Living wage
[4] Due to the flexible nature of the term "needs", there is not one universally accepted measure of what a living wage is and as such it varies by location and household type.
The income would have to allow the family to "secure food, shelter, clothing, health care, transportation and other necessities of living in modern society".
[10] A living wage, by increasing the purchasing power of low income workers, is supported by Keynesian and post-Keynesian economics, which focuses on stimulating demand in order to improve the state of the economy.
[14] In Wealth of Nations, Adam Smith recognized that rising real wages lead to the "improvement in the circumstances of the lower ranks of people" and are therefore an advantage to society.
[15] Growth and a system of liberty were the means by which the laboring poor were able to secure higher wages and an acceptable standard of living.
He reasoned that as wages and rents rise, as a result of higher productivity, societal growth will occur thus increasing the quality of life for the greater part of its members.
In 1891, Pope Leo XIII issued a papal bull entitled Rerum novarum, which is considered the Catholic Church's first expression of a view supportive of a living wage.
[16] Contemporary research by Andrea Werner and Ming Lim has analyzed the works of John Ryan, Jerold Waltman and Donald Stabile for their philosophical and ethical insights on a living wage.
A living wage is meant to address these by providing the material basis that allows individuals a degree of autonomy and prevents disproportionate income and wealth that would inevitably lead to a societal fissure between the rich and poor.
[10] Donald Stabile argues for a living wage based on moral economic thought and its related themes of sustainability, capability and externality.
Broadly speaking, Stabile indicates that sustainability in the economy may require that people have the means for 'decent accommodation, transport, clothing and personal care'.
Muilenburg and Singh see welfare programs, such as housing and school meals, as being a subsidy for employers that allow them to pay low wages.
This thought is repeated by Grimshaw who argues that employers offset the social costs of maintaining their workforce through tax credits, housing, benefits and other wage subsidies.
Studies by Professor Doug Miller during 2010 to 2012, have highlighted the evolving global trade practices in Towards Sustainable Labour Costing in UK Fashion Retail.
[25] This white paper published in 2013 by University of Manchester, appears to suggest that the competition among buying organisation has implications to low wages in countries such as Bangladesh.
[38] In 2014, Wisconsin Service Employees International Union teamed up with public officials against legislation to eliminate local living wages.
A notable study defined the control group as the subset of cities that attempted to pass a living wage law but were unsuccessful.
"[44] A study carried out in Hamilton, Canada by Zeng and Honig indicated that living wage workers have higher affective commitment and lower turnover intention.
[45] Living wage policies reduce poverty by addressing financial insecurity and signaling fairness and dignity, fostering employee commitment and organizational stability.
The Sullivan Principles in South Africa are an example of a voluntary code of conduct that state that firms should compensate workers to at least cover their basic needs.
In the table below, cross national comparable living wages were estimated for twelve countries and reported in local currencies and purchasing power parity (PPP).
The Joseph Rowntree Foundation funded the Centre for Research in Social Policy (CRSP) at Loughborough University[50] to calculate a UK-wide Minimum Income Standard (MIS) figure, an average across the whole of the UK independent of the higher living costs in London.
This included two reports funded by the Trust for London[55] and carried out by the Institute for Public Policy Research (IPPR) and Resolution Foundation: "Beyond the Bottom Line"[56] and "What Price a Living Wage?
[62] Ed Miliband, the leader of the Labour Party in opposition from 2010 until 2015, supported a living wage[63] and proposed tax breaks for employers who adopted it.
Other supporters include The Guardian newspaper columnist Polly Toynbee, Church Action on Poverty,[68] the Scottish Low Pay Unit, and Bloomsbury Fightback!.
"[78][79] It has been opposed by employers including Ibec and the Irish Small Firms Association (ISFA), while the supermarket chains Lidl and Aldi committed to pay all their employees the living wage in 2020.
There are member associations in Bangladesh, Cambodia, Hong Kong S.A.R., India, Indonesia, Malaysia, Pakistan, the Philippines, Sri Lanka, Thailand and Turkey as well as supporters in Europe and North America.
The proposed act will require developers who receive substantial tax-payer funded subsidies to pay employees a minimum living wage.
Conversely advocates for the legislation have acknowledged that when wages aren't sufficient, low-wage workers are often forced to rely on public assistance in the form of food stamps or Medicaid.
Authors point to living wages as being only a limited way of addressing the problems of rising economic inequality, the increase of long-term low-wage jobs, and a decline of unions and legal protection for workers.
