The "living wage" is an old idea that has experienced a dramatic resurgence of political popularity in recent years. The underlying logic of the concept is quite clear: it is a wage that provides workers with enough income to live on at some level considered adequate. However, in practice the term has become blurred with that of the "minimum wage" and in its implementation it has lacked a consistent meaning despite being widely used as a campaigning slogan.
This short primer traces the origins of the concept of the living wage and seeks to explain the current rise in its fortunes as an economic instrument with a social objective. It examines its impact on labour markets and wage levels, explores how it has been applied, and assesses whether it is an effective measure for raising living standards.
It offers a broad-ranging analysis of the debates, policy developments and limitations of wage floors in developed economies and will appeal to a wide readership in economics, public policy and sociology, as well as those working in non-profit and non-governmental organizations.
Donald Hirsch is Professor of Social Policy and Director of the Centre for Research in Social Policy at Loughborough University. He developed the calculation of the UK Living Wage accredited by the Living Wage Foundation and he leads CRSP's ongoing research programme into household incomes and poverty trends. He was Poverty Adviser to the Joseph Rowntree Foundation for the ten years prior to joining CRSP in 2008. Laura Valadez-Martinez is a Research Associate in the Centre for Research in Social Policy at Loughborough University. Before joining CRSP, she worked as a post-doctoral researcher at the Institute for Social Sciences, University of Lisbon. She completed her PhD in Social Policy at the University of Oxford.