Building a business from the ground up is a test of endurance.
Ryan Houston, who owns Lawn-N-Order Landscaping in Weaverville, remembers making about $5,000 in his first year as an entrepreneur.
At age 18, he quit his job as a cook after learning how much the restaurant’s landscaper made. “It was up in the six figures,” Houston recalls. “I put in my two-week notice the very same day.”
The business was launched on a shoestring, however. He had an old truck that leaked oil, making it necessary to place a cardboard box underneath the vehicle every time he parked, and he had to borrow his first string trimmer. For $10, he made about 300 copies at the library of a flyer he’d designed himself.
Over the years, Houston’s company grew, though a large portion of the revenues ended up getting reinvested in the business. That, of course, cut into his own earnings. “There’s several years that I didn’t make a living wage,” he reveals.
Nearly 20 years later, Houston employs close to a dozen people and is one of about 425 local businesses that have been certified by Just Economics, a nonprofit that calculates living wage rates for Buncombe and some other Western North Carolina counties.
“We’re a small but loud organization and really believe that it’s not a sustainable economy if people are living at such low wages,” says Carmen Ramos-Kennedy, who directs the living wage program.
In early January, the organization raised its living wage rate for Buncombe County by 65 cents, to $12.15 per hour for workers with employer-provided health insurance and $13.65 for those without insurance.
The latter figure is almost twice the federal government’s $7.25 minimum wage. But in Asheville, which is known for its high cost of living, Ramos-Kennedy says she can’t imagine anyone surviving on that minimal standard.
“I don’t know how they do it,” she says. “It’s impossible. They must live five or six people to an apartment.”
By the numbers
Just Economics’ living wage rate is based on the idea that a person who works full time should be able to afford a one-bedroom apartment in addition to their other expenses. The U.S. Department of Housing and Urban Development recommends that no more than 30 percent of an individual’s gross income be spent on housing.
To arrive at its figure, Just Economics takes a four-year average of monthly fair market rents in Buncombe County — $709 per month for 2016 through 2019 — and divides it by 30 percent to get the approximate monthly expenses for a person living in the county. The resulting figure is then multiplied by 12 to get annual expenses; divided by 2,080 (40 hours per week times 52 weeks), yielding the hourly living wage, rounded to the nearest nickel.
Ahead of the curve
Although they’re not certified by Just Economics, two of the region’s biggest employers — Buncombe County and the city of Asheville — do have living wage policies in place.
“The city’s policy explicitly states the way in which they need to adjust and when they need to adjust the wage rate,” says Vicki Meath, Just Economics’ executive director. “Whereas the county has a policy, but it’s a little less clear.”
Still, many Buncombe County municipalities have previously accepted the Just Economics rate as the minimum wage for their employees, notes Meath, and at least some may update their pay scales at the beginning of their next fiscal year.
According to county records, all of Buncombe’s roughly 1,400 permanent full- and part-time employees already make more than $12.15 an hour. But 45 of the county’s 132 temporary part-time employees, who don’t receive health insurance, fall short of $13.65 an hour. That includes library assistants, security guards and laborers. In fact, 18 pages make $11 per hour, which si less than even Just Economics’ previous living wage rate.
In 2012, the Board of Commissioners established a county policy of paying permanent full- and part-time employees a living wage. But the resolution doesn’t mention temporary workers. “That policy didn’t specify methods for adjustment,” says Meath, “and it didn’t clarify who all was covered.”
Despite the ambiguity, however, Meath says the county has been using Just Economics’ universal living wage formula to make periodic adjustments.
Asheville, meanwhile, currently has 222 temporary employees who don’t receive any benefits and fall below the new $13.65 rate.
The disparity between the two local governments might seem stark, but Meath says it has to do with the difference in the types of positions they offer, which reflect differences in the core services they provide. “The city tends to have more of those part-time seasonal positions that are potentially low, because of the nature of the work,” Meath explains. Those positions include concessionaires, bartenders and ushers who work at the U.S. Cellular Center and seasonal jobs in the city’s Parks and Recreation Department.
Jaime Joyner, interim director of Asheville’s Human Resources Department, says that number will grow once spring arrives. In keeping with city policy, however, the plan is to bring those employees up to the new living wage rate by July 1, the start of the next fiscal year. The move is estimated to cost $107,000, she reports.
In the meantime, though, both the county and city are ahead of most local governments across the state, Meath maintains: They’re among the handful of such entities that actually have a relevant policy on the books.
“Asheville and Buncombe County, and the same with Weaverville, Montreat, Canton … explicitly state that they are committed to paying a living wage rate,” she points out.
Ramos-Kennedy believes paying a living wage is essential for local businesses that want to hire talented employees. To begin with, it helps them stay competitive — particularly since, as of last November, Buncombe’s 2.7 percent unemployment rate was the lowest in the state.
“If the business next door to you is the same business as yours and they’re paying $15 an hour, you have to step up,” says Ramos-Kennedy.
It’s a phenomenon that Greig Hillman, who co-owns Hillman Beer with his wife, Brandi, and brother Brad, says he definitely sees in the local brewing industry. If they paid less than fair market rates, says Greig, “In the beer world, we wouldn’t be able to compete at all.” The company recently hired a new assistant brewer whose wages could top out at $18-$20 per hour, he notes.
Houston, too, sees advantages in paying workers in his landscaping business fairly: It has led to higher productivity, healthier workers, reduced turnover, stronger loyalty and fewer disciplinary problems, he reports.
And even though some of his hires are for entry-level positions, the physically demanding nature of the work and the amount of training required to use the equipment means Lawn-N-Order almost has to pay a decent wage. “We wear our jobs home,” he explains. “I know everybody does, to a degree, but we go home physically and mentally tired.”
Ultimately, however, these factors affect all employers, Ramos-Kennedy maintains. Whatever the nature of the work, “It’s in the business’s best interest to pay a living wage,” she says simply.