Report: Massachusetts wages lag behind living expenses
Caitlin Yoshiko Kandil | 5/22/2013, 8 a.m.
An estimated four out of 10 two-parent households in Massachusetts aren’t earning enough to make ends meet, according to a new report released by Crittenton Women’s Union, a Boston-based social service provider.
CWU’s research shows that in Massachusetts, a family of four made up of two parents and two young children needs at least $73,776 per year to meet their basic expenses without government assistance. This number includes bare bones housing, utilities, childcare, food, transportation, health care, taxes and personal items — and no luxuries such as eating out, entertainment or vacations, or financial investments such as paying off loans or building up a savings account.
At the same time, the median income throughout the state is far below this index, at $54,899 for individuals with a bachelor’s degree, $38,134 for those with an associate’s, $31,601 for a high school degree or GED and $22,513 for less than a high school degree.
“One of the most glaring statistics to jump out from this research is that it’s not just the unemployed or the chronically underemployed — it’s working people who are struggling,” says Ruth Liberman, CWU’s vice president of public policy and one of the authors of the study. “That really defies our American notion that if you work, you’ll be fine. That’s not the case anymore.”
The CWU report, “Massachusetts Economic Independence Index 2013,” also shows that the cost of living has been steadily rising over the past three years, while wages have dipped. Since 2010, living expenses have increased nearly 7 percent — outpacing the rate of inflation — which CWU attributes to soaring food, transportation and health care prices. At the same time, workers have seen another 7 percent drop from their paychecks.
CWU’s Mass Index is designed to improve on the federal poverty level as a measure of what families need to survive. The federal poverty level was developed in the 1960s around the cost of food, which at that time was the most expensive item in a family’s budget.The government calculated the price of groceries and multiplied it by three, and has been adjusting that number for inflation ever since.
“Everybody agrees, across the board, that it’s not a very useful measure for what you really need to make ends meet, and for who’s poor,” says Deborah Connolly Youngblood, CWU’s vice president of research and innovation, and another author of the study.
Youngblood points out that the federal poverty measure doesn’t take geographic variation into consideration — “so it’s the same if you live in Mississippi [or] if you live in San Francisco” — and that today, child care, not food, takes up the biggest portion of a family’s budget.
The numbers CWU projects as the cost of living in Massachusetts are about three times the federal poverty level, which means that far more people are struggling to get by than the government’s numbers indicate. Simply relying on federal poverty level numbers, Liberman says, “means that we’re really undercounting and under-serving those who are in need.”