Living wage study reveals racial disparities

Living wage legislation would result in wage increases for 30-40% of all Tompkins County workers and 65-75% of black workers, according to a new guidance document led by ILR director Ithaca Co. -Lab, Ian Greer.

“I was really struck by the racial disparity,” Greer said. “We’ve talked about racial disparities throughout this pandemic, and when it comes to living wages, they’re really stark.”

The term living wage refers to a theoretical level of income that allows individuals or families to afford adequate housing, food and other necessities. The researchers used a calculation of Federal Credit Union Alternatives Living Wage. Currently, the living wage for Tompkins County is $16.61 per hour, while the upstate New York minimum wage is $13.20 per hour. According to estimates from research published in May 2021, there were 660 black workers in Tompkins County earning less than a living wage and 343 earning more. Among white workers, about 11,000 earned less, while 26,000 earned more.

The group found that only 2-3% of workers would lose benefits from government assistance programs — such as Supplemental Nutrition Assistance or Medicaid — affected by the increases. But, Greer points out, fewer workers would be affected if they reduced the number of hours worked or if benefit thresholds were reformed to allow for more earned income. The group also found that although employers’ views varied, most supported the implementation of living wage legislation in principle.

“We found that there are a lot of employers who aren’t affected by this because they’re already paying a living wage,” Greer said. “We found that a lot of employers who don’t pay a living wage try to do that and they adapt their practices and find ways to do that. We also found that there are employers who already pay a living wage , but who oppose the legislation for mainly philosophical reasons.

In addition to Greer, ILR researchers including Russell Weaver, Sally Klingel, Reed Eaglesham, and Maru Rodriguez, as well as Shaianne Osterreich (Ithaca College) and Sean O’Brady (McMaster University), have been studying the introduction of living wage legislation for several years. Greer and Osterreich presented the group’s findings to the county legislature’s workplace diversity and inclusion committee in August.

The research team was guided by the Tompkins County Living Wage Task Force. Convened by Pete Meyers of the Tompkins County Worker Center and Anna Kelles, then county legislator and now New York State Assemblywoman, the group included other elected officials, employers and local activists. First, it collected relevant labor market data for Tompkins County. Next, he conducted an analysis to understand how an increase in the living wage would affect benefits. Finally, Greer conducted an employer study, interviewing 40 employers to assess how pay increases would affect them.

The researchers’ guidance note identifies issues raised by employers:

  • HHow organizations can adapt. A clear timeline, financial support and advisory expertise were all suggested as possible ways for policy makers to help.
  • How unfair is the wage squeeze? Most employers – even some who supported the living wage proposal – were concerned that raising the minimum wage to a living wage would narrow the pay gap between more experienced and less experienced workers, and be considered by experienced workers as unfair.
  • Would some workers be excluded from living wage legislation? For example, restaurants, bars and cafes would oppose the application of the living wage to tipped workersbecause they see tips as an important incentive to work.

While the task force isn’t taking a definitive position on the matter, its analysis gives a clear indication of who would benefit from a substantial increase in the minimum wage, Greer said.

“I think there is an overriding need for myself,” he said. “I think the research we’ve done supports that. The facts are the facts.

Michael A. Bynum