Living Wage Calculator 2013

The living wage is the minimum income needed to cover basic living expenses in a specific region. In 2013, organizations like the Living Wage Foundation and local governments calculated living wages based on factors like housing, food, transportation, and childcare costs.

What is the living wage?

The living wage represents the minimum income needed to maintain a decent standard of living in a particular area. It's typically higher than the minimum wage and accounts for regional cost differences. The concept was popularized in the UK by the Living Wage Foundation, which calculates the living wage based on the cost of essential goods and services.

The living wage is not a government-mandated standard but a voluntary benchmark set by organizations and businesses to ensure fair wages.

Key components of the living wage

The living wage calculation includes several key components:

Housing costs (rent or mortgage payments)
Food expenses (groceries and eating out)
Transportation costs (fuel, public transit)
Childcare expenses (if applicable)
Other essential living expenses (utilities, clothing, etc.)

These components vary by region and are periodically updated to reflect changing costs.

How to calculate the living wage

The living wage is calculated by determining the minimum income needed to cover these basic living expenses. The formula typically includes:

Living Wage = (Housing Cost + Food Cost + Transportation Cost + Childcare Cost + Other Expenses) × Safety Margin

The safety margin (usually 1.5 to 2 times the total expenses) accounts for unexpected costs and provides a buffer.

Example calculation

Let's calculate a hypothetical living wage for a single person in a mid-sized city:

Expense Category	Monthly Cost
Housing (1-bedroom apartment)	$1,200
Food (groceries and eating out)	$400
Transportation (gas and public transit)	$200
Other essentials (utilities, clothing, etc.)	$300
Total Monthly Expenses	$2,100

Applying a safety margin of 1.5:

Living Wage = $2,100 × 1.5 = $3,150 per month

This means a single person would need to earn at least $3,150 per month to maintain a basic standard of living in this region.

Comparison of living wage to minimum wage

The living wage is typically significantly higher than the minimum wage, which is the legally mandated lowest wage an employer can pay. The difference highlights the gap between what's legally required and what's needed for a decent standard of living.

Region	2013 Living Wage	2013 Minimum Wage	Difference
United Kingdom	£7.20/hour	£6.31/hour	£0.89/hour
United States (National Average)	$11.00/hour	$7.25/hour	$3.75/hour
Canada (National Average)	CAD $12.50/hour	CAD $10.45/hour	CAD $2.05/hour

This comparison shows that the living wage is often more than double the minimum wage, reflecting the higher cost of living in many regions.

Frequently Asked Questions

What is the difference between minimum wage and living wage?: The minimum wage is the legally required lowest wage, while the living wage represents the income needed for a decent standard of living. The living wage is typically higher and accounts for regional cost differences.
How is the living wage calculated?: The living wage is calculated by determining the minimum income needed to cover basic living expenses like housing, food, transportation, and childcare, with a safety margin applied.
Is the living wage the same everywhere?: No, the living wage varies by region due to differences in housing, food, and other living costs. Organizations like the Living Wage Foundation calculate region-specific living wages.
Who sets the living wage?: The living wage is typically set by organizations like the Living Wage Foundation or local governments, not by the government itself.
Can businesses pay the living wage?: Yes, many businesses voluntarily pay the living wage to ensure their employees can maintain a decent standard of living.