Wednesday, August 19, 2009

Poverty and Prosperity Part 3: A Living or Family Wage

A multitude of wage and income measures are produced by the federal government, state governments, and private entities. Many of these measures attempt to gauge the relative prosperity or poverty of Oregon's individuals and households.

While each measure varies in purpose, scope and definition, they all help illustrate the financial situation of Oregon's individuals and families...

A Living or Family Wage
Yet another measure of minimum income is a living or family wage. A living wage is exactly what it sounds like: income sufficient for a person to live on. For a wage to qualify as a “living wage”, it should provide enough money to at least cover basic expenses like food, housing, and utilities. Earning a “family wage” means that a person has sufficient income for his or her basic necessities and for the basic needs of children and/or a spouse.

While this kind of wage definition is appealing, the task of defining a living or family wage is fairly difficult. There are many factors to consider, such as: What items are “basic necessities”? What is a reasonable average cost for things like housing and utilities? To make matters more complex, the costs for basic necessities, housing, and so forth, vary depending on location. Thus a living or family wage rate must also vary depending on location.

Despite these challenges, some governments and private entities have attempted to define a family wage. The state of Missouri, for example, has a family wage calculator on the internet. In Washington, two private research organizations teamed up in 2006 to create a report called Improving the Odds, which discusses family wages. Both the online tool and the report factor in location and family size when calculating a family wage.

In Oregon, there is no official definition for a family wage, although the phrase is mentioned several times in the Oregon Revised Statutes. The Oregon Economic and Community Development Department (OECDD), offers one definition for a family wage: the average pay per worker covered by the state’s unemployment insurance system. This “average covered wage” is calculated down to the county level in Oregon using data from the Oregon Employment Department. In 2008, it was about $40,500. This was an increase of more than $800 from 2007.

For Thursday: Part 4 - Per Capita Personal Income


Julie said...

This is actually very helpful, with the link to the Washington study. One of the Recovery Act grants deals with training, and specifies an emphasis on working towards living wage jobs -- which as you point out doesn't have a specific definition in federal regs or economic associations.

Julie said...

P.S. Our Clark County unemployment rate for July was 13.7%, highest county in Washington (statewide was 9.1%)