What a ‘Living Wage’ Actually Means

When you choose your county, you’ll see a breakdown of what each adult in your household will need to make per hour — rather than per year, since many part-time and hourly jobs aren’t salaried — in order to cover basic expenses. Below that, you’ll see a breakdown of what those expenses like food, health care, and transportation, which is helpful if any of these categories are more expensive for you than the national average.

The line-item breakdown also helpfully demonstrates where someone making below a living wage might have to cut back to make ends meet. As Dr. Glasmeier put it: “Put yourself in the shoes of somebody that doesn’t make a living wage. What would you do? You wouldn’t pay certain bills every month. You’d pay them every other month and basically just hope that the electricity isn’t getting turned off.”

The Living Wage Calculator sets a baseline, but it doesn’t cover everything. The food costs are based on the Agriculture Department’s low-cost meal plan, but they don’t include eating out at a restaurant or buying fast food. Entertainment, leisure and even unpaid vacations are not included, and the calculator makes no allowances for saving money. In other words, even if you meet the salary criteria for your region, you still might feel a budgetary pinch if you try to save or ever spend money on luxuries.

Dr. Glasmeier points out that some expenses can be off the mark in regions where the rent is too damn high. “In places which have a tendency toward inflation of key goods, such as housing costs … my calculator is going to be insufficient in estimating precisely what the actual cost of housing will be.” However, since each expense is itemized, you can isolate those costs.

Once you’ve used the calculator to see what expenses in your area are like, it’s time to look at how much you make and compare it with the rest of your industry. The calculator shows typical annual salaries for several industries at the bottom of the page, but you can find more detailed information on sites like Glassdoor, Salary.com, and PayScale.

All three let current and former employees anonymously upload their salaries for others, including potential employees of their companies, to see. This can help you determine if there’s room to earn more at your company, or another like it. You can search the site for your own company or for your job title to find out how much other people who do what you do make.

Glassdoor also offers a tool called Know Your Worth. Enter your job title, location and years of experience and Glassdoor will give you an estimated range of how much people in your job typically make. If your salary falls below the average, it may be time to ask your employer for a raise, or search for a job with a company that is willing to pay you more. If you’re above the average and still not making enough, a change in career, position or even geography (if you can afford it) may be a better move.

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