Project-Based Learning: A Living Wage

Policy makers often compare income to the federal poverty threshold to determine a person’s ability to maintain a certain standard of living. However, poverty thresholds do not account for living costs beyond a very basic food budget. Further, poverty thresholds do not account for geographic variation in the cost of essential household expenses. The living wage model is a measure of basic needs, 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. The living wage is the minimum income standard that, if met, is the fine line between the financial independence of the working poor and the need to seek out public assistance or suffer consistent and severe housing and food insecurity. The living wage is perhaps better defined as a minimum subsistence wage for persons living in the United States. From the Massachusetts Institute of Technology MIT.edu website

The Economic Policy Institute's Family Budget Calculator measures the income a family needs in order to attain a modest yet adequate standard of living. The budgets estimate community-specific costs for 10 family types (one or two adults with zero to four children) in all counties and metro areas in the United States. Compared with the federal poverty line and the Supplemental Poverty Measure, EPI's family budgets provide a more accurate and complete measure of economic security in America.

How a living wage is calculated: The economist explains. (2015, May 20). The Economist (Online), via the RTC Library's ProQuest database.

Published by the The Economic Policy Institute (EPI), this is a series of links to articles on the problems (Income and wages, Irregular work scheduling, Minimum wage, Public-sector workers, Tipped minimum wage, Wealth, and Young workers) faced by workers in the US.