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Economic Yardsticks and Social Policy

Yardsticks

In Looking Up at the Bottom Line, Richard R. Troxell asks us to envision America’s socioeconomic structure as a yardstick, where approximately one foot of its length is taken up by students, who are not expected to make a significant financial contribution to society because their full-time job is learning. Another foot of its length represents those who have finished their years of toil, and who are no longer expected to make a significant financial contribution to society.

The middle “foot” represents the workers, and this section of society supports not only itself but the other two sections as well. These days, it can’t even sustain itself, and it’s only going to get worse. As the rather rudimentary graphic on this page illustrates, some members of the student group will be moving into the working group, but a great many more members of the working group will be moving into the retired group.

Already, the situation of the middle group is grim. As Troxell points out in chapter six, this middle section includes about 20 million people who are working at, or slightly above, an hourly wage of $7.25 per hour, which is not enough for basic rental housing as individuals. He says,

The work ethic is there; however, the wage is not.

The Universal Living Wage would fix this. The idea is based on three premises: a 40-hour work week; the expenditure of no more than 30% of one’s income on housing; and a minimum wage indexed to the local cost of housing. The Universal Living Wage, Troxell states, will stimulate the overall demand for goods and services, which is beneficial to the economy. He writes,

Families become dramatically more credit-worthy and can avail themselves of more goods and more services. The overall demand for goods and services will increase demand for low-wage workers as industry responds to this demand and stimulation.

However, until the Universal Living Wage becomes reality, at least we have excellent visual tools to help us understand the precipitating factors. The Living Wage Calculator is an online tool created by Dr. Amy K. Glasmeier, which shows exactly how poor (almost) everybody is. The University of Pennsylvania gets part of the credit too, for being the institution at which Glasmeier does her work. (Don’t miss the “About” page.)

Packed with information, yet simple to understand, the Living Wage Calculator’s informational tables reveal what it takes to make a living wage in your community. Pick your state, and then pick your county. Read it and weep.

This calculator uses a different definition of a living wage than the one mentioned above. In this context, a living wage is defined as what it takes to support a family if the sole provider works full-time. We’re not talking about a middle-class lifestyle. This is the least amount you can get by on, to maintain the standard of the working poor. In a family with two adults and two kids, somebody’s got to bring in $28.84 per hour, or $59,000 a year before taxes, and still they will be hanging on by their fingernails. Glasmeier says,

Our tool is designed to provide a minimum estimate of the cost of living for low wage families… The original calculator was modeled after the Economic Policy Institutes’s metropolitan living wage tool. Users should know there are many researchers contributing tools and resources to the movement to achieve living wages. Diana Pearce at the University of Washington, Seattle is an important contributor to the living wage movement.

No researcher in this field, or any other, can or should claim to have the final word on exactly what is going on. Even sociology and economics are vulnerable to the Uncertainty Principle — where something is and how fast it’s going cannot be known at the same time. These fields and many others are also at risk of being influenced by the Schrodinger’s Cat phenomenon: The very act of studying something changes it.

So it’s kind of cool when a scientist will fess up to not being the ultimate authority, and admit that many other intelligent and well-meaning people are working on a problem, and, while they are not all getting the same answers at the moment, they are all intelligent and well-meaning nonetheless. Such a refreshing attitude is worth remarking on.

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Source: “Looking Up at the Bottom Line,” Amazon.com
Source: “Introduction to the Living Wage Calculator,” LivingWage.com
Background image by Charlyn W (Charlyn Wee), used under its Creative Commons license. (Thanks to Julie Thomas Brown.)