Concept and practice of a living wage

A living wage has been defined as ‘a measure of income that allows an employee a basic but socially acceptable standard of living’ (United Kingdom Living Wage Commission). Living wage campaigns have been launched since the 1990s in an effort to achieve pay increases for the low-paid. These initiatives calculate the income required to achieve a basic standard of living, taking into account existing levels of state transfers. They do so generally on the basis of representative citizen input via focus groups, using the methods of minimum income standard research. These exercises are intended to reflect a social consensus on the standard ‘basket of goods and services’ that every household purchases. When this is calculated, living wages are invariably higher than the relevant statutory minimum wage.