Wednesday, March 7, 2018

Money Crashers: What Is a Living Wage?

For the last year or so, there's been a lot of noise at all levels of government about raising the minimum wage. Folks on the left (mostly) clamor for a $15 minimum, insisting that anything less is not a true "living wage"; those on the right (mostly) insist that raising the minimum wage to this level will hurt small businesses and ultimately throw more people out of work.

I don't have the economic skills to say whether the second argument is true, but I figured I could at least address the first. So in my latest Money Crashers article, I delve into the question of what a true living wage is.

This turns out to be a more complicated question than it appears, because it depends on so many factors. Location matters, because the cost of living is much higher in some parts of the country than others; so does family size, because obviously it takes more money to raise a family than to support only yourself. And, of course, there's the thorny question of what is an acceptable minimum standard of living. Obviously, you need a roof over your head and enough food to stay healthy, but what about, say, Internet access? Health care? Retirement savings?

In the article, I talk about the ways various organizations have attempted to answer this question, and the pros and cons of each model. I also discuss how cost of living varies by location and draw some conclusions about the most useful way to address the minimum wage issue.

Check it out here: What Is a Living Wage? – Minimum Income for Basic Needs Above Poverty

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