CUED

A Self-Sufficiency Living Wage for Chicago

October 2002
Ron Baiman, Center for Urban Economic Development, UIC; Joe Persky, Center for Urban Economic Development, UIC; and Patricia Nolan, Center for Urban Economic Development, UIC
PDF paper (75KB)

Executive Summary

An analysis of size, age, and working-hours characteristics of low-income families in Chicago shows that families of four with two workers have an average number of earners relative to dependents among low-income working families. We estimate that in Chicago, in such a four-person two-adult working family, the two earners together work about 1.5 full-time equivalent jobs. We conservatively estimate that child care costs for the two children in this family are 50% of full-time child care costs.

The City of Chicago and State of Illinois have officially endorsed and are using a set of “self- sufficiency standards” for basic family needs by family type that have been developed by Pearson and Brooks (2001) for various localities in Illinois. Based on our conclusions regarding the characteristics of low-income families in Illinois, we derive an estimate of the Chicago “living wage” from this family “self sufficiency standard” for four-person, two-child families in lower-cost areas of Chicago. We estimate a 2001 “living wage” in Chicago of $11.92/hour. Adjusting this for inflation from December, 2001 to August, 2002 raises this figure to $12.17/hour for a 2002 “living wage.” However, even if all the workers in low-income families received this wage, substantial additional support would be necessary to allow low-income families with greater dependency burdens (about 43% of all low-income families in Chicago) to support their most basic needs. It is urgent that this gap, which occurs even if all earners in the family receive an $11.92/hour wage, and which according to our analysis can be as much as $18,934 a year for a family with one earner and three young children, be addressed. Existing support programs are inadequate, as families whose working members earn a wage of $11.92 an hour in Chicago are not currently eligible for any of the major state and federal programs to help the poor.

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