Living Wages: The Wage We Deserve?

A living wage is not just increasing the minimum wage – it’s the income required for workers to afford basic necessities based on their geographic location. The idea is rooted in the belief that anyone who works full-time deserves a wage high enough to live above the poverty line, where they can earn enough to live with dignity. As the cost of living continues to rise while wages continue to stagnate, the gap between what workers make compared to what they need widens, making living wages a more controversial topic than ever.

But Do Empirics Side With It?

Places like the United Kingdom and New Zealand have adopted living wage policies. The results provide strong evidence in favor of increasing wages. When workers receive a wage that covers their basic needs, their wellbeing and overall lives improve. Studies have shown that people who earn a higher wage are able to afford better housing, increased accessibility to healthcare and education, which reduces the physical and mental stress that ties hand in hand with jobs. This leads to happier workers, increasing productivity in the workplace.

It also depletes income inequality. In our status quo economy where wages fluctuate while costs of housing rises, the wealth gap rises. However, implementing a living wage puts a sense of security into workers to ensure they aren’t trapped in poverty. This reduces the barrier that comes with economic status causing society itself to take a step in the equality direction.

The Ripple Effect

Critics argue that it leads to inflation, wage-price spiral, and job losses.

When businesses are required to pay higher wages, they often raise prices on good and services to accommodate. The wage-price spiral is a phenomenon that occurs using this concept. As wages rise, businesses may face challenges in remaining competitive in the scale of global markets. Higher production costs lead to higher prices for foods and services, making exports more expensive.

Low-income workers may actually end up suffering more because the cost of basic necessities like food, housing, and healthcare would rise, making it increasingly difficult for them to truly get ahead. Another effect is decreased purchasing power, as inflation erodes the value of money.

Another major concern is that living wages lead to job losses, particularly in industries that rely on low-wage labor. Businesses may respond by hiring fewer workers and cutting existing workers hours to reduce costs.

The Moral Responsibility

At its core, the idea that anyone who works hard should be able to meet their basic needs is a fundamental principle of fairness. Our current system is broken; people work full-time yet still live in an infinitely regressive cycle of poverty.

Beyond strengthening the economy through increased productivity, paying a living wage acknowledges everyone who contributes to the economy absent the industry they are in, increasing the value society places on its workers.

This is a cause that benefits everyone.