Update to Living Wage Report Presented

Numerous families in Lackawanna and Luzerne fall below official federal poverty measurements and there are also many others who work full time and are above the poverty line, but still fall short of a living wage that can adequately provide for themselves and their children, according to a new study that offers recommendations to close the gap and promote economic security.

In partnership with The Institute for Public Policy and Economic Development, The University of Scranton’s Office of Community and Government Relations, Ellacuría Initiative and Political Science Department released a comprehensive report that details how conditions have changed three years after their groundbreaking “Living Wage Report 2016.” A living wage is a rate at which a worker can reach a standard of living that meets essential basic needs and enables the worker to live a modest but dignified life.

“This report includes the perspectives of community leaders who illuminate the challenges faced by our neighbors,” said Scott R. Pilarz, S.J., president of The University of Scranton. “These voices, along with the data, put into perspective the difficulties so many in this region face in affording and accessing basic needs. The gaps between a minimum wage and a living wage are stark and the persistence of poverty troubling, and yet the report is in no way hopeless. As Pope Francis has said, ‘Poverty is not an inevitable misfortune: it has causes that must be recognized and removed, in order to honor the dignity of many brothers and sisters.’”

To understand better the extent of income issues beyond standard government poverty measures, The Institute for Public Policy and Economic Development used a living wage calculator developed by the Massachusetts Institute of Technology. The Institute and then analyzed federal, state and county economic and census data from 2017 and 2018.

Several resources are available to low- and moderate-income households that do not earn a living wage in NEPA. However, for many programs, some families can make too little to achieve family economic security but not enough to qualify for some assistance. “The ‘benefits-cliff’ effect is real as low-wage work can result in a difficult transition: benefits swiftly decline but economic stability is still out of reach. The availability of benefits are also a concern as many government programs are being cut or curtailed,” said Julie Schumacher Cohen, director of the University’s Office of Community and Government Relations, “which puts more and more families in an economically unviable position. Northeastern Pennsylvania has made significant economic and community development progress in recent years and has a generous social service and charitable sector, but the study shows that serious challenges remain.”

“While some solutions to address earning a living wage may seem partisan to some, this study is not intended to be a partisan paper,” said Teri Ooms, director of The Institute for Public Policy and Economic Development. “It reflects the real-life situation here in NEPA, where income inequality has increased over the past decade and our own residents cannot meet basic needs. It is important for everyone to band together and work on solutions. Mitigating this problem will improve our regional economy and reduce the need for social service programs.”

“While not necessarily surprising, it is disheartening to see how difficult economic conditions remain for residents of Lackawanna and Luzerne counties following ten years of economic growth,” said Michael Allison, Ph.D., coordinator of the Ellacuría Initiative and chair of the University’s Political Science Department. “Our community is not prepared to weather a significant economic downturn.”

The study draws on the region’s network of social service agencies to shed additional light on the challenges and offers recommendations rooted in Catholic Social teaching. Leaders of the community agencies point to the fraying social safety net and the struggle to help families overcome financial shortfalls, even when they earn more than the state’s minimum wage.

The findings of the Living Wage Report Update include: 

• In Lackawanna and Luzerne counties and across Pennsylvania, the living wage income need has increased for all family classifications from 2016 to 2018. For a family of two adults and two children in Lackawanna and Luzerne counties, the living wage income rose from $44,056 to $48,069, a 9.1 percent increase.
• The region as a whole has an above-average proportion of families living in poverty compared to the rest of the Commonwealth.
• The state’s minimum wage of $7.25 does not meet the living wage standard for any of the family compositions examined in the study. The gap between minimum wage income and living wage income has increased as of 2019.
• The cost of meeting some human needs increased dramatically since the 2016 report, including housing costs by 20.2 percent; medical expenses by 12.7 percent; transportation costs by 4.2 percent; and childcare expenses by 4.4 percent.

Achieving economic security requires a multi-pronged team approach that involves public policy changes, further economic and workforce development efforts, government social safety net programs, and private and individual charitable and service activities. “Underlying each of the following recommendations is an effort to identify how various sectors have a role to play in ensuring economic security for a greater share of our neighbors. Community partners can work together to connect families with opportunities and resources in their communities,” said Cohen.

The recommendations of the Living Wage Report Update include: 

• Increase wages: To foster and maintain more family-sustaining jobs, raise the Pennsylvania and/or federal minimum wage, and further increase economic development and workforce activities, including strategic higher education and K-12 collaborations to ensure a match between regional skills and needs.
• Support tax credits for low-income families: Support federal tax credits, and potential expanded state tax credits, to assist with basic costs for low-income families, including populations experiencing special economic challenges, such as grandparents serving as caregivers in the wake of the opioid epidemic.
• Address housing affordability: Identify and implement a range of strategies aimed at providing affordable housing in ways that address both the necessity of continued economic development and the needs of low-income residents.
• Expand access to existing social safety net programs that address issues, such as food insecurity and early education, and ensure that federal and other poverty measures adequately address the realities of low-income Americans.

The study dovetails with the University’s commitment, as a Catholic and Jesuit institution, to an educational mission that includes the service of faith and the promotion of justice. The University draws on the efforts of Catholic and Jesuit partners to raise awareness of and advocate for public policies in keeping with emphases within Catholic Social Teaching on principles of human dignity, community and the common good, dignity of work and the rights of workers, solidarity, the option for the poor and vulnerable, and the role of government and subsidiarity.

The University released the report update at a State of Scranton seminar luncheon titled “Living Wage Study: Three Years On” on Nov. 15 on campus. In addition to presentations on the updated report, the more than 130 community leaders, business professionals, government officials and faculty members in attendance discussed and prioritized in small groups how we can collectively respond to issues of economic insecurity in our region.

The event also included a short video featuring interviews of individuals who have experienced economic insecurity in our community, including their recommendations for community action.