living wage, the hourly wage that, at a minimum, supports a standard of living above the poverty level in a given locality. It differs from the minimum wage, which often provides a less than adequate standard of living. Usually exceeding both federal and state minimum wages, the living wage of any locality is normally set by a law that requires that it be paid to a specific set of workers, often those employed by businesses that have local government contracts or that receive government economic development subsidies. The recipient of a living wage stipend is generally a full-time worker who is expected to support a family (often of four). In normal circumstances, the higher the cost of living in a given locality, the higher the living wage. Living-wage laws are in effect in several European countries, e.g., Great Britain and Switzerland. In the United States, living-wage bills had been enacted by more than 140 cities and counties by 2007. That year Maryland became the first U.S. state to require the payment of a living wage by nearly all profit-making employers with state contracts. Since then, there has been an increased focused on higher minimum wages at the state and local level as well as indexing minimum wages to inflation.
See studies R. Pollin and S. Luce (2000), Z. Madjd-Sadjadi (2001), D. Neumark (2002), D. M. Figart et al. (2002) and as ed. (2004), and S. Luce (2004).
The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2024, Columbia University Press. All rights reserved.
See more Encyclopedia articles on: Economics: Terms and Concepts
