Making ends meet can be difficult for any low-wage worker, but for households saddled with debt, supporting a family on low wages can be next to impossible.

Across the country, families are finding that the amount they need to earn to make ends meet — or a living wage — far exceeds minimum-wage incomes. And, when you factor in the debt loads many households face, it is clear that our nation’s families are falling short of meeting their basic needs.

A family balance sheet is comprised of income, assets and liabilities. Non-wealthy families are witnessing a steep decline in real earnings, while living wages remain out of reach for many. Meanwhile, systemic inequities allow the affluent to accumulate more wealth, as the rest of America finds itself with fewer assets and more debt, reducing their ability to climb the economic ladder.

As net worth for the non-wealthy declines, families across the nation face increasingly stressful kitchen table conversations, as they must choose what to cut to survive. Ultimately, when off-balance families are unable to gain a firm fiscal foothold, they cannot build a strong financial foundation that allows them to weather financial storms and pursue a life of prosperity.

The Alliance for a Just Society’s living wage study examines what it takes to get by in 10 states (Colorado, Connecticut, Idaho, Florida, Maine, Montana, New York, Oregon, Virginia and Washington State) and in New York City. The study calculates living wage levels in each geographic area for different household structures while putting those numbers in the context of family debt.

On a national level, the study examined the Federal Reserve’s 2010 Survey of Consumer Finances, specifically examining two groups: those whose incomes amount to $15 per hour of full-time income or lower, and those with higher incomes.

The study finds that low-income households bear a disproportionate debt burden relative to income; higher-income families have 2-3 times more income per dollar of debt, depending on the type of debt examined, making them better able to pay off their balances. Despite this, the vast majority of low-income earners continue to prioritize their debt payments.

The 2014 study’s key national findings include:

  • When measuring ability to pay, low-income households comparatively lack the resources to handle their debt loads, relative to income. This group bears a disproportionate debt burden.
  • Low-income households have little to fall back on in case of emergencies, and live on the brink of financial insolvency.
  • Nine of 10 low-income households make debt payments a priority, not reporting payments more than 60 days past due.

On the state level, the study also finds that current minimum wage rates fall well short of living wages, with minimum wages providing less than half of the living wage for a single adult in seven of the 10 states studied, and less than one-third of the living wage for a single adult with two children in all 10 states.

The report examines what workers need to earn in a full-time job for their families to make ends meet.1 The study assumes workers receive no public assistance and covers five distinct household types, from a single individual to a married couple with two children.

The 2014 study’s findings for the 10 states analyzed and New York City include:

  • In Households Comprised of a Single Individual: Living wages range from $14.40 in Montana to $22.49 in New York City.
  • In Households Comprised of a Single Adult with a School-Age Child (Age 6-8): Living wages range from $19.72 in Idaho to $31.23 in New York City.
  • In Households Comprised of a Single Adult with a Toddler (12-24 Months) and a School-Age Child: Living wages range from $25.12 in Idaho to $40.66 in New York City.
  • In Households Comprised of Two Adults (One Working, One Caring for Children) with a Toddler and a School-Age Child: Living wages range from $28.14 in Idaho to $37.49 in New York City.
  • In Households Comprised of Two Adults (Both Working) with a Toddler and a School-Age Child, Combined Wages: Living wages per earner range from $17.69 in Idaho to $25.14 in New York City.

Getting by on less than a living wage is challenging enough, but, as this study shows, it can be even more difficult when debt is added to the equation. As large as our living wage numbers are, the methodology employed to calculate them does not factor in as a variable debt payments; we examine basic needs only. Debt has become a wide-spread, pervasive and structural phenomenon in the United States, and low-income workers are not exempt.

It is up to Congress and state legislatures to address the pervasiveness of debt and the lack of state investments to help working families by raising the wage floor, strengthening safety net programs, and making investments that help working families thrive.



Nazmie Batista – Ledyard, CT

‘I’m still paying my loan debt. We’re going to have to start making bigger payments in 2016 and I’m not sure how that’s going to happen.’


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