Life Below the Living Wage 

Work and wages don't measure up in Idaho

Terri Sterling is constantly making tough choices for her family: doctor visit or electricity, heat or food, a telephone or a pair of shoes.

"My daughter, for the last month, has had a sinus infection. And I keep saying, 'Oh, it's just allergies, honey.' But I know it's a sinus infection. And I know that I need to take her to the doctor and that I can't afford to take her," Sterling said.

Sterling went to college, earned a degree and started a master's program. After years of working, she and her husband, George, celebrated moving the family into a home of their own in Lewiston.

"We did everything right," said the Culdesac, Idaho, mother. "We thought that when I got my job and George was working, that everything was going to be OK."

They bought the house, worked hard and raised four children. But the American dream always seemed slightly out of reach. The paychecks never went far enough. The family often went without health insurance.

"I'm always paying the past due amount on the power," Sterling said.

The dream seemed to flicker, then dim every time the power company threatened to cut the electricity.

A deep recession, high unemployment rates and mass foreclosures have darkened the dreams of millions of Americans. But even before the stock market hit bottom, gas prices skyrocketed and the job outlook went torpid, studies found that the economic picture in Idaho was already worsening.

A recent study blames the paycheck for Idaho's situation. Or at least what constitutes many Idaho paychecks. Social justice advocates say the low wages so many Idaho families live on have a ripple effect in the larger economy.

If you're one of the more than 62,000 unemployed workers in Idaho as of June, you can expect some stiff competition for a job that pays a decent wage. Up to 88 percent of new job openings in Idaho don't pay a living wage, according to research by the Northwest Federation of Community Organizations, a coalition of social justice advocacy groups.

The NWFCO 2008 Job Gap study puts the living wage for a single Idaho worker at $11.49 per hour. The wage earners of a family of four would have to make a combined $31.90 per hour. That's about $66,352 in annual salary. The average household in Idaho will bring in about $46,136 this year, according to the Idaho Bureau of Labor Statistics.

The study found that 82 percent of new job openings in Idaho do not provide what is considered a living wage for a family of four, and 88 percent of new job openings do not offer a living wage for a single parent with two children. A living wage is defined as what it takes for families to meet their basic needs without public assistance while allowing them to save some money for emergencies, according to NWFCO.

Recently, the minimum wage was bumped up to $7.25 per hour, a change that will affect roughly 40,000 Idaho jobs, said Bob Fick, spokesman for the Idaho Department of Labor. The change will cost employers across the state $25 million over the next year, a less than 1 percent change, he said.

The Job Gap study does take the state's relatively affordable cost of living into account. The cost of living in Idaho is slightly less than in Oregon and Washington, where living wages for a single person are higher--­at $12.39 and $12.27 per hour respectively. A living wage for a single person in Wyoming, where residents enjoy an even lower cost of living, is $10.95, according to the NWFCO report.

But when researchers looked at the region as a whole, they found workers across the Northwest struggle to attain those wages. The report found that up to 11 individuals competed for a single living-wage job in the Northwest during 2007. And researchers say the recent recession likely pushed those numbers even higher.

"Living-wage jobs simply are not available to everyone who needs them," the study notes.

2008 and 2009 saw a steady decline in employment and personal earnings in Idaho. The state recorded a dip in income for three straight quarters from 2008 to 2009­--a slide that has happened only three other times since World War II, according to the Idaho Department of Labor. Personal income fell 0.8 percent from the last quarter of 2008 to the first quarter of this year.

Idaho unemployment hit a 25-year high when it rose above 8.4 percent in June. The picture was slightly worse for job seekers in the state's largest urban center, which accounts for one-third of the state's employment. The ranks of the Boise area unemployed almost doubled in one year, hitting 10.1 percent in June. The 12.2 percent unemployment rates in Nampa and Caldwell helped drive the region to almost twice the unemployment of metropolitan areas in the state.

"In the good times, a lot of the growth tends to be concentrated in the Treasure Valley," said Michael Ferguson, chief economist at the Idaho Division of Financial Management.

And in the economic downturn, the Boise area was also hard hit. The investment-driven 2001 recession hit high-tech manufacturing and construction jobs in the valley, and a waning technology industry further dampened job prospects over the past year, Ferguson said.

"We're not anticipating the numbers getting any better," study co-author Gerald Smith said of the 2009 and 2010 Job Gap studies that are slated to reflect the latest unemployment trends.

The 2008 study details the meager availability of well-paying jobs and found that for many workers, one job isn't enough to make ends meet.

"The cost of living has increased faster than real job growth," Smith said. Health-care expenses, a surge in the cost of gasoline and higher food prices all contributed to the increased cost of living, Smith said.

The study looked at data tabulated from 2007 for the 2008 report. Analysts currently researching 2008 data that includes the recent economic fallout may come to even more distressed conclusions in the 2009 report, Smith said.

"We're hearing a lot more about the folks who are unemployed, and the lay-offs, and they're not able to find the living-wage jobs. So we're anticipating that the big story will be: Where are the living-wage jobs?"

DO I TAKE THE CHANCE?

"When families fail to make it ... they self-sacrifice to an untenable level because they fail to make a living wage," said William Rainford, professor of social work at Boise State.

The study found that many families are forced to make the choice between paying for prescriptions, balanced nutrition and monthly bills.

"There are impacts on health when a family is living on less than a living wage," said Rowena Pineda, executive director for the Idaho Community Action Network, an advocacy group for middle- to low-income Idahoans. "If you don't have health insurance, you just forgo any health checks. So if you have a child, how do you get preventative care that is so critical in the formative years?"

Many working families find themselves in a catch-22 when it comes to providing health care for their children: They don't earn a living wage, yet they earn too much for public health-insurance programs. It's also difficult for families to tap into other state welfare benefits.

"Those programs are extremely restrictive and hard to qualify for," Rainford said.

And many Idahoans do not have access to free or sliding-scale health clinics.

The Sterlings fall into that category and live in a community without low-cost health care, forcing them to watch a sick daughter linger with an infection.

Donna Kemper of Buhl forgoes taking her prescriptions or seeing a doctor. By day, Kemper tends to the needs of dogs and cats at a local pet store. She and her husband both work full-time and have health insurance, but she says her wages don't meet her needs or cover her out-of-pocket health-care costs. Kemper's medication to control high cholesterol gets rationed out, and doses are often split in half or skipped all together. Kemper's doctor also has her on oxygen at night, but sometimes that therapy gets pushed aside.

"Do I run my [oxygen] which costs me about $300 a month? Or do I take the chance? When my oxygen gets so low, when I drive, I fall asleep," Kemper said. "Even though I have insurance, I have to pay a $1,500 deductible every year, and that's hard to come up with."

Job Gap researchers found that high health-care costs often have a spiraling effect. Health insurance premiums, hospital co-pays and medical bills stretched Franco Vuittonet's paycheck from his communications job beyond its limits. He fell behind on utility payments and faces foreclosure on his Nampa home. He even started cutting healthy food out of his diet--a move that makes Vuittonet more vulnerable to other health problems, Pineda said. "It just snowballs."

But it's a risk Vuittonet feels forced to take.

"To be a productive member of society, you need to be healthy, and access to healthy food is an important part of that. Fast food places prey on low-income people. Working people should be able to afford healthier food," Vuittonet told researchers. "It's ironic because in a plane crash, they always tell you to put your oxygen mask on first so that you can do a better job of helping your kids, but I can't."

GOVERNMENT INTERVENTION

When someone cares, they often give to a food bank, write a check or make sure their neighbors don't lose power. But the economic slump dampened many philanthropists abilities to give in recent months, Pineda said.

"A lot of people at the higher income bracket are no longer higher income," she said.

ICAN operates one of dozens of food banks around the Treasure Valley. And Pineda sees what many food bank managers report: an increased need for assistance and fewer donations.

Rainford said charities that typically serve as a social safety net find it more difficult to meet needs in the current economic climate.

"Just when our budgets are being vastly reduced by both grants and philanthropic giving, we are seeing astronomical increases in demand for aid. And I would argue that another year of this will break a number of the charities, which can't sustain what's happening now. And this is why I tell people that we need government intervention."

Idaho lawmakers passed legislation to help low-income people in the last session, including measures that retained the food tax credit and food stamps for the poor. But Rainford, who also serves as a legislative advocate for Catholic Charities of Idaho, said state leaders can do more by expanding tax credits to families.

"I know what the Legislature is going to say. They're going to say that we can't afford tax credits or tax deductions right now. And that's simply not true. They give $1.6 billion per year to corporations in tax deductions and tax credits ... They could hold back 1 percent of those tax credits and tax deductions--and that's almost $200 million a year. And yet they refuse to do it because of a philosophical difference. They say that they can't tax corporations because they'll lose jobs. One percent is not going to cost anyone their jobs."

"In Idaho, we really need to think about putting workers first. Often times we put businesses first," Pineda said. "We want to be able to balance attracting workers to the state but at the same time making sure that workers are getting paid a living wage. If I'm getting paid a living wage, I'm spending that in my community and that has a ripple effect in the whole community, because I have more money that I can spend at the store down the street that will then hire more people."

Past efforts to boost Idaho wages have met resistance or yielded a lethargic response from lawmakers. Several years ago, a sluggish Legislature stalled the passage of legislation that guarantees a minimum wage for farm workers. This year, lawmakers adopted a joint memorial urging Congress to oppose the Employee Free Choice Act. The bill would improve employees' ability to bargain for better benefits, wages and working conditions.

The Idaho Legislature isn't a hospitable climate for efforts that aim to boost workers' pay, said Boise Democrat Sen. Nicole LeFavour.

"Many people in here are concerned about business when we raise wages," LeFavour said. "What they forget is that two-thirds of our economy is consumer spending. And if employees aren't making ends meet, they can't participate in the economy."

LeFavour said her colleagues often don't welcome wage mandates.

"Their first concern is what effects it will have on businesses. And the really sad thing is probably the biggest impact on businesses in the last several decades is the cost of health care. I think that wages would be better if we had some sort of national health-care plan that allowed us to not have to spend so much to have to keep employees on health insurance."

The public isn't always receptive to improving wages either. A 2004 voter initiative to repeal the state's Right to Work laws--which aimed in part to increase workers' earnings--failed to make it on the ballot.

"The Right to Work law means exactly the opposite. It doesn't give you the right to work," said Dave Whaley, president of the Idaho State AFL-CIO. "What it does do is lower the protections as a worker that you have in your state as a group to collectively bargain for wages and benefits and conditions at your work site. And it lowers the economy and your earning power," Whaley said. "It doesn't help anybody other than businesses who want to gain profit off the backs of workers."

Supporters of Right to Work say the laws prevent workers from being forced to join a union in order to get a job and protect employers from being forced to hire only union members.

But such laws don't necessarily affect earnings, according to the National Right to Work Committee. The advocacy group claims that Right to Work states enjoy greater economic vitality than states where union dues and "fees" are compulsory. But unions and workers challenge that assumption, saying Right to Work laws hurt earning power.

Critical economic theories see efforts to maximize business profits as a source of low wages. In other words, companies can increase their earnings by simply paying workers less. Conventional economic theories look to supply and demand as a source of low wages, claiming that an economy ripe with willing workers can afford to offer slim paychecks.

"In every market, you're going to have buyers and sellers. And the market is going to settle on the price of the quantity that the sellers want to sell and the quantity that the buyers want to buy," said Donald Holley, economics professor at Boise State.

And employers aren't buying in Idaho in terms of wages. At least not to the same extent that they bought during more robust economic years.

But the Job Gap study may only tell a part of the economic story, Holley said. The report gleans its data from Bureau of Labor Statistics reports. This could exclude the myriad of other employment sources that skirt BLS reports. Some employers look for workers by word-of-mouth. High-paying jobs have less turnover. And Holley notes that many good jobs don't get advertised at employment offices or even in help wanted ads.

The Job Gap study makes a strong call for action. The report's first recommendation calls on lawmakers to boost the number of jobs paying a living wage. It challenges political leaders to give workers a voice and set wage policies. But LeFavour said Idahoans might have more luck by seeking change through the initiative process.

"Sadly, I don't think the Legislature will ever be a place where [living wages] will be addressed," she said.

Twin Falls Republican Rep. Stephen Hartgen said that legislating people's earnings isn't the best way to improve income. He said that mandates to boost wages would create a manipulation of the free market.

"They're an artificial movement of assets from where the market is moving for political reasons," said Hartgen, a business consultant and former newspaper publisher.

"They take money from one pocket and put it in another," he said.

Hartgen said workers could see bigger paychecks through campaigns to promote the state's hospitable business climate and efforts that tap into the region's resources.

"We should rely on those natural forces ... to attract industry and population."

WE LOST EVERYTHING

Efforts to boost wages through mandates have met some success, especially on the municipal level and with measures aimed at boosting the pay of employees contracting with local governments.

A 2006 ACORN report counted 140 communities that passed some kind of living-wage ordinance. About 10 communities have adopted measures since then, according to sociologist and economist Stephanie Luce, who researches the issue for the Political Economy Research Institute.

Luce, co-author of The Living Wage: Building a Fair Economy and A Measure of Fairness: The Economics of Living Wages and Minimum Wages in the United States, said that boosting wages doesn't necessarily come at great expense to businesses. Her research tries to debunk the idea that living-wage laws increase business costs and result in employers hiring fewer workers. She said studies have found no evidence of job loss related to living-wage mandates.

"That's partly because raising the wages is actually a small percent of the cost of doing business," she said. "Higher wages would result in less than 1 percent of their operation costs ... The wages are so low that raising them is just not a lot of money relative to other expenses."

Luce said conventional wisdom that wage increases beget inflation doesn't hold up, either. Researchers have yet to empirically prove that thinking, she said.

Luce's study of living-wage ordinances found no ripple effects in the larger economy. But she and her co-researchers discovered small increases to earnings can bring modest, if not significant improvements to financially strapped lives.

The City of Moscow passed Idaho's first living-wage ordinance to little fanfare in 2006. But similar efforts don't always meet a welcome response. A 2005 San Diego living-wage campaign mandating higher wages for employees who work for firms that hold city contracts drew fire from some business owners.

"This is absolutely devastating. I'll have to close down," the San Diego Union-Tribune quoted a gas station owner who criticized the proposal that ultimately passed.

Wage laws also squeeze businesses and don't necessarily benefit workers, Hartgen said.

"If you talk to someone who owns a franchise like a McDonald's or a Subway or an Applebee's and [ask], 'Well, how many people do you want to hire?' And they'll say, 'I want to hire the number of people I need to staff the business at the best level and maintain the appropriate level of customer service and quality of the operation.'"

But if the business owner is forced to hire workers at a certain wage, then they'll just cut back on the number of people hired in order to make ends meet. Or the owner may have to slash the pay of workers who already earn above the mandated wage, Hartgen said.

Living-wage campaigns often meet with sharp dissent from business owners who worry about the bottom line or their ability to adequately staff operations.

"Employees and consumers ultimately pay a higher price for business mandates," said Alex LaBeau, president of the Idaho Association of Commerce and Industry.

He said a variety of things happen because of wage mandates. For example, it costs more to get the product to the consumer and, as a result, the consumer pays more and fewer products are sold. Plus, he adds: "You end up with a net loss because it ends up in job losses."

Small business owners often find it even harder to pay their workers a living wage, said Jim Hogge, state director of the Small Business Development Center.

While corporations may enjoy the cost savings that comes with doing businesses on a large scale, most small business have a small budget, Hogge said. And in the last 15 months, those budgets have shrunk.

"There are a lot of companies who have had to downsize just to survive," Hogge said. "Sales are everything."

Hogge said the recession has forced small business owners to slash expenses, including their own earnings. And for the small business owners, what they pay their employees is just as personal.

"Certainly the small business wants to pay a living wage," Hogge said. "Their employees are family, and they want to do the right thing."

But what a business owner decides what to pay their employees is "not a matter of choice," Hogge said. "The market forces are going to determine what wages are possible."

Terri Sterling tasted what a living wage-could do--for a brief moment. She landed a living wage job in the nonprofit sector just more than a year ago. Her husband was working, too. But funding for the nonprofit dried up, and in December, the family moved out of their home, barely losing out to foreclosure. By March, George Sterling was laid-off from his job. He, too, joined the thousands of Idahoans vying for the scarce number of well-paying jobs.

"We lost everything," Sterling said. "We had to start over again."

The 2008-2009 recession has cost the Sterlings more than a paycheck, and the United States more than 5.7 million jobs. An Economic Policy Institute analysis using conservative job forecast data predicts the poverty rate for children could increase from 18 percent--where it stood in 2007--to more than 27 percent by 2010.

The Sterlings began to feel the chill of that forecast last winter.

They spent Christmas in their new home: a 1960 10- by 50-foot mobile home perched atop a muddy lot on the outskirts of Culdesac. They had no electricity or water, and the cold seeped through the trailer. Sterling worried about what little they could give their kids.

"It was a very merry Christmas," Sterling said with a laugh.

The home is so remote that it lies outside the UPS delivery area. But one delivery did make it the Sterling's home that Christmas. Some neighbors bought blankets and space heaters for the family of six.

"At that moment, someone cared," Sterling said.

Carissa Wolf is a freelance writer who also works as an adjunct professor in the Department of Sociology at Boise State.

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