TOMPKINS COUNTY, N.Y. — Would it be feasible for employers in Tompkins County if the minimum wage was set as a living wage — a wage that would adjust as the cost of living changes, a wage that someone working 40 hours a week could meet all their living expenses with while also saving a little money? And what would the effects of that change be on workers in the county?
These are some of the questions taken up in a recently published report, titled “A Living Wage for Tompkins County?” from the Ithaca Co-Lab at Cornell University’s School of Industrial and Labor Relations (ILR).
The research behind the report extends back to 2018, when a working group was convened with the goal of determining the feasibility of making the minimum wage a livable one, which is currently calculated at $16.61 an hour. The findings of the report from the ILR’s co-lab show that many employers that are paying below the current living wage will be able to adapt. However, the employers that will struggle will be in notably low-wage sectors, like restaurants.
The report also puts in clear terms the racial disparity that exists in the local economy. Of the county’s 51,000 workers, approximately 39.7% earn less than the living wage, but 74% of Black workers earn less than the living wage, the study found by drawing on data from the U.S. Census.
“The vast majority of Black workers in this county are making under our living wage threshold,” said Ian Greer, Director of the ILR’s Ithaca Co-lab and one of the reports authors. “So if you bring up the minimum wage to that level, you bring up the wages of the vast majority of Black workers.”
The living wage is a concept that has roots going back almost three decades in Tompkins County. Alternatives Federal Credit Union conducted its first living wage study in 1994 in an effort to identify what it would cost to support someone above the poverty level, according to their website.
Alternatives’ study, conducted every two years, accounts for the average costs an individual may contend with; from housing, to car payments, to insurance, or a new pair of shoes. It has become a powerful local reference, in part, through the advocacy of the Tompkins County Workers Center, a nonprofit that’s focused on worker’s rights and raising the standards at the bottom of the economic ladder. The Worker’s Center awards a living wage certification to employers that commit to making the minimum they pay their employees what Alternatives calculates in its living wage study.
The power to make the minimum wage a living wage, though, is not in county hands. It is the state’s authority. In a budget agreement that Governor Kathy Hochul announced that state lawmakers had reached in Albany, New York is now supposed to see its minimum wage raise to $17 by 2026, after which increases will be tied to inflation.
“A lot of times minimum wages are the outcomes of sort of political conversations rather than the actual cost of living for workers,” said Shaianne Osterreich, a professor of economics at Ithaca College and one of the authors of the report.
Ithaca’s ILR Co-lab interviewed 40 local employers across numerous sectors, including higher education, healthcare childcare, government, manufacturing, food and beverage, hospitality and retail. The group of employers is not statistically representative of the larger population of employers in the county, reads the report, but was chosen to be diverse, though, skewed towards employers defined by low-wage workers.
The majority of employers that the reports authors spoke to supported a living wage as a minimum wage. Out of those 40 employers, nine had said they were opposed to changing the minimum wage to a living wage in 2019 but in 2021, after the economic shock of the COVID-19 pandemic, seven of those nine would change their view according to the study.
The reasons for the change that employers shared with researchers ranged from the need to recruit and retain employees, as well as boost morale in what became a challenging labor market.
Five employers that had told researchers that they would not be able to afford paying a living wage in 2019, reported in 2021 that had shifted to doing so.
Greer said that the survey revealed to him that the challenge of filling vacancies for some employers “really changes the tone of what employers say about minimum wage increases.”
“When push comes to shove, the business doesn’t want to go out of business,” said Osterreich.
Wage compression would emerge as a common concern from employers, the study found. The report details that the concern for employers stems from wanting to avoid creating a sense of dissatisfaction between workers who feel that they’re compensation is not proportionate with their level of responsibility, and would then need to increase wages for staff, and incur those additional costs as well.
While the report is framed as a feasibility study, its authors cautioned that it is not meant to serve as a recommendation for the county to go ahead and pursue making the living wage the minimum wage. Rather, Greer and Osterreich said they wanted to see the findings they generated help inform the conversation and debate around the proposal of making a living wage the minimum wage in Tompkins County.