The living wage is the amount of pay considered sufficient for a worker to cover basic costs of living for his family in a specific location. There is no federal living wage law. However, more than 120 cities across the U.S. have established living wage laws applicable to employers who work on government contracts, whether at the state, county, or city level. A living wage ordinance is a legislation that establishes a wage floor above that of the prevailing minimum wage for workers covered by the ordinance. Living wage laws are similar to minimum wage laws, except that they require a much higher wage and often cover a smaller group of workers. The idea is that the wage would allow workers to meet a specified living standard in the United States, this is usually set at some measure above the federal poverty line. People often …show more content…
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 costs like clothing and personal care items. 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. In the long run, the Living wage ordinance could reduce the effectiveness of future job creation and reduces employment for low-wage workers. The other long-term impact of the ordinance is that it may encourage firms to leave the city if, over time, affected firms discover that the Ordinance severely impacts their profits. In this case, employment losses within the city could be far greater. Instead, if the firm left the city, all the jobs would be eliminated not simply a fraction of the workers earning, but all the workers regardless of their wage