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Labor & Economy

A Hard Math for Working Families





Working families know that making ends meet is not easy. Low and stagnant wages cannot cover the ever-increasing cost of basic expenses, leaving workers and consumers constantly scraping the bottom of the barrel. Nearly half of all Americans lack the incomes they need to be secure, according to research by Wider Opportunities for Women (WOW).

In Los Angeles, these challenges have inspired a new proposal to give workers in the city’s largest hotels a raise to $15.37 an hour. Across the country there is a growing national movement to raise the federal hourly minimum wage to $10.10.

Renewed attention to issues of economic insecurity and income inequality provide us an opportunity to ask an important fundamental question: what do working families really need to get by?

WOW answers this question by crunching the numbers. Our Basic Economic Security Tables™ measures the incomes that California’s working families need by determining the true cost of households’ basic expenses – such as food, housing, child care, health care and transportation – in their local communities. The measure just looks at basic needs; most families are not eating out or going to the movies.

According to this measure, a single worker in Los Angeles needs more than $16 an hour, or nearly $2,900 a month, just to make ends meet. A single parent with one young child needs to earn more than $29 an hour, or $5,000 each month. Parents with two young children need to earn $20 an hour or more.

In fact, a person working full time at California’s current minimum wage of $8 an hour barely earns enough to cover the average cost of a basic apartment, plus utility and grocery bills. To afford basic economic security, a parent with two young kids earning a hotel worker’s hourly wage of $8.50 would need to work more than 150 hours a week. Even the best budgeting can’t stretch a monthly income of $1,500 to cover $6,000 in expenses. The math just doesn’t work.

For working families this means making compromises every day – choosing between saving for your kid’s education or paying the water bill. It means relying on safety net programs, financed by the public, in order to keep a roof over your heads and food on the table. It means working two jobs to stay afloat, leaving little time to pursue additional education or to help kids with their homework.

Tens of thousands of full-time workers struggling in poverty cannot be our vision of our economic future. A strong economy that works for everyone – for both workers and businesses – is founded on good jobs and secure families. When workers earn enough to afford the basics, they can care for their families and support local businesses. Raising workers’ wages, then, is a key economic development strategy for Los Angeles.

The proposal before the City Council to institute a living wage of $15.37 an hour for workers in the city’s biggest hotels is a good start. It would help nearly 15,000 workers move their families closer to economic security and generate more than $40 million in additional spending in the local economy.

Targeting hotels makes sense because the hospitality sector, and hotels in particular, represent a significant portion of Los Angeles’ economy and employs many of the city’s poverty-wage workers. Hotels and restaurants also benefit from significant municipal investment from taxpayers who maintain the city as a hub of tourism and tourist dollars. The public is simply asking that these major hotel chains do their fair share and invest back into the city – paying their workers a wage that allows them to be secure, to care for their families and support the city’s economy.

(Matt Unrath is the Wider Opportunities for Women’s Director of National Projects. He specializes in alternative measurements of poverty and family economic security.)

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