Beth Walton

bwalton@citizen-times.com

ASHEVILLE - A nonprofit group's influential calculation for what amounts to a living wage will jump 50 cents an hour in 2017 to account for rising housing and living costs.

Just Economics announced Thursday the new rate will be $13 an hour for employees not offered health insurance and $11.50 an hour for those who are. This amounts to $23,920 to $27,040 a year for full-time employment.

The rate is a near 4 percent increase from 2015, when it was last changed.

"A living wage is the minimum amount that a worker must earn to afford his or her basic necessities, without public or private assistance," said Vicki Meath, executive director of Just Economics, a regional membership organization based in Asheville that advocates for a just and sustainable economy throughout Western North Carolina.

"We understand the hard business climate for small businesses and appreciate the folks who have made sacrifices to make sure they are doing the best they can to raise the wage floor, but we also understand the ongoing needs and increased cost of living for workers in our community," she said.

About 400 WNC businesses participate in Just Economics' Certified Living Wage Program. Those employers agree to pay the wage set by Just Economics to the majority of their employees

The city of Asheville, Buncombe County and the towns of Canton, Montreat and Weaverville all take part in the program.

Asheville began confirming that full-time employees were paid at or above the living wage as calculated by Just Economics starting in 2007, City Manager Gary Jackson said. The measure was extended to part-time employees in 2012 and seasonal workers in 2015.

"Unless otherwise directed by Council, our budget planning for city employee wage scales will factor in the latest calculations for an Asheville living wage," he said.

Employers use Just Economics' rate as the benchmark to set their own minimum wage, Meath said. Companies participating in the certification program are committed to providing a wage that their employees can live on without relying on taxpayer-supported programs, or outside help.

Just Economics calculates its living wage rate annually based on the Universal Living Wage formula, which uses the cost of housing as its main indicator, she said. An adjustment is triggered when the change is 3 percent or greater from the previous rate, she said.

Asheville and Buncombe County have particularly high housing costs, Meath said.

Housing costs are determined by the fair market rent rate set by the U.S. Department of Housing and Urban Development using a four-year average, Meath said.

The fair market rent rate is the same data point often used to determine subsidies for housing vouchers.

HUD set a fair market rate of $891 a month for a two-bedroom apartment in Buncombe County in 2017. That number jumped 8.8 percent from 2016 and nearly 24 percent since 2014 when it was $719. The federal agency uses data from the U.S. Census Bureau's American Community Survey in its estimate.

The living wage was set at $12.50 an hour for employees without employer-provided health coverage and $11 an hour for those with the insurance in 2015.

The federal minimum wage is $7.25 an hour and has not increased since July 2009. Some states have a higher minimum wage rate. North Carolina does not.

With 11 employees on the payroll at three different locations, Jenna Yarosh Wilson, owner of Patton Avenue Pet Company, has been living wage certified for three years.

Yarosh Wilson said she wouldn't hesitate to keep wages in line with the change.

"I think I can absolutely make it work and I think any successful business could," she said. "I think people that don't aren't looking at their books and seeing the value of their employees. They look as their employees as a burden. I look at mine as an investment."

Just Economics' rate changes are reasonable and within most small businesses' means, Yarosh Wilson said. Plus, it's the fair thing to do, she added.

"I wouldn’t feel good about having a profitable business if my employees were starving and not able to find affordable housing," she said. "Better-paid employees are happier, work harder, more invested in the business where they work. They are not looking for other opportunities; they are focused on their job."

Some of Patton Avenue Pet Company's employees have been with Yarosh Wilson since she opened five years ago. That sort of retention means less time training new staff and better customer relations, she said.

The living-wage program is a public contract, Yarosh Wilson said. "Our customers know that we are committed to fair wages. Our employees know they are going to be compensated fairly."

For employers considering paying a living wage, it's more than just an added cost, she said. "It's a great investment in your business."

Living-wage certified employers have been notified of the wage rate change and will have time to make adjustments, Meath said.

Businesses are re-certified every two years, she said. Those that are up for review now will have a one-year grace period to enact the changes. All businesses certifying for the first time this year will be at the new 2017 rate.

The number of certified businesses fluctuates slightly each month, Meath said.

Just Economics works with agencies to help them stay certified and is grateful for any organization paying above the federal minimum wage, Meath said.

“It’s a challenging business climate and we understand that; that’s why our program is supportive rather than retaliatory. However, it's also a hard climate for workers," she said. "Just Economics is committed to supporting businesses that are working to become living wage certified and maintain their living wage certification to build a better economic community. There are a lot of great businesses owners in this community who are doing a really great job."

Mission Health, the region's largest employer with 10,700 workers, bumped the pay of more than 200 people in August, using Just Economics' 2015 living wage formula with a program called the Mission Minimum. The hospital did not enroll in Just Economics' Living Wage Certification Program and would not be subject to its changes.

In a statement provided Friday to the Citizen-Times Mission Heath's Chief Human Resource Officer Sheila Meadows said the health system will consider the new calculations in 2017 planning, but that major changes could be hard to come by in a changing political climate.

Mission Health remains committed to providing its employees a competitive and sustainable rewards program based on the changing market, she said. This includes merit increases, market adjustments, health insurance and many other benefits.

"Recent proposals related to the repeal of the Affordable Care Act have the potential to reduce Mission revenue by

hundreds of millions of dollars, placing extraordinary stress on our health system," Meadows said. "Nonetheless, we will

assess the impact of this increase in the Living Wage, as we regularly do, as it relates to our overall Total Rewards strategy and planning for 2017."

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