Thursday, June 26, 2014

Update: IKEA'S Minimum Wage Uses 2010 HUD Fair Market STUDIO Rents.

Washington Post story says HERE that MIT Living Wage Calculator data should be updated in July. I'm guessing this will result in near 50 cent hourly wage increase for Portland, boosting  Ikea wage to close to $10, if not above. Ikea rep in story does not committ to providing that increase however...

While welcome doesn't change plan to use studio FMR as "living wage" benchmark, which may be appropriate for single person in entry level job, but clearly should not be confused with a"family" wage level. 

 Ikea is getting some good pub over adoption of minimum wages for workers based on local MIT Living Wage calculator, with Portland data HERE.

Bad news is that MIT calculator appears to be using in its calculation the HUD 2010 Studio Fair Market rent, so by definition Ikea appears to be saying that their minimum wage jobs cannot support a family, as a studio rent is by definition for one person. 

For Portland metro the studio FMR was $626 in FY 2010 vs 1 BR FMR of $726, and 2BR $839. 

For FY 2014, which ends in September, the same rents increased to $666 for a studio,  $774 for a 1 br, and $922 for a 2 BR, a difference of 6.4%, 6.6% and 9.9% from FY 2010. Note that new HUD FMR's will take effect in a little more than 90 days, and clearer will be even higher. 

IKEA's apparent Portland minimum wage is showing as $9.42 in the MIT calculator, higher than the statewide minimum of $9.10. 

If other components used to calculate the minimum wage are as out of date as using 2010 HUD Fair Market rents, it seems likely that minimum wages around the country for IKEA will start out as being sub minimum.  (Readers may recall my post earlier about the EPI family budget calculator, which is much more up to date than the MIT calculator).

Originally created and posted on the Oregon Housing Blog.

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