- If a person labors 40 hours a week to economically benefit another person or enterprise, how much compensation should he or she expect for their labor?
- What factors should be considered in determining whether compensation is fair?
- Does fair compensation benefit the community and the economy in general?
- If wage compensation by a profitable company is nevertheless insufficient to meet the workers basic needs, doesn't the resulting tax payer supported assistance really amount to a business subsidy supporting higher profits?
First, some background:
A living wage is the minimum hourly income necessary for a worker to meet basic needs. These needs may include shelter (housing) and other incidentals such as clothing and nutrition, health care, etc. In some nations such as the United Kingdom and 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 recreation.1
In 1891 Pope Leo XIII first described a living wage in terms that as could be generalized for application in nations throughout the world. He said, "Wealthy owners of the means of production and employers must never forget that both divine and human law forbid them to squeeze the poor and wretched for the sake of gain or to profit from the helplessness of others."2
Adam Smith was a supporter of living wages and viewed them as a way to achieve economic growth and equity. In his Wealth of Nations , Smith recognized that the rising real wages lead to the "improvement in the circumstances of the lower ranks of people" was an advantage to society. According to Smith, the government should align the interests of those pursuing profits with the interests of the labor force in order to grow the nation’s economy. Smith argued that high wages lead to higher productivity and overall growth.3
Introduction to the Living Wage Calculator
http://www.livingwage.geog.psu.edu/
In many American communities, families working in low-wage jobs make insufficient income to live locally given the local cost of living. Recently, in a number of high-cost communities, community organizers and citizens have successfully argued that the prevailing wage offered by the public sector and key businesses should reflect a wage rate required to meet minimum standards of living. Therefore we have developed a living wage calculator to estimate the cost of living in your community or region. The calculator lists typical expenses, the living wage and typical wages for the selected location.
Select a Location
To get started, enter a location into the search box above, or browse to a location using the list below.
States
The original calculator was modeled after the Economic Policy Institutes's metropolitan living wage tool. Users should know there are many researchers contributing tools and resources to the movement to achieve living wages. Diana Pearce at the Univesity of Washington, Seattle is an important contributor to the living wage movement. Her work provides an alternative calculator.
Our tool is designed to provide a minimum estimate of the cost of living for low wage families. The estimates do not reflect a middle class standard of living. The realism of the estimates depend on the type of community under study. Metropolitan counties are typically locations of high cost. In such cases, the calculator is likely to underestimate costs such as housing and child care. Consider the results a minimum cost threshold that serves as a benchmark, but only that. Users can substitute local data when available to generate more nuanced estimates. Adjustments to account for local conditions will provide greater realism and potentially increase the accuracy of the tool. As developed, the tool is meant to provide one perspective on the cost of living in America.
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