What is a Living Wage? (2024)

FAQs

What is a Living Wage? ›

At its simplest, a living wage is what one full-time worker must earn on an hourly basis to help cover the cost of their family's minimum basic needs where they live while still being self-sufficient. Here's a quick guide for what you need to know about the living wage data you see on the calculator.

An analysis of the living wage (as calculated in December 2022 and reflecting a compensation being offered to an individual in 2023), compiling geographically specific expenditure data for food, childcare, health care, housing, transportation, and other necessities, finds that: The living wage in the United States is ...

“The minimum wage, in almost every location in the United States does not cover a living wage,” Glasmeier said. She said even the highest minimum wage, $17 an hour, doesn't cut it. A livable wage, nationwide, would be closer to $25 an hour, according to her research.

A living wage is an hourly wage rate considered the minimum level to provide the basic essentials of modern living.

With careful budgeting and financial planning, $25 is still a viable hourly wage. Even though it's not a particularly high hourly rate, it's still well above the minimum wage rate in most areas. Keep in mind that your take-home pay will also be affected by things like benefits, overtime pay, and possible bonuses.

An individual must earn $96,500 a year before taxes to afford housing, groceries, transportation and entertainment, while also paying off debt and putting some money into savings, according to personal finance website SmartAsset.

If you make $20 an hour, your yearly salary would be $41,600.

SmartAsset says a single working adult must earn at least $114,000, or about $55 an hour, to support themselves in the Golden State. When it comes to a basic “living wage,” MIT says a single adult in California needs to earn $27.32 per hour or $56,800 per year.

At $20 an hour, a full-time worker earns a little more than $40,000 a year — it's not a lavish lifestyle, but enough to support a family, Wartzman says. And higher wages are not unheard of: In Denmark, McDonald's workers earn $20 an hour, which is working well for management and the corporation.

Why pay employees a living wage? ›

Paying a living wage creates an economy that works for everyone. Paying a living wage leads to increased worker morale, worker health, and improved quality of service. It also lowers turnover rates, saving money for employers.

The living wage is calculated by first establishing the cost for the basic but decent life in a specific region, inclusive of food, housing, education, healthcare, transportation, clothing and other essential needs for a family including unexpected events. The exact costs reflect local items and prices.

Living wage refers specifically to the context of hired workers (in factories, on farms, etc.), whereas living income refers to any self-employed income earner, such as farmers.

The national median for living comfortably alone is $89,461, which suggests that a 50/30/20 budget might not be practical for most single people.

The remuneration received for a standard workweek by a worker in a particular place sufficient to afford a decent standard of living for the worker and her or his family.

Living wages aim to give workers a decent standard of living and enough pay to afford basic needs like food and housing. A global living wage for all workers could generate $4.6 trillion in extra GDP each year, the World Economic Forum says.

The real Living Wage applies to all workers over 18 – in recognition that young people face the same living costs as everyone else. It enjoys cross party support. The UK Living Wage for outside of London is £12 per hour. The London Living Wage is £13.15 per hour.

But here's the thing: Neither is $15 a livable wage for the vast majority of Americans. Although corporations and politicians continue to use $15 an hour as their go-to target for decent pay, we desperately need to raise the bar.

California. California's living wage is $19.41, or $40,371 a year for an individual. A family of four requires $27.42, or $101,378 a year.

$30 an hour is how much a year? If you make $30 an hour, your yearly salary would be $62,400.