How much does it take to make ends meet in the Memphis metro area? If you’re a single adult, you need to make at least $10.48 an hour. Single adult with one child? $20.18 an hour. Two working adults with two kids? $13.28 an hour per person.
That’s how much a living wage is, based on MIT’s Living Wage Calculator.
Regardless of family size, you can’t get by on minimum wage, which in Tennessee is just $7.25 an hour. In 2013, the Volunteer State had the nation’s largest share of minimum wage workers.
As Memphis approaches the 50th anniversary of Dr. Martin Luther King Jr.’s assassination, we should remember that King came to Memphis in 1968 to support low-wage workers — specifically black sanitation workers who worked full-time but made so little that many qualified for welfare.
“Equality means dignity,” King said. “And dignity demands a job and a paycheck that lasts through the week.”
I talked by phone with Dr. Amy Glasmeier, professor of economic geography and regional planning at MIT, and the creator of the Living Wage Calculator. Many companies and organizations have relied on the calculator to determine what workers should be paid.
Thomas: What is the living wage calculator?
Glasmeier: We identify the components of a person’s living expenses that are essential, like housing, food, healthcare, transportation, childcare and utilities. We collect real data that is published at county, state and regional levels. We estimate what it costs by the number of people in a household. Then we add that up to an annual income and divide it by 2060 hours (which assumes a 40-hour work week, 51.5 weeks a year) annually. This defines a cost-based hourly wage.
Thomas: Does the living wage include savings, like setting aside money for a rainy day?
Glasmeier: It does not. Since most Americans don’t save, there’s no way to estimate what the average savings level would be. Many people identify this is a critical element missing from the tool.
Thomas: How would an employee use the living wage calculator?
Glasmeier: They use it when an employer pays less than what the cost of living is. The worker’s message to the boss is: I’m doing a good job for you, but I can’t live on this. Then it’s up to the employer to decide if they want to lose the employee.
The employers don’t know what the cost of living is. When they’re confronted with a worker that has a job opportunity somewhere else, it’s like: Gulp, what am I going to do?
Thomas: It’s obvious how a living wage benefits workers, but how does it benefit employers?
Glasmeier: The lower an employer’s wages are, the more likely their workers will constantly be looking elsewhere for a living wage. There are retailers who don’t want that type of turnover. There also are employers such as IKEA that feel strongly that treating people well has benefits, including stability and loyalty. They pay a living wage because they believe it’s the right thing to do, and they’re pragmatic business people.
Thomas: What about workers who make far more than a living wage. Why should they care?
Glasmeier: General Americans are moral individuals. Most of us don’t want to live next to someone who is starving. You don’t want to live next to someone whose kids don’t have clothes to keep them warm in the winter. Eventually it will be dispiriting.
Thomas: You consult with companies that want to start paying workers a living wage. Describe that process.
Glasmeier: I set up a scenario. I say, here’s the fixed costs you have (insurance, taxes, etc.). You need to pay a living wage to your workers and you desire to make a certain level of profit. I then set up a game and ask them to achieve their objects and pay a living wage.
They look at their workforce, figure out who they can ill afford to lose. Employers then refashion their workforce, operations and other variable costs to achieve a desired level of profit while covering expenses.They might decide, I might need pay this person more because they’re more productive, I might let this person go because they’re not adding very much.
During the simulation, I ask the employer: How do you feel about a situation where your employees have to work two jobs because they can’t live on what you’re paying them?
Believe it or not, unless you’re on the shop floor, you’re not thinking about that.
Thomas: You make this sound doable. Are you an optimist?
Glasmeier: I’m a pragmatist with a bit of optimism thrown in. It’s just that companies don’t use the role that they have as wage-creating enterprises to be sure that members of society can support themselves.
Thomas: Dr. Martin Luther King Jr. called for guaranteed jobs or a guaranteed basic income program, an idea that has been floated for decades by both the right and the left. Your thoughts?
Glasmeier: I’m agnostic about it. Work does more for us than just make income. It creates an identity and a community and a sense of self-worth.
Thomas: What other reasons to companies have to pay a living wage?
Glasmeier: Reputational value is incredibly important today. Whole Foods doesn’t just pay well because the company wants to pay well, but it does so also because the people who shop there expect them to pay well. Why did Walmart succumb to paying $10 bucks an hour and recently announced an additional dollar increase for selected employees? Because they were both personally ashamed and they realized, that their own workers were increasingly becoming unable to shop at Walmart stores.
Whole Foods doesn’t just pay well because the company want to pay well, but it does so also because the people who shop there expect them to pay well.
The question becomes: How do you recommend and privilege the companies that are doing the right thing and shame the ones that aren’t?
Wouldn’t it be great if Memphis had a program where once a month the city identified a good company that met a certain set of social conditions, and their story was put on the front page of your paper?
Thomas: What are three things each of us can do today?
Glasmeier: First, write all of your elected representatives and everyone you know who is involved in decision-making. Tell them your story (or share stories of low-wage workers) and explain how hard you work and how difficult it is to make ends meet. Secondly, join groups of people who are like-minded to keep your morale up. Third, remember that there are good employers out there and support those businesses. Start talking about changing where you’re consuming. Convince your neighbors to do the same.
None of this is rocket science, we know the answers to these questions. We’re just choosing to ignore them.
Where do we go from here?
Read MLK50’s series on businesses that have chosen to pay their workers a living wage.
Check out these videos and resources to learn more about a living wage.
This story is brought to you by MLK50: Justice Through Journalism, a nonprofit reporting project on economic justice in Memphis. Support independent journalism by making a tax-deductible donation today.