ASHEVILLE — Pointing to the rising cost of housing, the local living wage level has also increased, the Asheville-based nonprofit Just Economics announced late Wednesday.
The nonprofit, which has set a living wage standard for area employers since 2008, defines a living wage as “the amount a worker needs to make in order to meet their basic needs without public or private assistance.” Now, that amount is $12.50 an hour or $11 an hour if the employer offers health insurance. Since 2013, the living wage was $11.85 without insurance or $10.35 an hour with it.
The new living wage totals to about $26,000 a year without insurance or $22,880 with, assuming a 40-hour work week. The nonprofit considers workers who receive tips as receiving a living wage if their wage plus tips exceeds that amount.
The towns of Montreat and Weaverville, as well as Buncombe County and the city of Asheville, all use the nonprofit’s living wage standards to set the baseline for their public employees’ wages. Asheville, however, has an exception to the living wage rate that’s currently the topic of some debate.
“By definition, the living wage rate is not static. Recently, we’ve seen a dramatic rise in the cost of housing here, which translates to an increase in the cost of living, dictating the rate change,” Mark Hebbard, who coordinates the nonprofit’s living wage certification program, said in the official announcement of the change.
About 400 businesses, primarily in Buncombe, Henderson and Transylvania counties, are certified as living wage employers through the nonprofit’s program. Businesses certified under that program keep their living wage certification for two years. Those due to re-certify this year will have the option of either adjusting to the new rate or taking advantage of a one year “grace period” in which they may maintain their certification while they work to increase their wages.
“Our program is not about punishing businesses,” Executive Director Vicki Meath said. “We’ve had employers that have faced challenges and come off our list and some that have come back on.”
According to the organization, the increased living wage standard is based around Buncombe County. For the moment, Transylvania’s living wage standard is remaining the same while the nonprofit assesses economic conditions there.
Living wage standards across NC
Indeed, wages are a topic of national discussion, as several states — even those with historically conservative voting patterns — passed minimum wage increases in last year’s elections. North Carolina, however, was not among those states, and the minimum wage here remains the same as the federal minimum wage: $7.25 an hour. In the State of the Union address earlier this week, President Barack Obama sharply criticized Congress for not increasing the federal minimum wage to $10.10 an hour.
In addition to several municipalities located in Buncombe County, the cities of Durham, Carrboro and Chapel Hill, as well as Durham County, mandate a living wage standard for their employees. State legislation in 2013 forbade localities from mandating that contractors working with those local governments also pay a living wage.
Housing costs and calculating a living wage
Just Economics addresses issues of poverty and wages throughout the region, though its living wage numbers are usually targeted at Asheville and the surrounding area and are calculated by comparing the cost of living to federal data. Meath said that Just Economics conducts that calculation every year, but the organization only raises the rate if the necessary wage to make ends meet has risen by more than 3 percent.
This year, the organization has a webpage detailing more information about how it sets the local living wage, and why it believes both the minimum wage and the federal poverty line haven’t kept pace with the reality for many working people, leaving local organizations to come up with more accurate calculations.
During the economic downturn, the rise in the cost of living was somewhat blunted, meaning the living wage didn’t see a sharp increase until 2013.
Meath said that the cost of housing is increasing so fast that the wages necessary to keep pace must increase as well. Indeed, the cost of housing is the major factor in the nonprofit’s formula for calculating a local living wage.
“The reason that we chose that is that we think it’s really reflective of the major issues in our area: the inconsistency between the cost of housing and wages,” she said. “The cost of housing is typically the largest expense for an individual.”
By contrast, Meath said, “the poverty guidelines go back to a time when an individual’s biggest expense was food. In our day and age, housing is typically a bigger cost than food.
“But I think employers understand that the cost of living is going up, and if the minimum wage reflected inflation and the rise in the cost of living, we’d be at a very different minimum wage.”