Decades of stagnant wages, rising costs and frequent economic crises in the US have put millions of Americans on the financial edge. Just to make ends meet, a family with one adult and two children needs to earn an average of $35.80 an hour, an income level that is beyond what most households across the country earn, according to a new 2022 County Health study. Classifications.
Of the nation’s more than 3,100 counties, families in only two counties earn enough to meet their county’s baseline for a living wage, said Keith Gennuso, lead author of the study. A living wage covers food, housing, child care, health care, and transportation costs, but does not provide retirement savings, higher education costs, emergency savings, or other expenses that can help families gain long-term financial security. term.
An hourly wage of $35.80 equates to about $74,400 in annual income. The median hourly wage stood at $31.73 in March, or about $66,000 annually, according to the latest government data. That means many families are falling behind in their ability to afford basics, said Marjory Givens, co-director of the County Health Rankings, which is a program of the University of Wisconsin Population Health Institute.
“This is definitely a clear indication that financial security is out of reach for many,” Givens told CBS MoneyWatch. “It’s a call to action.”
The two counties where earnings meet or exceed benchmark living wages are Los Alamos County in New Mexico and Williamson County in Tennessee, according to the analysis, which was based on 2021 data from the MIT Living Wage Calculator. by MIT professor Amy Glasmeier. Those two counties “seem to be relatively high-income counties with lower cost of living and good health outcomes,” Givens noted.
Los Alamos County, home to the Los Alamos National Laboratory, has a median household income of more than $111,000. Williamson County in Tennessee, near Nashville, has a median household income of about $118,000.
A living wage is not uniform across the country, with some areas, such as expensive coastal cities like New York and Los Angeles, having significantly higher basic costs than other regions. The study found that the lowest living wage is $29.81 an hour, which is enough for basic needs in Holmes County, Mississippi, and peaks at $65.45 an hour in San Francisco.
Inflation erodes wage gains
Workers are now seeing significant wage increases amid a labor shortage, but those increases are being gobbled up since inflation far exceeds the typical wage increase. That is putting more workers under financial stress as they seek to regain their footing amid the ongoing pandemic.
The county’s health rankings took advantage of 2021 data but don’t fully reflect the rise in inflation toward the end of 2021 and into 2022, Givens noted.
At the same time, families continue to be financially hurt by long-term structural problems such as sexism and racism, and the report highlights the gender pay gap as detrimental to the well-being of families and the economy. Women earn about 81 cents for every dollar men earn, with an even larger gap in southern and western plains states, the study found.
The pandemic exacerbated financial struggles facing many women in the workforce, with the female labor force participation rate falling to a 30-year low. In some cases, that was because women with children had to stop working amid childcare shortages and other challenges.
“We already knew that women experience discriminatory practices in the workplace, and our systems do not help women fully participate in the workforce,” Givens said. “These are systems and structures that we need to attend to.”
Unaffordable child care in all counties
Child care is generally considered affordable if it costs less than 7% of a household’s income, but the study found no US county where child care for two children is at or below that threshold. That’s a major barrier for families and child care providers themselves, whose low average wages make it virtually impossible to afford outside care for their own children, the study found.
“A child care provider with two kids probably couldn’t even provide their own services — it would be 50% of their income,” Gennuso said.
Older children are also being ripped off in much of the country, and the study found that public schools are underfunded in many parts of the country, the researchers said. Roughly half of all counties in the US operate with a public school funding shortfall, needing an average of an additional $3,000 per student, and have the largest shortfalls in southern states.
“We know that a well-funded school can put a child on the path to success and a healthy life,” Gennuso said. “Schools need the resources to provide that quality education, and we know that’s not the reality in the US.”