Living Wage vs Minimum Wage


As the fight to increase the minimum wage has taken center stage in the US, a growing number of people have argued that legislators should focus on implementing a federally mandated living wage rather than simply raising the minimum wage. The living wage standard is defined by the amount of income a person needs to cover basic family expenses. It varies by region, as costs in certain geographic areas are vastly different. In almost all cases, the living wage is higher than the minimum wage.

Professor Amy Glasmeier and her colleagues at MIT created the Living Wage Calculator to help individuals determine what the living wage would be in specific locations, based on factors ranging from food costs and medical care to housing and transportation. Glasmeier and her colleagues hope that organizations will use the tool to determine how to compensate their employees more fairly.

Living Wage

3 Questions for Dr. Amy Glasmeier

What do you wish everyone knew about the living wage issue?

Dr. Amy Glasmeier: Americans are hardworking. They believe in fair pay for an honest day’s effort. What they are confronting is a disconnect between how much they’re being compensated and their ability to live on that level of compensation. If people can’t buy basic goods, then our consumption-based economy is going to be increasingly in question.

Why is making a living wage so critical?

AG: If a family can’t make a living wage, then they are forced to make choices about what bills they’ll pay each month; what, if any, care they will seek if ill; and how they will address the developmental needs of their children, such as books, dentistry, optical care, vitamins, and social and physical activities. We know that healthy people start with a solid and supportive upbringing. Economic precariousness does not create the conditions for health, a secure sense of self, or a view toward personal aspiration across one’s life.

What is the largest barrier to getting minimum wage on par with living wage?

AG: Politicians do not want to be the ones to change the minimum wage. This is despite the fact that organizations like JUST Capital have provided reliable evidence that the general public believes a fair wage is not only fair and just, but importantly, Americans as a group believe a living wage should be delivered by policymakers.

Try the Living Wage Calculator for yourself at livingwage.mit.edu

This article appeared in Issue 6 | March/April 2016

To read more inspiring articles from Issue 6 including stories about Greyston Bakery, Dave's Killer Bread, Rising Tide Car wash, and our cover story featuring Leila Janah, Founder of Samasource, purchase a copy of Issue 6 online or on newsstands!

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