Living on the edge

Published in The Post-Star (B1)
8/6/06

Michelle Stewart dreams of spending just one day at a store without peeking at a price tag and having to tell her kids, 'No.'

"It's kind of sad, but I think a lot of people feel that way," she said. "I'm just so tired of struggling."

Her husband, Charles, makes about twice the state's minimum wage of $6.75 an hour as a dump truck driver, and often works up to 25 hours of overtime a week. They do their best to stretch his paycheck across a wide canyon of expenses each week, but there never seems to be enough for their family of four in Hudson Falls.

"He gets paid every Friday, and by about Tuesday, after paying rent and some bills and doing the shopping, there's about $60 left," she said.

Christina Mattison of Fort Ann is in a similar situation. She earns about $7.50 an hour as a cashier for a retail chain, and her fiancee, James Mariani, earns twice that much as an overnight retail stocker. But their combined wages are barely enough to cover household expenses, let alone pay a baby-sitter for their four children -- so they work opposite shifts, staggering their sleep schedules as needed.

"We've been struggling a lot lately, especially with gas prices going up," Mattison said. "This winter's going to be tough, because we have fuel heat, but I don't even want to think about that yet."

According to the government's definition of poverty, as measured by the U.S. Census Bureau, neither of these families are poor. The official poverty threshold for a family of four is $19,806 in annual income, which translates to a full-time hourly wage of about $9.50 in a single-income family. For a family with four children, like Mattison's and Mariani's, the threshold rises to about $26,000, or two workers earning $6.25 per hour. They are well past that mark.

But in recent years, many economists have pointed out that the poverty rate is calculated with an overly simplistic formula that hasn't changed since the 1960s, and does not include the effect of factors like taxes, home ownership, health care and child care costs.

"There's almost no place in America where you can live on $20,000 as a family of four...you need at least $36,000 to pay basic expenses," said Amy Glasmeier, director of the Poverty in America project at Penn State University, which developed a city-specific Living Wage Calculator based on census data and economic statistics.

The more complex reality, she said, is that a large swath of the population is barely getting by, making too much to qualify for public assistance but not enough to cover all their expenses.

They may not have not crossed the threshold into poverty, but they live on its doorstep.

In Michelle's words, "it's better to be poorer than poor or richer than rich" than stuck in the middle. For example, when Charles was briefly unemployed earlier this year, the Stewarts applied for food stamps. But for a family of four, the maximum gross monthly income that qualifies for assistance is currently $2097. They were $12 over the limit even though he had not worked for two weeks.

"I can't tell you how many people say things to me like, 'People ought to be able to get by on that kind of money,' but they don't do the math!" Glasmeier said. "A lot of people don't do the math because it's too scary. They don't want to know how close they are to the edge."

Stewart is all too familiar with the math. She knows exactly what it costs to pay the rent ($900 a month for a small three-bedroom house, and they're still catching up on past months), fill the gas tank on their '89 Chevy Blazer ($62 and rising), make three healthy meals for her family every day (around $125 a week), pay the car insurance ($187 a month), and outfit their two kids with school clothes and supplies (at least $400 each).

"My husband makes decent money, and we're still not making it," Michelle said. "So I don't know how any family could survive on minimum wage. The cost of living here is just so high."

Minimum wage is higher in New York than in many other states -- it will rise to $7.15 an hour on Jan. 1, while the federal rate remains stuck at $5.15 -- but it's still a far cry from what many people consider a living wage.

Michelle thinks it's getting harder and harder for families like her own to make it, and she's not alone.

"Lower middle income workers, which is what I would call anyone making under $50,000 a year, are feeling really significant constraints based on changing national economic circumstances," Glasmeier said. "They're the first to feel the effect of things like rising gas prices and higher interest rates."

Such workers, she added, are also the least likely to have any sort of financial safety net if they meet with unexpected costs.

"In some cases and in some places, these are families who find themselves at the end of the month with insufficient money, being forced to make choices between making their payments and buying food," she said. "It's far more dire, and far more precarious, than the American public would ever care to believe."

No net to fall into

Glasmeier describes the growing gap between America's rich and poor in terms of income brackets, comparing the lowest-earning 20 percent to the highest-earning 20 percent of the population. Between 1979 and 2003, bottom-bracket incomes rose 14 percent, or about $17,000. In the same time period, the incomes of the highest earners rose 200 percent, or about $625,000.

"Which group would you like to be in?" she remarked dryly.

In other highly developed countries, she said, there is a sense of obligation to the poor, but the American attitude toward poverty is less forgiving.

"The American ethos seems to be that everyone deserves a chance, but you're supposed to make it on your own," she said. "But what happens if something that you have no control over suddenly turns your life upside down?"

That's what happened to the Stewarts. Two years ago, faced with nearly $50,000 in bills after Michelle was hospitalized for a week with no health insurance, the couple filed for personal bankruptcy.

Michelle has applied for at least 10 office jobs in the last few months, and has been told she is underqualified, overqualified, or just "not able to commit enough," which she attributes to telling prospective employers that her children are her top priority.

If she does find work, she worries about leaving her children, now 11 and 14, on their own for too long. Child care can cost $150 or more a week.

"When you're earning like $9 an hour and subtracting child care and gas costs, it almost isn't worth it," she said.

She knows several families who have moved to the Carolinas and Florida, where they've heard wages are higher, taxes are lower, and the cost of living is cheaper. The Stewarts are considering a similar move, although they don't want to uproot their family.

James and Christina, who will marry next spring, have set their sights on something closer to home -- the new Advanced Micro Devices plant moving into Malta. James, who has some college education and is a certified computer technician, hopes he can to get a better-paying job there, so Christina can afford to stay home with the kids.

"I'd like to be able to provide them with everything they need, so they never have to worry," he said.

The Stewarts are less optimistic, although they haven't given up. They doubt they will ever be able to save for retirement or send their kids to college.

"It's kind of a joke in our house -- we'll say we're going to write up our wills, and our son will say, 'What are you going to leave me, Dad's work pants?'" Michelle said. "I guess all I can really leave them is the hope that they won't be like us. That they'll make it big."

CALCULATING A LIVING WAGE

1 Adult / 1 Adult, 1 Child / 2 Adults / 2 Adults, 1 Child / 2 Adults, 2 Children

Monthly Expenses:
Food $156 $273 $335 $452 $570
Child Care $0 $411 $0 $411 $823
Medical $86 $225 $225 $266 $307
Housing $474 $630 $501 $630 $630
Transportation $127 $127 $127 $127 $127
Other $238 $341 $316 $409 $453
Monthly After-Tax Income That's Required:
$1,081 $2,008 $1,504 $2,296 $2,910
Annual After-Tax Income That's Required:
$12,972 $24,099 $18,053 $27,551 $34,917
Annual Taxes:
Payroll Tax $1,212 $2,252 $1,687 $2,575 $3,263
State Tax $585 $1,088 $815 $1,243 $1,576
Federal Tax $1,078 $2,002 $1,500 $2,289 $2,901
Gross Annual Income That's Required:
$15,847 $29,441 $22,054 $33,658 $42,656

Living Wage
The living wage shown is the hourly rate that an individual must earn to support their family, if they are the sole provider and are working full-time (2080 hours per year).
The state minimum wage is the same for all individuals, regardless of how many dependents they may have.
The poverty rate is typically quoted as gross annual income. We have converted it to an hourly wage for the sake of comparison.
Wages that are less than the living wage are shown in red.

1 Adult / 1 Adult, 1 Child / 2 Adults / 2 Adults, 1 Child / 2 Adults, 2 Children
Living Wage (per hour)
$7.62 $14.15 $10.60 $16.18 $20.51
Minimum Wage (per hour)
$5.15 $5.15 $5.15 $5.15 $5.15
Poverty Wage (per hour)
$4.73 $6.38 $6.03 $7.43 $9.39


Source: The Living Wage Calculator developed by the Poverty in America project at Penn State University: www.livingwage.geog.psu.edu
__________________________________________________