The Case for the Living Wage

The living wage movement is working to change the way we Americans think about the minimum wage. The concept of living wage is not new, according to a January 2006, NY Times Magazine article titled, “What Is a Living Wage?”

“It was a popular workers' refrain in the late 19th century and was the title of a 1906 book by John Ryan, a Roman Catholic priest.”

Source: New York Times Magazine

There are several ways to compute a living wage. One way is to compute the living wage by multiplying the cost of housing by some factor to compute a monthly wage. The folks at Universal Living Wage use federal standards for fair market rents within each metropolitan statistical area or MSA.

“The concept is simple. It is based on the premise that if a person works 40 hours a week, then he/she should be able to afford basic housing. We use two existing Federal guidelines to determine what the Universal Living Wage should be. The first guideline … dictates that no more than 30% of a person's gross monthly income should be spent on housing. The second guideline, the Fair Market Rents (FMRs) [is] established by HUD throughout the country for each municipality and all other areas. Therefore, the Universal Living Wage will vary per area in accordance with the FMR. FMRs are based on gross rent estimates [that] include shelter, rent and the cost of utilities except telephone service.

Source: Universal Living Wage

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