Minimum Wage vs Living Wage vs Essential Wage

Article main image
Nov 5, 2020
This article is part of a series called COVID-19 Coverage.

My first job at 16 years old was a courtesy clerk at Kroger. I worked part-time during the week and usually a full eight hours on the weekend. I used my paycheck to buy tennis shoes and clothes from Express. (Gas money was easy because I was one of the few among my friends who had a car, so if I gave you a ride, you had to chip in a dollar.) I lived in a household with income from both parents, so I was never expected to contribute to utilities, or groceries, or rent.

Minimum wage was just fine for me. It was the legal requirement, and I knew if I worked for a while, I would be eligible for a raise. 

Fast-forward to 2008 when the mortgage crisis forced millions of people out of their jobs and out of their homes. There were a multitude of educated and highly educated people now working in jobs traditionally classified as minimum wage. That is what I recall as the advent of the term “living wage.” It evolved with the increase in the number of working adults that lacked alignment with a more progressive blend of entry-level and highly paid career opportunities. 

How Can You Actually Live on Minimum Wage?

You can’t. You exist, but your quality of life varies.

You may require subsidies from government assistance, multiple minimum-wage jobs, sharing living space with other adults, homelessness, or simply going without other needs and wants to have some sort of shelter.

Consequently, in recent times, counties and cities began feeling the pressure to institute living wages that went well beyond state or federally mandated minimum wages. “We need $15.00 an hour!” were the words of a new and evolving workforce. 

As an HR professional, I have often been asked, “How do you feel about raising the minimum wage to $15.00?” My reply is always: “What’s the value of a minimally-skilled job?”

I have always welcomed the debate of assigning wages to support lifestyle rather than based on the value of work performed. I have also held the opinion that minimum-wage jobs were never intended for adults as a life-long career journey. 

Weren’t Essential Workers Always Essential?

Now comes a global pandemic, and the very same people who went from minimum wage to living wage find themselves labeled as essential. Some are now earning an essential wage, or an increase in their hourly rate and/or lump-sum bonus in recognition of the danger they face and the critical role they play in our society. 

But hasn’t a clean building always been valuable? Haven’t groceries always been necessary to sustain life? Didn’t we always need gas in our car?

Though the tasks performed by people in these roles seemed simple and repetitive, simple and repetitive are essential. Essential workers have more than proven their worth to our society. Essential workers have demonstrated their value to the organizations they work for and the communities they serve. 

It’s time that we elevate the conversation about wages well beyond the value of a task and truly discuss the value of people. 

This is an issue that requires intelligent and thoughtful discussion, with business owners, HR professionals, community leaders, and the workforce at large. We all understand that the cost of labor directly impacts the cost of products and services. If an employee can’t afford the product or service they help to produce, where’s the break even point? We have to decide what business model works best for employees, for consumers, and for businesses. Let’s get the conversation started!

This article is part of a series called COVID-19 Coverage.
Get articles like this
in your inbox
Subscribe to our mailing list and get interesting articles about talent acquisition emailed weekly!