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 shows 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 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 own 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 2019

Employers certified (and re-certified) in 2019 must pay at least $14.25/hour to all regular full- and part-time employees. For employers providing health insurance the threshold is $12.75/hour.

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

     

2018

$847

     

2017

$834

     

2016

$796

     

2015

$737

     

4 yr total

$3,214

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

monthly gross x 12

divide by 2080 to get living wage hourly rate

Avg

$803.50

$2,678.33

$32,139.96

$15.45

         

 

 

Alamance County

(Burlington MSA)

FMR 1 br apt

     

2018

$601

     

2017

$668

     

2016

$642

     

2015

$551

     

4 yr total

$2,051.67

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

monthly gross x 12

divide by 2080 to get living wage hourly rate

Avg

$615.50

$2,051.67

$24,620.04

$11.85

         
 

 

 

 

 living wage   hourly rate              weight  

 

Chatham, Durham, and Orange Counties

 15.45                 2    

 

Alamance County

 11.85                 1    

 

 

     

 TOTAL

42.75                  

 AVERAGE

 14.25  

 

 

  Rate for 2018 (rounded)  $ 14.25

 

 Rate if employer provides health insurance

 $ 12.75