As new college graduates seek jobs, they may quickly face sticker shock with respect to a livable wage fight. But who’s to blame here?
As someone who occasionally has at least a hand in hiring new employees, I hear a lot of talk about a livable wage. I get it. No one wants to take a job if they can’t afford to live where they’ll be working. But I suspect that workers are placing at least some blame where it isn’t necessarily due.
First, let me just put something out there that younger readers might need to hear. Older folks are always going to compare current salaries to how little (relatively speaking) they made when they started out. That’s human nature, I think.
My first full-time job in TV, as an on-air reporter, paid $13,000 per year. I’m not making this up. When I tried a few calculators to determine how much $13,000 back then would equal in today’s dollars, the consensus seems to be around $28,500.
For stores and fast-food restaurants that pay $14 an hour — some now pay more than that — those employees, assuming they work 40 hours a week, would earn $29,120.
So some fast-food employees are making more than the equivalent of my salary in the profession for which I received a college degree. I never worked at a fast-food restaurant. However, I am reliably informed that when I started in TV, fast-food workers didn’t make more than I did.
I bring this up to make the following point: I made a lot less an hour than people start out making today. But I don’t have a problem with that. I don’t expect young people to suffer just because they’re young. A lot of people my age and older don’t always seem to feel that way.
Yes, there is such a thing as paying one’s dues. But there’s a difference between working your way up and burying yourself in poverty. Everything costs more now than it did 30 years ago. That’s life.
But those starting out in 2024 will make more than I did in 1992! I would expect nothing less. That’s life, too.
Breaking down the numbers a bit: Then vs. now
Officially, the minimum wage in South Carolina is $7.25 per hour. At 40 hours a week, that adds up to what is now a paltry $15,080 per year. Of course, if you’re still living at home, that’s one thing; if you’re trying to live on your own, you’re not going to make it.
But how much does it take to make it? There’s no easy answer there.
I work for a company that has set its own minimum wage that’s higher than some fast-food minimums. My company offers a minimum wage of $18 per hour. Some similar companies either don’t set a minimum wage or they set one that’s less than that.
Let’s do the math: $18 per hour, for 40 hours a week, adds up to $37,444. That’s considerably better than the salary I started with. So it definitely passes muster when you look at it against 1992 standards. But what about 2024 standards?
I’ve recently been involved in interviewing people for an open position. That position pays more than $18 per hour. But several have bailed during the interview process citing the money.
To be fair, in the interviews I’m involved in, the money is the first thing we talk about. We know that job candidates always want to know about money but that some are afraid to ask right off the back. We feel it’s a waste of everyone’s time to go through a long interview and then find out the money isn’t what the applicant is looking for. Therefore, we try to be transparent about that from the first moments of the conversation.
A few years ago, workers were staging protests demanding a $15 federal minimum wage. That, they said, would put everyone on more of a level playing field. That, they said, would help people step up out of poverty.
Some of us knew a $15 wage still wouldn’t be enough to make some take a job. Even fast food businesses that have managed to offer that much are still struggling to find workers who are actually willing to show up.
So what’s the problem? It’s simple. Depending on where you are, $15 per hour isn’t a livable wage. In some states, $20 per hour doesn’t cut it. The Massachusetts Institute of Technology put together this resource showing what a livable wage actually is for various states.
Let’s look at Charleston, South Carolina just for an example. It sets that wage at $24.35 for a single adult with no children. I’ll come back to that figure in a minute.
If you have a roommate, you each would have to make $15.94 per hour. A lot of young people have no interest in having a roommate. I get it. But in some cases, they might just have to so they can make ends meet.
But here’s where the livable wage fight goes a bit crazy
In case you’ve lived in the same place for a long time and haven’t looked at real estate and rental prices for a long time, you might be in for a shock.
I just scanned a few prices for apartment rentals in the Charleston area. Some one-bedroom units range from about $1,300 per month.
But I found what appears to be a nice apartment complex where one-bedroom units start at $1,743 per month. Depending on where you live, that might sound outrageous. Or, it might sound like a bargain.
Here’s a little harsh life lesson for people who haven’t yet rented an apartment: most rental companies demand that a potential renter make three times the rent price per month. Years ago, before the pandemic and the skyrocketing rental prices that followed, that three-times-the-rent total wasn’t so unreasonable. But these days, that creates a major problem for prospective employees and those who want to hire them.
It shouldn’t be difficult to figure out why: that $1,300-per-month apartment would require an applicant to make at least $3,900 per month, or $46,800 per year. That works out to $22.50 per hour. That is, at least, below MIT’s estimate of a single person’s livable wage.
But what about that nicer $1,743-per-month apartment? Three times $1,743 works out to be $5,229 per month that the candidate would have to make. That translates to $62,748 per year. That, in turn, works out to be $30.17 per hour. That’s far above MIT’s livable wage estimate. But it’s reality.
Maybe some people believe that a new college graduate or a relatively inexperienced worker should start off making nearly $63,000 per year. Some of us might disagree with that notion.
Most potential renters can get around the triple-rent salary requirement by having a roommate who can split the costs of a two-bedroom apartment or by having someone co-sign for them. I can understand why someone might not want a roommate. I can understand why finding a co-signer might be a challenge for some.
But I also understand that if property management companies are going to keep raising prices beyond the rate of inflation and continue making unreasonable income requirements, they’re costing employers members of the workforce and they’re costing newer members of the workforce jobs.
Maybe it’s time for action on housing prices
Yes, it’s easy to blame employers for simply “not paying more.” But employers have the same challenge that employees have: the budget.
It’s not simply an employer vs. employee problem. There’s much more involved than that. Housing cost is a major consideration now that it hasn’t always been.
It will continue to be so until the housing industry faces some sort of regulation to slow things down or help would-be renters afford to live there. In the Charleston area, new homes are popping up everywhere. But when new homes come, existing homes rarely drop in price. The new homes start off higher.
For some, the law of supply and demand seems to not be working all that well when it comes to finding a place to live. It’s beyond frustrating to see people who’ve just graduated and who are eager to enter the workforce have to turn down good jobs just because of housing costs.
The best advice I would give someone looking for a job is to do their homework before they apply. Know what housing is going to cost. Try to get a sense of what a job you’re interested in will pay. If the math doesn’t work, it just won’t work…unless you’re able to find a roommate or a co-signer. It’s not ideal, I know. But there are some things that neither the would-be employee or the hiring manager can control.
The more you prepare during your job search, the less time you waste…including your own!
