July 18, 2015
Close to three-quarters of Kansas workers aren’t earning a “living wage” if they are attempting to support a family, according to a university’s calculations — but that data may not actually reflect minimum costs.
A family of four in Kansas would need $46,509 to meet basic needs if only one parent is working, according to data from the Massachusetts Institute of Technology. The income needs would rise to $58,286 if both parents work because of the need to pay for child care and additional taxes. The statewide average wage is $42,020.
It assumes a family of four in Kansas would pay $9,095 for food; $5,853 for medical expenses; $8,909 for housing; $11,236 for transportation; and $4,891 for other expenses. To view the living wage data, visit livingwage.mit.edu.
About 76 percent of jobs in Kansas had an average wage of less than $46,509, according to data from the U.S. Bureau of Labor Statistics. The data doesn’t include self-employed people and relies on average salaries, which may not reflect that some people voluntarily or involuntarily work part time, and therefore earn less.
The calculated living wage may not actually reflect the cost of living in Kansas, said Jeremy Hill, director of Wichita State University’s Center for Economic Development and Business Research. Low-income people tend to find lower-cost areas where they can live and other ways to economize, he said.
“If you’re lower income, you can make (your cost of living) lower than that,” he said. “People can move around. They can reduce their costs.”
Still, discussing what level of income people need to live on and why some are falling below is a “healthy” conversation, Hill said.
Annie McKay, executive director of the Kansas Center for Economic Growth, said she doesn’t know exactly what level of pay would constitute a living wage, but job growth in recent years and projected for the future has been concentrated in low-wage sectors.
“We do know that some of Kansas’ fastest-growing jobs are low-wage jobs that would leave a family of three in poverty,” she said. KCEG typically bases its calculations on a family that includes one adult and two children.
Even setting a lower threshold for a living wage, however, leaves a significant number of people below. About 37 percent of jobs in Kansas pay less than $30,000 per year on average, according to the BLS data. Of the 10 most common occupations, only three earned more than $30,000 per year on average: registered nurses, customer service representatives and secretaries and administrative assistants.
A family of four is considered to be in poverty if it lives on less than $24,250 per year under federal guidelines. The phenomenon wasn’t unique to Kansas. The four neighboring states had similar mixes of top occupations, though managers made it into the top 10 in Colorado, Missouri and Oklahoma, and driving trucks was the second most-common occupation in Nebraska.
Salary data doesn’t include other sources of income people may have, such as public assistance, child support, pensions and investments, Hill said, so it may underestimate households’ purchasing power. It also doesn’t account for people working multiple jobs or for legal subminimum wage, which can be paid to people with disabilities under some circumstances, he said.
Data from the U.S. Census Bureau for Topeka showed about 43 percent of all households had an income of less than $35,000, Hill said, but only about 31 percent of families did. (Nonfamily households could include people living with roommates, for example.) Only about 17 percent of households headed by a married couple earned less than $35,000, he said. That data includes forms of income other than wages.
Families can be in a difficult position because people tend to marry and begin having children early in their careers, so their expenses go up before they hit their prime earning years, Hill said. On the other hand, people also are beginning to accumulate home equity in those years and can use other methods to help, he said.
“You’ve got to keep in mind, people will borrow,” he said.
About half of school-aged children in Kansas are receiving free or reduced-cost lunches because of their family income, McKay said, so safety net programs can help families bridge the gap. Those programs often aren’t enough, however, for low-income families, she said.
“They’re going without things. They’re skipping meals,” she said. “They’re deciding which bills to pay.”
Read more from the Topeka Capital Journal here.