What's a living wage?
You’ve probably heard that the Minimum Wage isn’t a Living Wage. But what does that mean? According to MIT’s Living Wage Calculator,
The minimum wage does not provide a living wage for most American families. A typical family of four (two working adults, two children) needs to work nearly four full-time minimum-wage jobs (a 76-hour work week per working adult) to earn a living wage. Single-parent families need to work almost twice as hard as families with two working adults to earn the living wage. A single-mother with two children earning the federal minimum wage of $7.25 per hour needs to work 138 hours per week, nearly the equivalent of working 24 hours per day for 6 days, to earn a living wage. (Source)
Employers that only pay minimum wage are actually externalizing their costs onto society. The rest of us pay for their employees’ food assistance, health care and housing assistance while the owners pocket the difference.
But what should be included in a Living Wage? Should we assume a single Millennial living with roommates or a single parent with two kids?
Unfortunately there is no consensus yet around the definition of a living wage lifestyle but MIT has created a calculator where your business can choose your assumptions. Here’s a link to the data for Yavapai County. If all your employees are single adults, a living wage is $11.78. If you assume an adult should be allowed to have one child, it’s $24.13. If you think in a two-parent household, that one should be able to stay home with their first child, it’s $22.66.
The calculator also provides a breakdown of the typical expenses (food, medical, housing, child care, etc.) and typical salaries in the County. These figures can help you determine whether you’re paying enough for your employees to make ends meet or if you’re dooming them to a treadmill of multiple jobs.