What’s a livable wage in Maine?

What do you have to make to be able to afford to live in Maine?

If you look at the basic expenses, the whole kit and caboodle, including food, rent, utilities, phone, health care, transportation, child care, clothing, personal care, household goods, taxes, etc., what’s the end cost?

A new report out from the Maine Department of Labor tells us that.

If you’re a single adult, you need to make $11.02 an hour in order to cover your basic annual expenses of $22,925 a year. That’s on average, statewide. It’s lowest in Aroostook ($9.90), and highest in the Portland metro area ( $12.53).

“Variations in livable wage across regions are due to underlying differences in rent and child care costs, the only budget lines for which regional data are available,” the report authors note. “In areas where rent and/or child care expenses are relatively high, higher income is required to cover costs, which in turn can increase tax burden.”

And, of course, it changes with your household makeup. If your family consists of two adults and two children, each adult would have to earn $13.35 an hour to cover expenses of $49,491, as a statewide average.

The Maine DOL report covers the “livable wage” calculations for 2010. The Maine Center for Economic Policy used to put out the report, but in 2007, the Legislature charged the state agency with the task. To read the report, click here, and download the file (it’s under “Publications and Presentations.”

It makes the calculations based on renters, too, not home owners.

And the estimations are for folks living a frugal life. For example, when looking at food, the methodology uses federal stats that “reflect the estimated cost of a balanced diet and do not include allowances for take-out, fast food or restaurant meals; the plans reflect what it costs to adequately meet nutritional needs, not typical consumer behavior,” the report said.

Similarly, when calculating transportation costs, the authors estimate that 30 percent of typical household travel is social and recreational, “which is excluded from the livable wage transportation calculation.”

Why develop this measure of “livable wage?” According to the report, MECEP put the estimate together “in response to growing recognition that neither the federal poverty level (a common measure of economic well-being) nor the minimum wage provides a reasonable standard of livability for many Maine families.”

The authors explain:

The federal poverty level is based on calculations made in the early 1960s, updated annually for price changes using the Consumer Price Index. The underlying assumption is that food costs are equal to one-third of household income.

Since it was first introduced in 1938, debate about the minimum wage has divided lawmakers along political, financial and ideological lines. Increases have been sporadic and have not kept up with inflation, diminishing the minimum wage’s effectiveness as a means to ensure a minimal standard of living. Since 2002, Maine’s minimum wage has consistently exceeded the federal minimum wage.

An alternative measure of income adequacy is one that covers the costs of a basic needs budget that accounts for today’s actual living expenses: a “market basket” of personal and household expenses. The market basket approach allows for variation by household composition and by region.

 The Maine DOL uses the methodology first developed by the MECEP. To calculate the various expenses, it looks at data from federal agencies, including the U.S. Department of Agricult8ure, the Department of Housing and Urban Development, Health and Human Services, the Internal Revenue Services, the U.S. Department of Labor – as well as information from some state agencies, too.