The woman behind Ikea's living wage calculator

http://www.marketplace.org/topics/business/woman-behind-living-wage-calculator

by saticmotion • 12 years ago

51 50 12 years ago

marketplace.org

thyroxo• 12 years ago

http://livingwage.mit.edu/

I found reading the project more interesting than the article.

joelhaasnoot• 12 years ago

It's sad that such a worthwhile tool like this uses data that is four years old. I realise the publish cycle of government agencies is slow and as such is a limiting factor, but in this day and age with everything being fast moving, it can be limiting.

cperciva4• 12 years ago

Olson says it would be too complicated to pay people different wages based on household size

... also, it would be wildly unfair, and quite likely illegal.

GeneralMayhem• 12 years ago

Certainly illegal. Marital status is a protected class in the United States.

dragonwriter• 12 years ago

"Marital status" is unrelated to "household size".

cperciva4• 12 years ago

In Canada we have a "disadvantaged group" rule, which basically says that discrimination is fine as long as you're discriminating in the right direction. I wasn't sure if the US had anything similar.

lambda2• 12 years ago

Huh? Certainly illegal? Then how do you explain spouse and family health care benefits, the cost of which depends on the size of your family?

rubbingalcohol• 12 years ago

Hasn't IKEA heard of the Sharing Economy? Living wage is socialism. We're hackers, we should be figuring out ways to externalize the real costs of doing business onto a contract labor force with flexible hours and no guarantee of basic income. Keep people hungry, that's how you squeeze the most of them.

DanBC• 12 years ago

Kind of depressing that the largest charity in the world pays just enough to live.

http://www.economist.com/node/6919139

sliverstorm2• 12 years ago

What? A charity's purpose is to help those most in need. Every dollar a charity gives to someone beyond what they need is a dollar they can't give to someone whose needs still aren't met.

eternauta3k• 12 years ago

Or they could enable a smaller number of people to get an education and leave poverty.

kiiski• 12 years ago

One might argue that by paying more they could attract better employees and became more efficient at helping the people in need.

lambda2• 12 years ago

I think you missed reading the linked to article. According to the article, IKEA is actually legally incorporated as a charity, though it's only "charitable" purpose is "innovation in the field of architectural and interior design," and the charitable foundation appears to only be a shell built to avoid taxes and funnel money to the founder (in order to maintain the facade, it donates minute amounts to the Lund Institute of Technology).

So IKEA, despite being from all outward appearances a privately held for-profit enterprise, it technically categorized as a charity, and despite all of this pays many of its employees below a living wage, though has now promised to start paying them a living wage, at least according to this calculator.

honksillet• 12 years ago

Charities should not be in the business of enriching their employees. They should be paying as little as possible.

Drakim• 12 years ago

Really? So if there was no minimum wage laws, a charity aimed at bringing people out of poverty should be paying their employees a cent an hour?

SilasX3• 12 years ago

Some charities even use completely unpaid labor!

sergers• 12 years ago

IKEA Richmond BC. Google that + strike, they have been striking for over 1 year over labor dispute.

They demolished the existing one and opened a bigger one right next door. It was barely open before strike shut it down.

The changes in this article do not help Canadian IKEA workers get a fair wage

gaadd33• 12 years ago

Given its about Ikea in the United States, why would it help Canadian workers? Plus doesn't Canada have a much better minimum wage in the first place?

jeffreyrogers• 12 years ago

10.76 x 40 x 52 = $22,380.80

Pretty appalling.

lotharbot4• 12 years ago

I have a wife and a son and we did fine on my salary of $21,000 last year.

There are a lot of parts of the country where that's a perfectly viable wage.

notduncansmith• 12 years ago

That seems nuts to me. I significantly more than that, and it still feels like we're scraping by. Our location doesn't have a particularly high cost of living, either.

oh_sigh• 12 years ago

Yeah, but if they just work two jobs for 40 hours a week each, then they can have an income of $45k. Heck, if you work 3 40 hour a week jobs, you're firmly in the middle class!

SilasX3• 12 years ago

So what would be enough to live on? That would of course depend on where someone lived, and how much that place costs. And so Glasmeier rounded up some of her best graduate students to create, basically, a giant spreadsheet. They loaded it up with the best regional data available, from government and industry surveys, on costs for housing, food, child care, medical expenses, and transportation.

I don't get it: she "avoids tourist traps" (a few paragraphs up) to find the places people really shop. But when estimating cost of living, she uses detached government aggregates rather than finding how people actually make their wages work, meaning she would necessarily miss eg how grandma provides most of the daycare services.

I would think that the primary question in building out a living wage figure would be to ask how people are currently pulling it off on low wages, rather than extrapolate one's own life through some categorized figures.

nhebb• 12 years ago

Most likely the professor is pulling together whatever information she can with the resources she has. Can you imagine how big of a ground effort it would take to collect the information you described?

SilasX3• 12 years ago

Absolutely! That's why I wasn't criticizing the missing country-wide tabulation of such data, but trying to reconcile its absence with the praise of the researcher at the beginning, and how she collects another kind of data on the ground.

Of course, that could just be stuff getting scrambled by the PR machine.

My main criticism was this: if you're going to calculate a living wage, wouldn't the number one question be "How are people currently living on their wages?" Even knowing how one family pulls it off would be tremendously informative, and from that point you could figure the cost of the missing amenities. In contrast, the researcher's approach is to assume they buy everything from some model budget (probably based indirectly on her team's own lives), but less of it.

kome• 12 years ago

Federal minimum wage is below the survival line (without children), as showed by Amy Glasmeier. So low, that corporations have to find what is the real lower bound for the survival of their workforce. (Not even reproduction of the workforce, just its survival) Isn't that absurd?

Let rise the federal minimum wage now.

lotharbot4• 12 years ago

There are lots of people who work but don't need (and aren't worth) survival wages -- high school kids who still live with their parents, for example. Should they be unemployed and therefore unable to gain real-world working experience because they're not worth survival wages?

There are lots of others who need, but aren't worth, survival wages -- like my autistic friend. He partly supports himself working, with the rest coming from government programs. Should he be unemployed and therefore be 100% government-supported instead of 25% government-supported?

It's good that minimum wage and living wage are not the same thing. Let's stop confusing the two.

FLUX-YOU• 12 years ago

There are lots of others who need, but aren't worth, survival wages

That's got to be such a small (and unfortunate) pool of people that I'd happily send some taxpayer money to meet the article's living wage number. We can probably pay for it by not buying another single jet next year or something.

And honestly I'm not trustworthy of corporations' judgments of low end labor worth anyway. For one thing, you can work at extremely busy stores and get paid the same as workers at the very dead stores in the next county over because they use blanket values for these positions.

afafsd• 12 years ago

The wonderful thing about the free market is that you don't have to use magical algorithms to determine the "correct" price of things, you just set the price you're willing to buy/sell at, see how many takers there are, and then adjust the price upwards/downwards.

If you need to hire twenty people, and you find twenty people willing to do the job for eight bucks an hour, and you can't find twenty people willing to do it for seven bucks fifty an hour, then eight bucks an hour is the correct price. It's not that tricky.

The woman behind Ikea's living wage calculator

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