May 12, 2009 — Food, health care, utility bills — how much does the average local family have to earn each year to cover the most basic expenses without going on welfare?
Right now, there's really no answer to that question. But the Bureau of Economic Research (BER) is searching for a firm that could come in and develop a local self-sufficiency standard — that is, nail down exactly what it costs to live here and keep families running above the federal poverty line.
Through a bill sponsored last year by former Sen. Basil Ottley Jr., BER was appropriated $100,000 to conduct the study. (See: "Labor Committee OKs Funds for Living Wage Study.")
"We originally issued a request for proposals last month, but had only one person respond," said Lauritz Mills, BER's chief researcher. "And the firm responded after the deadline, so we reissued for June 2 to allow more people to submit bids. We're also looking off-island, and once we get the responses and select the candidate, we should have a self-sufficiency standard established by next year."
Factoring in everyday expenses ranging from rent to taxes, the self-sufficiency standard would also account for differences in income based on age, family size and number of children, she explained. The Senate or governor can then use that information to set what's called a living wage — a minimum hourly wage that would ensure full-time workers are bringing in enough to support their families without public assistance.
"We've seen that there are many ways we can do this," Mills added. "The government, for example, may decide that anybody with a government contract or anybody that's the recipient of government benefits — like EDC companies — would be required to pay living wages, instead of saying that every business must pay."
Living wage laws can also set standards for employee benefits, such as health insurance and vacation time.
More than 140 U.S. cities and counties have living wage ordinances, or ongoing living wage campaigns, Mills said.
"When they were developed in the 1960s, the federal poverty guidelines were based on a single item: food," she explained. "They didn't take into account all the other costs we're looking at. Instead, what's done every year is to increase it for inflation, and that's it. That's why it's too low — and that's why a number of states have minimum wages above what is considered to be the poverty wage."
According to federal guidelines, a family of four earning below $22,050 is considered poor.
In the territory, the minimum salary for government workers is $20,000.
"Our median income is the lowest in the nation — including Mississippi," Mills said. According to local statistics, the overall median family income for the territory was $38,914 in 2006, compared to $58,407 on the mainland.
In 2006, about 27,986 residents and 6,479 local families and 8,491 children under the age of 18 were living in poverty, according to information from the Eastern Caribbean Center.
"What we would like to see at the end of this process is a true picture of what it costs to live in the Virgin Islands," Mills said. "And from there, we can really begin to take the steps as policy makers to begin addressing the large number of people that are living in poverty all over the territory."
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