Life with Living Wage

Suppose Congress realized that the best economic step they could take would be to quit talking about minimum wage and pass Living Wage laws instead, thereby curing a laundry list of ills. What would it be like?

Living Wage means that every full time worker earns at least enough money to support a family of four at no lower than the upper limit of poverty. His or her wage is enough to provide not only life’s essentials, but health insurance and savings for old age. In essence, most poverty is simply abolished with Living Wage as are many government welfare payments. It would never be crucial that a child drop out of school to contribute to family income.

If such laws were passed, it would require considerable adjustment, of course, but the end result would be a stronger economy and far more equality. The workforce would be more stable, because fewer people would feel it necessary to find a job that paid more. It’s noteworthy that Australia has had Living Wage laws for a century. Lower income people are better off there. And you don’t have to tip to make up for their lousy wages, because they have good wages.

Living Wage would result in a
stronger economy and greater equality.

If we were to have Living Wage, prices for many common items would rise somewhat, because many products depend on low-wage workers. Produce, for example, would no longer be harvested at sub-standard wages. Common services such as dry cleaning could be higher. The price of any product or service that formerly depended on low-wage labor would rise, but the price of products or services provided with wages greater than that would not be affected. Services by professionals such as teachers and dentists would remain essentially the same.

Tax revenue would increase sharply, because all workers would now pay tax. This would make it possible to reduce taxes in general, which would have the effect of increasing middle class incomes. In addition, welfare rolls would fall sharply, allowing further tax reductions.

Tax revenue would increase sharply across the board,
making it possible to reduce taxes in general.

The cost of health care would fall even without a national plan, while at the same time national health would improve. The reason is that when all persons have health care, the public does not have to pay for major uninsured health conditions, which affect whole families and communities, not just the one who is ill. A national plan would further reduce that because national plans cost half of what we pay.

With mandatory retirement savings and continuous health care coverage, the public cost of retirement would be sharply reduced because few would need welfare assistance through tax money. The only ones who would need public assistance would be those who have become disabled by accident or ill health.

All this would have little effect on the rich, who easily afford health care insurance under any circumstance and have more than enough money for retirement. Nor would the general rise in the cost of things matter much to them, because the rich are always easily able to buy what they need and want. Their wealth is used for larger, more expensive things.

There are few downsides to Living Wage.

The overall educational level of the country would rise, because fewer young people would be forced by family poverty to leave school and enter the work force, and more could afford higher education. This should have a salutary effect on the quality of the work force as it competes with workers elsewhere.

There are few downsides to Living Wage. The alternative is to continue as we are, with millions of Americans who cannot survive on what they are paid as full time workers, in spite of the fact that, no matter how humble the work they do, it is crucial for a smooth-running society. Those who are underpaid this way, as well as those who cannot find work, cost the nation in several ways. At minimum, some level of public support is a moral necessity. Perhaps more important, those whose lives are occupied by trying to literally survive represent lost national wealth. The talents of such people could be put to better use than mere survival.

Living Wage would solve many problems for those who have jobs, but it does not provide jobs for those who don’t have them. What might be accomplished with Living Wage will be confounded if we don’t also tackle the obsolete 40-hour week. More about that later.

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6 CommentsLeave a comment

  1. I find it ridiculous that all Americans are not equal, the minimum wage differs from state to state, in Australia the Federal Govt decides the minimum wage payable and every Australian is entitled to it whether they live in a high cost place like Sydney or a village in the outback of Queensland.

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    • Very few Americans have even heard of living wage. I think it is the key to our lost equality.

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  2. It is a disgrace when college educated people are forced to take low paying jobs sans health insurance. Apply for housing assistance (usually denied) and receive reduced lunch fare. Meanwhile, many of the lost Middle Class jobs have been outsourced by major companies. One, here in MN. Best Buy. Yes, Best Buy outsources hundreds of employees from another country. Yet, MN has a high unemployment rate. Additionally, it disgusts me to see Seniors ages 65+, forced to work jobs that even I at 43 struggle to keep up with. Standing, lifting, bending. One I work with is 76. Really? To see a living wage passed in the US would be “Un Milagro!”

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  3. Thanks for introducing this concept of a Living Wage (I’m an American abroad and had never heard of it). Every single person should also have the ability to purchase good, quality food for a family of four, not the processed crap people can afford today. I think we and the govt. also have a huge responsibility to take care of our health BEFORE it goes downhill. Programs around health and self-empowerment, not injecting the economy and focusing on drug-based medicine that is practiced after a person becomes ill. I may live abroad, but I see a huge opportunity for Americans to turn the country around and bring it back to what really matters: quality living standards, time for family and hobbies, and a sense of community and interdependence.

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  4. […] Life with Living Wage (classwarinamerica.wordpress.com) […]

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  5. […] Life with Living Wage (classwarinamerica.wordpress.com) […]

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