A living wage for individuals with disabilities: implications for rehabilitation professionals

Journal of Rehabilitation, April-June, 2004 by Dan Lustig, Dave Strauser

Two facts are understood by both individuals with disabilities and rehabilitation professionals. First, people with disabilities experience a much higher rate of unemployment than those without disabilities. While 76% of working age people without a disability are employed, only 28% of individuals with disabilities are employed (NIDRR, 1996).

Second, the mean earnings of employed individuals with disabilities are only 75% of those without a disability. In 1997, the annual earnings for the average American without a disability was $31,000 while for those with a disability it was $23,000. Even more distressing is the number of full time workers with severe disabilities who fall below the poverty line. Ten percent of full time workers with severe disabilities fall below the poverty line, a rate more than three times that of full time workers without disabilities. In 1992, employed vocational rehabilitation consumers earned $7.35/hour as compared to $10.25/hour. In other words, vocational rehabilitation consumers earned 71% of what the average American earned.

What does this mean for consumers and rehabilitation professionals? If we are to fulfill the mandates of empowerment and self sufficiency, then we must be concerned with not only assisting consumers to secure employment but also help them find employment that provides a living wage.

Living Wage

The concept of a living wage is an idea that has begun to receive attention in many metropolitan areas throughout the United States. To date, over 100 metropolitan governments have passed an ordinance mandating that the government, government contractors, and beneficiaries of government tax breaks or subsidies pay a living wage (Ciscel, 2004). The living wage is an income level that is required for a family to live free from dependence on monthly public assistance, food stamps, childcare subsidies, rent subsidies, and disability payments (Ciscel, 1999; 2004). The living wage is defined as the minimum amount of income that is required to meet an individual or family's basic economic needs (Ciscel, 2002). A family's income is considered inadequate if it falls below the living wage criteria developed for the individual or family's specific community.

The concept of the living wage is different from the poverty threshold established by the U.S. Department of Health and Human Services. Poverty thresholds do not provide adequate income for an individual or family to become self-sufficient and live independently from public assistance. For example, the poverty level for a family of three in the Unites States is $13,880 per year, while the living wage in Memphis, Tennessee for a family of one adult and two children is $31,284 per year. The difference between the federal poverty threshold and the living wage is Memphis Tennessee is $17,404 per year. In addition the current federal minimum wage of $5.15 per hour or $10,300 per year is below the poverty threshold for a family of two ($11,060 per year), and would be significantly lower then the living wage established for any major metropolitan area.

Three factors contribute to determining a living wage. First, the living wage is based on the number of individuals in a family and their geographic location. The living wage would be different for a family of one adult and two children than a family of two adults and three children. Similarly, the living wage would also differ for a family that lives in Memphis than from a family that lives in San Francisco. Second, a living wage is based only on the amount of income necessary to provide the basic necessities for a family that are related to self-sufficiency. Basic necessities include the cost of housing and utilities, childcare, food, transportation, medical care, clothing and personal care, and taxes. It does not take into account costs such as going out to eat, seeing a movie, or the regular purchase of new clothes. In addition living wage does not include savings for retirement, education, or the purchase of a new vehicle when the current car breaks down beyond repair. Third, the living wage is based on the income level necessary to support a family.

Individuals and families are able to attain a living wage by obtaining jobs that pay higher wages or by increasing their level of participation in the labor force. For example, in Memphis the living wage for a family of one adult and one child is $26, 128 per year (Ciscel, 2004). Using this figure, if the adult wage earner were able to obtain a job earning $13.06 per hour they would meet the living wage criteria by working 40 hours per week. However, if the worker obtained a job paying $9.00 per hour they would have to work an additional 18 hours per week (58 hours per week) in order to meet the living wage criteria established for Memphis. The higher the overall wage the lower number of labor hours are needed to meet the living wage.

Recommendations to Rehabilitation Professionals

Based on the concept of living wage we provide the following three recommendations.