Across the country and around the state, people are struggling to make ends meet. Right here in Essex County, 38% of people cannot pay for life’s basic necessities.
That’s because, according to the MIT Living Wage Calculator, a family of four with two working adults must earn $84,365 each year to live and raise a family in Essex County, the fourth most expensive county in Massachusetts. $84,365. That equates to two earners each working a fulltime job that pays $20.28 per hour.
In Massachusetts, we have one of the highest minimum wages in the nation: $12.75 an hour, with plans to raise that to $15 by 2023. But it’s not enough. Minimum-wage workers often need to work multiple jobs just to make ends meet. What’s more is that despite historically low unemployment figures, we are still locked in a stalemate between sluggish wage growth (4% from 2000-2017) and skyrocketing expenses: housing, health care and childcare among them. In Essex County, many residents have long been priced out of home ownership, and renters are now spending 37% of their incomes on housing, which is well above the 30% federal guideline.
The truth is that there are a lot of us who simply cannot afford to live here, never mind prepare for the future or the unexpected. According to a recent report by the Federal Reserve, 39% of people would struggle to come up with $400 in an emergency, say a car repair or broken furnace. Overall, 3 out of 10 adults are either unable to pay their bills or are one modest financial setback away from disaster.
The other truth – one that is not talked about often enough – is that there is not one single thing that we can point to and say, ‘Look, there’s the problem. That’s what we have to fix.’ The whole system is broken, and it’s hitting working-class families (often defined as families headed by earners without college educations) hardest, and manifesting itself in myriad ways, including a rise in deaths from suicide, drug overdose and alcoholism – what economists Anne Case and Angus Deaton have recently termed “deaths of despair.”
Let’s be honest. There are some things that philanthropy cannot fix, at least not alone. But in the absence of sweeping federal policy reforms, philanthropy – specifically the type that inspires cross-sector collaboration and collective action – can, and should, bring people together to work towards solutions to our biggest social challenges. In Essex County, systems philanthropy is taking one small step towards addressing the income inequality that is impeding nearly 300,000 people from living the lives they want and deserve. Central to this work – which ECCF is so proud to play a role in – is a focus on economic empowerment: financial coaching and literacy; support for small, non-bankable businesses; and access to affordable college education through credit for prior learning.
Empowering Economic Opportunity (EEO) – the first project of Impact Essex County, the Foundation’s lasting commitment to addressing the region’s most critical issues — is bringing together more than 35 nonprofit organizations, higher education institutions, municipalities and even state agencies to jump start solutions for Essex County residents struggling to stay afloat. By working together to scale local collaborations already having a positive impact, our collective intention is to build upon and expand working solutions already seeing results.
“I am so thankful for this program. It has been life-changing,” said a recent graduate of Community Action Inc.’s financial literacy program in Haverhill, which is empowering low-income women – among the region’s most financially vulnerable – to take charge of their futures by teaching critical money-management skills. This type of financial education for men and women is now happening across all five of the region’s Community Action agencies and will likely impact more than 200 families each year.
“I handled my credit card debt, negotiated from $3,200 to $800,” said a graduate of the financial literacy program at Action Inc., located in Gloucester. “I made a budget, and I’m sticking with it. I am more comfortable handling emergencies.”
According to the 2019 TIAA Institute-Global Financial Literacy Excellence Center Personal Finance Index, or P-Fin, only about half of Americans grasp the concepts behind managing debt, saving for retirement and insuring against major risks, highlighting the critical need for financial literacy education.
The data shows strong support for EEO’s two other investment areas — increasing access to postsecondary education and support for small businesses — too.
For example, according to the Center on Education and the Workforce at Georgetown University, an estimated 72 percent of jobs in Massachusetts will require a postsecondary education by the end of 2020. But the cost of postsecondary education is out of reach for adults living below the living wage. The EEO Credit for Prior Learning program — building on the renowned North Shore Community College program — brings together area colleges and universities, regional workforce investment boards, adult education, ESOL providers and employers to enable adult learners to translate specialized experience and skills into college credits, resulting in reduced costs and time to graduate.
“Everybody knows a college degree can help you live the life you want to live,” said Dr. Cristy Sugarman, Executive Director of the Center for Alterative Studies at North Shore Community College, in a recent interview with ECCF.
College isn’t the only path, of course. Area workforce development initiatives are also working to deliver opportunities for people seeking routes to lucrative careers and financial security. We have written extensively on the GE Foundation Advanced Manufacturing Training Expansion Program, just one of the many initiatives designed to upskill the local labor force recently supported by the Baker administration.
Until nationwide policy reforms mend what has been broken for decades, local workforce development initiatives and collaborative and philanthropic efforts to expand access to job training, college education and financial support programs are stepping up to help those in need.
But we have a real community crisis on our hands, and there are ways to help. Volunteer or support organizations engaging in work that is lifting people up. Educate yourself about the problems that people right here in Essex County are facing. Then, spread the word.
The balance sheet of the working class is simply not adding up. The cost of living is too high. Wage increases are too low – and too slow. And hanging in the delicate balance are the livelihoods of our friends and neighbors, people who simply want to provide for their families and prepare for the future.
Stratton Lloyd is the COO and vice Ppresident of Community Leadership at Essex County Community Foundation. Michelle Xiarhos Curran is the Foundation’s communications writer.