Ever wanted to know how to arrive at an accurate living wage for your local community? Perhaps you are a group considering a campaign, a writer planning an Opinion Editorial for your local newspaper, or a business owner deciding on starting wages for your employees.

If so, then the following system will be of help. It works best with a group, especially as an exercise you can do together early in your campaign. But individuals can do the research as well. (The group option will take about an hour.)

1. Monthly Income

Ask the group what the lowest paid hourly worker they know in their community makes per hour. Then multiply that figure to get a monthly income for that worker and his or her family. Hourly wage x 40 hours x 4 weeks = monthly income. [Will take about 5 minutes]

2. Monthly Budget

Put together a budget with the group. First ask them to give you budget categories and write them on a chalkboard or easel. Make sure these are included: food, transportation, housing and utilities, childcare, health care, clothing/miscellaneous (laundry, school supplies, personal care and household supplies.) Then ask them how much it costs a family of four per month, bare minimum, in each budget category in their list. They will probably have to talk through the details, but don’t let them drag on too long. Tell them that we are looking for general figures. Add up the totals to get a monthly, minimum budget. [20 minutes]

3. Comparison

Compare the two monthly income and budget figures. Note the difference in dollars per month and comment that the gap is what produces poverty in your community, plus all the social problems which poverty creates. And this is for working people, not to mention those who cannot work because they are elderly or disabled. Give the group a chance to comment. [15 minutes]

4. Local Living Wage

Divide out the monthly budget the group created to determine an hourly living wage figure for your community. Monthly total divided by 160 = hourly living wage. [5 minutes]

5. Adjust Monthly Budget

Adjust Monthly Budget— Now have your group go back and cut their monthly budget so it stays within the bounds of the real, monthly income of low-wage workers in your community. What will they do without, how, and why? [15 minutes]

If you have a wealthier group, they may have no idea how to budget a bare minimum for their community. You can prepare for this ahead of time by doing a little research, or just let them do it based on their limited knowledge. Their estimates will likely be high. If so, your wage gap will be more dramatic, and you can point out that poor people learn to be harsh budgeters by necessity.

An even better option is to do this exercise across two meetings. Make research assignments for each category. Group members will report back at the second meeting and you can discuss the findings and proceed with the calculations. This method will yield a more accurate local picture if you are laying the groundwork for an actual living wage campaign.

Research sources:

1. Local, lowest paid hourly workers:

Look at the want ads in your local papers, ask at the businesses where you shop, and call local hotels and food service businesses and ask for the starting wage.

2. Food:

You can find national figures for the current month at this web page, http://www.cnpp.usda.gov/ using3.htm, the Low-Cost Plan of the Cost of Food at Home. Check with your group and adjust the figures if they seem inaccurate for your community.

3. Housing:

You will find average monthly rents at this web page, http://www.huduser.org/datasets/fmr.html. Look for the Fair Market Rents (FMR) for the current year. Click on the link and then find the figures for Virginia and the region closest to your community. Be aware that these figures are generally a few years old. If your community has experienced a sharp rise in housing prices, you should go to your phone book and call three or four realtors, rental agencies or apartment complexes to ask them if the FMR is still accurate for your community. In particular, look for apartments that accept Section 8 vouchers.

4. Transportation:

This should be more or less the same for everyone, unless you live in a community where people can realistically use public transportation to get to work. If so, that cost is your bare minimum. Otherwise figure it based on one car.

5. Childcare:

Go to the yellow pages and call three or four local providers to get their weekly rate per child. Average it out. Family of four assumes one school age child and one child before school age.

6. Health care:

Again, go to your yellow pages under Insurance. Call three or four agencies that provide health insurance and ask for their minimum, family rates for self-employed persons. Ask for a $300 deductible. That gives the figure for jobs that don’t include health care. Then ask them what is the employee share of an average business policy. That gives the figures for jobs with health benefits.