NEWS for North Dakotans
Agriculture Communication, North Dakota State
University
7 Morrill Hall, Fargo, ND 58105-5665
May 7, 1998
Many North Dakota residents currently on public assistance are unlikely to be able to find jobs that pay a living wage, an NDSU analysis and current labor statistics show.
"In North Dakota, the estimated cost of living for an employed single mother with two children ages 4 and 6 is $511 a week. That equates to $2,213 a month or $26,556 a year," says Debra Pankow, extension family economics specialist at NDSU. "To meet her monthly cost of living, this not-so-hypothetical single mother would need to earn a take-home wage of $12.77 an hour."
How does this scenario compare to reality? Job Service North Dakota reports that in 1995 the median full-time income for men ages 25 to 34 was $12.25. The median income for women in the same age group was slightly more than $10.
What is the scenario when people are working for the current minimum wage of $5.15 an hour? If a single parent with two dependent children was fully employed—that is, working 2,000 hours a year or 40 hours a week with two weeks of unpaid vacation—he or she would earn only $10,300 a year before taxes. The current poverty threshold for a three-person household with two related children younger than 18 is $12,641 a year. In order to attain an annual take-home salary of $26,556, this single parent would need to earn an additional $8.89 an hour—or work an extra 69 hours a week at $5.15 an hour.
Pankow says the $26,566 "living wage" used in this examples includes costs for housing and utilities, food, child care, transportation, and basic household and personal-care items. But it does not include costs for entertainment, birthday gifts or other gifts, toys, tobacco products, or alcohol. The majority of low-income North Dakotans enrolled in the Temporary Assistance to Needy Families (TANF) program are single-parent families—typically single mothers, who eventually will need jobs that pay a living wage, due to the 60-month limit on welfare assistance.
Meanwhile, data from Job Service North Dakota shows that the state's three largest employers are services, retail trade, and the agricultural, fishing and forestry sectors. Pankow says women are more likely to be employed in services and retail trade. In 1995, the national median weekly earnings for service industries was $264, or $6.60 an hour, for females and $357 ($8 an hour) for men.
Assuming a single mother with two preschool-age children was employed in the service sector and was earning $6.60 an hour and working 2,000 hours a year, her annual gross salary would be $13,200—an amount slightly less than half the living-wage salary indicated by the NDSU analysis.
"Certainly, if an employer offers health insurance or other benefits, the monthly cost of living for these lower-wage families would decrease dramatically—by more than $200 a month if we're talking about providing health insurance," says Pankow.
Another option would be for employers to help working parents cover child-care costs, says Helen Danielson, extension child development specialist at NDSU. Parents with two preschool-age children can now expect to pay, on average, $600 a month for child care in North Dakota.
"Children need reliable, safe child care so that they can enter school ready to learn and develop to their full potential, and parents need reliable, safe child care so they can get jobs and work productively," says Danielson. She adds, "Unfortunately, many parents are forced to make child care choices based on what they can afford, not on what is best for their children."
###
Source: Debra Pankow (701) 231-8593
Helen Danielson (701) 231-8289
Editor: Dean Hulse (701) 231-6136