Living wage calculations must take into account some common factors including the number of family members to be supported, the basic nutritional needs of a worker and other basic needs including housing, healthcare, education and some basic savings.
In his article “Minimum’ vs. ‘Fair’ vs. ‘Living’ Wages “, Eric Krell helps us understand the differences between living wage, minimum wage and fair wage.
“At first blush, a country’s minimum wage rate may look like a definitive starting point for compensation planning. Upon scrutiny, however, global minimum wage rates raise more compensation and workforce planning questions than they answer, according to human resource professionals, compensation consultants, and labor and economic experts.”
A “living wage” refers to a threshold that allows workers and their families to have decent living standards. Location-specific living wage standards usually identify a minimum amount of money required to cover food, basic nonfood items and other discretionary expenditures.
Wage levels and wage-fixing mechanisms that provide a living wage floor for workers, while complying with national wage regulations (such as the minimum wage, payment of wages, overtime payments, provision of paid holidays…
View original post 380 more words