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It’s time to end the high cost of low wages

Our economy is booming, at least that’s what the economists say, so why then do so many of my constituents tell me they’re struggling to make ends meet?

Northampton County’s Department of Human Services deals with this conundrum every day. The unemployment rate may be less than 5% but requests to Children, Youth and Family for help with housing, clothing, food and basic needs rose 63.23% in 2019. We’re having a mild winter, but applications for emergency fuel assistance are up 4.65%.

We used to call these families ‘the working poor,’ but The United Way has a new term: ALICE – Asset-Limited, Income-Constrained, Employed. More Americans have full-time jobs, but they aren’t receiving a living wage. This traps them in a paradox with an income above the federal poverty level, but not enough money to meet their basic needs. Currently, 39% of Northampton County families walk a financial tight-rope where the slightest problem might send them into a downward plunge—a car repair, an illness, a malfunctioning heating system, etc.

The monthly household survival budget for a family of four in Northampton County (two adults, one toddler and one infant) is $67,404 a year or $33.05 an hour.  According to statistics published by Lehigh Valley Workforce, the average annual wage in the Lehigh Valley is $47,680 which falls far short of the mark. To achieve a level of stability, where an unexpected bill doesn’t cause a panic, requires a yearly salary of $106,000.

Low salaries have high costs. Saving for retirement or a child’s education isn’t possible. Buying a home or replacing a used car becomes out of reach. Consumer spending makes up 68% of the U.S. economy. Low incomes are a threat to growth in Northampton County, the state of Pennsylvania and the nation.

Salaries in the Lehigh Valley aren’t keeping up with the expenses required to live here. The average hourly wage for a dishwasher is $9.90, $14.04 for a waitress and $11.50 for a hotel clerk. No job is disposable. Companies can’t function without cashiers, restaurants can’t serve food without cooks, and hotels wouldn’t stay open long without bellhops.

People who work in Northampton County should be paid enough to live in Northampton County. With the median sale price of a home running at $190,000, it’s not surprising that the only housing option available to most families is to rent. In the Lehigh Valley, three-quarters of all rents fall between $500 and $1,500 per month and competition for rental units is high.

If people can’t live near where they work everyone’s quality of life is negatively impacted with increased traffic and more air pollution. Even those who ride the bus face increased stress from the long commutes, and stress is bad for peoples’ physical and mental health. New businesses aren’t going to move here if there’s a spatial mismatch between the jobs they can offer and the housing people can afford. And, the more someone has to pay for housing, the less disposable income they have to spend on entertainment or products.

The fallout from the ALICE often falls on our Human Services department with desperate families seeking help with childcare, affordable housing and adequate food. It’s not unusual for someone who didn’t have a mental illness or an addiction problem to develop one after becoming homeless.

In 2017, 37% of households in Pennsylvania could not afford basic needs such as housing, child care, transportation, health care or technology. It is not beneficial for our society to have so many of our citizens classified as ALICE. Low-incomes not only stress individuals and families, they stress communities through the increasing vulnerability of workers and the costs to society of having large numbers of people poor, in ill health and desperate. This stress requires governments to provide more services, but prevention is more effective than any cure.

As a community, we need to insist on making sure every full-time worker is paid a living wage and not look to Pennsylvania’s anemic $7.25 as guidance. All full-time workers should be earning at least $15/hour. Northampton County is taking steps to lead on this issue. Currently, the County employs 1,748 full-time workers at an average wage of $22.90/hour. (County employees also receive benefits worth $9.62/hour in the form of health insurance, pension, etc.).

At this time, only 6% of our workforce earns a take-home wage of less than $15/hour. In our next round of contract negotiations, we hope to get that number below 3% and, in the round after that, we want all County employees to be above the $15/hour threshold.

We’re hoping more Northampton County employers follow our lead in combatting ALICE. Living wages aren’t just good for individuals and families, they’re crucial for a healthy economy.

Lamont McClure is the Northampton County Executive.

References

United Way. (2019). ALICE in Northampton County: Available online: https://www.unitedwayglv.org/UnitedWay/media/PDFs/ALICE/Northampton-County-ALICE-County-Sheet.pdf

Lehigh Valley Workforce. (May 2018 Wages). LV Wages May 2018 pdf http://lvwib.org/Portals/2/2019%20PDF/LV%20Wages%20May%202018.pdf

Lehigh Valley Planning Commission. DATA LV: The Lehigh Valley’s Data Source – Housing. Available online: https://lvpc.org/data-lv-housing.html

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