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Living wage

A living wage is defined as the minimum income necessary for a worker to meet their basic needs.[3] This is not the same as a subsistence wage, which refers to a biological minimum, or a solidarity wage, which refers to a minimum wage tracking labor productivity. Needs are defined to include food, housing, and other essential needs such as clothing. The goal of a living wage is to allow a worker to afford a basic but decent standard of living through employment without government subsidies.[4] Due to the flexible nature of the term "needs", there is not one universally accepted measure of what a living wage is and as such it varies by location and household type.[5] A related concept is that of a family wage – one sufficient to not only support oneself, but also to raise a family.

The living wage differs from the minimum wage in that the latter can fail to meet the requirements for a basic quality of life which leaves the worker to rely on government programs for additional income.[6] Living wages have typically only been adopted in municipalities. In economic terms, a minimum wage is a price floor for labor created by a legal threshold, rather than a reservation wage created by price discovery. The living wage is one possible guideline for determining a target price floor, while a minimum wage is a policy to enforce a chosen price floor.


In the United Kingdom and New Zealand, advocates define a living wage to mean that a person working 40 hours a week, with no additional income, should be able to afford the basics for a modest but decent life, such as, food, shelter, utilities, transport, health care, and child care.[7][8] Living wage advocates have further defined a living wage as the wage equivalent to the poverty line for a family of four. The income would have to allow the family to 'secure food, shelter, clothing, health care, transportation and other necessities of living in modern society'.[9] A definition of a living wage used by the Greater London Authority (GLA) is the threshold wage, calculated as an income of 60% of the median, and an additional 15% to allow for unforeseen events.[5]


Living wage campaigns came about partially as a response to Reaganomics and Thatcherism in the US and UK, respectively, which shifted macroeconomic policy towards neoliberalism.[10] A living wage, by increasing the purchasing power of low income workers, is supported by Keynesian and post-Keynesian economics which focuses on stimulating demand in order to improve the state of the economy.[10]

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Madjd-Sadjadi, Zagros, Living Wages: The Issues and the Impact Division of Labor Statistics and Research, California Department of Industrial Relations, San Francisco, 2001

Sklar, Holly; Mykyta, Laryssa; Wefald, Susan, "Raise The Floor: Wages and Policies That Work For All Of Us", 2002, South End Press. ISBN 0-89608-683-6

South End Press | Raise the Floor

Nadeem, Shehzad, , Research in Social Movements, Conflicts, and Change 28: 137–67 (2008)

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Miller, Doug (5 February 2013). Towards Sustainable Labour Costing in UK Fashion Retail. Northumbria University. :10.2139/ssrn.2212100. S2CID 166733679. SSRN 2212100. {{cite book}}: |website= ignored (help)

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Living Wage Calculator

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Living Wage Calculator

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Living Wage Calculator

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Living wage

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New York Living Wage Campaign

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Use IE techniques to determine Living Wage

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Living Wages, Rarity for U.S. Fast-Food Workers, Served Up in Denmark