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Working Together
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A Livable Wage: The Disappearing Middle Class
Last month, as part of our on-going examination of a livable wage, we looked at some stats on "what must be unarguably less than a livable wage -- poverty" ... specifically, childhood poverty in the region. {Click here to see that piece.} We found, among other things, that "in the four years between 1989 and 1993 {the last year for which we could find comprehensive statistics}, the poverty rate in Addison County actually increased from 9.7% to 12.2% ... an increase of more than 25%." ... This month. we thought we'd focus on what folks in the State are actually earning. We decided to use state-wide data for two reasons: First, since many people in the more rural areas of the State actually work in urban centers like Burlington, Montpelier, Rutland, etc., wage and salary statistics which leave out those urban centers would not provide an accurate reflection of actual earnings. Bur second, and more importantly, the issue of a livable wage is a state-wide issue, and any comprehensive solution will have to be state-wide. ... About the data: The first thing to keep in mind here is that the data that follow simply provide a snapshot of wage and salary earnings for workers in Vermont. It is not a measure of household income, and much less does it show income from sources other than wages or salaries. In other words, it does not include data, typically more representative of higher income households, for earnings from dividends, investments, etc. It also does not include data for corporations or other types of business income. The data is strictly wage and salary based. In that light, consider the following chart:
Where's the middle class? While the average for the range of income levels covered by the Dept. of Labor study was $14.11/hour, the actual average income was less. In Vermont, for 1998, the average income from wage and salary earnings was slightly less than $12.94/hour. As you may know from high school math, in a normal distribution, the majority of the population would tend toward the middle -- the mean or average. If we look at the chart, however, we can see that workers earning in the $12-$14/hour range accounted for only slightly more than 11% of all workers. And even if we expand the range to include all those earning between $10-$16/hour, the total still only accounts for less than 30%, with nearly 14% earning between $10-$12/hour, and less than 5% earning between $14-$16/hour. ... As the chart shows, then, average earnings are skewed rather heavily toward the low end {left} of the scale ... and this, despite the fact that the groupings for the high end cover a much wider range of earnings. ... Pieces of the pie ... Another way of looking at the data is to compare the percentages of workers in each of the wage ranges with how much of the total of all wage & salary income they actually earn.
As you can see, those in the middle range actually take home an amount roughly equal to their numbers. Those earning near the average wage of $12-$14/hour account for 11.06% of all earners and take home 10.43% of all earnings. The next closest in proportion are those earning $14-$16/hour, who account for 4.67% of earners and take home 5.03% of salary & wage income. At the other ends of the spectrum -- those in the lowest and highest earnings brackets: The largest group of workers -- those earning $8-$10/hour -- account for more than one-fourth [26.24%] of earners, but take home only 17.69% of the pie. The next largest group -- those earning less than $8/hour -- account for nearly one-in-six workers [17.01%], but take home only slightly more than half of their proportional share [9.17%]. At the other end, workers earning between $20-$26/hour account for 5.32% of earners, or slightly more than 1-in-20. On the other hand, they bring home nearly twice their proportional share at 9.33% of all wage & salary income. Even more dramatic is the top end of wage & salary workers -- those earning more than $26/hour, or roughly twice the average wage. While accounting for slightly more than 1-in-22 workers [4.54%], they bring home almost 3.25 times their proportional share of all wage & salary income [14.71%]. The real problems ... While these figures show something of the disparity in income for Vermont workers, the real problem is not that there are some workers earning more than others. If we included all sources of income -- things like dividends from investments or trusts, and other non-earned income, the disparities would be even greater, with large amounts of income attributable, not to work, but to the fact that money is able to generate more money. The real problem with respect to Vermont wages & salaries is two-fold: On the one hand, as we saw, here in Vermont, wage & salary income is notoriously skewed toward the low end of the scale. That cannot be good for the economy; and it certainly cannot be good, either for those who have to find a way to make ends meet on such relatively low wages, nor for the social fabric. In addition, however, while mid-range wage earners ought to account for the largest percentage of workers, in fact, as we also saw, the opposite is the case. At least as much as any disparity in wages, or the even more troubling and troublesome disparity in assets that further widens the gap between those who have those who don't, Vermont's lack of a substantial middle class is, in many respects, more of a long-range threat, both to the State's economic and social well-being. With the range of income reported in the study -- meaning average annual incomes between $12,300 and $93,590 -- in a normal distribution, some 69% of jobs should provide an average wage of $14.11/hour. In fact, however, if we take the middle 69% of Vermont workers, the average is only $11.82/hour. Moreover, at the time of this study, 1 in 12 Vermont workers [8.5%] were earning less than $7/hour. As we've said before, the idea of a Livable Wage is an important one. And as we've seen in our series on a Livable Wage to date, Vermont has some housekeeping to tend to. ...
We've got our work cut out for us. ... More next month, then, in our continuing series on A Livable Wage. ... . Lou Colasanti, Editor. . ******* ******* If you would like to submit something for our Working Together section, don't hesitate to let us know. Simply e-mail us at work@downstreetmagazine.com. The e-mail should contain your name, address, and a phone number where we can reach you. You may also send a copy of your proposed article. The text can either be included in the body of the e-mail, or you can send it as an attachment in just about any word processing format. If your piece is accepted, we will pay a small honorarium for your interest & your time. [See Freelancers Wanted for more details.] ******* ******* If you would like to advertise in this section, or throughout the magazine, please visit our Advertising Info Pages ... or call, write, or e-mail ads@downstreetmagazine.com. ******* *******
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