Written by Dr. Amy K. Glasmeier on 08/23/2021

Recent Article Posts the Wrong Value for the MIT Living Wage Calculator

Over the last eight days, I received 48 comments about the Living Wage Calculator. I traced the comments back to an article written by a writer for a national news service. I want to make a necessary correction in the report written by the writer.

The correction. The author used state and not county-level data when they reported the value of a living wage. The living wage number is the taxable value of income required to cover a person's cost of living. The author should use taxed income as the cost of living, including the amount of income you must earn to pay your taxes and still cover your costs. In most cases, people ask permission to use the data and ask me to verify their use. Unfortunately, this time that didn't happen. I regret the error exists, so I am doing my best to correct the misuse of the data.

While I am at it, I want to make two further clarifications. First, we post data during the first month of the calendar year. At that time, We also report state minimum wage values based on the National Conference of State Legislatures (NCSL) website. The data we post annually reflects the most recently published data from NCSL*. However, states change their minimum wage rates throughout the year. Therefore, there are years when a state posts its minimum wage after we publish our annual update, and our numbers are out of date.

The second correction I wish to make is to call out the correct geographic scale of the living wage estimate. The appropriate use of the data is at the county level. Unfortunately, the news article utilized the state-level living wage value, which is an approximation and not the localized cost of living. We do not recommend using the state data other than for illustrative purposes.

Now for news from the field. I briefly summarize the recent notes written to me. Five points stand out. First, many people are not getting by on the wages they earn. Second, most find it hard to pay rent and indicate rental costs greatly exceed the Fair Market Rents calculated by the Federal Department of Housing and Urban Development. Third, Those facing the most difficulty are big cities, mainly in high-cost areas like Anchorage, Alaska, New Haven, Connecticut, and New York City. Fourth, others live in fast-growing cities where population growth is outstripping the supply of affordable housing. Fifth, many complain that the estimated living wage is too low, forcing them to choose among the monthly bills they can pay.

Each year we update the tool in January. At that time, publicly available data are collected and posted. The good news is many companies, big and small, are using the living wage calculator to pay better wages. We have to keep up the pressure to raise the minimum wage.