It’s time for wages to catch up with cost of living

Nathan Charles

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Many years ago, my uncle moved from his hometown of Oakland to Modesto in the Central Valley. He was starting a family with his wife and working in San Francisco, but when he began to look for a bigger house, he found the real estate market to be too expensive.

This problem didn’t just affect my uncle. The Bay Area as a whole is one of the most expensive places to live in all of America, and this has forced hundreds of thousands of workers to migrate further away from their workplace.

A study done by Expatistan, a website that compares the cost of living in cities internationally, ranked San Francisco second out of 86 cities in highest cost of living in America, and sixth out of 337 cities worldwide. In addition, a report from Redfin, a real-estate website, revealed that San Francisco lost more residents than any other U.S. city in the last quarter of 2017, and an article by Moneyish cited the cost of living in the Bay Area as about 50 percent more expensive than the national average.

The current population of San Francisco is roughly 900,000, but a study done by the American Community Survey in 2016 found that the population increases over 20 percent during the workday as an influx of workers flock to the city for their jobs. Couple those numbers with the fact that the average commute in San Francisco is 31.4 minutes, according to The Mercury News, and there is a developing trend: people aren’t living where they’re working.

The companies employing these workers aren’t matching their wages with the amount it costs to live in their area. Cost of living is relatively straightforward: it is defined as “the price of goods and services required for maintaining an average level standard of living,” by Business Dictionary. However, what we’re seeing in parts of America, notably the Bay Area, is that people are not making enough money to maintain that average standard of living.

This is completely irresponsible on the part of corporations. Everyone deserves the right to a living wage, but many companies are denying them even this basic compensation. For companies based in higher-end areas, such as those in the Financial District of San Francisco or Silicon Valley, it is imperative that they raise wages across the board to match standard of living costs. Yes, that means they will be paying more for services than companies in other areas, but only because they can afford to. It’s a two-way street—because a company is based in a wealthier region, they can charge higher prices for their goods as the average population will have more money. Since they are charging more for their goods, they’re generating more profit, meaning they have extra funds to allocate towards paying their employees fairly. While this is not necessarily true for companies like those in the tech industry, the principle remains the same. It makes no sense for a company that nets $1 million per year and a company that nets $10 million per year to pay their employees the same rates.

The fact is wages have not kept up with the rising cost of living across America. The federal poverty level for a family of four in the lower 48 states is set at $24,600. However, that money is worth less than face value in 21 of those states due to inflation and cost of living expenses. States that are seeing dramatic rises in quality and cost of living, such as California and Hawaii, have failed to accommodate their workforce with fair wages.

Inflation in the Bay Area has steadily hovered over 3 percent per year for 3 years now, but wages only rose 0.4 percent in Santa Clara County and 1.3 percent in the East Bay in 2017, according to The Mercury News. This problem can even be seen locally at Redwood, where a number of teachers and staff commute from communities in Novato and northern San Rafael because they can’t afford to live next to the school where they teach.

Even in general terms, families in Marin are underserved when it comes to wages. According to the Marin Independent Journal, the median hourly wage in Marin is $23.80, 31 percent higher than the national average of $18.12. However, even this large increase of pay is not enough. In the same article, it is mentioned that a family of four in Marin with two working parents, one child in school and one in preschool would require an annual income of $129,313 to be “self-sufficient.” This means both parents would need to make $30.61 an hour, nearly $7 more than the $23.80 average.

There are, of course, a wide range of arguments to take up against this call for equity. Some will say if one can’t afford to live in an area then they should move. Take it from a guy who’s moved three times: it isn’t easy to uproot and find a new home. Or, people might advise someone not to take a job in an area that is above their price range. However, what if it is the best offer they have, or the one they’ve been waiting for? Can they afford not to take it? Others will point out that corporations can’t afford to raise all their wages. While this is true for some, like those operating on a smaller scale, losing dollars every year or just starting up, a company with enough overhead should dedicate some of it to treating their workforce fairly.

Those who have been paying attention to the news may point out the recent growth spurts of the minimum wage—it has climbed from $5.15 in 1997 to $7.25 in 2009—and call it sufficient enough. However, many experts have estimated it would take over $11 an hour for someone to have a fair living wage in most parts of the country. Another argument claims that lower-level employees don’t deserve higher wages for performing basic tasks. However, they must realize that wages should not be set by the type of job, but rather the economic situation of the area surrounding it. While $7.25 may be enough to support an employee living in Mississippi, it wouldn’t come close to helping in California, where the cost of living is 60 percent higher than the southern state, according to the Goldwater Institute.

If companies want to pay you pennies on the dollar for the profit they bring in each year, they should relocate to a better-suited environment like Arkansas or Oklahoma. However, if they are going to base themselves in an affluent region, they should take care to compensate their workers accordingly.

About the Writer
Nathan Charles, Author

Nate Charles is a second-year reporter for the Bark. He enjoys reading, writing and all things sports. He is a jumper on the Track and Field team and loves...

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It’s time for wages to catch up with cost of living