Who Uses the Living Wage Tool and Why?

Written by Dr. Amy K. Glasmeier on 09/22/2017

People often ask me, “who uses the living wage tool.” My answer mostly reflects the moment. I get several user emails a day. The stories and queries range from “Your calculator has no idea how expensive it is to live in Seattle, I don’t care what the new minimum wage is.” To a single mom who thanks the tool for being there, but then finishes her missive by reciting the current challenge which often is about rent or a problem with the family car, or the difficulty of finding inexpensive child care.

Another storyline arises from a conversation I frequently have with employers who see paying a living wage as a moral issue. Enter Aaron, living in Washington D.C.; a former World Bank employee turned home-cleaning service entrepreneur. Aaron stepped away from international development to pursue as he says, “an experiment.” Well-Paid Maids is a living wage-paying home cleaning service. Using his observation of self and others, he pondered "who would pay a living wage to have their residence cleaned--perfectly, spotlessly, painlessly?" Aaron researched how firms in other high-income countries like the U.K. manage to pay living wages. It helps to have organizations like the Living Wage Foundation, an accounting firm-sponsored group, able to certify more than 3000 companies currently paying a living wage. Aaron figured out the math needed to offer a clean residence through “Well-Paid Maids” his start-up while still paying everyone a living wage. Aaron is not alone. Another small business, in need of work ready-employees, turned a business investment in the firm's own labor force into a product, serving as a trainer of entry-level workers subsequently made available to neighboring companies also in need of work ready employees. No-cost trades were made with the proviso that contracting employers agree to pay a living wage to newly hired employees. What I have learned is this: pointed in the right direction and given the needed information to make the business case for living wages, firms see it in their own best interest to pay living wages.

NOTE: We are starting our annual preparation to calculate the 2018 living wage. The recovery from the financial downturn has mostly taken hold except in communities deeply affected by the loss of manufacturing jobs. New data will be out starting from December 31 2017. To users: this year saw outsized increases in housing, child care, and health care costs. Some cities experienced rent increases between 6-30 percent. Keeping up with major shifts in costs was tough: we saw increases in the living wage as high as 18 percent. The average was more like 4-6 percent.