Tags: Minimum Wage | alabama | minimum wage | living wage | difference

What's the Difference Between Minimum Wage and Living Wage in Alabama?

By    |   Thursday, 29 Oct 2015 01:47 PM

Recently, demands to raise the minimum wage have boomed around the country. Proponents of an increase have cited the gap between the minimum wage and a living wage in real dollars. But how much of a difference would that mean for minimum wage workers in Alabama?

According to the Massachusetts Institute of Technology, the living wage in Alabama is much higher than the federal minimum wage that is currently in place. The living wage is the calculation of minimum hourly pay, at full time, that is needed for basic necessities of survival, such as housing, food, child care, and medical care.

Alabama's living wage has been calculated at $10.17 per hour for one adult. A family of two adults and one child would require a person to earn $19.22 an hour with one adult working.

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Alabama is one of only a handful of states left in the country that does not have its own minimum wage in place. As a result workers are compensated at the federal minimum wage rate, which is currently $7.25 per hour, $2.92 less than the living wage for one person.

For those in the service industry, such as wait staff, the numbers are even further down the scale. The tipped minimum wage is set at $2.13 per hour.

Overall, Alabama struggles to meet the national averages as well. The average household income in Alabama is $42,276, which falls nearly $8,000 below the national average.

A person with a full-time job, earning minimum wage in Alabama, who works 40 hours a week, 52 weeks a year, earns $58 per day. That equates to $290 per week, $15,080 annually in wages. But the annual living wage calculation for one person in Alabama is $21,149. This gap between minimum wages and living wages has led many to take up second jobs in order to survive.

The pay scale in Alabama has long been a subject of scrutiny. Some argue the cost of living in Alabama is much lower than the rest of the country so the need of a minimum wage is negated by the purchasing power of workers.

VOTE NOW: Is Alabama Gov. Robert Bentley Doing a Good Job?

"I certainly do believe that the minimum wage would have greater purchasing power in Alabama than in other places," said Alan Cole, an economist with Tax Foundation, in an AL.com story. "I certainly think that $9/hour would not go very far in many areas of New York and California."

But in Birmingham, Alabama, the city council has been taken measures to surpass the current federal minimum wage, passing ordinances that will increase minimum wage workers' hourly pay to $8.50 in 2016 and then up to $10.10 the next year, according to U.S. News and World Report.

By the summer of 2017 in Birmingham, single, minimum-wage workers will earn at the hourly level near the living wage standard.

Alabama's largest city decided to be proactive on the issue to help its poorest residents and overall economy ahead of federal efforts to hit the $10 minimum.

Tell Us: Should the Government Raise the Minimum Wage?

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Recently, demands to raise the minimum wage have boomed around the country. Proponents of an increase have cited the gap between the minimum wage and a living wage in real dollars. But how much of a difference would that mean for minimum wage workers in Alabama?
alabama, minimum wage, living wage, difference
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2015-47-29
Thursday, 29 Oct 2015 01:47 PM
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