There are critical differences between the concepts of a minimum Wage, a living wage and a subsistence wage. Let us explore the differences here:
A Minimum Wage - The lowest wage, determined by law or contract, that an employer may pay an employee for a specified job and may fail to meet the requirements of a living wage.
Living wage is a term used to describe the minimum hourly wage necessary for a person to achieve some specific standard of living. This standard generally means that a person working forty hours a week, with no additional income, should be able to afford a specified quality or quantity of shelter, food, utilities, transport, health care, and recreation.
Subsistence wage is the lowest wage upon which a worker and his family can survive - a wage so low that it is barely enough to live. According to Lassalle, wages cannot fall below subsistence level because without subsistence, laborers will be unable to work for long
Here are further elaborations on these concepts from a social justice point of view: as propounded by scholars and the Catholic Church:
—"If a worker receives a wage sufficiently large to enable him to provide comfortably for himself, his wife and his children, he will, if prudent, gladly strive to practice thrift; and the result will be, as nature itself seems to counsel, that after expenditures are deducted there will remain something over and above through which he can come into the possession of a little wealth.. ”
—"Wealthy owners of the means of production and employers must never forget that both divine and human law forbid them to squeeze the poor and wretched for the sake of gain or to profit from the helplessness of others.”
—"As regards protection of this world’s good, the first task is to save the wretched workers from the brutality of those who make use of human beings as mere instruments for the unrestrained acquisition of wealth.”
—"Care must be taken, therefore, not to lengthen the working day beyond a man’s capacity. How much time there must be for rest depends upon the type of work, the circumstances of time and place and, particularly, the health of the workers.”
In spite of the above call for social justice there remains still today across the world many places where exploitation through "human trafficking" remains a severe concern.
There are supporters and critics of the idea of a living wage and its effects on the economy.
The critics argue that implementing a living wage establishes a wage floor, which will harm the economy. They believe that companies will choose not to hire the same number of employees at such high levels of pay. This creates higher unemployment, resulting in deadweight loss, as people who would work for less than a living wage are no longer offered employment. —Supporters of the living wage, on the other hand, argue that benefiting employees will also help the company. If employees are more satisfied earning a living wage, there will be less employment turnover. This reduces expensive recruitment and training costs for the firm. They also argue that the higher wage will boost morale. Employees with high morale are expected to have higher productivity, allowing the company to benefit from increased worker output.
All in all these above stated wage standards today across the world are not adequate for the average human being to live a decent life. The living costs, especially of the essential necessities of a decent life are regularly trending upwards. One earner or one job situations are becoming scare to make ends meet.
So an esoteric debate around economic philosophy is mute in the real world. Majority of the world's population are still on income hovering at the subsistence level and below. Certain areas of the world are suffering more than the others. The irony around modernity is that the rate of growth of technological advances, globalization, communication systems, medical sciences etc. is much greater than rate of improvement of the living conditions of a majority of the world's population. While a portion of the world's population sees a rapid increase in living standards, the largest proportion of the world's population live under a system of "wage slavery".
Look for an essay on the concept of "wage salary" in a future essay on this blog.