as savings. It also tallies transportation costs at $625/month for Montanans—an amount that few single Missoulians likely spend.

On the other hand, both "living wages" assume that a single adult will spend about $560 per month on housing and utilities. That's a lowball figure unless you're living with roommates or in the landlord's shed. Average monthly rent in Missoula for a one-bedroom apartment in a complex is $664, according to the latest Missoula Organization of Realtors annual report.

Every penny counts, particularly when it comes to defining who makes up the working poor. Only five of the 20 most common occupations in Missoula yield median wages of more $14.36/hour, compared to 14 that exceed the $10.30/hour level. In fact, more than 86 occupational categories in Missoula (from school psychologist to butcher to newspaper reporter) don't meet the higher "living wage" standard, according to state labor data.

The gap between the two wages, then, reflects how so many Missoula workers perceive their economic station in life: somewhere between scraping by and making a living.


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