The DMV is an expensive place to live (see my earlier blog post about how much it cost to buy a house in the DMV). But, how much do you need to make to cover the basics here? My gut says 'a lot', but my gut isn't good at math. Fortunately, MIT has a handy living wage calculator. Let's take a look for the DMV shall we?
A couple of caveats. First, a good benchmark for thinking about these wages is to consider the federal minimum wage--currently at $7.25 an hour. Second, the calculations from the site are also conservative. That is, the actual or real living wage may be higher in some places. The site's authors' note, for example, that the calculator "is likely to underestimate costs such as housing and child care" in metropolitan areas (i.e. the DMV). Finally, it is useful to keep in mind that a living wage is NOT a middle class wage. This is the wage you need to get by on. It only covers the basics--specifically: food, child care, medical costs, transportation, taxes, and an 'other category' for emergencies. What's not covered? Entertainment (going to the movies), vacation (a trip to the beach), savings (for a rainy day), education (tutoring, private school, college for you or the kids).
So, let's start with a comparison between DC, Maryland, and Virginia. (the table below is created from data selected from the website, which includes much more detailed data).
Place
|
Living Wage
|
Adult
|
Adult,
1 child
|
2
Adults, 1 child
|
Hourly wage
|
$13.68
|
$26.37
|
$23.54
|
|
DC
|
Annual income
|
$28,454
|
$54,842
|
$48,959
|
Before taxes
|
||||
Hourly wage
|
$11.79
|
$23.41
|
$21.04
|
|
Maryland
|
Annual income
|
$24,515
|
$48,696
|
$43,757
|
Before taxes
|
||||
Hourly wage
|
$10.54
|
$20.77
|
$19.49
|
|
Virginia
|
Annual income
|
$21,927
|
$43,200
|
$40,543
|
Before taxes
|
A few patterns emerge. First, DC has the highest living wage, followed by Maryland and then Virginia. Second, the living wage is higher for a single parent with one child than it is for 2 parents with 1 child. Why, you might ask? Well, single parents usually HAVE to rely on child care. In 2 parent households childcare costs can be eliminated because one parent can stay home with the child. This doesn't always happen, of course, but it CAN happen.
Now, let's look at how areas within Maryland stack up against each other. To capture the state's diversity, I'm including a rural, suburban, and urban place.
Place
|
Living Wage
|
Adult
|
Adult,
1 child
|
2
Adults, 1 child
|
Hourly wage
|
$7.70
|
$18.59
|
$16.21
|
|
Garrett
Co.
|
Annual income
|
$16,013
|
$38,672
|
$33,715
|
Before taxes
|
||||
Hourly wage
|
$13.20
|
$25.02
|
$22.66
|
|
Montgomery
|
Annual income
|
$27,464
|
$52,049
|
$47,135
|
Before taxes
|
||||
Hourly wage
|
$11.24
|
$22.88
|
$20.51
|
|
Baltimore
|
Annual income
|
$23,373
|
$47,595
|
$42,667
|
Before taxes
|
Not surprisingly, MOCO is more expensive than rural Garrett County. But, it is also more expensive than Baltimore (city). For people who live in the DMV this won't come as a surprise. Many people commute from Baltimore to DC because it costs less to live there. In this regard, even though MOCO is a suburb, its proximity to DC is both a blessing (all those free museums) and a curse (high cost of living).
Finally, a couple of points. MIT wouldn't be coming up with a living wage calculator if most people made one. We have these kind of nifty tools precisely because many people don't make a living wage--especially in expensive metropolitan areas like the DMV. Second, the federal minimum wage--$7.25--simply isn't enough to live on anymore, even in rural Garrett County (though it isn't far off).
In my next post I'll talk about how people get by in a context where they don't make a living wage. See you soon...
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