The ‘living wage’ and low income: Can adequate pay contribute to adequate family living standards?
journal contributionposted on 03.12.2020, 16:36 by Donald HirschDonald Hirsch
The success of the contemporary ‘living wage’ movement has been highlighted by the UK government’s decision to increase the statutory minimum wage for over-25s sharply, in the name of improving living standards. This breaks with neoliberal reluctance to intervene in labour markets, yet raises difficult issues centring around whether minimum hourly pay rates are suited to promoting adequate household incomes. At worst, ‘living wages’ could distract from other policies with this objective. This article acknowledges recent critiques of the living wage as an anti-poverty measure, but demonstrates that, in combination with other policies, wage floors can play a crucial role. It shows that low pay and inadequate working incomes overlap substantially. The article argues that governments promising that work will deliver adequate living standards need a clearer narrative in which pay, public transfers/subsidies and sufficient levels of employment combine to deliver minimum acceptable living standards for working families.