Living Wage refers to an income which would permit the people who earn them to be able to provide for sufficient food, shelter, and other important needs for their livelihood. In order for this wage to be sufficient to sustain an individual and/or family, it has to be high enough that the spending on housing does not exceed 30 percent of the total. The ideal with such a wage is for the workers to be capable of bringing home enough income to maintain an acceptable living standard.
Interestingly enough, the concept for a Living Wage enjoys both proponents and detractors. The critics maintain that enforcing such a livable wage sets a new wage floor that ultimately hurts the overall economy. This argument claims that corporations and small companies will decide to hire fewer employees with these greater amounts of payroll. Such a response would likely lead to a greater unemployment rate. In the end, the argument states that fewer people would be allowed to work for this new wage. Meanwhile those people who are still willing to work for a wage (less than the livable one) will not have job opportunities any more.
Those who support the concept of Living Wage instead suggest that employees who benefit from the higher income will work harder for the firm. This is partly based on the concept that satisfied employees will change companies less frequently. It would lower the costly training and recruiting expenses of companies. A higher wage should similarly increase company morale. Workers wither greater morale tend to enjoy greater productivity. The end beneficiary of the livable wage proves to be the corporation that ultimately gains from better output of its workers.
Part of what makes a living wage confusing is the fact that there are now a number of different definitions for this concept. These also vary by nation as well. For example, in countries like Switzerland and Great Britain, the term concerns a person who is employed for 40 hours per week and has no additional income. In these realms, such an individual ought to be able to afford a reasonable quality of life to include shelter, food, transportation, utilities, a minimum amount of recreation, and quality health care.
In the U.K. capital city London, the GLA Greater London Authority defines Living Wage as at least 60 percent of the median income plus an extra 15 percent for any unforeseen circumstances. As a tangible example, if the average London area salary amounted to 50,000 British pounds, then the livable wage by their definition would be 30,000 pounds plus another 4,500 pounds for unforeseen emergencies to equal 34,500 pounds in total.
More generally, others define livable wages as those necessary to secure all basic needs for a decent and safe standard of living in a given community. This amount could vary widely from one locality to another based on the costs of living. Activists of the living wage cause have expanded this basic definition to include the amount which equates to the poverty line applicable for a family of four people. This would be sufficient to obtain shelter, food, health care, clothing, transportation, and other daily needs commiserate with life in the modern world.
A more generous definition for Living Wage comes from the Seattle-based Alliance for A Just Society. They define the concept as the amount necessary to cover child care, medical care, housing, education, transportation, food, and pension costs (retirement contributions). They then add on an additional ten percent of that figure to cover savings and debt payoff.
It is easy but wrong to confuse the ideas of minimum wage and livable wage. While a minimum wage is enacted by a national government’s policies, laws, and regulations, it is generally insufficient to cover the basic costs and needs of life in society. It forces families to fall back on governmental assistance for the necessities they cannot afford on their own otherwise. Where livable wages have been adopted, this has occurred on a municipal governmental and jurisdictional level. Some places and campaigns have gone a step further and pushed for the idea of a family wage sufficient to support a family.