Family Sustaining Wages
A family-sustaining wage is the income a family needs to cover minimum necessary expenses, including food, child care, health care, housing and transportation.
(Note: we use the term family-sustaining wage because it encapsulates the needs of working families. Living wage is often used when referring to the wage a single individual would need to meet necessary expenses, though sometimes the two are used interchangeably.)
Benefits to Employers
- Drives economic growth Footnote # 1
- Aids in job creation and supports small business growth Footnote # 2
- Increases employee moraleFootnote # 3
- Improves employee health, which leads to fewer absences from workFootnote # 4
- Improves productivityFootnote # 5
- Lowers turnoverFootnote # 6 and improves retention
- Improves quality of serviceFootnote # 7
Benefits to
Children
- Lowers infant mortality ratesFootnote # 8
- Improves brain development and cognitive abilityFootnote # 9
- Improves mental healthFootnote # 10
- Improves school performanceFootnote # 11 and test scores
- More likely to graduate high school and attend collegeFootnote # 12
- Less likely to be recipients of public assistanceFootnote # 13
- Improves physical healthFootnote # 14, both short-term and long-term
- Lengthens lifespanFootnote # 15
- Lowers risk of abuse and neglectFootnote # 16
Benefits to Parents/Families
- Reduces financial stressFootnote # 17
- Improves mental healthFootnote # 18 and reduces overall stressFootnote # 19
- Less likely to be recipients of public assistanceFootnote # 13
- Lengthens lifespanFootnote # 21
- Improves overall healthFootnote # 22
- Reduces tobacco and alcohol useFootnote # 23
- Stabilizes housingFootnote # 24
- Stabilizes child careFootnote # 25 and allows parents to afford high-quality care
- Lowers the risk of abuseFootnote # 26
- Advances economic mobilityFootnote # 27
Research or Recommendations from National Organizations
- The amount families need for a sustaining wage varies by county/metropolitan area and family size.
- To find a calculator of family-sustaining wages by county and family size, visit the Massachusetts Institute of Technology’s (MIT) Living Wage Calculator.
- To determine the average family budget in your county or metropolitan area, visit the Economic Policy Institute's Family Budget Calculator.
- North Carolina’s minimum wage is $7.25 per hour. While the formulas used to determine exact dollar amounts for family-sustaining wages can vary, all of the data is clear—North Carolina’s minimum wage is not a living wage or a family-sustaining wage. Below is a summary of family-sustaining wage calculations:
- Just Economics, which runs the largest voluntary living wage certification program in the United States, calculates a living wage (for one adult without children) of $17.70 per hour for Buncombe County; MIT’s Living Wage calculator sets a living wage of $16.83 per hour for Buncombe County.
- According to the MIT Living Wage Calculator, a single adult with one child in North Carolina needs $30.09 per hour to earn a family-sustaining wage.
- In a 2020 report created for The United Way of North Carolina, the Center for Women’s Welfare at the University of Washington School of Social Work determines that the median sustaining wage for a family with one adult and one preschooler is roughly $37,000 per year (just over $17 per hour). However, the actual rate varies widely by county from just over $30,000 in the least expensive counties to over $54,000 (or nearly $26 per hour) in the most expensive counties.
- According to the Economic Policy Institute’s Family Budget Calculator, the cost of living for a one-adult, one-child household in North Carolina ranges from $4,277 per month (just under $25 per hour) in Burke County to $5,665 per month (just under $33 per hour) in Currituck County.
Range of Practices in the United States
- Before the pandemic, 44 percent of U.S. families with children—or 14 million households—did not earn an income high enough to cover their families’ living expenses.Footnote # 28
- In North Carolina, the number of mid-career adults (age 34-45) that earn less than what they need to cover living expenses is slightly higher, at 46 percent.Footnote # 29
- One in five children in North Carolina live in poverty.Footnote # 30
- Families headed by women and Black, Latino or Hispanic individuals are much more likely to be struggling economically—both before the pandemic and now
- Low-wage workers have experienced higher rates of pandemic-induced unemployment, and low-wage jobs have been the slowest to return. Footnote # 31
Case Study
Sean Degnan is no stranger to activism. While in college studying English and theater, he attended so many protests on campus that he missed classes and wound up on academic probation.
While this passion for advocacy may not have been great for his GPA, it has been an underlying theme in the way he runs his businesses. Recently, Degnan’s two Triangle area restaurants, SoCa and kō-än, implemented a $15 an hour minimum wage and instituted 14 days of paid sick leave for each employee—groundbreaking policies in the world of hospitality.
“Our industry is going through a reckoning right now,” says Degnan. Spurred by the recent COVID-19 pandemic, Degnan and his teams at both SoCa and kō-än worked together to rethink the way they run their restaurants in a world that was no longer safe for all. They rewrote their mission, values and vision while remaining committed to sustainable hospitality.
“I waited 14 years to see this, and to be a part of it just brings tears to my eyes.”
– Francisco Almaguer
It all began with the decision to provide sick time to restaurant employees. “If you’re going to reopen a restaurant in a pandemic,” says Degnan, “then you’ve got to incentivize people to stay home if they don’t feel well.”
Prior to the COVID crisis, less than half of employees in the hospitality and food service industry received any paid sick leave, and 60 percent of service and retail workers report going into work sick, in large part because they lacked access to paid sick leave.
In a world facing a global pandemic, the SoCa and ko-an teams knew it was time to change. The 14 days at SoCa and kō-än was based on quarantine guidelines for those who are having symptoms of or have tested positive for COVID-19. This level of paid sick leave also provides peace of mind to employees afraid to lose money if they miss a shift—money that their family may need to provide basic essentials. On top of lost wages, working parents without paid sick time are also more likely to accrue higher family medical expenses.
The next logical step after sick leave was to implement a $15 an hour living wage. Because so many restaurant workers supplement the $2.13 an hour minimum wage in their industry with tips, the SoCa and kō-än teams knew that wage was not enough financial security to help people make the choice to safely stay at home.
“You can’t be incentivized to stay home when you’re sick if you don’t make enough money when you stay home,” says Degnan.
The new wages and sick leave have made a significant impact on the employees in each restaurant. Francisco Almaguer, the pastry chef at kō-än, recalls telling the prep people in the kitchen about their new wages. “I was just about to cry because you could see the relief and happiness on their faces.” Almaguer says these new policies, especially the paid sick leave, makes employees feel comfortable enough to speak up and say, I’m not feeling well. It’s a large burden off the shoulders of every member of the restaurant staff and their families.
Degnan and all the staff hope this is a shift for the industry as a whole. “We’re trying to be the guinea pigs,” says Degnan, “the ones who jumped first to see what happens.”
Almaguer, though, has seen changes like this before and hoped to see them again one day. After immigrating to the US from Mexico, Almaguer worked his way up from dishwasher to chef in restaurants in California. In that time, he worked with one chef who announced to the staff that she would be raising the minimum wage. “She said, ‘I don’t think what we’re doing is right. You live in San Francisco on a minimum wage and it’s impossible.’ And she raised the minimum wage to $12 an hour,” he says. That was 14 years ago, and Almaguer never thought he’d see that again.
“The $2.13 an hour had been thrown in my face so much,” says Degnan, “but you’re allowed to pay people more than that. If you’re paying the minimum you can pay, that’s your choice, but you can be competitive and pay people more than that. And then we did. And everyone is prouder of the work we’re doing.”
Including Almaguer who’s excited to be a part of these changes. “I waited 14 years to see this, and to be a part of it just brings tears to my eyes.”
Sample benefits: SoCa and kō-än restaurants
- $15 and hour minimum wage
- 14 days of paid sick leave
- Health insurance (coming soon)
- Paid maternity and paternity leave