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The ‘living wage’ is a meaningless metric

The ‘living wage’ is a meaningless metric

Parrish Miller
September 24, 2014
September 24, 2014

Several news outlets in Idaho have published stories declaring that the "living wage" in Idaho is now $14.57 an hour for a single individual and a $25.12 an hour for a single parent with two children. That's $30,000 and $52,000 a year respectively for those who think in terms of salaries rather than hourly wages. Another figure touted was that a full 70 percent of Idaho jobs failed to pay a living wage.

In truth, these numbers are based on a report from the "Alliance for a Just Society," and if the name doesn't give you enough of a hint, they're more than a wee bit inclined toward a particularly government-centric worldview. Other sources such as MIT's "Living Wage Calculator" suggest that the numbers in Idaho are $8.09 an hour for a single individual and $22.25 an hour for a single parent with two children.

The substantial discrepancies between these figures should be the first indicator that the notion of a "living wage" (much like the "poverty level") is more of a political tool than an expression of reality. Few would argue that earning more is a bad idea (and far too many are inclined to adjust their lifestyle to consume 100 percent of what they attain), yet millions of Americans and thousands of Idahoans live on incomes well below these arbitrary "living wages" and still manage to survive (and many of them do so without going into debt.)

Everyone's situation is different and everyone has different expenses based on their choices and lifestyle, yet individual choice is almost entirely absent from these arbitrary calculations. One who chooses to work less (or for less) but garden more may well make up the difference in savings on food (especially when compared to eating at restaurants frequently), but the concept of a "living wage" ignores such possibilities.

Adults who have relatives watch their children or who work from home to avoid the cost of child care (a substantial component of the "living wage" calculation for single adults with children) may live comfortably below these thresholds, yet remain discounted by the metric. In reality, there are innumerable personal decisions—shopping at thrift stores, having roommates, bicycling instead of driving—that can allow people to do more and live happier lives on less money. There is no such thing as a "living wage" because one's expenses are almost entirely dependent on one's choices.

Some people (and some political candidates) are quick to bandy about numbers from partisan organizations that support their goals for a larger and more intrusive government, and they are always ready to offer "solutions" (such as a $15/hour minimum wage or increased government redistribution) to problems that are largely illusionary.

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