by Mark Schultz
Making ends meet can be difficult for some, and at times, costs of living seem to be increasing faster than wage increases in the state. In fact, in an article by Josh Bersin found on Forbes.com he states that "wages after inflation have barely budged over the last 44 years1." For some, their wages just aren't fitting the bill, and they are forced to be creative with the money they earn, make sacrifices not to spend money, or take on an additional job (or two) for extra income to help them meet their cost of living needs.
|County||Annual Median Wage||Cost of Living Requirement*||Difference|
|Lac qui Parle County||$36,816||$45,576||-$8,760|
|Lake of the Woods County||$36,660||$55,164||-$18,504|
|Red Lake County||$35,880||$47,916||-$12,036|
|*Cost of living wage requirement based on the typical family in the state - two parents working a combined 60 hours per week with one child
Source: DEED QCEW and Cost of Living;
While some of the counties in Minnesota have median wages that are high enough to meet (or exceed) basic cost of living needs, there are some that do not meet the threshold needed. As shown in Table 1, six of the top 10 counties with the highest median wages across all industries do not pay high enough median wages to meet the basic cost of living needs for the typical family - two parents working a combined 60 hours per week with one child. However, when looking at the bottom 10, none of them meet the required median wages needed.
There are some other things to consider when analyzing wages and cost of living data. First, there are costs that are not accounted for in the cost of living data, such as savings, vacations, entertainment and eating out, so adding these activities would definitely increase the cost of living base wage requirement.
Second, certain things can increase the amount needed to meet the basic cost of living needs. For example, if an additional child is added to the typical family the wage requirement jumps to $82,080 in Hennepin County and $57,828 in Cook County, both of which are much higher than the median wages being paid in these counties. In addition, the absence of a second parent means a single person with one child can also see a massive increase in the cost of living wage needed. For example, the wage requirement in Cook County would jump to $60,708.
Thus, analyzing median wages and cost of living wage requirements gets a little more complicated than simply whether or not median wages are high enough to meet the basic cost of living needs. Depending on things such as family composition (two-parent vs. one-parent), worker status (full-time or part-time), and/or lifestyle choices (e.g., taking multiple vacations per year) can have an impact on cost of living wage requirements.
Sources: Bersin, Josh. 2018. "Why Aren't Wages Keeping Up? It's Not the Economy, It's Management." www.forbes.com/sites/joshbersin/2018/10/31/why-arent-wages-keeping-up-its-not-the-economy-its-management/#5294d743397e Retrieved 5/11/2020.