Low-wage earners struggle below the poverty line

Jeffrey Libby

Saturday, Dec. 16, 2000 | 12:37 p.m.

Painting contractor Dan Kneppler left a rented trailer and 1 acre of land in Peyton, Colo., in October for "all these opportunities" he'd been hearing about in Las Vegas.

But after footing the bill for two breakdowns during the 800-mile trek, the 43-year-old and his son landed in town looking not for false hopes, but for sleep and a safe place to park their truck.

Like a modern-day Ellis Island, Las Vegas attracts almost 6,000 new families a month, and most of the newcomers have high hopes of making a better living with higher wages and a lower cost of living.

But a national report due out in January shows that for middle- or lower-income Nevadans, wages are far from the American Dream. In fact, they have stagnated or dropped slightly through the 1980s and 1990s. More than 25 percent of jobs -- including keno writers, fast-food cooks and retail clerks -- continued to be families headed by single wage earners living at poverty levels despite full-time, year-round employment.

The combination of a tight job market and the longest economic expansion in American history has resulted in only a slight uptick in wages for Nevada's low and median wage earners in the last three years.

But for most, those slight gains have done little to meet rising health care costs and higher rents. The wage gains also have done little to close the growing income gap between rich and poor.

Many low to median wage earners -- those earning between $7 and $11 an hour -- have been forced to take second and third jobs to pay bills.

And if the economy slows during the next year -- as experts are predicting -- more newcomers such as Kneppler and his son, also named Dan, will likely find themselves landing not in a valley of opportunity, but in the hard lap of an already overburdened social-services system.

For Kneppler, who says he commanded $25 an hour for painting services in Colorado -- about the industry standard for someone with his 20-plus years of experience -- Las Vegas provided an unexpected wake-up call. Without any resources to reignite his own business, he had to look into working for someone else.

But at the wages he wanted, contractors told him he was overqualified.

"Ten dollars an hour. That's what I heard over and over," Kneppler said.

It was a short contest between his stoic pride and a tightly drawn labor market. Within two weeks, Metro Police caught up with the Knepplers at their snoozing spot north of town. The officers helped them find a room at the MASH Village and a short list of chores.

Providing help

For Ruth Blevin, who helps as many as 8,000 people a year with everything from housing to health care through her job as executive director of the 300-bed MASH transitional-housing center in West Las Vegas, Kneppler's story came as no surprise.

"I can't tell you how many times people come to Las Vegas just hanging on," Blevin said.

More than 50 percent of the people who apply to become MASH residents possess reading and math skills below the eighth grade level. Less than 30 percent test positive for drugs and alcohol.

As part of the requirements for living at MASH, residents must take part in the facility's training and education services so that when they re-enter the work force they can get jobs with salaries above minimum wage, Blevin said.

Most residents leave within a year, many with a high school equivalency degree. None have had to return, she said.

"The cost of living keeps going up in Las Vegas, and a lot of people aren't keeping up," Blevin said.

When a new resident comes into MASH with a minimum-wage job, "we ask them to quit," Blevin said.

"We don't want them to come back," she said, noting that minimum-wage jobs could force their return. If residents are trained, they can get better-paying jobs and become independent.

"If we're going to see them again, we want it to be at a bank or the grocery store -- because the minimum wage doesn't pay the rent. It doesn't pay the utilities. And it doesn't buy the food."

The federal minimum wage is $5.15 an hour, where it has remained since it was raised by 40 cents an hour in 1997. Nationally, about 10 million families live on these wages.

But according to the upcoming report from the Washington-based Economic Policy Institute, even workers earning $8.19 an hour, or $17,000 annually, cannot lift a family of four above the poverty line.

In Nevada, three of the largest employers -- hotel-casinos, retailers, and construction -- pay a significant number of employees wages close to the poverty level.

The Department of Employment Training and Rehabilitation this year is tracking those wages for the first time.

In the Las Vegas metropolitan area, lower hourly wages paid to hotel-casino employees, for example, range from an average $6.76 for food-preparation workers to $9.36 for a change person.

Sales clerks make an average of $9.87 an hour, while stock clerks earn closer to $8.64.

The construction industry pays better: Carpenter's helpers average $11.54 an hour and laborers $10.68.

According to the study, most low-wage Nevadans are doing better than their national counterparts, averaging $7.61 an hour compared to $7.35 elsewhere.

However, when the current average is adjusted for inflation, the state's low-wage workers are making about $625 a year less than they were 20 years ago.

Median-wage Nevadans also have not fared well, according to the report. Two decades ago, the state's median-wage workers were making $11.92 an hour in inflation-adjusted wages. Today they average about $11.16 an hour -- a loss of about $1,600 a year.

During the same 20-year period, while low- and median-wage workers in Nevada watched their income drop, the richest fifth of the working population enjoyed a 24 percent increase in pay, adding more than $26,000 to annual salaries in excess of $108,000.

Las Vegan Lottie Stidhum, 39, a 16-year Caesars Palace employee and a single mother of two, falls into the median-wage category. If she had the $1,600 that a wage earner of her status would have had 20 years ago, she'd be able to afford a better car.

Stidhum, who earns about $12 an hour as a housekeeping administrator, shares her 1995 Hyundai with her daughter, a full-time UNLV student and Millennium Scholar. Stidhum also uses the car to get her 3-year-old to day care. But repair bills are adding up more rapidly since the car passed 100,000 miles, she said.

Even with an annual salary of about $25,500, Stidhum can barely make ends meet, much less maintain an aging car.

Stidhum qualifies for housing assistance, something she says she needs to keep up with expenses. She has received some form of housing assistance since 1985, when she found work as a maid at about $8 an hour through the Culinary Union.

That many years with federal assistance may raise some eyebrows, both from critics who would accuse Stidhum of taking advantage of the system and from hotel-casino critics such as the labor unions, which are constantly working to get fair compensation for workers.

But despite a promotion and steady raises guaranteed by labor contracts, Stidhum's hourly wage has increased by just 50 percent over 16 years.

In that same period, the cost of low-income housing in Las Vegas rose 87 percent, according to Clark County Community Resources Management.

At the county level, the rent increase has been compounded by a lackluster response from the U.S. Department of Housing and Urban Development, according to Gustavos Ramos, deputy executive director of the County Housing Authority.

Housing woes

Since 1980, funding for construction of new, publicly owned housing in Southern Nevada has evaporated to a near mirage.

Federal lawmakers budgeted just one 61-unit project in Clark County in the last 20 years. That money was earmarked in 1990, and the apartment complex has yet to be built.

Today, Ramos is making due with the same 4,200 public-housing units the county had to offer in 1984 when he joined the agency. He says he is able to meet only 20 percent of the public's need.

"The safety net has deteriorated over the last 10 years," Ramos said. "We're maintaining the units we have, but we have no funding to help additional people. We're just circulating what we have."

On any given day, an average of 5,000 families are on waiting lists to receive housing assistance locally, said Shawna Parker, a Community Resources Management grant writer. They often wait as long as a year before an appropriate unit becomes available, she said.

As a result, Ramos says more families are being forced to move into smaller units, to double up with relatives or to move into the streets.

Others take on second and third jobs to stay in their homes.

Jennifer Scott, 29, a Las Vegas High School graduate, works 65 hours a week at two jobs to provide for her three children, ages 12, 10 and 6.

She pays $229 a month in rent for her three-bedroom apartment off Craig Road in northeast Las Vegas, and the Housing Authority kicks in another $535.

A full-time housekeeper at Lake Mead Hospital, where she earns $8.20 hour, Scott picked up another 15 hours a week as a cashier at Kmart in September to pay outstanding bills and to get ready for Christmas. The cashier's job pays $6.50 an hour.

"I never wanted to be a housekeeper, that's not me," Scott said. "I wanted to work in a medical office."

But a pregnancy during her senior year changed her career focus to raising her children.

"My kids are my pride and joy," Scott said. "If they want something and I can't get it (right now), I get it this month or the next month.

"My kids have been brought up wearing name-brand shoes. I keep that going for them."

Like Stidhum, Scott receives health insurance through her full-time employer. But for many low-wage earners in Nevada the tab for medical care is picked up by the taxpayers.

About 21 percent of the state's residents were uninsured in 1999, up from 17 percent in 1995.

And though the cost of uninsured medical care has gone largely undocumented, a 1999 study by UNLV economics professor Jeff Waddoups showed that at University Medical Center alone, the uninsured required $70 million in medical care in 1997. Taxpayers paid the bill.

But even as the costs of health care and rents rise and people with low-level skills continue to pour into the state, new programs are taking hold to meet their needs.

New programs

Under the current system, subsidy programs rely more on public/private partnerships and involve minimal cost to taxpayers, according to state officials.

On the Nevada housing front, tax credits and tax-exempt bonds initiated at the federal level have led to significant gains in the amount of housing for families living near and below the median income level of $53,000.

In 1999 the Nevada State Housing Division oversaw bonds for $193 million in subsidized projects to build nearly 3,000 rental apartments and more than 700 single-family homes, Chas Horsey, an administrator, said.

Taking advantage of these federal tax benefits, developers have built 17,000 homes, most since the mid-1990s and most in Las Vegas, Horsey said.

In Clark County, the average mortgage for a so-called Section 42 home is about $107,000, making them affordable for a family with one child and an income near $37,000 annually, Horsey said.

But for newcomers unable to command those wages, the Culinary Union is playing a significant role. By using dollars diverted from labor agreements with local employers, the union provides job-skill training.

Since 1993, the Southern Nevada Joint Management Culinary and Bartenders Training Trust has offered training programs to give workers the skills to move from minimum-wage jobs with no benefits to jobs paying closer to $11 an hour with medical coverage.

Mark Solomon, the training center's executive director, says a single mother with two children working at a convenience store or in retail is a good example of the more than 17,000 people who have graduated during the center's seven years.

"It enables people to come off public assistance and (federally subsidized) medical benefits and puts them in a position where they're independent," Solomon said.

That financial independence may not be possible for every person that goes through the program, as Stidhum's experience shows. And for some, such as Kneppler, a choice of a new career may not mean joining the local union.

Kneppler says he is taking several classes at MASH Village with plans to pursue a job at Yucca Mountain dealing with hazardous materials.

"God's challenged me in many different ways, but I've never wavered. I've been in worse," said Kneppler, who grew up homeless in Houston and lived for many years alone in the abandoned basement of a Presbyterian church.

But what did he tell his son, a 10th grader at Rancho High School, as they gazed at what he still calls "all the beautiful gold street lights" in October?

"I just told him it could be a good learning experience," Kneppler said.

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