Many young people I know live on much less than this.
This is more like “optimal wage to live alone in my own apartment with a car.” Which of course, people would like to have but certainly isn’t required to be comfortable.
For example, transportation costs are $9000/year and housing is $20000/year. These are both way more than is necessary.
They need better branding because calling this a living wage is a misnomer and harming their cause.
This is a debatable goalpost. It seems more reasonable to me to assume that meeting basic shelter needs includes having a private room to oneself. The only reason to argue otherwise is to try to drive down the wage further, and is that at all necessary? Renting a private room was possible on nearly any wage 50 years ago, and the only reason it seems out of reach for many now is because purchasing power has been slowly stagnating for decades, while housing costs have soared in recent times. Yet this whole time, GDP continues to rise. It seems that our society can easily support much higher minimum wages (and this would likely have only a positive effect of stimulating the economy), but simply chooses not to.
I think it's reasonable for young people to have flatmates and share an apartment, for example.
If it is reasonable for a young person to have flatmates, then that should be because they are a student or an artist and are working only part-time while devoting the rest of their time to their studies or their art.
But a person working full-time? Who may be a single mother or father with a child to support? They should be able to afford a place to live, without roommates.
A living wage is for living indefinitely, not just surviving. That should afford more comforts like a reasonable amount of space, a car if needed, and saving for retirement or emergencies.
These are all real situations that make me think that pinning "living wage" to a level where you have to have roommates is not a good goal. You're basically asking people to survive by accepting unstable living conditions and potentially taking strangers into their homes, which isn't exactly "having your needs met."
Theres also lots more people, and as more people consume more resources it does not follow that better technology in some field will translate to increased every aspect of life.
It's not "student wage". It's not "struggling young person" wage. It's "living" wage. It's for living - at any age.
Eg does that quants internship get a lower pay because they are expected to graduate beyond it? If so, how do we define what jobs are stepping stones and which are long-term careers?
Pick IL for example. Min wage $15, so $30k a year income fulltime. Most every adult that’s worked even a little should be able to earn decently more than min, which is for completely unskilled, new workers. Median il wage is 66k.
Even at $30k, the rough 30% rule on housing is $750/mo. At 66k it’s over $1500/mo.
Dig through smaller cities, and you’ll find apartments to rent in either end of this range. This works in any state.
(Which in turn opens up opportunities for others to move in to the higher-cost places and boost their own productivity.)
Historically housing was much smaller. And people lived with their families for a lot longer commonly. A lot less was also spent on domestic appliances (not just washer & dryers) and at-home entertainment (a lot less was spent on entertainment in general).
50 years ago, in high cost of living areas, you could rent an SRO, but now they're either banned or practically banned because they're strongly disincentivized against. Combine this with not building enough new housing and you get a recipe for rent increases. Even if a minimum wage works as intended, it can only subsidize demand, which would do nothing when the bottleneck is the supply.
I think others pointed this out but I don't think you can find any data to prove this because its not true.
I'm not a historian but I have seen a number of old movies and in those movies it was very common for the characters to be some poor schlub with a full time job at the factory living in some sort of group home/flophouse situation. Movies tend to reflect stories that resonate with the public at the time so I suspect that is because this was a common situation. I'd much prefer a single roommate in an apartment to a flophouse.
Why would that be reasonable? College students and young adults usually have roommates. I don't feel it's inhumane.
> The only reason to argue otherwise is to try to drive down the wage further
Another reason to argue otherwise is because you care about the truth. Even if you and I agree on the ends, if you use the means of exaggerating or stretching the truth to get there, you are never on my side. Saying that you need to not have roommates to live is an exaggeration.
> Renting a private room was possible on nearly any wage 50 years ago
You will never find any data to support that because it isn't true. 50 years ago, flophouses were common. You would share a bedroom room with others, with shared kitchen and bathroom between multiple bedrooms. In college, I lived in a housing-coop network where we slept two to a room. 50 years ago, they slept 4 or 6 to a room in my exact house.
> and the only reason it seems out of reach for many now is because purchasing power has been slowly stagnating for decades, while housing costs have soared in recent times
This is true. But there is a very natural reason why. Look at nearly any US city, and see how many more jobs there are in that city than there were 50 years ago. Then look at how many more homes there are in that city than there were 50 years ago. You will see that the number of new jobs far exceeds the number of new homes. The result is that wealthier people bid up the housing, while poor people are forced to live outside the city and commute. So why have no new houses been built? It can't be helped by the fact that building new homes is illegal. (e.g. buildings with 3 or more apartments are illegal in 70% of san francisco.)
Please direct your anger in the right direction! It's not generally the case that billionaires own thousands of homes, hoarding them while the poor live on the street. It's more often the case that the population has increased while the number of homes in places people want to live has stayed the same. The *only* solution is to increase the number of homes in places people want to live. Raising the minimum wage, taxing the rich, fighting corporations, adding rent control laws, none of that will help solve the root of the problem, the growth rate of homes in cities is far slower than the rate of people wanting to live there!
Not to mention you need to be able to save money for unemployment and rainy days..
$9000/year is a ton more than just having a car.
If you need roommates because you can't afford an apartment on your own, you are poor by definition. That's probably the most universal definition of poverty that has ever existed. As long as there have been houses, the baseline household has had a housing unit of their own. Households that have to share housing with others have always been characterized as unusually poor, no matter the continent and the millennium.
Thus my point. I don’t know what “livable wage” means with these numbers so it’s not very useful for discussion or planning or measurement.
The calculator suggests $5,021 for food, but for me I’d only shop at high-end grocery like Whole Foods and buy organics whenever possible. That’s clearly not enough. On the other hand it suggests $1,792 for internet and mobile which is about double what I actually pay and I have both unlimited mobile data and unlimited home data. Then it claims medical costs of $2,890. For a fit individual with good employer-provided health insurance, that figure should be almost zero.
Ultimately the amount one spends for living depends very much on one’s preferences and these calculators are approximates. I believe you when you say many young people can live for much less, but that doesn’t invalidate the calculator.
No, it won't be almost zero because they're including health insurance premiums in that figure. Few jobs in the US cover 100% of the premiums for their employees.
>> The cost of health care is composed of two subcategories: (1) premiums associated with employer-sponsored health insurance plans and (2) out-of-pocket expenses for medical services, drugs, and medical supplies.
Because preferences for food, housing, and healthcare are essentially unbounded, I think “having the version of those I want” is an absurd standard.
Even on the smaller things. "Internet & Mobile" for where I am jumped out to me. Based on the difference between 1 adult and 2 adults, it's $582 per person-year for mobile (which I guess isn't far off if you get a good new phone every 2 years, it's reasonable enough) and with that subtracted, internet is $100 per month. The methodology page says "County-level data on the cost of internet comes from research on lowest-cost monthly plans from BroadbandNow", but even that page shows much cheaper options available (including the $70 per month Google Fiber I have).
I was surprised (at least for Birmingham/AL/Jefferson County) how accurately it pegged _most_ of the costs -- childcare here is closer to $12k/annum/child so that one was the only one I pegged as 'off' - they show 2 children as $16k and that's a ~$8k underestimate
I spend $20/month for mobile and buy a new $500 phone every 3 years.
I make way more than a livable wage, but spend much less than their projected costs.
The minimum wage is far below what it takes to actually 'live', like have a place to live and a car.
An appartment and a car aren't exactly luxury goods. Cars are often needed to work, and well, having a roof over your head is usually required for a decent living.
Sure, if you fancy living in a cardboard box located next to your work, your living standards are going to be much easier to attain.
Their cost estimates are much higher than what’s required to live comfortably and save for a rainy day.
The average person is not-quite healthy, at best.
They do not actually live on less, they sacrifice their health or well-being in order to meet the constraint.
I would argue the calculator grossly underestimates necessities because most of these jobs are not doable in old age, so you need to account for saving $1 for each $1 you make, to support yourself while old. You also need an emergency fund, because in the US you get billed $1000 for the most random shit at the most random time.
I got billed $5000 randomly for an echodardiogram because insurance didn't pay for it despite them saying they would. At least I have $5K to spare, but considering that can happen, that needs to be considered a basic necessity.
Edit: also the housing cost is probably factoring in a studio or maybe a 1bd for a single person. That may seem luxurious to you, but for many that is the only real option they have (roommates are hard to come by and can hurt you physically and fiscally).
In my 20s everyone I knew had roommates. And it was a good life.
Saying a studio or 1 bedroom is required makes this metric pretty ambiguous.
Thus my point, that this isn’t what’s required to just live. But to live comfortably.
Needless to say; only old people have homes and only those who have sufficient help get a nice appt.
I don’t make a living wage for my region and while I can afford food and a room to rent, I can’t really live a decent life, save for the future or invest in myself, I just barely get by every paycheque to paycheque. Thanks
More the former. A lot of the commenters here are missing that detail. A living wage doesn't mean you can afford all the nice things, it means you aren't starving and can cover the needs for you and your family, but maybe not many wants.
What math are you doing to get $130k with those numbers? That wage works out to around $60k/year.
130k/yr is more like 65/hr.
If you can't live alone with a car? Then what do you think you are doing?
After looking at the method, I think the calculator probably has some bias towards “what society has convinced us we need”. To a certain extent that is a relative and subjective perception problem, and one exacerbated when you live in a society with a lot of consumer debt.
I don’t consider daily or even weekly restaurants part of a necessity for life.
6-8 servings of fruits and vegetables a day, fairly liberal amounts of dairy and lean protein, lesser amounts of red meat. Grains like breads/rice for additional carbohydrates.
Admittedly, avoiding eating out regularly is the #1 way I keep food costs down, though.
Behold, "averages" are not perfect.
But we stick to the essentials, utilize different stores for the lowest prices we can get, and don't purchase nonsense.
Ie “averages” with large variances are not often very informative
I would expect living wage to mean the amount one needs to be able to live out your life fairly decently and with dignity. I think many do so without having pay this high.
Through mid life, your financial health is not as determined by wages, but by your family/connections. Do you have access to a grandmother who can babysit? A decent second-hand car? A good roommate situation? Just look at the expense table - any one of these things could be worth up to 20% of your income!
And you see that literally right here - are any of us actually comfortable with the idea that the value of your labor should be determined by your marriage status and number of children?
It's kind of telling that countries with "successful" minimum wages either don't have one and just institutionalize collective bargaining, or they do some fancy calculations that start with prevailing median wages and welfare eligibility. The idea of trying to get this number from the bottom up by building expenses just doesn't seem very robust.
Here in Norway we have five weeks of holiday plus various public holidays and only 37.5 hours per week adding up to about 1700 hours per year.
Norwegian workers do 1,418 hours per year, one of the lowest in the world
For reference, that's 10:15 per day, 365 days a year. Or 996 without vacations, if you intend to have one day off.
996 has never been a standard work duration for urban workers in China, aside from some tech companies that promoted performative work ethics. And even there, people do take vacations.
Just going off basic numbers:
- 3744/52/5 = 14.4 hour day if they work 5 days a week
- 3744/52/6 = 12 hrs if they work 6 days a week
- 3744/52/7 = 10.3 hrs if they work 7 days a week.
Office workers will eat lunch, take a 1-2hr nap in the afternoon, and also eat dinner with their coworkers within the common 9-9-6 rhythm. It still takes a significant chunk of time, but the actual working time butt-in-chair is closer to 54 hours
Edit: And looking into it a little, I'm pretty sure two of those islands actually do have mandatory paid leave after a minimum period of employment.
1. Further exploit desperate people since those that don't need to work at any cost would steer clear of jobs that have 0 holidays. 2. You would further penalize people with families where both parents work. It is well understood that if your kid is sick you can't really use your sick days and so must use your PTO days. Having 0 available days doesn't play well with having kids (personal experience).
And finally, having mandated PTO allow you to actually take holidays. I heard too many times of companies that offer unlimited PTO and when the employer tries to take some they sabotage him/her or plainly threaten his/her job security.
Another way to think about it: why do we have building codes? We don't want to incentivize builders to cut corners that would risk an electrical fire or falling down in an earthquake or something in order to offer a cheaper price, so we make it illegal. If unsafe buildings are allowed, it makes it difficult for safe builders to stay in the market. Similarly, we don't want to incentivize workers to sell their labor with zero leave in order to offer a cheaper price, because that risks unhealthy and insular communities (literally unhealthy if people can't take sick leave), poor mental health, unhealthy childcare practices, an unhealthy civic environment if people can't take time off to vote or volunteer, etc. The labor market is competitive and people will sacrifice paid leave if they have to, because they need money to live, so we should make it illegal to remove the incentive.
No, you do not want that.
The market value of most people's labour is very close to zero.
Left to the market most of the population would live just below starvation, a very small group of owners would live very well, and a small group of artisans would do OK supporting the tiny group.
That is where many countries are heading
If you would rather trade your paid vacation for an extra week of pay, I am sure you and your boss can work it out. Companies pay out unused vacation all the time. Just don't ruin it for the rest of us!
Similarly, there is no US law against most crimes. It doesn't mean those laws don't exist in every State.
That said, there is no State with mandatory paid vacation either AFAIK.
Given the political diversity of the States, this suggests that mandatory paid vacation is either not considered an important issue by people across the political spectrum or there are existing regulations that would create real problems if there paid vacation was mandated without changing those regulations first.
Edit: Also, the US is a damn oil nation. It has nothing to do with oil, and everything to do with politics.
Those outcomes depend much more on labor policy, bargaining power, and what governments choose to protect. In many places, business pressure and media framing make long hours seem unavoidable, even though they’re ultimately the result of policy choices.
Where do you think the term "Dutch disease" came from?
If they had a car they most likely shared it. It was far less safe, didn't have AC, guzzled gas and polluted.
Never ate out and spent a third of earnings on cheap grocery store staples.
College and healthcare was much cheaper, and he got a lot less of it.
We're benefiting greatly from the increase in productivity. We just view our great-grandfather luxuries as our necessities.
But at least they could afford a house, right? I think a lot of people would accept living in a house without AC and more likely to catch fire. Is a house like that cheap today? No, right? It's crazy expensive as well.
>If they had a car they most likely shared it. It was far less safe, didn't have AC, guzzled gas and polluted.
Car technology in the past was worse, we know that. Cars were more affordable though.
>Never ate out and spent a third of earnings on cheap grocery store staples.
Like today then.
>We're benefiting greatly from the increase in productivity. We just view our great-grandfather luxuries as our necessities.
Young people are rotting at home unable to go ahead with their lives because wages nowadays are not enough to pay for a house and a family. Why do people try to deny this obvious reality? Productivity didn't benefit everyone equally and people in the past had more opportunities to build a life inside a standard that was socially acceptable.
>Is a house like that cheap today? No, right? It's crazy expensive as well.
I assume by catch fire GP means electrical wiring? Many houses on market today are literally not remodeled since the 1940s so retain that original wiring.
You're ignoring the gorilla in the room. Why can't one live in a comparable manner today and bank the difference? Because those things aren't available? Why aren't those things available?
You can do this. Just move to a sparsely populated area and work remote. Rural and semi-rural areas are basically the "poor", lower productivity areas within any given country, if you can arbitrage the incomes difference via remote work you stand to gain quite a bit.
You see this pattern across the American economy. The boomers locked in their house values by passing all the zoning regulations to artificially restrict the supply of housing. AMA artificially restricts the supply of doctors to increase their wages. Accreditation pushed ever higher costs on universities which increased costs, and the availability of loans basically cut off the brake cable. And who do you think is really benefitting from all the companies enshittifying everything and pushing up costs? The billionaires and retirees of course. And the young/working people are paying for it.
The solution for individuals is arbitrage. Remote work, get healthcare abroad, and avoid college tuitions. The fact that these things make sense at all shows how broken the markets are.
Rent is always going to go up there even if they build more. Same in other places. As long as rent setting tools exist to collude - we will see the rent not go down. You're not gonna dump $100m in new buildings and not maximize your return.
"The very reason why we object to state ownership, that it puts a stop to individual initiative and to the healthy development of personal responsibility, is the reason why we object to an unsupervised, unchecked monopolistic control in private hands. We urge control and supervision by the nation as an antidote to the movement for state socialism. Those who advocate total lack of regulation, those who advocate lawlessness in the business world, themselves give the strongest impulse to what I believe would be the deadening movement toward unadulterated state socialism."
--Theodore Roosevelt
It shows $13,641 for my metro (Chicago), but day care costs are easily twice that. Obviously once kids are school-age this is much lower (if going to public school), so maybe that's how you get at this figure.
On the other hand the transportation costs are way overestimated for non-car families (we spend less than $2k/year on local transit for 2 adults and 1 child, obviously this doesn't include airfare for vacations or whatnot). Maybe these are both an artifact of too broad a catchment area (childcare is probably cheaper in the 'burbs, but so likely are average transportation costs).
$11,896 with 2 children? My Kaiser $14K deductible bronze plan costs $2100 a month. That's more like $25K a year, and that's before I use it... the only reason I have it is in case something traumatic happens. This is the cheapest plan I can get on covered california.
The core of the problem is that you basically have to have someone define what is an acceptable standard of living. Sharing a flat? Nah, the MIT trained economist thinks that's for the poverty people so that is defined as below living wage. Walk to work? No. You need atleast $10k a year on travel otherwise you're a bus wanker.
A huge amount of this is value judgements on what is an acceptable standard of living from people who benefit from immense privilege but will never experience the thing they're studying.
When I looked at the methodology, some is based on consumer surveys so it may be more reflective of over-consumption. In other words, it prices in what people want or what they’re used to, not what they need. The counterpoint is that maybe some wealthy countries should be pricing in a higher quality of life, but the “living wage” then becomes a bit of a misnomer.
If you look at US BLS and Federal Reserve studies on such things, they make a distinctions between what people actually spend on ordinary expenses and when people can no longer afford those categories of expenses.
An interesting artifact is that incomes across the 15-40th percentile range in the same city don't save much money but still have enough money to pay for all ordinary expenses. That is a wide range of incomes for people nominally spending their entire income on the same things. What actually seems to happen is that average people spend excess income on upgrading their lifestyle until they hit the 40th percentile, at which point the average person starts saving some of their additional excess income.
For example, the average new-vehicle price in December 2025 was about $50,000. But people earning the living wage mostly aren't buying that kind of car. They could buy a new car for less than half that, or buy a used car. Or they may choose to take public transit.
Having roommates is extremely common.
There are also a lot of room-for-rent situations that don’t show up on the websites listing apartments. If you’re tapped into local networks of younger people there’s always someone with a room for rent or a group of friends looking for someone to take over a room in a house they’re renting together. Not helpful for someone in their 50s moving to a new city, but for young people living on a budget this is just how it works and has for a long time.
For example, you don’t want me to be the one to define “living wage.” I’ve been a prepper/bushcrafter for 20 years… the ACTUAL “living wage” is _zero_. There are innumerable resources all around you if you know how to find and use them.
By my estimations, it's not a great calculator. $2.5k/month for all housing costs. I'm not saying it's not possible to find a studio + utilities but that's not a fun place to live. No AC, no insulation, built for a different climate which was 70 years ago, laundromat or (hopefully) coin-op laundry in building, likely near busy roads (101, el camino) or train tracks with no sound insulation, still extremely car dependent (which is included in this calculator - gas/electricity, taxes, and cars in CA are very expensive), etc. Again, doable but competitive market and not a fun one. You'd be guaranteed to NEVER own any property at that income. Until we have some public housing utopia, I'd say ownership should be accounted for in a living wage. Otherwise, you're gonna get evicted when retirement hits.
Its calculation on taxes seems off to me as well. https://smartasset.com/taxes/california-paycheck-calculator#... Says $72308 in San Mateo, CA gives you $55793 - not $59791. You'd have to make close to $80k/yr to get the amount they suggest to live.
This calculator does not include retirement savings, emergency saving, etc. It just assumes you'll comfortably live paycheck to paycheck until you die and never save a dime. In our country, you will not be getting $60k/yr post tax from social security. So, this is a stupid calculator unless you plan to never retire or never experience job loss (max payout is $450/week for unemployment in CA), etc.
It doesn't include those things because those aren't the things that are covered by a "living wage". Living wage sounds like something good, but it's literally just enough to cover what's needed. Can you afford housing, childcare, medical care, transportation for work, etc. It's a low bar, not a good target, for a society to try to hit. It means people at that wage shouldn't be going hungry or without shelter, but they won't necessarily be thriving.
The thing I want to see next would be the sister calculator: what it would take for a business of X size employees, Y revenue, Z other expenses, to increase wages to these standards.
This feels like it would help to close that gap. Give a business owner a concrete path to take. Just saying something is broken isn't going to get it fixed.
Just typing all this I think I have my weekend project lined up.
Thanks MIT!
If you live in a large city, then it works great.
According to Wikipedia[1] median household income in the US and Norway is only about a quarter of your 160 kUSD.
I'm pretty sure that most of the people living near me in Norway are not high earners but I don't see any signs of starvation either.
That highly depends on your definition of "need" and where you live. If you're in a city with ludicrous cost of living, like San Fransisco, then sure. But, that's also why people commute, or just choose to go somewhere cheaper. It's somewhat shocking seeing how much higher the standard of living is, with much less income, outside the big cities.
That feels pretty close to accurate.
How is 1 adult + 3 children at $107.95 and 2 adults + 3 children at $63.97
5 people could require more money than 4. You could say in the 2nd case it's $63.97x2 but that doesn't make any sense either because the table also has 1 adult 0 children $29.31 and 2 adults 0 children at $41.81. Clearly they are not doing 2x to that $41.81 as it would be more than the $29.31 at 2x
Was this AI generated?
And the non-working adult is taking care of children, so reducing childcare expenses.
2. Did you look in the costs breakdown? You'll probs find your answers there.
3. I am guessing having a spare adult to take care of 3 children instead of paying for childcare is probably the difference.