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Press Release 6/03

Ithaca, NY - June 2, 2003 Joined by a panel of speakers interested and active around the issue of Livable Wage, Leni Hochman, Chief Operations Officer of Alternatives Federal Credit Union, announced the updated figures for Livable Wage: “Starting with the bottom line, we found that an annual livable wage for an individual rounds out to $18,061. That compares to $17, 540 in 2000. It translates to an hourly wage of $8.68, up from $8.43 an hour for a 40 hour week.” The increase before taxes comes to 5.57%. Due to a reduction in taxes, the livable wage after taxes increased just under 3%. The Cost of Living increase for that period of 4.47%. Hochman feels it’s important to note that this is the Livable Wage for someone receiving health insurance from their employer.

Since the Livable Wage Study was first released by Alternatives in 1994, paying a livable wage has been a controversial topic in Tompkins County, and a veritable grassroots movement around the country. The study was originally done for internal use by Alternatives, but its release to the public was encouraged by the Board of Directors. It has stimulated important discussion about the meaning of earning a livable wage and provided a benchmark for others to use in advocating for higher starting wages.

Why would a Credit Union get involved in doing a study on Livable Wage? Looking at the mission of Alternatives Credit Union, it becomes clear that paying their staff a livable wage is right in line with their goals. Alternatives uses the Credit Path, their model for designing products and services that help move people along a path of financial empowerment. While they paid a competitive wage, they were interested in finding out if they were in fact paying enough for an individual to live, not in poverty, in Tompkins County. Hochman said, “If our mission was to move people out of poverty, we didn’t want to be keeping our own staff there because of our wage policy.”

See the chart and notes for specifics about the figures in the study.

There are some areas where other studies or other employers might differ:
Health Care is figured specifically for Alternatives staff, so it will be different depending on whether a business offers health insurance and what the employee pays towards premiums and co-pays. Alternatives offers individual coverage and the staff pay 25% of the premium, or $509/year. Then they added for costs not covered by insurance. If an employer doesn’t offer Health Insurance, the wage would need to be quite a bit higher to offset sky rocketing health care costs.

Recreation and Entertainment may be the most controversial line, and is more subjective than the others. $1377/year comes to $115/month, or $26.50/ week. It includes things like television, newspaper and magazine subscriptions, books, computers. “Really, when you think about it, its not extravagant, and we consider it a quality of life issue,” says Hochman.

Savings stayed at $50 a month, but the Board has recommended that the figure be increased with inflation in future studies. Savings is another area that other studies don’t include, but Alternatives considers encouraging savings a core part of their mission and an important means of moving out of poverty.

The Miscellaneous category, comes in at $1383 includes clothing, personal care products, household products, etc.

Joining Hochman were
Anita Peebles, Member Service Representative/Collections Clerk at Alternatives on the meaning of a livable wage in her life.
Carl Feuer and Pete Myers, Organizers for the Tompkins County Living Wage Coalition on the impact the living wage figure has had on this community.
Patrice Jennings, General Manager of GreenStar Co-op Market on the development of a livable wage model for Retail Cooperatives.
Carolyn Peterson, Fourth Ward Common Councilwoman, on the living wage resolution being presented to the Common Council on June 4.
Kathy Luz Herrera, County Legislator, District 5, City of Ithaca, on relationship between the living wage and the quality of life.

The Alternatives Federal Credit Union Board of Directors has expressed its commitment to paying a livable wage since 1994. At their last Board meeting they approved a new hourly starting wage for Alternatives employees of $9.14/hour, which is the new annual livable wage divided by a 38 hour work week. 38 is the average number of hours worked by full time starting level employees.

Hochman thanked Bryan Darrow, a WISP intern from Cornell ILR for his assistance in gathering the data, the Board of Directors for their commitment to paying staff a livable wage, and to the Living Wage Coalition for their work in challenging the business community to understand the reasons and seek ways to pay their employees a livable wage.

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My family's credit union has been Alternatives since '96; We liked the mission, and who could resist banking in a converted house? In 2005 I started thinking about a retail start-up called "Home Green Home" that would sell healthy and eco-conscious home furnishings and renovation supplies. The Business CENTS class helped me to understand and develop the elements of a business plan, and set me on the path to taking the big leap.

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