Our nation, with all our peoples’ many divergent political and social views, feels sometimes on the verge of tearing itself apart. We try to convince others to recognize our “truths”. It isn’t working. But we do have one truth that we all might agree on. Libertarian or Socialist, it is “American” to expect people to support themselves, stand on their own two feet. But a closer look shows that over the last 50 years, the ability for anyone to be able to earn a “living wage”, enough money to support yourself and your family on a minimal basis, providing housing, food and healthcare, has become impossible.

The success of our nation’s future as a democracy depends on our ability to provide a “living wage” for our people.

Looking back on the decade following the end of WWII, from 1947 to 1957 the air in America was balmy, skies were clear and blue, optimism for the future cast a pink haze over everything. The world was safe.  Families gathered again under the roofs of new homes.  New school buildings were under construction to educate the “baby boomer” generation.  New roads were built to connect the new subdivisions of housing.  New water systems, treatment, flood control, sewage, etc. were built to connect the new homes.  War related manufacturing plants morphed into peace time aeronautics, scientific and technology companies. 

Peace brought construction.  Construction required workers.  In Orange County California, an example of what happened across the nation, the Hispanic population, traditionally limited to agricultural work, was pressed into service to construct the thousands of new homes in the county.  If they served in WWII, they got an additional financial “bump” to help them buy new homes.  (Black Americans, even those who served in WWII, were not so fortunate, denied by FHA policies and rules from the opportunity to live near places of work or to buy a home on the discounted mortgage terms available to all others who served (see THE COLOR OF LAW by Richard Rothstein).

Wage Differences in Adjacent Cities: Irvine vs Santa Ana

In southern California, postwar Orange County’s construction needs drove salaries for the Hispanic population in the region, enabling many families to purchase homes.  With a Black population of around 1%, the opportunity for housing and wealth growth in those post war years is minimal.

But the difference in cost of living between two neighborhood cities in Orange County is stark.

Irvine and Santa Ana California are adjacent cities in Orange County California.  According to data, https://smartasset.com/data-studies/salary-needed-live-comfortably-2024, Irvine is the third most expensive city in the US and Santa Ana is the fourth. 

In both cities, the hourly wage needed for a single adult is $60.96 and the annual salary needed for a single adult to live comfortably is $126,797.  Households with combined salaries for two working adults with two children need $291,450.

In the adjacent city of Santa Ana California, according to CensusReporter.org, the actual https://censusreporter.org/profiles/16000US0669000-santa-ana-ca/  household income is $79, 351, a far cry from $291,450 recommended for a living wage.  In Irvine California the actual https://censusreporter.org/profiles/16000US0636770-irvine-ca/  household income is 155% than that of Santa Ana.  The Irvine family earns over 1.5 times that of the Santa Ana family. A big difference, especially considering they border each other.  But the real shocker is not just the difference between these two adjacent cities but rather the calculation that a “living wage” for a household with two adults and two children should be $291,450, according to Smartasset.com, a site that covers “living wage” issues.  That is almost 2.5 times the household income of Irvine and a whopping and 3.3 times the household income of Santa Anans.

Note:  The living wage calculator developed by Dr. Amy Glasmeier at MIT is concerned with addressing a family’s most basic needs. As such, Dr. Glasmeier defines a living wage as “the wage needed to cover basic family expenses plus all relevant taxes” (Glasmeier, 2022).

The Smart Asset.com 50/30/20 formula is more generous, it recommends that for sustainable comfort, 50% of your salary should be allocated to your needs, such as housing, groceries and transportation; 30% toward wants like entertainment and hobbies; and 20% toward paying off debt, saving or investing. Applying the local cost of necessities and taxes to this rule, we can derive the pre-tax salary needed to live comfortably in 99 U.S. cities.  This is the formula used in this article on Santa Ana & Irvine.

So far we are discussing typical American families and how their incomes might differ from one municipality to the other.

The City of Irvine has a “dark” history that demonstrates a clear intention in 1969 to intentionally exclude lower income populations from the city through the process of the original company which owned the land aggressively blocking the annexation of an area by the city of Santa Ana, an annexation that the company had previously promised the city of Santa Ana would be possible.  The breaking of that promise as well as the housing plans developed with no consideration for middle and lower income housing set these two adjacent cities on very divergent paths.

Those actions by the Irvine company in 1969 still affect the lives of Santa Anan’s today, as shown in the income tables.  But even more important for the ability of American households to attain a living wage is the series of decisions made by elected officials at the national level, influenced by libertarian view of government, by aggressive proponents of such views as the Koch brothers and the Heritage Foundation and the actions of the legislators under the influence of these organizations who, beginning in the early 1980’s with the support of Ronald Reagan’s presidency, began to staunch the tide of working class union organizations, clamp down on public health and safety regulations that previously cost corporations money for compliance, greatly reduced the tax obligations of corporate heads and wealthy individuals.

The chart below from Statista (https://www.weforum.org/agenda/2019/04/50-years-of-us-wages-in-one-chart/) clearly shows that in “real dollars”, aka dollars of the same value controlled over time, hourly earnings in March 2019 were exactly the same as hourly earnings for production and nonsupervisory employees in the US FORTY SIX years earlier.  Working class and middle income Americans earned $23.24 an hour in Feb. 1973 and $23.24 an hour in March 2019.

The USA remains a world leader in production and in innovation.  Where does all that money go for all that successful work done?  The rich are continuing to get far richer than the lower and middle class workers in America.

In 1983 upper income families held 60% of the aggregate wealth of the nation.  By 2016 their share had increased 29 points to 79% of the nation’s wealth.  But middle income families took a steep slide, with a share of 32% of US aggregate wealth in 1983 down by almost half to 17% in 2016 .

By 2023, according to USAFacts.org, the top 1% of US households owns 26% of the nation’s wealth. This is no way to run a democracy.