Living Wage Calculator

Recently, I came across the Living Wage Calculator from MIT, and would be curious to know what people think about it: https://livingwage.mit.edu/

They need to add a row for “Savings” under the “Typical Expenses” section. It’s atrocious that they don’t. Someone making a “living wage” will have nearly zero dollars leftover to put into savings according to their stats, which puts people into highly precarious situations if they are without savings, let alone a retirement account.

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Brilliant insight, Sally!

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They use an outdated state minimum wage, and in a lot of places (in California, anyway), local jurisdictions have higher minimum wages. For the City of Mountain View, the Calculator lists the minimum wage as $12 (the state minimum was $12 in 2019 and has risen a dollar each year since then- now $15), but it’s actually $17.50. In our county’s jurisdictions alone, minimum wage can vary by almost $2 per hour, depending on the jurisdiction where you work. I’d like to see the study at least make that explicit in the description if it can’t account for local minimum wage. And if they’re going to put this tool out there, they ought to at least update it annually.

Sally and Ali make great points! An alternative measure that may be useful depending on the goals/content area of the project is the Self-Sufficiency Standard developed by the UW’s Center for Women’s Welfare. Of course, with any measure there are limitations and usually lacking of context. I’m curious if others like these come to mind that we can add to this thread?

@TaylorB We’ve used the Self Sufficiency Standard in our Community Health Needs Assessment for local hospitals and public health accreditation. I really like it in concept, but we ran into two problems. First, unsurprisingly, some of the data they are relying on isn’t measuring what they think it is (at least here). The housing costs are based on a survey that basically only our housing authority fills out, which suggests average rents are about 50% lower than they really are. We adjusted that and I feel ok using it for a guideline.

The second problem is more interesting for this group–the whole point of the self sufficiency standard is that it looks different for different types of households… but no one in a leadership position in my community wants to talk about how different households have different self sufficiency needs, they want to talk about ONE NUMBER that means self-sufficiency, and use census data to say who is above or below that number. Which removes any nuance from the whole conversation. We ended up publishing both–several household profiles and a general self-sufficiency index target. I’m not in love with it, but I’m glad there is some level of nuance alongside the easy-to-talk-about single number.

We used to use the MIT Living Wage calculator but we have stopped for two reasons. Between 2019 and 2020, they calculated living wage in a new way, add a cell phone and internet access as essential items, a decision that I totally agree with, and then also adding an opaque category called “civic” which in the definitions included having a pet, toys, hobbies, attending events, etc. The internet and cell phone part was carefully calculated, the civic add-on, not at all. This also meant that 2020 is not comparable to previous years. The second reason that we stopped using MIT living wage was that they don’t save previous data, so when we missed pulling the county level data for 2019, they were not able to retrieve previous year values. See page 7 of their technical documentation, https://livingwage.mit.edu/resources/Living-Wage-Users-Guide-Technical-Documentation-2021-12-28.pdf

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Another option to consider is the Family Budget Calculator from the Economic Policy Institute:
https://www.epi.org/resources/budget/

The intention is a bit different than the minimum wage calculator, but, in my opinion, the numbers generated are more realistic.

Even so, we make adjustments for local conditions. We work with our regional planning agency to collect rent data and substitute the median values for the rent figures in the calculator, which are too low for our community. We also adjust the costs for childcare using state specific information from Childcare Aware. My community recently collected child care cost data and we will use that in our next iteration of local living wages.

Cliff Cook
Cambridge, MA

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This is a wonderful conversation. Thank you so much for starting it @mbopaiah! I think that tools like living wage calculators can be helpful to the extent that they are transparent about the choices and assumptions that are embedded in them. Any time we’re using data to generate averages or ranges that apply to large groups of people, we will lose individual nuance. Each calculation will make fundamental assumptions about what is an “acceptable minimum” or a “realistic average cost” for various parts of “living”. As long as the tool is clear about the purpose of the calculations, the assumptions that are being baked in, and who gets to make these decisions, like most of the ones linked here are, then they can be really useful tools.

To keep the conversation going:

Does anyone know of a participatory living wage calculator, something along the lines of participatory budgeting that civic tech is producing in cities around the world?