However, there is a federal minimum wage in the United States that stands at $7.25 per hour in the current world. Currently, there have been pressures exerted by workers and any associated labor unions to have the minimum wage increased to $15 an hour. However, critics have stated that the increase to $15 an hour is still inadequate to sustain most families in the United States. Would $25 oh per hour qualify as a living wage then?
A Review of What the Term Livable Wage Encompass
A livable wage is a wage that is sufficient to provide the necessities of life with the balance of wages being used to save or invest. This involves having an income that can meet the cost of the basic needs in life such as shelter, food, clothing, transport, medical expenses, taxes, and a little extra to save for rainy days or a rainy day. The aim of a living wage is for employees to be able to have a decent income once they are paid for a normal 40-hour work week.
The definition of a livable wage specifically in monetary terms is not set and may even differ about the place of residence and the number of members in the household. There is always a stark difference in how much a single adult needs to earn to support themselves as compared to how much a single parent needs to earn to feed and house several children. As much as it is true that people living in areas such as San Francisco or New York City pay their bills and rent, the prices they pay are considerably higher than those in rural areas.
For a person with no responsibilities, $25 per hour should be sufficient to take care of all their needs for an hour’s work especially if they reside in an affordable neighborhood in the Midwest, but for a family of four struggling to make ends meet in an expensive city, $25 per hour would be highly inadequate.
Who stands to gain more, workers earning $25 an hour?
Therefore, for many childless single adults, living in moderately priced districts, $25 per hour should be sufficient to offer a fairly comfortable standard of living. It amounts to $ 52,000; annually if one is paid a gross salary when working full-time. It was, however, not affluent enough, so while it could afford the basic needs, it could also have something left over, extra money, or perhaps even be in a position to start saving.
However, a single parent with only one child would also probably consider $25 per hour as almost a –line of poverty. For families with several children, paying for their education and other necessities while living in the higher-cost urban centers would be impossible given such wages. Even when families are working full time or finding second jobs, in this situation, they would continue struggling with extremely hard decisions.
The Impact of Inflation
The other factor that is of even more concern is that inflation has eroded purchasing power to the extreme. Thus a wage, which might have once appeared sufficient to support a worker and his family, may now not be sufficient since the cost of consumer goods is increasing at a faster rate than wages. It seems as if even those who have been very careful with the money they spend on goods and services in the recent past have been forced to bite the bullet when it comes to the rising costs of rents, food, fuel, and many other necessities that they cannot do without in the last couple of years.
These economic sorts of risks can explain why wages should be more than to meet subsistence levels and offer some security and opportunities for mobility. With projections showing that living costs are likely to increase even higher and even threats of recession, what might appear to be only a mere income level that is just enough for one to survive today may not be enough to sustain them in the future.
Thus, although $25 per hour is more than a minimum wage increase for today’s employed millions, it has the potential to remain a wage that millions of American families struggle to survive on, let alone thrive, particularly if inflation is to accelerate even further in the coming years. Hitting the livable wage requires actual policy interventions that are highly different depending on the cost of living in different regions of the country. However, for the majority of workers and families, it requires earning more than $25 per hour or $50,000 per year.
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