The livable wage, also known as the living wage, is defined as the amount of income determined to provide a decent standard of living. In public policy, advocates define the living wage as the minimum income necessary for a worker to meet their basic needs. Basic needs include housing, food, healthcare, and other essential needs.
The living wage should pay for the cost of living in any location and should also be adjusted to compensate for inflation. The purpose of the living wage is to make sure that all full-time workers are compensated enough to live above the federal poverty level.
The living wage and minimum wage are different although they are often used interchangeably. The U.S. Congress created the minimum wage with the intent to provide a living wage. The minimum wage, however, is an amount set by law whereas the living wage is determined by the average costs to live or cover basic needs.
The minimum wage is $7.25 an hour, which does equate a livable wage and would set a full-time worker earning that wage below the federal poverty line of $26,200 for a family of four. A livable wage in the least expensive city in the United States, Harlington, Texas, is $10.47 an hour. In Manhattan, the most expensive city, the livable wage is $17.46 an hour, and one would still need roommates.
It’s complicated for the U.S. government to demand certain wages in certain areas. This level of government involvement would constitute a command economy, contradicting the free market economy we currently have.
The Massachusetts Institute of Technology’s Living Wage Calculator shows the minimum wage, poverty wage, and living wage for each of the 50 states and the counties in them.
Washington D.C. has the highest livable wage in the United States of $67,867 per year. Washington D.C. generally attracts lawyers, government workers, politicians, and lobbyists that can afford the lifestyle, but also has plenty of suburbs that are less expensive than living in the city.
Hawaii has the second-highest livable wage in the United States of $60,000 per year. The reason for Hawaii’s expensive cost of living is because it’s an island where mainland imports are expensive.
Massachusetts has the third-highest livable wage of $59,560. This comes as no surprise as the northeast is the most expensive region in the country. Connecticut, also in the northeast has the fourth-highest livable wage in the country at $59,502.
New York state has the fifth-highest livable wage of $59,128. It is well-known that New York City is the most expensive city in the United States, but the rest of the state is pricey as well.
Kentucky has the lowest livable wage in the United States of $43,308, followed by Arkansas of just $44,571. The third lowest livable wage in the United States is in West Virginia of $44,823. These three states have some of the least expensive housing of all 50 states, so a person looking for a two-bedroom apartment can expect to pay less than $1,000 a month.
South Dakota has the fourth-lowest livable wage in the United States of $45,410, most likely because South Dakota is not densely-packed and highly desirable like Washington D.C. or New York. South Dakota is the fifth-least populated state in the U.S. Idaho follows with the fifth-lowest livable wage of $45,801.
A full map of each state’s livable wage can be found here. The livable wages are for states; however, counties and cities within states can have varying livable wages as well.