Living Wage Calculator 2018
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Reviewed by Calculator Editorial Team
The Living Wage Calculator 2018 helps you determine the minimum hourly wage needed to provide a decent standard of living for a single person in your area. This calculator uses 2018 data to provide an estimate based on the cost of living in your region.
What is the Living Wage?
The living wage is the minimum hourly wage needed to provide a decent standard of living for a single person. It's based on the cost of essential goods and services in a particular area, including housing, food, transportation, and childcare.
Unlike the minimum wage, which is set by law and often doesn't cover basic living expenses, the living wage is designed to ensure that workers can afford a comfortable life. The concept was first introduced in the UK in 1997 and has since spread to other countries.
Key Difference
The minimum wage is the legally required wage, while the living wage is the wage needed to cover basic living expenses. The living wage is typically higher than the minimum wage.
How to Calculate the Living Wage
The living wage is calculated based on the cost of essential goods and services in a particular area. The formula typically includes:
- Housing costs (rent or mortgage payments)
- Food costs (groceries and eating out)
- Transportation costs (fuel, public transport, vehicle maintenance)
- Childcare costs (if applicable)
- Other essential expenses (healthcare, utilities, etc.)
Living Wage Formula
The basic formula for calculating the living wage is:
Living Wage = (Total Monthly Costs / Hours Worked) × 4.33
The 4.33 multiplier accounts for the average number of weeks worked in a year (52 weeks) and the average number of hours worked per week (40 hours).
For example, if the total monthly costs for a single person in a particular area are $2,000, and the average person works 40 hours per week, the living wage would be:
$2,000 / (40 hours × 4 weeks) = $12.50 per hour
Factors Affecting the Living Wage
Several factors influence the living wage in a particular area, including:
- Cost of living - Higher housing, food, and transportation costs will increase the living wage.
- Family size - The living wage for a family of four will be higher than for a single person.
- Childcare costs - Areas with high childcare costs will have higher living wages.
- Taxes - Higher taxes can reduce the amount available for living expenses.
- Employment status - Part-time workers may need a higher living wage to cover the same expenses as full-time workers.
Regional Variations
The living wage varies significantly between regions due to differences in the cost of living. For example, the living wage in New York City is higher than in rural areas.
Comparison of Living Wage and Minimum Wage
Here's a comparison of the living wage and minimum wage for different regions in 2018:
| Region | Minimum Wage (2018) | Living Wage (2018) | Difference |
|---|---|---|---|
| New York City | $13.50 | $22.00 | $8.50 |
| Los Angeles | $12.50 | $20.00 | $7.50 |
| Chicago | $11.00 | $18.00 | $7.00 |
| Houston | $11.00 | $17.00 | $6.00 |
| Phoenix | $11.00 | $16.00 | $5.00 |
This table shows that the living wage is significantly higher than the minimum wage in all regions, reflecting the additional costs of living in urban areas.
Frequently Asked Questions
What is the difference between the minimum wage and the living wage?
The minimum wage is the legally required wage, while the living wage is the wage needed to cover basic living expenses. The living wage is typically higher than the minimum wage.
How is the living wage calculated?
The living wage is calculated based on the cost of essential goods and services in a particular area, including housing, food, transportation, and childcare. The formula typically includes a multiplier to account for the average number of hours worked in a year.
Does the living wage vary by region?
Yes, the living wage varies significantly between regions due to differences in the cost of living. For example, the living wage in New York City is higher than in rural areas.
Is the living wage legally required?
No, the living wage is not legally required. It's a voluntary standard set by organizations like the Living Wage Foundation in the UK and similar groups in other countries.
Can employers pay the living wage?
Yes, many employers voluntarily pay the living wage to ensure their workers can afford a comfortable life. Some governments and organizations also encourage or require living wage payments in certain industries.