Alternatives CU Causes a Stir With Living Wages study; So Accurate Government Goes by CU's Numbers

ITHACA, N.Y. – The $48 million Alternatives FCU, a community development credit union, has released its annual study of living wages for its area and, according to the study, a single person living in Tompkins County, will have to make a minimum of just over $18,000 per year to live. Alternatives began taking the survey for internal use in 1994, but then decided to publish the results as a benchmark for the area. The credit union began caring about this issue, it said, because it uses an approach it calls the Credit Path to move members away from poverty and towards financial independence – including their staff. “If our mission was to move people out of poverty, we didn’t want to be keeping our own staff there because of our wage policy,” explained Leni Hochman, COO for the credit union. Since the year 2000, the credit union noted, the living wage has increased 5.57% before taxes, the credit union reported, and assumes an employer pays at least part of a worker’s health insurance premium. If the employer is not paying any part of health insurance the living wage figure is much higher, the credit union said. The survey has its critics as well since the credit union throws open its budget for the living wage calculation when it makes the announcement. Among the more controversial items is $1,377 per year for recreation and entertainment, which the credit union said covers things like television, newspapers and magazine subscriptions, books and computers. But Bill Myers, CEO of the credit union, downplayed any controversy, pointing out that the credit union publishes the source of data and how it came to the figures it uses. If other people want to look at the numbers and make them fit them together better, Myers said, more power to them. “Once you sign onto the concept that a person should be able to make at least enough to live on in a pay period, the rest is just discussing the numbers.” Myers explained that Alternatives’ biannual wage exercise has become so well respected in Ithaca and Tompkins County that the governments have referenced it in their living wage statute. Now, thanks to Alternatives’ work, all firms that contract with the City or County have to pay their workers at least a wage equal to Alternatives most recently released living wage, Myers explained. “A couple of years ago they said `why should we use Alternatives’ numbers’ and called in an independent firm to come up with a number,” Myers said, chuckling. “The firm came back to them and said that it would be hard to come up with a cost of living number that would be any more accurate than Alternatives. So they kept using our number.” Myers said the credit union has generally not taken any flack for its numbers, even from local banks and other credit unions which might pay their people less. The average starting salary for bank tellers in the area, Myers said, is $2,000 less than Alternative’s living wage. “This is not a coercive thing,” Myers said. “We stepped up to the plate and said we would pay our workers at least this amount of money,” Myers said, “and we have been gratified that other businesses have done the same, but no one has had to do so.” The reaction to the most recent announcement has been unprecedented, Myers said. The local paper ran some part of the story about the living wage calculation and announcement above the fold on its front page from June 3 to June 5, in part because the credit union invited local government officials to take part in the announcement. Eleven Alternatives employees saw their wages rise in the wake of the announcement. Not all of the employees were making the living wage that was raised, Myers said, but raising it lifted the overall wage scale for the lowest part of the credit union’s wage scale. Questions that arise about the living wage often have to do with whether an employer should pay a living wage to student workers and interns and people working two jobs. Myers said he doesn’t necessarily believe a high school student working a summer job or serving as an intern needs a living wage, but he said he will not apologize for the argument that people working two jobs need a living wage. “That’s part of the problem we are talking about,” Myers said. “Someone working two jobs because they can’t make enough to live on by only working at one.” -