Wage gap

Minimum wage can’t sustain local livability

The Region 9 Economic Development District has released information on “livable wages” for the communities in Region 9’s five counties.

According to the statistics, a single person renting would require a lower income to live in Cortez – $10.66 per hour, working 40 hours a week – than in any of the region’s other communities.

In ascending order, the computed livable wage for those communities is: Mancos, $11.40; Dolores, $11.52; Pagosa Springs, $11.67; Bayfield, $11.96; Durango, $12.10; Rico $12.11; Dove Creek, $12.11; Silverton, $12.55; and Ignacio, $12.68.

A livable wage is defined as “the level of income necessary to support a given size of household. When one earns less than a livable wage, he or she is forced to make undesirable choices, such as working two or more jobs, longer hours or giving up basic items such as health insurance or licensed child care.”

The issue of a livable wage has been in the news most recently when Wal-Mart threatened to cancel three of the six stores it had planned to open in Washington, D.C., if the City Council passed legislation that would require it to pay a higher wage than the local minimum. According to The New York Times, the bill, called The Large Retailer Accountability Act, would force any store larger than 75,000 square feet, and whose parent company has at least $1 billion a year in revenue, to pay $12.50 per hour. Minimum wage in the district is $8.25.

A point in Wal-Mart’s favor is that such costs are passed on to consumers, including minimum-wage workers the policies are intended to help. That’s a point Wal-Mart makes whenever any municipality attempts to enforce local restrictions, including architectural and landscaping standards, and while it’s undoubtedly true, that argument also is oversimplistic.

It’s hard to believe that a raise of $57.60 a week would enable a low-earning Cortez resident to live as comfortably in Durango, or that earning an additional $1.84 an hour would compensate for the added costs of living in Washington, although major cities do have a larger stock of low-income housing available and much more retail competition.

But the real message to be taken from such statistics is that there’s a gap between what it costs to live here – or, probably anywhere – and what a minimum-wage employee can earn at one full-time job. Colorado’s minimum wage currently is $7.78, which creates a shortfall for Durango workers of almost $9,000 a year.

Although solid arguments can be made that the marketplace rather than the government should (and does) dictate wages, that minimum wage is intended to protect young workers just starting out rather than be a long-term plateau, and that individuals have many ways to mitigate the cost of living, the effects of poverty spread beyond individuals and throughout the community. High unemployment rates and low skills trap a segment of the population, and in some communities, that segment is large and economically significant.

The gap is troubling. It should be a message to workers to improve their employability and to community leaders that the local workforce is not well-positioned for a vibrant economy. Although it is not an issue that can be quickly resolved, it is definitely not one that should be ignored.