Over the past few years, we have seen several of our clients considering and/or implementing a living wage policy and structure. The “living wage” concept dates back to when the American Federation of Labor (AFL) was established in 1886. The organization pushed for paying all workers (union and non-union) at a level which would maintain an active family with an “American standard of living higher than the 19th century European urban working class.” (Quote from the University of Maryland University Libraries article on Living Wage)
A valuable resource that we have used with our clients that desired a living wage for its employees is the Living Wage Calculator which was first created in 2004 by Dr. Amy K. Glasmeier and the Massachusetts of Institute Technology (MIT). Her model is explained in the next paragraph which was taken from the Living Wage Calculator website.
The living wage model is an alternative measure of basic needs. It is a market-based approach that draws upon geographically specific expenditure data related to a family’s likely minimum food, childcare, health insurance, housing, transportation, and other basic necessities (e.g. clothing, personal care items, etc.) costs. The living wage draws on these cost elements and the rough effects of income and payroll taxes to determine the minimum employment earnings necessary to meet a family’s basic needs while also maintaining self-sufficiency.
There are 12 family compositions in the calculator from One Adult with No Children to Two Adults with Three Children and Both Adults working. The program allows you to select a state and county in the state to see the living wage, poverty wage and minimum wage for all 12 family compositions.
There are many groups around the country that are promoting higher minimum wages that align with the current living wage figures. One such organization is the Fight for $15 which was started in 2012.
We believe that it is important for organizations to set a plan in place to ensure its employees are making at least a living wage if they don’t have one in place already.