The concept is simple. It is based on the premise that if a person works 40 hours a week, then he/she should be able to afford basic housing. We use two existing Federal guidelines to determine what the Universal Living Wage should be. The first guideline (a HUD standard also used by banking institutions across America) dictates that no more than 30% of a person's gross monthly income should be spent on housing. The second guideline, the Fair Market Rents (FMRs) are established by HUD throughout the country for each municipality and all other areas. Therefore, the Universal Living Wage will vary per area in accordance with the FMR. FMRs are based on gross rent estimates which include shelter, rent and the cost of utilities except telephone service.

We believe that this format, using already established government guidelines, enables us to utilize existing government formulas to easily justify specific Universal Living Wage figures that are based on the need for housing and are appropriate to each municipality and outlying areas.

 Universal Living Wage Formula

"We have devised a National formula that is based on each local economy throughout the entire United States. The formula is designed in such a manner that no matter whether you are in Austin, Boston, or L.A., if you are willing and able to work a 40 hour week, you should at least be able to afford a one-bedroom apartment."

 

  • Work a minimum 40 hour week

  • Spend no more than 30% of income on housing

  • Index the minimum wage to the local cost of housing as set each year by the US Department of HUD (Fair Market Rents)

ONE BEDROOM APARTMENT

1. HUD STANDARD: No more than 30% of a person's gross income should be spent on Housing.
2. HUD Fair Market Rent: $(A)_________One Bedroom Apartment, or ____# of bedrooms in the city/county of _____________________.
3. TOTAL MONTHLY INCOME: $(A)_________ divided by .3 = $(B)_________ monthly gross income necessary to afford basic housing.
4. PREMISE: Anyone working 40 hours per week should be able to get housing and get off of the streets.1
5. WORK HOURS: 40 hours/week @ 4.33 weeks/month = 173.33 work hours/month, 173.33 work hours X 12 months = 2080 hours/year.

6. Total Gross Monthly Income of $(B)_________ X 12 months = $(C)___________

$(C)___________ divided by 2080 hours/year $_________ /hour

NEW HOURLY WAGE in __________________

7. Total Monthly Expenditures:

 $(B)_________
  Total Gross Monthly Income
-$(D)_________
  Fed. Taxes, Soc Sec., Medicare sup 2
-$(A)_________
  Housing Costs
===========  
 $_________
  Remaining for: Medical, Clothing, Food,  Transportation and Telephone

1Whether a person works 4 hours per week or 40 hours per week, they should be paid at the full 40 hour rate. A full hours work deserves a full hours wage.
2Minus $(d1)_________ for Federal Income Tax, $(d2)_________for Social Security, and $(d3)_________ for Medicare. The Federal Income Tax rate (15%) is based on the monthly deductions outline in the Internal Revenue Circular E, Employers' Tax Guide (Rev. Jan, 2000), Social Security is 6.2% of gross monthly income, and Medicare is 1.45% of gross monthly income (Total equals $(D)_________)

To see a sample of this form using Anywhere, USA data, click here.

The Universal Living Wage is DYNAMIC. The Universal Living Wage is Dynamic in the purest sense of the word. It is designed to show what salary a full time, minimum wage worker would need to be paid in order to afford a certain bedroom size. So far the consensus of living wage initiatives across the country is to use the Fair Market Rent for a one-bedroom apartment. The community would be able to slide along the bedroom/size wage continuum, anywhere from an efficiency apartment all the way up to a multiple bedroom apartment. (Many cities have laws specifying one child/one bedroom, a further burden on the average homeless family, which is a young woman with two small children.)
It is currently suggested that this decision-making process would occur no more regularly than every four years, and that it be attached to presidential elections.


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by Universal Living Wage
PO Box 2312, Austin, TX 78768. All rights reserved.

This site last updated July 29, 2007. Thank you for visiting