Minimum wage vs. livable wage
By Tillie Fong 
| July 31, 2009 | 5:01 AM
Angela Charles was thrilled when she got a part-time job with Project Angel Heart in April.
“It was hard making ends meet,” said Charles, 45, of Aurora. “Everything depended on my husband’s income.”
Charles’ husband, Robert, makes $12 an hour working full time at a warehouse. Even though their two daughters are grown and no longer living with them, it was still a struggle to get by on only his salary.
“I like to have food in the refrigerator,” Angela Charles said.
Through a Work Options for Women program, she now works four hours a day, four days a week at Project Angel Heart, helping prepare meals and washing dishes. She’s paid $8.50 an hour, but even with the extra money, Charles’ budget is tight, and there’s no room for savings.
She is among thousands of Colorado workers who are finding it tough to make ends meet at minimum wage or slightly above.
Last Friday, the federal minimum wage went up by 70 cents, to $7.25 from $6.55. The new rate didn’t apply to Colorado, though, thanks to a constitutional amendment passed in 2006 that pegs minimum wage to inflation. Here, minimum wage was set to $7.28 in January, and by law, employers who are subject to paying minimum wage must pay the higher rate, whether it’s federal or state.
Because the federal rate is not applicable, it’s hard to determine exactly how many minimum-wage workers are in Colorado. Most labor statistics are gathered based on federal requirements.
Bill Thoennes, spokesman for the Colorado Department of Labor and Employment, said his agency estimates the state has 50,000 workers who are being paid Colorado’s minimum wage.
Rich Jones, director of policy and research at the Bell Policy Center, which bills itself as a progressive think tank, pegs the figure closer to 73,000. That’s roughly the number of Coloradans who were making the federal minimum wage in 2006 before the state amendment took effect.
Finding a realistic wage
Charles makes slightly more than a $1 an hour above Colorado’s minimum wage, and her annual salary at 16 hours per week totals $7,072. The federal poverty level for a single individual is $10,830. When combined with her husband’s pay, the Charleses’ annual income is $32,032, more than twice the federal poverty rate for two people: $14,570.
Advocates for the working poor say the federal poverty level is not a realistic assessment of what it takes to work and live in these tough economic times.
Last year, the Colorado Fiscal Policy Institute, which bills itself as nonpartisan, commissioned Dr. Diana Pearce with the University of Washington to create the Colorado Self Sufficiency Standard, which takes into account living expenses that federal agencies don’t.
“It actually costs money for people to go to work,” said Tracey Stewart, economic self-sufficiency coordinator with the Colorado Fiscal Policy Institute. “People need to take that cost into consideration when they pay people.”
One of the self-sufficiency standard’s purposes is to calculate wage adequacy, which Stewart defined as how close wages approach expenses — basically answering the question: ”Are you making ends meet?”
A self-sufficiency calculator allows anyone to plug in their location, income and expenses to determine whether they can afford to work and live in a given city or county in Colorado. The site also calculates the minimum wage a person would need to earn to cover the costs of living in that area.
One caveat: The data for the standard are based on information collected by various federal agencies in 2006-2007, so some figures may seem too high or too low for current economic conditions. The standard also underestimates the amount of benefits that someone may qualify for under the federal stimulus program.
Still, Stewart and others say the standard is a more accurate barometer of Colorado’s cost of living than similar federal calculations.
Difficult to land on their feet
For the Charleses, a trial run through the self-sufficiency calculator indicates that they have a wage adequacy of 144 percent, meaning they can meet their monthly expenses and have an extra $834 to spend each month. But the reality is different.
Angela Charles, a Denver native, moved back to Colorado last August after living in Georgia for more than a decade.
“Things weren’t good down there,” she said. “I was making miminum wage at fast-food places for six years. Then they started cutting hours, and I lost my job. I couldn’t pick back up, and things started to go back down, so we decided to uproot.”
She said that before leaving Georgia, she “jumped around” to three different workplaces — a Chik-Fil-A ($8 an hour), a McDonald’s ($7.50) and a grocery store ($7.50) — staying at each place for about a year.
“When they started cutting hours, I would try to get more money somewhere else,” she said.
When that didn’t work, she and her husband moved to Colorado to be closer to her two daughters and three young grandchildren. It wasn’t an easy move. They stored most of their furniture in Georgia and drove to Colorado with only some clothes and basic supplies that they could pack into their Oldsmobile Intrigue.
The vehicle barely made it to Colorado, so the couple tried to buy a 1997 Pontiac from a local dealer. It kept breaking down and spent more time in the shop than on the road.
“They (the dealer) decided to take it back” before the couple even made their first payment on it, Charles said. Now they are renting a car: “a little Daewoo” for $500 a month.
Charles said that initially she took the bus to get around but that it wasn’t convenient to run errands such as grocery shopping. With the rental car, she drops off her husband at work in the morning, goes to work in the afternoon, and picks up her husband at night before heading home.
The couple lived on food stamps the first three months they were in Colorado. Upon arriving, they had rented a townhome for $1,100 a month, hoping to be able to retrieve their belongings in Georgia. But, after three months, they were unable to keep up with the rent and had to move – this time to a one-bedroom apartment for $500 a month. They lost all their belongings in Georgia after falling behind on the storage payments, and everything was auctioned off.
While Robert Charles was able to find a warehouse job, Angela Charles found it much harder to land anything.
“I don’t have a degree, and I’m not skilled — I didn’t take typing in high school,” she said, adding that she also had a 20-year-old felony conviction, which didn’t help.
But she didn’t give up. Part of the reason she returned to her hometown was because of all the resources available here to help her get back on her feet, like all the services offered through The Gathering Place, she said.
“You don’t have anything like The Gathering Place in Georgia,” she said. “It’s more diverse (in Denver) and I’m able to pick myself up.”
She is getting culinary arts training through Work Options for Women and is participating in Project WISE (Women’s Initiative for Service and Empowerment), a mentoring program through the Junior League of Denver.
She said the WOW training helped her get the Project Angel Heart job.
“I took this job to empower myself,” she said. “I’m learning on what being a chef is like.”
Still, she said she is looking at other career options, including taking classes at Emily Griffith Opportunity School in medical insurance billing and coding. Eventually, she would like to be able to earn enough to buy a car and home. If possible, she would like to move back to Georgia, which she said she likes better than Colorado because of the weather — no snow.
In the meantime, she said she’s grateful to be earning more than minimum wage.
“I do what I can with what I have,” she said. “That little bit more makes things go further.”
Angela Charles, Colorado Fiscal Policy Institute, Colorado Self Sufficiency Standard, economy, jobs, minimum wage
