Living Wage – MIT¹ Definition ¹:
Per MIT (see https://livingwage.mit.edu/pages/about )
“The living wage model is an alternative measure of basic needs. It is 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 (e.g., clothing, personal care items, etc.) costs.
The living wage draws on these cost elements and the rough effects of income and payroll taxes to determine the minimum employment earnings necessary to meet a family’s basic needs while maintaining self-sufficiency.
The living wage model is a ‘step up’ from poverty as measured by the poverty thresholds but it is
a small ‘step up’, one that accounts for only the basic needs of a family. The living wage model
does not allow for what many consider the basic necessities enjoyed by many Americans. It does
not budget funds for pre-prepared meals or those eaten in restaurants. It does not include money.
for entertainment nor does it allocate leisure time for unpaid vacations or holidays.
Lastly, it does not provide a financial means for planning for the future through savings and
investment or for the purchase of capital assets (e.g. provisions for retirement or home
purchases).
The living wage is the minimum income standard that, if met, draws an exceptionally 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. Considering this fact, the
living wage is perhaps better defined as a minimum subsistence wage for persons living in the
United States.”
Technical Notes and Users Guide is enclosed and can be found at Living-Wage-Users-Guide-Technical-Documentation-2023-02-01.pdf (mit.edu)
FAMILY COMPOSITIONS
“The living wage calculator see Living Wage Calculator (mit.edu) estimates the living wage needed to support families of twelve different compositions: one adult families with 0, 1, 2, or 3 dependent children, two adult families where both adults are in the work force with 0, 1, 2, or 3 dependent children, and two adult families where one adult is not in the work force with 0, 1, 2, or 3 dependent children.
For single adult families, the adult is assumed to be employed full-time. For two adult families where both adults are in the labor force, both adults are assumed to be employed full-time. For two adult families where one adult is not in the labor force, one of the adults is assumed to be employed full-time while the other non-wage-earning adult provides full-time childcare for the family’s children. Full-time work is assumed to be year-round, 40 hours per week for 52 weeks, per adult.
Families with one child are assumed to have a ‘young child’ (4 years old). Families with two children are assumed to have a ‘young child’ and a ‘child’ (9 years old). Families with three children are assumed to have a ‘young child’, a ‘child’, and a ‘teenager’ (15 years old).”
¹ Glasmeier, Amy K. Living Wage Calculator. 2020. Massachusetts Institute of Technology. livingwage.mit.edu