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Wednesday, April 17, 2019 by Ryan Thornton
County considers matching Austin with $15 livable wage
Between the tax revenue ceiling regaining momentum at the state Legislature and ongoing affordability concerns, Travis County is looking for a way to increase its livable wage for county employees before the imminent property tax caps take effect.
Todd Osburn, compensation manager of the Human Resources Management Department, told the Commissioners Court on Tuesday that the county’s current livable wage rate of $13 an hour is just over what is necessary for single adults to support themselves. According to HRMD’s recent Livable Wage Study – which used data from the Massachusetts Institute of Technology living wage calculator to determine basic costs of living for Travis County – if you add a partner or children to the equation, $13 is not enough.
Though there is no precise definition, a livable wage is usually higher than the minimum wage under the Fair Labor Standards Act, and is at least sufficient for basic needs like food, shelter and clothing.
Considering the cost of housing, Commissioner Brigid Shea said that even without a partner or children to support, the study’s livable wage calculations seem too low for Travis County. With some of the county’s new subsidized affordable housing units charging roughly $900 a month for rent, she said the study’s livable salary of just over $26,000 for a single adult was still too low to make even those a viable option.
“If you just look at housing costs and you look at these figures, you see that even affordable housing is pretty readily out of the reach of people who are making what’s considered a livable wage,” Shea said.
The study also compared Travis County to other urban areas in Texas – Austin, San Antonio, Bexar County and Harris County – and found that several have programs similar to the county’s Livable Wage program (in effect since 1997), but that each of them has adopted a $15 per hour livable wage – what Osburn called the “sweet spot.”
Meeting that sweet spot would cost the county an additional $755,000 every year. The study also explored making smaller adjustments to the livable wage if the court decides $15 would require too much of a sacrifice to other programs.
Pushing for the $15 mark, Commissioner Gerald Daugherty said that if the county wants to keep its Livable Wage program, salary cannot be a secondary budgetary consideration after funds have been allotted to various programs and departments.
“The truth of the matter is it doesn’t make any difference about what everyone else does,” Daugherty said. “We know that living in this town, you cannot do it for the salaries that we pay .… If your first place that you want to spend your money is on the people that work for this county, do it, get right with it, and let all the other things fall where they may.”
County Judge Sarah Eckhardt said the county has been doing just that since 2015, when the Commissioners Court and staff decided to front-load compensation into its budgetary process, whereas before then it was a “jump ball at the end of budget.”
Still, Eckhardt said, in addition to the estimated $755,000 of moving the wage up to $15, doing so will also cause a vertical compression in wages, where everyone’s salary bunches up at the lower end of the pay scale, potentially erasing pay differences between distinct positions.
To spread wages back out again, Alan Miller, assistant budget director of the Planning and Budget Office, said the county could “cost out compression” by increasing wages across the board for employees making up to a certain figure. Depending on how the county wanted to approach the pay increases, Miller said the impact could range from $7 million to $20 million.
The county is already in the process of finalizing a market salary survey comparing its wages to those being paid in similar areas, so wages are likely to be adjusted going into the next budget cycle regardless of the livable wage rate.
With the results of that survey coming to the court in early June, Eckhardt said it would be wise to use that data to make any necessary wage adjustments first before revisiting the livable wage.
That way, Eckhardt said, “We’ll have a fewer number (of employees) to pull up over that floor and we’ll have already seen the adjustments in the pay grades and be able to predict with a higher degree of certainty what kind of compression issues will come from moving that floor.”
To avoid limitations set by the state’s property tax bills, however, the court will have to act rather quickly. With this year set to be the last under the 8 percent rollback rate, Eckhardt said it is incumbent upon the county to commit any necessary ongoing dollars to the budget within that finite window, which would likely close by Fiscal Year 2021, but possibly as soon as the start of the new fiscal calendar in October.
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Key Players & Topics In This Article
Living Wage: The hourly rate an individual must earn to pay for themselves or their family. In Travis County, the living wage for one adult would be $10.97, according to the MIT living wage calculator.
Travis County Commissioners Court: The legislative body for Travis County. It includes representatives from the four Travis County Precincts, as well as the County Judge. The County Judge serves as the chair of the Court.