With all the talk in politics about a “living wage,” we decided it would be a good time to refresh on the meaning of the term, and how it differs from “minimum wage.”
Let’s start with definitions:
Living Wage: an approximate income needed to meet a family’s basic needs to maintain a normal standard of living, which includes achieving financial independence while maintaining housing and food security.
Minimum wage: The lowest wage permitted by law or other labor agreement.
The problem arises in the gap between what is the minimum wage standard, and what level of wages is required to actually maintain a basic standard of living, including buying food and housing for your family.
Research on wages and the cost of living across the United States has shown that there is NOT A SINGLE COUNTY in the United States where the minimum wage can support the minimum living costs for a family of four. In fact, a typical family of four (two working adults and two children) requires 144 hours at minimum wage – nearly two full-time jobs per adult – to earn a living wage. A single parent with two children has it much harder, and would need to work 139 hours in a single week (the equivalent of three and one half full-time jobs) to earn the living wage on a minimum wage income. That is more hours than exist in a five-day workweek.
To look up your county specifically, check out MIT’s Living Wage Calculator here.
The minimum wage falls short across the country. In Washington, where the minimum wage is the closest of all states to the living wage, it only covers 63.7% of a family’s living expenses before taxes. The worst state offender is Hawaii, where two full time minimum wage jobs only amount to 40.2% of the necessary living wage.
This is why the minimum wage has risen to the forefront of politics, and why states like New York and California are raising their minimum wages to $15 per hour. The minimum wage today is far behind cost of living, and it’s costing families.
Minimum wage policies were originally set to provide a floor of wage protection for workers. Today they are outdated. Adjusted for inflation, the minimum wage has barely changed, or even fallen since the 1960’s. That’s because we’ve relied on small, incremental changes to increase it – often in piecemeal efforts across the country – instead of pegging the minimum wage to cost of living increases, so that working families don’t get left behind with rising costs.
Today, there are businesses and states taking the minimum wage into their own hands, and making it a living wage. It’s time we all realized who the wage gap is leaving behind, and rallied behind those working to make a difference.