October, 25 2016, 12:00am EDT
Low Wages and Student Debt Break the Promise of Prosperity
 To make ends meet, a single adult with student loan debt needs to be paid more than $17 per hour in most states
WASHINGTON
Some 43 million people in the United States have student loan debt. Yet, that significant expense is left out of traditional cost of living or living wage calculations. Considering that a monthly student loan payment is about the same as a car payment or groceries, and is often more than health insurance or utilities, it's a critical factor in family budgets.
Tuesday, People's Action Institute releasedWaiting for the Payoff: How Low Wages and Student Debt Keep Prosperity Out of Reach. The report calculates how much a single worker must be paid hourly, working full-time, to make ends meet. There is also a second calculation, adding in the monthly student loan expense.
Nationwide, adding in the median monthly student debt payment to the cost of living increases the single adult living wage to more than $16 per hour in every state, and to more than $17 per hour in most states.
Waiting for the Payoff includes numbers nationally, and for each of the 50 states and Washington, D.C. for both the single adult living wage and student debt living wage.
* Traditional Single Adult Living Wage and Student Debt Living Wage by State
* Single Adult Living Wage and Current Minimum Wage by State
* Median Student Debt and Monthly Payment for Graduates by State
"In the past, the promise of a college degree was a more prosperous life - certainly you could expect to be able to make ends meet. But that promise has been broken," said LeeAnn Hall, co-executive director of People's Action Institute. "College graduates, especially women and people of color, are struggling with low wages and high student loan debt that doesn't allow them to support themselves, much less their families.
"We need better wages and affordable higher education for everyone if we are all going to prosper and move our country forward together," said Hall.
Waiting for the Payoff shows that a $15 an hour minimum wage is a modest demand - the minimum wage in every state falls far short of an actual living wage. In Alabama, the $7.25 minimum wage is 47 percent of the $15.49 needed to make ends meet - without student debt. In California, the $10 minimum wage is just half of the $19.90 it takes for a single adult to get by. Add in student debt and a worker needs $21.05 to stay afloat in California.
"Higher education is lauded as the great equalizer and a solution to the growing income gap. But wages, even for those with a college degree, have not kept pace and have even declined in many occupations," said Allyson Fredericksen, deputy director of research and author of the report.
"Student debt especially impacts students of color, who are more likely to borrow money for college. Then they are hit again in the job market where women and people of color, even with bachelor's degrees, are paid less than white men with the same level of education," said Fredericksen.
The Job Gap Economic Prosperity Series of reports have been produced since 1999 by the Alliance for a Just Society. Last summer the Alliance merged with several other organizations and is now People's Action Institute.
Allyson Fredericksen continues as the lead researcher and author of the report series.
Please join Fredericksen in a discussion of the report by phone on Tuesday.
What: Telephone conference call to discuss "Waiting for the Payoff"
Who: Allyson Fredericksen, author and researcher for People's Action Institute
When: Tuesday, Oct. 25, 2016
Time: 2 p.m. Eastern/ 1 p.m. Central/ 11 a.m. Pacific
Call-in Number: (515) 604-9000 passcode: 639371#
What is a living wage? A living wage allows people to meet their basic needs, without public assistance, and provides them some ability to deal with emergencies and plan ahead. It is not a poverty or survival wage. In this report, living wages are calculated on the basis of family budgets for several household types. Family budgets include basic necessities such as food, housing, utilities, transportation, health care, child care, clothing and other personal items, savings, and state and federal taxes. This assumes full-time work at 40 hours per week, for 52 weeks per year.
People's Action builds the power of poor and working people, in rural, suburban, and urban areas to win change through issue campaigns and elections.
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