Just Economics put the 2023 Living Wage Certification on hold for the first two months of the year as the organization planned for a few changes to the program. Today, March 1st, Just Economics is announcing the 2023 Buncombe County Living Wage Rate and the new addition to the living wage program, a pathway toward living wages by certifying as a Living Wage Pledged Employer.
The 2023 Living Wage Rate is $20.10/hr. This rate represents the wage floor that would allow a single person working full-time to qualify for a 1BR apartment in the Buncombe County area. Just Economics uses a four-year rolling average of the Fair Market Rent (FMR) as determined by HUD to calculate this hourly wage used for Living Wage Certification.
Additionally, Just Economics is also excited to announce a new level of certification – Living Wage Pledged Employers. These employers are paying a minimum wage rate of $18/hr and have committed to increasing their pay rate annually by 3% plus the annual rate of inflation. This new “Living Wage Pledged” certification is a recognition of both their current pay rate as well as their dedication to making annual pay increases until they reach the current Living Wage Rate.
This new two-tiered system aligns with the national program Just Economics is in partnership with, Living Wage For US, a living wage certification program in the United States using internationally recognized methodology. The entry-level wage certification is designed to assist employers who have made a commitment to achieving the Living Wage Rate. The $18/hr starting rate for Living Wage Certified Pledged employers was calculated by Living Wage For US in consultation with both business and labor groups. It represents a starting point that is more attainable by some organizations, while still offering a reasonable pay for workers as they grow towards the $20.10/hr rate.
Just Economics certifies employers in Western North Carolina using two different sets of wage criteria–one for Buncombe County and a separate wage rate for the rural counties in Western North Carolina. The 2023 Living Wage Rate for employers in rural counties outside of Buncombe County in Western North Carolina is $16.40/hr.
The Just Economics Living Wage Certification Program began in 2008. The model used for certification was based on the Tompkins County Workers Center in Ithaca, New York. Over the last fifteen years, the program has grown to include over 400 Western North Carolina employers, and is the largest such program in the nation, and Just Economics leads the national Living Wage Network.
Frequently Asked Questions:
What has changed with Just Economics’ Living Wage Certification Program in Buncombe County?
The 2023 Buncombe County Living Wage Rate is $20.10/hr (with or without benefits). This wage represents the lowest wage that will allow an employee working full-time to qualify for a one-bedroom apartment in Buncombe County, based on a four-year average of the Fair Market Rate released by HUD. The increase from the 2022 Living Wage Rate of $17.70/hr to the new 2023 rate of $20.10/hr reflects the significant increase in the cost of housing in our community.
Just Economics has also introduced a new path for employers who wish to become Living Wage Certified. This new program requires that an employer’s lowest paid employee earn at least $18/hr AND has a requirement that the employer pledged to increase their rate of pay every year by 3% plus the cost of inflation. For instance, if the 2023 annual inflation rate were 4%, wages would need to be increased a total of 7% from $18, with the new rate of pay being $19.26/hr.
While the Living Wage Pledged employer is a new aspect of our program, we have always allowed Living Wage Certified Employers a grace period to take up to a year to come up to the new living wage rate, and have often had Living Wage Certified Employers at different rates in the same year. The new Pledged Employer level will take the place of the grace period.
After some confusion with the changes to our formula we implemented in 2022, we made one minor change in our formula reverting back to using 2080 hours (instead of 2000) as the number of full time working hours used to calculate the Living Wage Rate.
What has stayed the same?
The basic formula of our Living Wage Rate has remained tied to the cost of housing. We use the figures from HUD that report the Fair Market Rent for a one bedroom apartment rental in the Buncombe County area. We use a four-year rolling average of this number to adjust for dramatic changes and mitigate any spikes up or down.
Our formula calculates the wage floor that would allow a single person working full time to qualify for a lease for a 1BR apartment in the Buncombe County area by making three times the rent, a common standard used by landlords to obtain housing.
My employer is Living Wage Certified, but I don’t get paid $20.10/hr – are they out of compliance?
If your employer was certified in a previous year, they may still be paying the old living wage rate. Businesses and organizations that certified in 2022 at the rate of $17.70/hr will not be recertified until 2024. Businesses that certified in 2021 will be due for recertification in 2023, but do not have to submit an application verifying their new pay rates until June 30th.
Additionally, members of our new program, “Pledge Living Wage Employers” are required to pay a minimum of $18/hr with a commitment to raise their annually at the rate of 3% plus the rate of annual inflation. This program will include a yearly check in to ensure this pledge is being met.
Any new employer seeking Leading Living Wage Certification must pay at least $20.10/hr.
Where did the $18/hr rate come from?
The Pledged rate of $18/hr was calculated by the national certification organization Living Wage For US. Their methodology also has the two-tiered system that Just Economics is implementing this year and requires the same commitment to wage growth. This process has been vetted by national labor groups as a proven method of raising wages for workers as their employers work towards the Living Wage Rate.
Why are you certifying employers at a rate below your calculated Living Wage Rate?
This Pledged level of certification is a strategy Just Economics is using to support and promote businesses that are not yet ready to make the increases necessary to reach the Living Wage Rate of $20.10/hr. This is an acknowledgement that the cost of housing in Asheville has pushed the Living Wage Rate to increase faster than inflation and at levels that can be difficult for employers to keep up with, while encouraging participation in our program and pushing the wage floor higher for area employees. By tying this $18/hr wage requirement to a pledged annual increase in wages, Just Economics hopes to raise the pay rate for low wage workers and support these employers as they continue on the path to a living wage.
How are decisions about changes to the Living Wage Certification Program made at Just Economics?
Just Economics strongly values the input of our community when making changes to our programs. This particular set of decisions regarding our wage rate, formula, and new Pledged Living Wage Program were the result of two years of input from stakeholders, employees, employers, partner organizations, and the community at large. Decisions are made by our Board of Directors, and always with the Just Economics mission as the goal – a just and sustainable local economy that works for all in Western North Carolina.