Universal Living Wage Calculation

The Universal Living Wage calculation is a widely used and nationally accepted method for determining the living wage amount for a specific area of the United States. It is based on the U.S. Department of Housing and Urban Development (HUD) standard: no more than 30% of a person's gross income should be spent on housing. 

The Universal Living Wage is dynamic in the purest sense of the word. It is designed to show what salary a worker would need to be paid in order to afford a certain sized rental apartment. The consensus of living wage initiatives across the country is to use the Fair Market Rent (FMR) for a one-bedroom apartment. 

Orange County Living Wage uses the Durham-Chapel Hill, NC HUD Metro FMR Area data twice in the calculation. That data is for Chatham, Durham and Orange Counties. We use it twice in the calculation, thereby double-weighting it. We also use the Burlington MSA data once, which represents Alamance County. Our use of this FMR (fair market rent) data reflects the reality that employees work in Orange County and live in Alamance, Chatham, Durham, and Orange Counties.

The use of average Fair Market Rents (FMRs) over the most recent 4 years is a conservative approach and removes the variability of rents over time.

Premise: Anyone working 40 hours per week should be able to meet their and their family's most basic needs for food, rent, transportation, child care, and medical care.  Whether a person works 4 hours per week or 40 hours per week, they should be paid the same.  A full hour of work deserves a full hour's wage.

 

Living Wage Calculation for 2018

 

Employers certified (and re-certified) in 2018 must pay at least $13.70/hour to all regular full- and part-time employees. For employers providing health insurance the threshold is $12.20/hour.

Employers certified (and re-certified) in 2017 must pay at least $13.15/hour to all regular full- and part-time employees. For employers providing health insurance the threshold is $11.65/hour.

Employers certified in 2016 should re-certify in 2018 at the current rates ($13.70 / $12.20). Until their re-certification date is effective, they will continue to pay at least $12.75/hour to all regular full- and part-time employees, or $11.25/hour with health insurance.

Again, note that in the calculation we use the Fair Market Rent (FMR) data for Chatham, Durham and Orange Counties twice, thereby double weighting it. (see above)

 

 

Chatham, Durham, and Orange Counties

(Durham-Chapel Hill, NC HUD Metro FMR Area)

FMR 1 br apt

     

2017

$834

     

2016

$796

     

2015

$737

     

2014

$711

     

4 yr total

$3,078

avg /  .3 = monthly gross income needed to afford basic housing

monthly gross x 12

divide by 2080 to get living wage hourly rate

Avg

$769.5

2565

30,780

14.79807692

         

 

 

Alamance County

(Burlington MSA)

FMR 1 br apt

     

2017

$668

     

2016

$642

     

2015

$551

     

2014

$542

     

4 yr total

$2,403

avg /  .3 = monthly gross income needed to afford basic housing

monthly gross x 12

divide by 2080 to get living wage hourly rate

Avg

$600.75

2002.5

24,030

11.55288462

         
 

 

 

 

 living wage   hourly rate              weight  

 

Chatham, Durham, and Orange Counties

 14.79807692                 2    

 

Alamance County

 11.55288462                 1    

 

 

     

 TOTAL

41.14903846                  

 AVERAGE

 13.71634615  

 

 

  Rate for 2017 (rounded)  $ 13.70

 

 Rate if employer provides health insurance

 $ 12.20