Living Wage

Posted by Lee Yarborough on 4/6/17 2:31 PM
Lee Yarborough
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Posted on: April 6, 2017

A living wage is defined as the minimum income necessary for an individual to maintain a normal standard of living. The living wage calculation typically covers expenses necessary to support a family including housing, medical costs, child care, food, and transportation. It does not include vacation, saving for retirement, or paying off past debt.

The calculation is the hourly rate of an individual working full-time. The calculation is based on geographic areas and the most recent one was compiled by Dr. Amy K. Glasmeier of the Massachusetts Institute of Technology. ( According to the calculator, in Greenville County, the living wage for one adult is $10.21 per hour while the living wage for one adult with two children is $25.03 per hour. If there are two working adults in the family with two children, the living wage per adult reduces to $13.82 per hour. Compare this to the current minimum wage in South Carolina of $7.25 per hour.

As a Human Resources professional, the discussion surrounding living wage is important to me and it should be important to all business owners. Can a business that has large numbers of low wage employees increase wages to a more suitable living wage and still be profitable?

To answer this, businesses need to focus on the long term and be willing to make short term sacrifices. Yet overall, a living wage policy can be good for your business:

  • Decrease in employee turnover. When employees make higher wages, they are more likely to feel valued and less likely to leave the position. Employee turnover is expensive and there are hard costs associated with recruitment, training, and lost time.
  • Attract more qualified workers. By paying higher wages, companies may be able to recruit more skilled workers who would have otherwise not applied.
  • Improve employee morale. When employees are compensated fairly, they feel appreciated and respected. The business benefits from increased productivity, efficiency, and a sense of pride in the work.

The reasons above are hard to place a dollar value on, but the return on investment is real. Companies have always invested in high level professionals as strategic assets, but now many businesses are finding that investing in front-line employees through a living wage is a smart business strategy as well. Costco, Trader Joe’s, and QuikTrip have all been leaders of the living wage investment strategy yet they have kept their prices low and out-performed competition. In addition, these employees now make more money which adds to the local economy.

Do I believe a living wage policy is best for the employees? Yes, I certainly feel that I would not be able to raise my family on a minimum wage and be a productive member of society. I believe that if you work full-time, you should not be stressed each month about meeting your basic needs.

But, I also believe that a living wage strategy is best for business too. Paying living wages can increase job satisfaction, productivity, and loyalty. It is good for business, workers and the community. Employees are the backbone of business and I feel that investing in employees is the single most important investment that a company can make.

Topics: Leadership

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