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Living Wage

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THE LIVING WAGE AND ITS EFFECT ON THE ECONOMY

INTRODUCTION

The topic of our study investigates the living wage and its effect on the economy. A survey will be distributed asking questions about wages, cost of living, and making ends meet. Our conclusions and recommendations on the topic of living wages will result from this survey.

BACKGROUND

The definition of living wage is “a term used to describe the minimum hourly wage necessary for a person to achieve some specific standard of living. This means a person working forty hours a week, ”should be able to afford housing, food, utilities, transportation, health care and recreation” at a basic level. (Wikipedia.org).

Currently, a living wage is set by local municipalities based on a local cost of living assessment, and applies only to government employees and/or contractors. This is different from minimum wage, which is set by law through the Federal government. The federal minimum wage is the minimum amount that a worker can be paid an hour and this law applies to nearly all workers. In Michigan, the minimum wage is currently $7.40 an hour. Minimum wage does not always meet the requirements of a living wage. (Wikipedia.org). For example, in 2008, East Pointe, MI paid its employees a living wage of $10.40/hr , while Detroit, MI paid its employees and contractors $8.25/hr, both with health benefits in comparison to $7.40/hr Federal minimum wage.(laborstudies.wayne.edu/

According to the Economic Policy Institute, “the living wage level is usually the wage a full-time worker would need to support above federal poverty line, ranging from 100% to 130% of the poverty measurement”. (EPI Issue Guide – Living Wage, p. 1). A full-time worker supporting a family of four should make at least $21,200, which is the poverty line. Cities and counties with a higher...

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