Item Title: Amendment of County Personnel Ordinance for Living Wage Component ... Asheville, NC, offers three popular wa
Item Title:
Amendment of County Personnel Ordinance for Living Wage Component
Specific Action Requested: That the Board of Commissioners amends the Wake County Personnel Ordinance to provide for a living wage minimum wage standard for regular employees effective December 1, 2015.
Item Summary: Commissioner Calabria requested staff provide background research on establishment of a living wage. A “living wage” is defined as the wage that can meet the basic needs to maintain a safe, decent standard of living within the community. The first living wage campaigns were launched in the 1990s by community initiatives addressing poverty faced by workers and their families. In 1998, two North Carolina jurisdictions implemented a living wage based on the federal poverty level for a family of four. Since that time, several North Carolina counties and cities have adopted Living Wages. Additional information on those local governments is included in the research paper attached. Calculating a Living Wage: The research found a range of methodologies for determining a living wage rate. Just Economics, a non-profit organization out of Asheville, NC, offers three popular ways to calculate a living wage: Percentage of the Federal Poverty Line – Many living wage ordinances in other cities/counties base their wage off a percentage of the federal poverty line. Basic Needs Assessment – Several organizations use the costs of basic needs in an area to determine a living wage. For example, the NC Justice Center calculates its Living Income Standards by estimating the local cost of seven main household expenses (food, housing, healthcare, transportation, childcare, taxes, and miscellaneous) for different family sizes. Universal Living Wage Formula – This formula is based on the idea that a person who works full-time (40 hours per week or 2080 hours per year in determining the annual salary) should be able to afford a one bedroom apartment and meet their basic needs expenses. According to the US Department of Housing and Urban Development (HUD), no more than 30% of a person’s gross income should be spent on housing. The Universal Living Wage Formula is based on local cost of housing according to HUD’s Fair Market Rents (FMR). Just Economics recommends using a four year average FMR. In addition, this formula allows for $1.50 an hour credit for employer provided health insurance. (http:universallivingwage.org)
Selecting a Methodology: When implementing a Living Wage, the methodology for establishing the wage rate must be identified. The method should have a process for regular updating and preferably address the cost of living of a specific geographic area. Of the more frequently used methodologies, the Universal Living Wage appears to be an appropriate benchmark for identifying a rate that allows a worker to meet their basic living needs.
Universal Living Wage Organization has devised a national formula that is based on each local economy throughout the entire United States. The formula is designed in such a manner that no matter whether you live in Austin, Chicago, Los Angeles, etc., if you are willing and able to work a 40-hour week, you should be able to afford an efficiency apartment on no more than 30% of your gross monthly income and avoid homelessness. The Universal Living Wage (ULW) calculation as of November 2015 for the Raleigh – Cary MSA per the ULW Organization is $14.88 per hour before taking the credit for health insurance of $1.50 per hour. Minimum Wage Rate: It is recommended that the initial minimum living wage standard be rounded up and established at $15 (before the credit for health insurance) and that the minimum salary for regular employee pay bands be established $13.50 ($15 less $1.50 credit for health insurance) that when applied to the standard annual working hours of 2080 yields an annual salary of $28,080. Eligibility: It is recommended that the living wage be applied to regular employees only. A regular employee is defined as being in a Board authorized position and having regularly scheduled straight-time hours in excess of 1040. Per the County’s Pay and Classification plan, Band 1 is excluded as it used only for temporary employee classifications that are comprised primarily of seasonal workers (park aide, student assistant, swimming pool technical) and library pages/shelvers only. No positions are currently classified in Band 2. The salary bands that would be impacted are Bands 3 and 4 as the current salary minimums fall below $13.50 per hour. Fiscal Impact: The fiscal impact of changing the band minimums to $13.50 per hour wage or $28,080 annually for 2080 hours is: Number of regular employees in Bands 3 and 4: 502 Number of employees whose salaries are below $13.50 75 Annual cost to increase the hourly rate of regular employees to $13.50 $93,000 Annual Update: It is further recommended that an annual review be done in conjunction with the annual budget and that living wage be adjusted as necessary to the greater of $15 (before $1.50 credit) or the rate calculated by Universal Living Wage calculator for a one bedroom dwelling in the Raleigh / Cary MSA.
Attachments: 1. Research Document on Living Wage 2. Revised Personnel Ordinance
