Study Highlights Gap Between Living and Minimum Wage

 Posted on October 15,2015 in Minimum Wage

As stories of fast-food industry workers protesting for higher wages continue to hit headlines around the country, a recent study suggests that such demands may be founded on at least a kernel of truth. Claims have abounded for decades that the federal and state minimum wages could not produce a sufficient income on which to live and raise a family. Researchers have developed a method to quantify exactly what constitutes a living wage for a particular area of the country, and, comparing that to the minimum wage currently in place, establishing a dollar measurement of the gap between the two.

Cost of Living

Amy Glasmeier is a professor of economic geography at the Massachusetts Institute of Technology, better known as MIT. She and a team of researchers developed what they call the Living Wage Calculator designed to take into account various financial, governmental, and tax factors at work in an area to determine a fairly precise cost of living. Applying the calculator to the entire country, Glasmeier found serious discrepancies between the amount per hour required to live and raise a family and the minimum hourly wage in nearly every region of the nation.

Concerns in Illinois

As might be expected, the highest cost of living throughout Illinois is centered around its two major metropolitan areas, Chicago and St. Louis. While state’s minimum wage is currently $8.25 per hour—a dollar above the federal standard—the city of Chicago recently implemented a wage hike up to $10.00 per hour. According to the calculator, it still is not enough. Glasmeier and her team estimate that a living wage for a family of four in Cook County is a little over $24.00 per hour, nearly two and half times Chicago’s minimum wage and nearly three times that of the state’s minimum. Even for a single adult, the calculator found the living wage to be about $11.66 per hour, still not met by minimum wage standards. In more rural areas, the gap lessens a little, but not enough to make a substantial difference.

Protect Your Business

As the battle over increasing minimum wage and decreasing the cost of living is sure continue for the foreseeable future, it is important to keep your company in compliance with existing minimum wage laws. For assistance in developing an appropriate compensation schedule for your business, contact an experienced Illinois employment law attorney. Attorney Richard J. Miller is committed to serving the needs of small and medium-sized business throughout Cook, DuPage, Kane, and Lake County. Call 847-995-1205 to schedule a consultation today.

Sources:

http://www.chicagotribune.com/suburbs/oak-park/news/ct-oak-fight-for-15-tl-1001-20150929-story.html

http://www.theatlantic.com/business/archive/2015/09/living-wage-calculator-interactive-minimum-wage/404569/

http://news.mit.edu/2015/3-questions-amy-glasmeier-living-wage-0611