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“Living wage’ eludes many Asheville workers

People walking by RAD sign

Much-talked-about $15/hour jobs
hard to find

Over the past few months, fifteen dollars has emerged as an often-discussed wage that would enable local hourly workers to make ends meet. But statistics show that precious few on-the-clock employees are being paid that amount, and that even if they were, that figure still falls short of providing the actual purchasing power needed to survive at a basic level in the city.

The fact becomes starker still in light of February figures from the Bureau of Labor Statistics, which show the current national average hourly wage is $25.35. That figure, of course, includes all worker experience levels and other variables; still it provides a benchmark for comparison.

And on the opposite page of the ledger, figures tell the same story in reverse: Asheville is an expensive place to live.

According to local Chamber of Commerce information, Asheville has a cost of living index, on a scale of 100, of 97, a number that puts it ahead of Charlotte at 96.4, Raleigh at 90.5 and Durham at 88.7.

However, AreaVibes, the independent online search engine that calculates COL indexes nationwide, puts Asheville’s figure – on the same scale of 100 – at 101.

According to Just Economics, an Asheville-based nonprofit that monitors COL-to-wage ratios throughout Western North Carolina, a living wage in Asheville (“living wage” being defined as the amount a person needs to earn to live decently without government or other outside assistance) is $12.50 per hour if benefits are not included, or $11.00 if they are.

But the National Low Income Housing Coalition annually publishes a report it calls “Out of Reach” which tracks housing costs nationwide and compares them with local wages. The 2016 report is not due for release until May; however, the May 2015 report showed that an Asheville worker must make $16.48 an hour in order to afford a two-bedroom apartment. The same report showed that the mean renter wage in Asheville at that time was $12.16 an hour, 27 per cent below the needed figure and less than the Just Economics rate.

The discrepancy between the $12.50 hourly figure adopted by the city and cited by Just Economics on one hand and the $16.48 figure cited by LIHC’s “Out of Reach” report on the other has never been addressed directly by either the city or by the business community per se.

In September of 2015, Asheville City Council raised the pay rate for seasonal and part time workers to $12.50 an hour, which it said was the figure “considered to be a living wage” locally. Council’s action most directly affected event workers at the U.S. Cellular Center and seasonal Parks and Recreation Department workers such as lifeguards and ticket booth staffers.

Councilman Cecil Bothwell said at the time, ““To me this symbolically means a tremendous amount … because if we’re claiming the mantle of being a living wage employer, how do we justify not being a living wage employer?” Council took pride in noting that the pay increase put Asheville’s hourly rate substantially ahead of the North Carolina minimum wage, which is $7.25 per hour, the same as the federal minimum wage.

The exact origin of the $15-an-hour figure as a living-wage benchmark is not known; it emerged last fall during the time when McKibbon Hotel Group announced plans to turn the 16-story BB&T building on West Pack Square into upscale apartments and condominiums. During the run-up to City Council approval, which was needed for the project to go forward, hotelier John McKibbon, whose firm also owns the Aloft Hotel on Biltmore Avenue, was asked pointedly if he intended to provide a living wage to his employees, and it was then that the $15-an-hour amount was mentioned publicly. McKibbon responded that Aloft employees were already being paid a living wage.

That, however, seemed to cut little ice with some council members, particularly Gordon Smith, who said McKibbon should be denied permission to launch the BB&T project until and unless he promised to pay a living wage to his new hotel’s workers, and to make a substantial contribution to the city’s Affordable Housing Trust Fund.

When McKibbon appeared before Council, he did indeed promise a living wage to his employees and said his hotel group would contribute $250,000 to the trust fund. At that point Smith exclaimed, “Sir, you have won me over!” and the project passed 5-2, opposed by Councilmen Brian Haynes and Keith Young. Smith’s dramatic acceptance was hailed by pro-hotel groups and dismissed by others as a piece of put-up-job political theater.

Later, when a local publication pressed the McKibbon Group staff for particulars as to what it was paying and would pay its hourly employees, corporate staff hedged, saying existing workers were paid a living wage as defined by the city and that it would be premature to discuss future hourly rates.

Far and away the single largest factor in the Asheville COL index is housing. A lack of affordable housing, which became noticeable in Asheville at least a decade ago, has now reached crisis proportions; it has fostered sometimes heated and bitter public debate, and promises to solve the problem have become a staple of local political campaigns.

The city’s Affordable Housing Trust Fund, to which McKibbon made his quarter-million-dollar pledge, was established in 2000 to provide a source of local funding to assist in the development of affordable housing in Asheville … in the form of repayable loans at a low rate of interest.

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