A living wage is the minimum income necessary for a worker to meet their basic needs, including shelter, clothing, transportation health care and nutrition. This doesn’t even include such spurious luxuries as recreation, vacation, retirement savings, paying legal fees and insurance, taking care of sick or elderly family members, tithing to your church, debt repayment, higher education for your children, and other such frivolous extravagances.
Unfortunately in this country the minimum wage that employers must may is far below this even this paltry standard. Currently the national minimum wage is only $7.25 an hour. This is substantially less than what the MIT Living Wage Calculator computes is the cost of a living wage in even the least expensive state in the country, Ohio, where it is $9.39 for a single adult working 40 hours a week. A living wage in Hawaii would be $13.74 and $13.35 in Alameda County for a single adult (and a buck more than that if you live in New York County). What is particularly shameful is that the minimum wage adjusted for inflation in the United States is actually only 66.8% of what it was at its peak in 1968, almost 50 years ago, when the minimum wage was $10.85 in real terms. To add insult to injury, worker productivity has vastly increased, growing 74% between 1973 and 2013. Productivity is the output of goods and services per hour worked. In other words, a minimum wage worker today is paid less than half as much per unit of output as they were almost 50 years ago!
This wouldn’t be as big an issue if the economy worked the way it is supposed to in the neo-liberal textbooks, with cheap, highly productive labor causing a scarcity of workers, and making wages rise to match the increases in economic output. (In fact, hourly compensation increased in lock-step with gains in productivity in the period from WWII until about 1973, but since then have diverged enormously). In the real world 1.3 million workers earned the prevailing federal minimum wage and another 1.7 million workers were paid BELOW the federal minimum. And many millions more are paid above the federal minimum but below a reasonable living wage. And another 6.6 million workers work part time even though they want full-time jobs. Certainly many employers are cutting hours below 30 hours a week so they can avoid paying benefits like medical coverage, but this number is not simply an artifact of Obamacare. In fact during George W. Bush’s last year involuntary part-time jobs shot up from 4.8 million to 8 million and has actually decreased from its peak in 2010 (which is when the Affordable Care Act started to go into effect).