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AUTHOR: R Quinn on 11/23/2024
Be careful what you ask for or at least understand it.
The words “living wage” keep popping up in my reading, even on HD, but mostly on social media when complaining about pay. It’s also a good trigger phrase in politics.
Everyone should earn a living wage we may be told. Of course, typically without understanding what that means, how it could be achieved or the possible consequences.
After I wrote the following, I read and re-read it and concluded I was going in circles. There is no way, no logic to providing a livable wage because it doesn’t actually exist.
A living wage is the minimum income that a full-time worker needs to earn to afford basic necessities like housing, food, transportation, and healthcare for themselves and their family. It’s calculated based on the cost of living in a specific location. Advocates for a living wage argue that it helps reduce poverty, improve worker well-being, and boost the local economy.
I can’t help thinking that universally applied it would also trigger inflation and thus be self-defeating.
The median household income in the US is about $80,610. According to the US Bureau of Labor Statistics, American workers make a median wage of $59,228 per year. Is that a living wage? For many Americans that amount and less is what they live on.
As I mentioned in a recent HumbleDollar post, in the county in NJ where I live the living wage according to the MIT Living Wage calculator for a single parent with one child is $82,784 per year. Should we pay every such worker $80,000 plus a year? What about workers being paid through citizen’s taxes? The median teacher salary in NJ is $80,196. Should a waiter be guaranteed the same?
The median household income in my county is $74,994, but in my town it is $215,000. Half the households in my county earn far less that a living wage according to the numbers. How could a living wage possibly be applied?
Zip recruiter says the average salary in New Jersey is $59,022. The living wage for a single person in NJ is supposedly $51,500, but what if there is a two income family?
Let’s jump to Kentucky where the living wage for a single worker is $40,352. Zip recruiter says average salary is $52,875, but another site says $55,000. On the other hand, the median household income in Kentucky is reported to be $60,183.
Frankly I can’t make sense out of any of this. The numbers are questionable at best. Go to three different sites and you get three different answers.
The very idea of a living wage is a red herring in my opinion and just like calls to raise the minimum wage, we fail to consider the consequences not just on the individuals affected, but on all workers, employers and the economy.
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