Cornell University: Tompkins County living wage study reveals racial disparities
Living wage legislation would lead to pay increases for 30% to 40% of all workers in Tompkins County, and 65% to 75% of Black workers, according to a new policy brief spearheaded by the ILR School.
“I was really struck by the racial disparity,” said ILR Ithaca Co-Lab Director Ian Greer, who led the study. “We’ve been talking about racial disparities throughout this pandemic, and when it comes to living wage, they’re really striking.”
The research was commissioned by Tompkins County as part of the Tompkins County Living Wage Working Group. Convened by Pete Meyers of the Tompkins County Worker Center and Anna Kelles, then a county legislator and now a New York State Assembly member, the group includes elected officials, employers and local activists.
Members gathered relevant labor market data for Tompkins County, then conducted an analysis to understand how a living wage increase would affect benefits. Finally, Greer conducted an employer study, interviewing 40 employers to gauge how the pay increases would affect them.
The term “living wage” refers to a theoretical income level that allows individuals or families to afford adequate shelter, food and other necessities. The researchers used a calculation of living wage from the Ithaca-based Alternatives Federal Credit Union. Currently, the living wage for Tompkins County is $16.61 per hour, while upstate New York’s current minimum wage is $13.20 per hour.
According to estimates from research published in May 2021, 660 Black workers in Tompkins County made less than a living wage and 343 made more. Among white workers, about 11,000 were making less, while 26,000 were making more.
The group found that only 2% to 3% of workers would lose benefits from government assistance programs – such as Supplemental Nutrition Assistance or Medicaid – if they received raises. But, Greer said, fewer workers would be affected if they reduced the number of hours they work, or if benefits thresholds were reformed to allow more earned income. The group also found that while employer opinions varied, most support the implementation of living wage legislation in principle.
“We found out that there are a lot of employers who are not affected by it because they already pay a living wage,” Greer said “We found out that a lot of the employers who don’t pay a living wage are trying to do so and they’re adjusting their practices and finding ways of doing it. We also found out that there are employers who already pay a living wage, but are opposed to legislation for mainly philosophical reasons.”
The researchers’ policy brief identifies issues brought up by employers:
How can organizations adapt: A clear timeframe, financial support and consulting expertise were all suggested as possible ways policymakers could help.
Fairness to longtime workers: Most employers – even some who supported the living wage proposal – were concerned that increasing the minimum wage to a living wage would reduce the pay gap between more experienced and less experienced workers, and would be seen by experienced workers as unfair.
Possible exclusion of some workers: For example, restaurants, bars and cafes would oppose applying the living wage to tipped workers, because they see tips as an important work incentive.
Greer said that while the working group does not take a definitive position on the subject, its analysis gives a clear indication that a substantial minimum wage increase would reduce inequity.
In addition to Greer, researchers from the ILR School – including Russell Weaver, Sally Klingel, Reed Eaglesham and Maru Rodriguez – as well as colleagues from Ithaca College and McMaster University presented their findings in August to the county legislature’s Workplace Diversity and Inclusion Committee.