Executive Summary and Introduction

National Table #1 – Single Adult Living Wage vs. Minimum Wage by State
National Table #2 – Median Student Debt and Monthly Payment for Graduates by State
National Table #3 – Traditional Single Adult Living Wage vs. Student Debt Living Wage by State

Executive Summary

Education is often lauded as the great equalizer and a solution to the growing income gap. But, as the cost of college breaks family budgets and requires students to take out thousands of dollars in educational loans, wages, even for those with a degree, have not kept pace, and have even declined in many occupations.

For millions of people in the United States, it is difficult to pay even for basic expenses like food or housing, let alone to put money aside for emergency or retirement savings or to pay off student debt.

Beginning in 1999, the Alliance for a Just Society produced an annual living wage report calculating how much it actually costs to make ends meet, including paying for basic expenses like food and housing, as well as the ability to save for the future. Now that the Alliance for a Just Society is part of People’s Action Institute, this report series will continue that work to show how current state and federal minimum wage rates fall short of providing a true living wage.

In 42 states and in Washington, D.C., the living wage for a single adult is greater than $15 per hour, and in 26 states it exceeds $16 per hour. Nationally, the living wage for a single adult is closer to $17.28 an hour. When adding in repayment of student debt, the national living wage for a single adult rises to $18.67 per hour.

For families with children, the cost to make ends meet is even higher. In the 18 states and Washington, D.C. where a living wage for other family sizes was calculated, the living wage for a single adult with two children ranges from $26.39 in South Carolina to $41.11 in California, and $43.86 in Washington, D.C.

While 43 million people in the United States have student loan debt, the distribution and impact of that debt is not equal. Students of color and their families are more likely to take out student loans, and, while the average starting wage for those with a bachelor’s degree is enough to cover expenses including student debt, majors with more women and people of color see starting wages below the cost of living. And, because women and people of color are overrepresented in low-wage work due to underlying structural issues and discrimination, they are more likely to struggle to pay off student loans after graduation.

When workers aren’t paid enough to cover their cost of living, set aside some savings and pay their student debt, something has to give. That may mean foregoing payments on their student loans, or it might mean leaving the utility bill unpaid to put food on the table.

Introduction

Attending college should not require students to be saddled with thousands of dollars in debt after graduation, and those who graduate with debt need jobs that pay enough to make ends meet, including the ability to repay their loans.

What does it really take to make ends meet? Is a person really making ends meet if they or their family lacks access to quality health care, to affordable child care, to an affordable place to live, or doesn’t have enough left over to save for emergencies and eventual retirement? What if a person can pay basic expenses, but does not have enough to pay for college or to repay their student loans?

Millions of people in the United States find it is difficult to even pay for basic expenses like food or housing, let alone have enough to put some aside for emergency or retirement savings, or to pay off their student debt.
Beginning in 1999, the Alliance for a Just Society produced an annual living wage report calculating how much it actually costs to make ends meet for households in select states. Last year, for the first time, the report included a living wage calculation for all 50 states and Washington, D.C. Now that the Alliance for a Just Society is part of People’s Action Institute, this report series will continue to examine what it takes to make ends meet and show how current state and federal minimum wages rates fall short of providing a true living wage.

A living wage represents the amount a full-time worker needs to be paid to make ends meet, including the ability to set money aside for savings and emergencies. In urban and rural states across the country, the living wage is consistently far higher than the minimum wage, and higher than most people would guess.

Traditionally, though, a living wage does not include debt payments. This year, we also include a student debt living wage that takes into account the median monthly student debt payment in each state.

In 42 states and in Washington, D.C., the living wage for a single adult is greater than $15 per hour. No state has a living wage for a single adult that is less than $14.50 an hour. Nationally, the living wage for a single adult is closer to $17.28 an hour. When adding in repayment of student debt, the national living wage for a single adult rises to $18.67 per hour.

For working families with children, the cost to make ends meet is even higher.

In the 18 states and Washington, D.C. where a living wage for other family sizes was calculated, the living wage for a single adult with two children ranges from $26.39 in South Carolina to $41.11 in California, and $43.86 in Washington, D.C.

While 43 million people in the United States have student loan debt, that debt is neither distributed equally nor is the impact of that debt the same for all borrowers. Students of color are more likely to take out student loans than are white students. And, because hiring discrimination and systemic and historical oppression mean women and people of color are more likely to be paid low wages, they are more likely to struggle to pay off their student loans after graduation.

When workers are paid a wage that falls short of their cost of living, including savings and student debt payments, something has to give. Working families make tough choices on what to cut. Yet, when it comes to buying food versus making a student debt payment, the choice for most people is clear.

Students should not be saddled with thousands of dollars in debt after graduation. However, those who do graduate with debt need jobs that pay enough to make ends meet. And, making ends meet should include not only basic necessities like food and housing, but the ability to put aside money for savings and to pay off existing debt.

Panel 1

The Living Wage

While 29 states and Washington, D.C. have a state minimum wage that is higher than the federal minimum wage, all fall well short of an actual living wage. The federal living wage for a single adult, as a weighted average of states’ living wages, is $17.28 per hour, or nearly $36,000 annually. The federal minimum wage of $7.25 provides just 42 percent of that.

As previous research has shown, there are not enough living wage jobs to go around. This year’s research shows an increase in the living wage for a single adult in nearly every state and at the national level. A combination of state and local campaigns and, in some cases, automatic increases secured in previous years led to a large number of cities and counties, as well as 17 states and Washington, D.C., to increase their minimum wage in the last year. While these increases have made a significant difference in the lives of low-wage workers, even these increases have not provided workers with a living wage.

Forty-three states have a living wage above $15 per hour for a single adult, and in no state can a single adult make ends meet on less than $14.50 per hour. Yet, only nine states have a minimum wage greater than $9 per hour and while California and Massachusetts reach $10 per hour, each still falls well short of providing a living wage. Even Washington, D.C.’s recent minimum wage increase to $11.50 provides only 52 percent of the District’s single adult living wage.

Additionally, 43 states and Washington, D.C. have a lower minimum wage for tipped workers than for non-tipped workers. Tipped occupations such as restaurant service are often seen as a way to help students through college. However, half of tipped workers are 30 years or older and tipped workers live in poverty at three times the rate of the overall workforce. And, with women and people of color more likely to work in tipped occupations, separate tipped subminimum wages only keep tipped workers farther from financial stability.

The success of higher minimum wages at the city and county level, as well as lower poverty rates for workers in states that do not have a separate base wage for tipped workers, shows that even greater increases and one fair wage for all workers can help workers and their communities to thrive.

Panel 2

Student Debt

At $1.3 trillion, student loan debt is second only to mortgage debt as the largest share of all consumer debt, with 43 million borrowers nationwide. Increased tuition, room and board, and other fees – along with stagnant or declining real wages – leave families unable to afford the cost of attending even once-affordable public universities. Instead, students and their families take out thousands of dollars in student loans, adding costs to graduates’ and sometimes families’ budgets for years to come.

In 2006, the average total cost of attending a public 4-year university, including tuition, room and board, and other fees, was $12,796 per year, or about $15,287 in 2016 dollars. Today, that figure has risen to $19,548 per year. State investment in higher education has dropped across the country in recent years, leaving students and their families to pick up a larger percentage of the total cost of attending college.

That higher price tag for students and their families has not coincided with higher wages. Instead, wages have largely remained stagnant or dropped over the past several years, leaving families with less money and greater costs. State and federal grants and scholarships have failed to keep up, resulting in 70 percent of students relying on loans to help make up the difference.

In 2015, the national median student debt load for graduates of all higher education institutions was $23,581, with a median payment of $242 per month. Across the country, the median student debt load for graduates upon starting repayment ranges from a low of $14,104 in Wyoming, where most students attend 2-year colleges, to a high of $28,205 in Hawaii, and $32,282 in Washington, D.C.

Due to some of the same factors blocking many people of color from high-wage employment, student debt especially impacts students of color and their families. A 2013 study found that while 65 percent of white households borrowed money for college, 67 percent of Latinos and 80 percent of black households borrowed. Additionally, black and Latino students are more likely to attend for-profit institutions, which notoriously require students to take out significant student loan debt, and are less likely to complete their degree, leaving them with student loan debt but less access to high-wage employment.

Panel 3

State Findings

Across the country, the living wage for a single adult ranges from $14.50 per hour in South Dakota to $21.73 in Hawaii, and $21.92 per hour in Washington, D.C. For families with children, though, the cost of living can be even greater. In addition to the living wage for a single adult, the living wage for four other family sizes was calculated for 18 states and for the District of Columbia. These other household sizes illustrate the added costs for families with children, including the high cost of child care. While no states’ minimum wage provides a living wage for a single adult, those wage floors fall even shorter of providing enough for people with children to make ends meet.

California

The living wage for a single adult is $19.90 per hour. This reflects what is needed to meet basic needs and maintain some ability to deal with emergencies and plan ahead. The living wage for a single adult with two children is $41.11 per hour. For those paying off student debt after graduating from college, the living wage for a single adult increases to $21.05, based on the state’s median student debt payment.

California’s minimum wage of $10 does not allow working families to make ends meet. The state’s minimum wage provides only 50 percent of a living wage for a single adult and less than a quarter of the living wage for a single adult with two children.

Connecticut

The living wage for a single adult is $19.57 per hour. This reflects what is needed to meet basic needs and maintain some ability to deal with emergencies and plan ahead. The living wage for a single adult with two children is $41.09 per hour. For those paying off student debt after graduating from college, the living wage for a single adult increases to $20.97, based on the state’s median student debt payment.

Connecticut’s minimum wage of $9.60 does not allow working families to make ends meet. The state’s minimum wage provides only 49 percent of a living wage for a single adult and less than a quarter of the living wage for a single adult with two children.

District of Columbia

The living wage for a single adult is $21.92 per hour. This reflects what is needed to meet basic needs and maintain some ability to deal with emergencies and plan ahead. The living wage for a single adult with two children is $43.86 per hour. For those paying off student debt after graduating from college, the living wage for a single adult increases to $23.83, based on the state’s median student debt payment.

Washington, D.C.’s minimum wage of $11.50 does not allow working families to make ends meet. The District’s minimum wage provides only 52 percent of a living wage for a single adult and just over a quarter of the living wage for a single adult with two children.

Florida

The living wage for a single adult is $17.29 per hour. This reflects what is needed to meet basic needs and maintain some ability to deal with emergencies and plan ahead. The living wage for a single adult with two children is $30.10 per hour. For those paying off student debt after graduating from college, the living wage for a single adult increases to $18.63, based on the state’s median student debt payment.

Florida’s minimum wage of $8.05 does not allow working families to make ends meet. The state’s minimum wage provides only 47 percent of a living wage for a single adult and just over a quarter of the living wage for a single adult with two children.

Idaho

The living wage for a single adult is $14.90 per hour. This reflects what is needed to meet basic needs and maintain some ability to deal with emergencies and plan ahead. The living wage for a single adult with two children is $26.85 per hour. For those paying off student debt after graduating from college, the living wage for a single adult increases to $16.56, based on the state’s median student debt payment.

Idaho’s minimum wage of $7.25 does not allow working families to make ends meet. The state’s minimum wage provides only 49 percent of a living wage for a single adult and just over a quarter of the living wage for a single adult with two children.

Illinois

The living wage for a single adult is $17.57 per hour. This reflects what is needed to meet basic needs and maintain some ability to deal with emergencies and plan ahead. The living wage for a single adult with two children is $35.33 per hour. For those paying off student debt after graduating from college, the living wage for a single adult increases to $18.90, based on the state’s median student debt payment.

Illinois’ minimum wage of $8.25 does not allow working families to make ends meet. The state’s minimum wage provides only 47 percent of a living wage for a single adult and less than a quarter of the living wage for a single adult with two children.

Iowa

The living wage for a single adult is $15.10 per hour. This reflects what is needed to meet basic needs and maintain some ability to deal with emergencies and plan ahead. The living wage for a single adult with two children is $28.32 per hour. For those paying off student debt after graduating from college, the living wage for a single adult increases to $16.74, based on the state’s median student debt payment.

Iowa’s minimum wage of $7.25 does not allow working families to make ends meet. The state’s minimum wage provides only 48 percent of a living wage for a single adult and just over a quarter of the living wage for a single adult with two children.

Kansas

The living wage for a single adult is $15.23 per hour. This reflects what is needed to meet basic needs and maintain some ability to deal with emergencies and plan ahead. The living wage for a single adult with two children is $28.75 per hour. For those paying off student debt after graduating from college, the living wage for a single adult increases to $16.48, based on the state’s median student debt payment.

Kansas’ minimum wage of $7.25 does not allow working families to make ends meet. The state’s minimum wage provides only 48 percent of a living wage for a single adult and a quarter of the living wage for a single adult with two children.

Louisiana

The living wage for a single adult is $15.87 per hour. This reflects what is needed to meet basic needs and maintain some ability to deal with emergencies and plan ahead. The living wage for a single adult with two children is $28.44 per hour. For those paying off student debt after graduating from college, the living wage for a single adult increases to $17.21, based on the state’s median student debt payment.

Louisiana’s minimum wage of $7.25 does not allow working families to make ends meet. The state’s minimum wage provides only 46 percent of a living wage for a single adult and a quarter of the living wage for a single adult with two children.

Maine

The living wage for a single adult is $16.27 per hour. This reflects what is needed to meet basic needs and maintain some ability to deal with emergencies and plan ahead. The living wage for a single adult with two children is $29.87 per hour. For those paying off student debt after graduating from college, the living wage for a single adult increases to $17.71, based on the state’s median student debt payment.

Maine’s minimum wage of $7.50 does not allow working families to make ends meet. The state’s minimum wage provides only 46 percent of a living wage for a single adult and a quarter of the living wage for a single adult with two children.

Michigan

The living wage for a single adult is $15.78 per hour. This reflects what is needed to meet basic needs and maintain some ability to deal with emergencies and plan ahead. The living wage for a single adult with two children is $28.79 per hour. For those paying off student debt after graduating from college, the living wage for a single adult increases to $17.16, based on the state’s median student debt payment.

Michigan’s minimum wage of $8.50 does not allow working families to make ends meet. The state’s minimum wage provides only 54 percent of a living wage for a single adult and just under one-third of the living wage for a single adult with two children.

Montana

The living wage for a single adult is $14.93 per hour. This reflects what is needed to meet basic needs and maintain some ability to deal with emergencies and plan ahead. The living wage for a single adult with two children is $28.20 per hour. For those paying off student debt after graduating from college, the living wage for a single adult increases to $16.23, based on the state’s median student debt payment.

Montana’s minimum wage of $8.05 does not allow working families to make ends meet. The state’s minimum wage provides only 54 percent of a living wage for a single adult and just over a quarter of the living wage for a single adult with two children.

New Mexico

The living wage for a single adult is $15.60 per hour. This reflects what is needed to meet basic needs and maintain some ability to deal with emergencies and plan ahead. The living wage for a single adult with two children is $27.69 per hour. For those paying off student debt after graduating from college, the living wage for a single adult increases to $17.06, based on the state’s median student debt payment.

New Mexico’s minimum wage of $7.50 does not allow working families to make ends meet. The state’s minimum wage provides only 48 percent of a living wage for a single adult and just over a quarter of the living wage for a single adult with two children.

New York

The living wage for a single adult is $20.42 per hour. This reflects what is needed to meet basic needs and maintain some ability to deal with emergencies and plan ahead. The living wage for a single adult with two children is $39.58 per hour. For those paying off student debt after graduating from college, the living wage for a single adult increases to $21.62, based on the state’s median student debt payment.

New York’s minimum wage of $9.00 does not allow working families to make ends meet. The state’s minimum wage provides only 44 percent of a living wage for a single adult and less than a quarter of the living wage for a single adult with two children.

Oregon

The living wage for a single adult is $16.49 per hour. This reflects what is needed to meet basic needs and maintain some ability to deal with emergencies and plan ahead. The living wage for a single adult with two children is $32.20 per hour. For those paying off student debt after graduating from college, the living wage for a single adult increases to $18.10, based on the state’s median student debt payment.

Oregon’s minimum wage of $9.75 does not allow working families to make ends meet. The state’s minimum wage provides only 59 percent of a living wage for a single adult and just under one-third of the living wage for a single adult with two children.

South Carolina

The living wage for a single adult is $15.79 per hour. This reflects what is needed to meet basic needs and maintain some ability to deal with emergencies and plan ahead. The living wage for a single adult with two children is $26.39 per hour. For those paying off student debt after graduating from college, the living wage for a single adult increases to $17.24, based on the state’s median student debt payment.

South Carolina’s minimum wage of $7.25 does not allow working families to make ends meet. The state’s minimum wage provides only 46 percent of a living wage for a single adult and just over a quarter of the living wage for a single adult with two children.

Virginia

The living wage for a single adult is $18.95 per hour. This reflects what is needed to meet basic needs and maintain some ability to deal with emergencies and plan ahead. The living wage for a single adult with two children is $36.41 per hour. For those paying off student debt after graduating from college, the living wage for a single adult increases to $20.49, based on the state’s median student debt payment.

Virginia’s minimum wage of $7.25 does not allow working families to make ends meet. The state’s minimum wage provides only 38 percent of a living wage for a single adult and just one-fifth of the living wage for a single adult with two children.

Washington

The living wage for a single adult is $17.59 per hour. This reflects what is needed to meet basic needs and maintain some ability to deal with emergencies and plan ahead. The living wage for a single adult with two children is $33.58 per hour. For those paying off student debt after graduating from college, the living wage for a single adult increases to $18.93, based on the state’s median student debt payment.

Washington’s minimum wage of $9.47 does not allow working families to make ends meet. The state’s minimum wage provides only 54 percent of a living wage for a single adult and just over a quarter of the living wage for a single adult with two children.

Wisconsin

The living wage for a single adult is $15.69 per hour. This reflects what is needed to meet basic needs and maintain some ability to deal with emergencies and plan ahead. The living wage for a single adult with two children is $31.02 per hour. For those paying off student debt after graduating from college, the living wage for a single adult increases to $17.20, based on the state’s median student debt payment.

Wisconsin’s minimum wage of $7.25 does not allow working families to make ends meet. The state’s minimum wage provides only 46 percent of a living wage for a single adult and less than a quarter of the living wage for a single adult with two children.

Panel 4

Student Debt and the Living Wage

While traditionally living wage calculations have not included any debt payments or payments for college, the reality is that workers paying for college or paying off student debts actually face a higher cost of living than those who are not. Even for households with incomes that otherwise approach a typical living wage, adding hundreds of dollars per month for education can eliminate the possibility of financial stability.

When student debt payments are added to the traditional living wage, the national student debt living wage for a single adult climbs to $18.67 per hour. Across the country, adding in median monthly student debt payments would increase single adult living wages to more than $16 per hour in every state and more than $17 per hour in most states.

Though the average starting salary for bachelor’s degree graduates is enough to cover the student debt living wage for a single adult, at $50,651, or $24.35 per hour, salaries vary widely by major. For example, majors with a high proportion of white males, such as computer and information sciences, see starting salaries of $65,000. At the same time, English and Psychology, which see more women and people of color, have median starting salaries of $35,000 and $32,750 per year, respectively – lower even than the traditional living wage for a single adult. As with employment, both overt and systemic discrimination also play a part in college majors’ demographics, reinforcing a system where women and people of color are more likely to be in lower-paying work after graduation.

In fact, overall women and people of color with bachelor’s degrees are paid significantly less than white males. For example, black men and Latinos with bachelor’s degrees are paid 78 cents and 81 cents, respectively, for every dollar paid to similarly-educated white men. Black women and Latinas with degrees are paid only 72 cents and 69 cents for every dollar paid to white men with degrees. These disparities are caused by discrimination in hiring, as well as systemic barriers and assumptions about what work is valued. This makes it more difficult for women and people of color to make ends meet, to cover basic expenses and to pay off their student debt.