The term "living wage" is used by advocates to refer to the minimum hourly wage necessary for a person to achieve some specific standard of living. In the context of developed countries such as the United Kingdom or Switzerland, this standard generally means that a person working forty hours a week, with no additional income, should be able to afford a specified quality or quantity of housing, food, utilities, transport, health care, and of recreation. This concept differs from the minimum wage in that the latter is set by law, and may fail to meet the requirements of a living wage.

In the United States, several municipalities and local governments have enacted ordinances which set a minimum wage higher than the federal minimum for the purpose of requiring all jobs to meet the living wage for that region. Often, these ordinances only apply to certain types of businesses, such as those receiving government contracts. However, San Francisco, California, Santa Fe, New Mexico, and Madison, Wisconsin have notably passed very wide-reaching living wage ordinances.

In Australia, the 1908 Harvester Judgment ruled that an employer was obliged to pay his employees a wage that guaranteed them a standard of living which was reasonable for "a human being in a civilised community," regardless of his capacity to pay. Justice Higgins established a wage of 7/- (7 shillings) per day or 42/- per week as a 'fair and reasonable' minimum wage for unskilled workers. In 1913, to compensate for the rising cost of living, the basic wage was increased to 8/- per day, the first increase since the minimum was set. The first Retail Price Index in Australia was published late in 1912. The basic wage system remained in place in Australia until 1967. It was also adopted by some state tribunals and was in use in some states in the 1980s.

The national and international living wage movements are supported by many labor unions and community action groups such as ACORN.

There is some controversy as to whether living wage regulations actually help the poor. Many economists contend that, by increasing deadweight loss, mandated living or minimum wage regulations shrink the labor market and make the least-skilled workers less employable.

Critics of living wage ordinances assert that the government should not intervene in the marketplace. Living-wage advocates respond that governments intervene in the market to help businesses through subsidies, tax breaks, and other assistance. Living wage laws typically only cover businesses that receive this type of assistance or have contracts with the government. epi.org

See also

• Social wage
• Minimum wage
• Wage slave
• Labor market
• Ten Thousand Villages
• Positive rights

External links

• Campaign for a Living Wage in British Columbia
• Economic Policy Institute
• Center for Policy Alternatives – Living Wage Policy Model
• ACORN Living Wage Resource Center
• Living Wage Action Coalition – An organization of student activists involved in campus living wage campaigns
• Center for Economic and Policy Research
• Minimum Wage/Living Wage
• Building a Living Wage Floor: An Analysis of Living Wage Campaigns in the U.S.
• Measuring the Full Impact of Minimum and Living Wage Laws
• Santa Fe Living Wage Network

Employment compensation