Effects of living wages on municipalities and consumers
A living wage is a complete consideration of the cost of living. Wages vary according to location, as costs of living vary. Living Wage A living wage as opposed to the federal poverty line, takes into account the many necessary factors in calculating the actual costs in a specific geographic area. The Real story of Working Families.
Read any of their Self Sufficiency Standards and data background online at: What's a "just wage", "competitive wage", or"prevailing wage"? A living wage is not a just wage! Since a living wage cover only the very basic necessities and don't even account for savings or emergencies, it is only one small step towards a truly just wage. Many religious traditions and political philosophies relate the concept of just wages to a radically fairer redistribution of wealth.
Since most service workers' wages are far below a living wage, it doesn't mean much when employers claim to pay prevailing or competitive wages. The seven factors in calculating the basic cost of a safe and decent standard of living are:. EPI bases food calculations, for example, on the Dept. Transportation data is based on the different driving distances for a given area or, if available, the cost of public transportation.
While most of the data used by both WOW and EPI are from federal sources, it is sometimes supplemented with local research where federal research is not available, as is the case for the cost of childcare in Washington D. A family of four is an average. In reality low wage earners have more complicated networks of family and dependents. Some live alone without dependents.
Thus, the guideline of a family of four is a meeting point for the varying networks of dependents on the income of a low wage worker. Note that it assumes both parents work for a living wage. EPI and WOW's two studies are reliable assessments of the actual cost of living for an individual or family. They take into detailed account the seven most basic factors of living in a given area.
Federal minimums and poverty assessments are reckless and simplistic. The federal minimum wage is based on little more than precedent. Minimum wage earners, however, cannot eat precedent. This creates higher unemployment, resulting in a deadweight loss , as people who would work for less than a living wage no longer get offered employment.
Supporters of a living wage, on the other hand, argue that paying employees higher salaries benefits the company. They believe that employees who earn a living wage are more satisfied, which helps to reduce staff turnover.
This reduces expensive recruitment and training costs for the firm. They also point out that higher wages boost morale. Employees with high morale are expected to be more productive, allowing the company to benefit from increased worker output.
The movement for workers to earn a reasonable living wage is not a new one. Boston ship carpenters came together in to demand higher pay. The American Federation of Labor AFL , founded in , proposed a general living wage that adequately supported a family and maintained a standard of living higher than the 19th-century European urban working class. Many commentators argue that the federal minimum wage should be increased to align with a living wage.
Although the minimum wage dollar amount has risen since its introduction by President Franklin Delano Roosevelt in , the constant dollar amount has decreased since Most states have their own minimum wage laws to try and align it more closely with a living wage; however, in some states, the minimum wage is below the federal minimum wage, in which case the federal minimum applies.
Average industrial wage is the mean hourly rate of pay for workforce Here are some positives and negatives to help you decide where you stand on the minimum wage debate. We explain how the minimum wage affects unemployment, public assistance, and the economy overall.
BREAKING DOWN 'Living Wage'
We developed a living wage calculator to estimate the cost of living in your community or region based on typical expenses. The tool helps individuals, communities, and employers determine a local wage rate that allows residents to meet minimum standards of living. Mar 29, · The Labor Center's research examines the effects of minimum wages and living wages on employment, workers, firms, and the public. See also Public Cost of Low-Wage Work. Know your rights, whether you are on the National Minimum Wage, National Living Wage or Real Living Wage But the amount is still below the Real Living Wage, a voluntary scheme to which thousands.