Why Companies and Employers Say They Use the Living Wage Calculator

Written by Dr. Amy K. Glasmeier on 06/26/2015

The recent announcement by IKEA that its 2015 compensation scheme will utilize the values from the living wage calculator has prompted a number from the tool using community.

I am frequently asked, “why do businesses use the living wage tool?" Here I list the top reasons why large and small businesses use the calculator. I do not weigh in on the reasons nor do I rank them. Here are the top answers to the question, "why do firms of all types, sizes and sectors use the tool?

Because they can. Firms use the tool in instances where they feel they can afford to do so;

They acknowledge the relationship between loyalty and compensation;

They see the link between productivity and compensatory wage rates;

Because it is the right thing to do;

The owner has worked low wage jobs and knows how hard it is to make it on low wages;

It is a worthy and moral practice.

Because if people are paid more they spend more.

Costs of living are out of sync with long term wage rates;

Workers must be able to afford to drive to work;

A person working a 40 hour week, deserves to make a living wage that can cover basic costs.”