WHAT IS A ‘LIVING WAGE', AND HOW DO WE DEFINE IT?
Personal Finance|May 2022
There's a fine balance between paying fairly, preserving jobs, and maintaining economic competitiveness
WHAT IS A ‘LIVING WAGE', AND HOW DO WE DEFINE IT?

BRYDEN MORTON and CHRIS BLAIR

THE CONCEPT of a living wage' has gained much attention in recent years, spurred on further by the economic shockwaves caused by the COCID-19 pandemic.

There have been many views expressed in terms of what constitutes a living wage, and how it should be calculated. Some believe it can be calculated using a few fundamental economic data points, while others believe that more attention should be paid to other, nonremuneration aspects such as number of dependents and number of income earners per household.

In the humanistic approach, individuals are viewed holistically as human beings who know what they need, and define what constitutes a decent life for themselves. This approach seeks to go beyond the purchasing power element of a living wage, seeking to evaluate social elements of the individual's life as well (such as standard of living).

Other, more quantitative methods include regression modelling, purchasing power parity, and cost of living analysis that treat individuals as units that are measured against a set of criteria to determine the living wage. The quantitative approaches tend to be insensitive to individual considerations.

The humanistic approaches provide more understanding of the unique environment faced by each person. Computationally, such a methodology would prove tedious and even more challenging to execute-as a country such as South Africa, that has equal pay for work of equal value laws, does not make provision for outside-of-work circumstances when determining fair pay in the workplace.

Esta historia es de la edición May 2022 de Personal Finance.

Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.

Esta historia es de la edición May 2022 de Personal Finance.

Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.

MÁS HISTORIAS DE PERSONAL FINANCEVer todo
'Hack' your money psychology
Personal Finance

'Hack' your money psychology

Spending too much money? Tempted by sales? These money psychology hacks’ can help

time-read
4 minutos  |
February 2023
Accounting tips for small businesses
Personal Finance

Accounting tips for small businesses

It's important to properly manage your business finances

time-read
5 minutos  |
February 2023
KIDS AND MONEY: FIVE WAYS TO START THE CONVERSATION
Personal Finance

KIDS AND MONEY: FIVE WAYS TO START THE CONVERSATION

WHEN IT comes to teaching young children about the world, parents may feel that some topics—like politics and religion—are too tough to broach.

time-read
4 minutos  |
February 2023
REDUCE THE PAIN OF DOWNSCALING
Personal Finance

REDUCE THE PAIN OF DOWNSCALING

Investing in a holiday home as a retiree

time-read
3 minutos  |
February 2023
THE RISKS INVOLVED IN INVESTING
Personal Finance

THE RISKS INVOLVED IN INVESTING

Finding the balance between eating well and sleeping well

time-read
2 minutos  |
February 2023
TESLA: WHY IT MIGHT BE TIME FOR MUSK TO GO
Personal Finance

TESLA: WHY IT MIGHT BE TIME FOR MUSK TO GO

What 2023 holds for the electric vehicle company

time-read
4 minutos  |
February 2023
FINDING SOMEONE TO STEP INTO YOUR SHOES
Personal Finance

FINDING SOMEONE TO STEP INTO YOUR SHOES

The Eskom crisis demonstrates again the importance of proper succession planning—loDSA

time-read
1 min  |
February 2023
BORROWING MONEY ISN' ALWAYS A BAD THING
Personal Finance

BORROWING MONEY ISN' ALWAYS A BAD THING

On the contrary, debt can be a sensible way to build wealth

time-read
4 minutos  |
February 2023
WILL SOLAR POWER INCREASE THE VALUE OF YOUR HOME?
Personal Finance

WILL SOLAR POWER INCREASE THE VALUE OF YOUR HOME?

The upfront investment is high, which you'll want to recover when you sell

time-read
3 minutos  |
February 2023
WHERE NEXT FOR THE GLOBAL ECONOMY?
Personal Finance

WHERE NEXT FOR THE GLOBAL ECONOMY?

Why central banks face an epic battle against inflation in 2023

time-read
5 minutos  |
February 2023