What Actually is a Living Wage?

By Rita Epperson

With all the talk on minimum wage and cost of living increases in the last few years, it is easy to get distracted and confused by the abstract and complicated financial concepts and forget what the individual living on the poverty line experiences.  Most people can agree that the federal minimum wage of $7.25/hour is not a living wage. What seems to get lost in the conversation is the fact that $8.00/hour is also not a living wage. Neither is $9, $10, $11, or $12. Even in quaint little Joplin, Missouri where the cost of living is the lowest of any city I’ve ever been to, you need to make between $15 and $20 an hour to live comfortably or even come close to thriving.

For those of us who have grown up in the lower to middle class, $15-$20 an hour is “good money.” What this means for Millennials especially, is that we have enough to cover our bills, eat, and occasionally buy something “frivolous,” like a new sweater from Target. This doesn’t account for health insurance, student loans, or the unimaginable luxury of a vacation. We have been gaslighted into believing barely surviving is thriving. Rather than question the status quo, we give in and get second jobs if we want to afford any manner of luxury in our lives. We glorify “the grind” and “getting this bread,” working ourselves into delirium because it is all we have known in our adult life.

Many arguments against a cost of living wage increase carry the sentiment that the minimum wage was never meant to be a living wage. That it was meant for teenagers and their first part-time jobs. To go ahead and squash that ridiculous theory, here is a quote from the President that signed the first minimum wage into law. In his 1933 address following the passage of the National Industrial Recovery Act, President Franklin D. Roosevelt noted that “no business which depends for existence on paying less than living wages to its workers has any right to continue in this country.”

“By ‘business’ I mean the whole of commerce as well as the whole of industry; by workers I mean all workers, the white collar class as well as the men in overalls; and by living wages I mean more than a bare subsistence level — I mean the wages of decent living.”

For a single person making $10/hour (well above min. wage mind you) in Joplin, living on your own would be literally impossible. The cheapest apartments available here are around $500, throw in utilities and internet, and you’re looking at around $800 a month. That would be over half of your income every month. Throw in your phone bill, health insurance, and any other smaller bills you may have and you’re in the negative before you even get paid. This is with a single person in mind, I can’t even begin to imagine how difficult this situation would be with kids. However, there are so many people in that exact predicament.

Does a person working 40 hours a week deserve to live on Ramen simply because their employer can get away with paying them minuscule wages? Not to mention the psychological torment of being constantly stressed about how to make ends meet. To me it seems that an employer paying minimum wage or close to it, is basically saying “I’d pay you less if I could.”

More and more large corporations like Walmart, Target, and Amazon have started upping their game with mass wage increases, and often the argument is that small business cannot compete. It is important to remember that every business starts out as a small business (for the most part) and studies have shown across the board that paying your employees a living wage does nothing but good things for your business.

“Studies have shown that paying a living wage leads to increased worker morale, worker health, and quality of service. Paying a living wage also lowers absenteeism, turnover, and recruiting and training costs. Raising wages is affordable: employers generally absorb the costs of wage increases through higher worker productivity and lowered training and administrative costs. Living wages enable working people to become self-sufficient and rely less on social services. Living wages stimulate the economy through increased consumer spending and a regional / local “multiplier” effect. A multiplier shows that for every additional dollar earned, workers actually spend more than that dollar within their communities and close to home.”  (orangecountylivingwage.org)

Employees that make a living wage are happier, healthier, more reliable and committed to doing their best job possible. Paying your employees well is an investment in your business, no different than the building itself or the product you are selling. Just because it is legal to pay your employees the bare minimum does not mean it is wise or ethical. If you wouldn’t compromise on the quality of your product, don’t compromise on the quality of life you are providing for your employees.

Maybe the culture of entrepreneurship needs to be reexamined and restructured with the prosperity of the employees in mind, and a new business model formed that would be mutually beneficial to the employer/employee relationship. Maybe if paying your employees a true living wage isn’t in the cards, it’s not a good idea to start a business. That may seem like a bold statement, but the worship and reverence we have for small business in this country rarely takes into account what employee wages are. “Support local business” is a great sentiment but even Walmart started out as a local business and they spent decades taking advantage of their employees as they grew to be the largest company in the world. Late Stage Capitalism has turned our country into a slave/master relationship wherein the majority of Americans live at the poverty level while very few are able to prosper. Most of us are aware of this divide but how can we do anything to change it if we are still shaming poor people for getting iPhones and lattes? Its time to eat the rich my friends. Or at least demand they prioritize our well-being over their profits.


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