For anyone who lives and/or works here, it’s not exact news that the metro-Washington area is an expensive place to live. It’s no accident that some of the wealthiest zip codes in the country are right here. It takes quite money to just to maintain a modest in the metro-Washington area. Even just “getting by” doesn’t come cheap here. (Even living outside of the district and commuting in to work, I can attest, doesn’t make things less expensive. The farther out you live, the longer and more expensive your commute.)
According to folks at the Council for Community and Economic Research, the Washington area traditionally managed to just miss being in the top ten high-cost urban area. For the third year in a row, the Council’s cost-of-living index, places the Washington area in the top ten most expensive places to live.
The areas ranked as the most expensive places to live included most of the usual suspects, with New York’s Manhattan and Brooklyn boroughs taking the top two slots on the list. But for the third year in a row, Washington snagged a spot in the top 10, driven by the region’s high-priced housing market and relative immunity from the economic downturn.
“Since the beginning of the Great Recession, Washington has catapulted itself into the top 10 based on the housing market,” said Dean Frutiger, project manager for the Cost of Living Index at the council. Washington – which took ninth place in the first quarter- traditionally remained just shy of the top 10 high-cost urban areas, often swapping places with Boston, Frutiger said.
On average, the Washington area is 41.7 percent more expensive compared with the national average. Housing here is more than twice as expensive as in the rest of the country. Groceries are 12.8 percent more expensive, while health care is 1.6 percent more expensive.The region’s cost of living dropped slightly from the same time last year but is higher than 2011.
Washington’s high-priced housing market may have put the Washington in the top ten, but the index is compiled based on the cost of basic essentials – like housing, utilities, transportation, groceries, and health care – that many workers employed by private companies that contract with the federal government can’t afford on what they’re paid.
We find that nearly two million private sector employees working on behalf of America earn wages too low to support a family, making $12 or less per hour. This is more than the number of low-wage workers at Walmart and McDonalds combined.1 Yet, if anything, this figure underestimates the total number of poorly-paid workers funded by our tax dollars. Our analysis encompasses U.S. workers employed by government contractors, paid by federal health care spending, supported by Small Business Administration loans, working on federal construction grants, and maintaining buildings leased by the federal government. This encompasses the largest share of poorly-paid workers funded by our taxes. However, other streams of funding have yet to be analyzed. For example, loans and subsidies from the Department of Agriculture fund giant agribusinesses that employ more than a million farm workers, while grants from the Department of Education fund low-wage assistant teachers, bus monitors and cooks in Head Start and other programs. Due to lack of data, retail and food service workers for concessionaires of the National Parks Service and other federal agencies also fall outside our analysis.
These are employees working on behalf of America, doing jobs that we have decided are worthy of public funding-yet they’re being treated in a very un-American way. Our nation has a history of ensuring our tax dollars provide decent jobs. From the 1931 Davis-Bacon Act to Executive Order 11246 of 1965, and a host of other laws and executive actions, our laws have mandated that companies working on behalf of the American people are upholding high standards of employment practices. Yet as the nature and prevalence of federal contracting, lending and grant-making have changed, and some laws have been weakened, working people have fallen through the cracks.
When our tax dollars underwrite bad jobs, the economy as a whole is weakened and all of us are negatively affected. There is a ripple effect as low-paid workers and their families have little money to spend, hindering economic growth that could be creating more jobs. Poorly-paid workers also contribute less in taxes and are more likely to rely on public benefits to care for their families. In contrast, we would all benefit from an economy where workers earn good wages-and we have a special responsibility to see that the people working on behalf of our nation are paid and treated fairly. Raising standards for people working on behalf of America is one important piece to providing opportunities for workers to reach the middle class.
Behind those numbers are real people, hard-working people, who just want to earn a wage that helps them afford the essentials that don’t come cheap in the Washington area.
- Lucilia Ramirez, who has cleaned Union Station for 21 years spoke of making $8.75 an hour, with no benefits. Struggling to pay their mortgage on her small salary, Ramirez and her husband were forced to rent out bedrooms to strangers just to keep a roof over their heads.
- Katina Washington, who earns $9.65 an hour cleaning offices rented by the Department of Justice, lives with her cousin because she can’t afford her own apartment, and has to rely on food stamps to help with groceries.
- Nelly Garcia, 55, works at the Old Post Office Building, for a company that makes lots of money from federal contracts. But Garcia only earns $9.00 an hour, which isn’t enough to afford food or pay for the subway commute to work. A cancer survivor, Garcia has no health benefits, and must rely on Medicaid as a result.
According to the MIT Living Wage Calculator, a single adult needs to earn about $28,425 a year to afford the cost of basic necessities like housing, utilities, transportation, groceries, and health care. That requires an hourly wage of at least $13.67 an hour. For a single adult and a child, the annual costs are $54,805 – nearly double the cost-of-living for a single adult – and would require an hourly wage of at least $26.35.
Most private sector employees of federal contracts earn far less than a livable wage in an area as expensive as Washington. Yet everything one needs to live in Washington, from housing to groceries to transportation, is still more expensive than most other places, because Washington is area where lots of people can pay more.
Paying more for food, housing, etc., isn’t a hardship if your the CEO of a company with a federal contract. After all, federal benchmark compensation for CEO Reimbursement for work on a federal contract is over $760,000.00, but the lowest compensation reported by workers on federal contracts is $6.50 an hour. You can earn over $760,000 on a federal contract, while not paying your employees enough to live on. How’s that for inequality? And it’s all supported with your tax dollars and mine.
I don’t know about you, but I’d rather Nelly Garcia be able to buy groceries and have benefits than have my tax dollars help a federal contractor CEO redo his Rosslyn, VA penthouse again. If you feel the same way, then stand with these workers tomorrow, and join them in demanding a livable wage. Because nobody can live in Washington on minimum wage. Not in the 9th most expensive city in America.