Chef preparing a dish

Employees who earn minimum wage are confined by basic necessity, are unable to live fruitful, healthy lives, and more likely than not, unable to live in decent housing. The minimum wage for workers has remained at $7.25/hour since 2009. Since then, Inflation has risen over 23.94%. This translates to $0.24, or $1 in 2009 being equivalent to $1.24 in 2021. The average national cost of living has also risen 20% in this time. They are able to afford the basic necessities, but often struggle covering bills and unexpected expenses. This lifestyle makes for little flexibility, burnout, and employment turnover.

On the other hand, companies who pay their employees a decent wage see high levels of productivity and lower turnover rates. While this can be an expense at the upfront, companies ultimately save money through hiring and attract quality employees for time to come.

What is the Livable Wage?

A livable wage is a socially acceptable level of income that provides coverage for basic necessities such as adequate food, shelter, child services, and healthcare. The goal of a livable wage is to allow employees to earn enough income for a satisfactory standard of living and prevent them from falling into poverty.

The livable wage model is an alternative measure of basic needs. It is a market-based approach that includes geographically specific data related to a family’s likely minimum food, childcare, health insurance, housing, transportation, and other basic necessities costs. A study from MIT shares the livable wage draws on these cost elements and the rough effects of income and payroll taxes to determine the minimum employment earnings necessary to meet a family’s basic needs while also maintaining self-sufficiency. The calculated livable wage does not provide a financial means to enable savings and investment or for the purchase of capital assets (e.g., provisions for retirement or home purchases).

The livable wage also changes based on the number of dependents one has, increasing with each additional dependent. This makes the livable wage more dynamic than the traditional minimum wage.

The living wage calculator is composed of the wage needed to cover basic family expenses on a basic needs budget, plus all relevant taxes. Values are reported in 2020 dollars, and to convert values from annual to hourly, a work-year of 2,080 hours (40 hours per week for 52 weeks) per adult is assumed. The basic needs budget and living wage are calculated as follows:

Basic needs budget = Food cost + childcare cost + (insurance premiums + out
of pocket health care costs) + housing cost + transportation cost + other
necessities cost + civic engagement + broadband

Living wage = Basic needs budget + (basic needs budget*tax rate)

Why minimum wage is a problem

The living wage is often suggested to be $16.54 per hour, or $68,808 per year, significantly higher than the legally mandated minimum wage. Rent and daily expenses are much higher in urban cities than rural areas, and poverty thresholds do not account for geographic variation in the cost of essential household expenses. This is one of the many flaws of the current minimum wage calculation.

Additionally, poverty thresholds do not account for livable costs beyond a very basic food budget. The federal poverty measure does not take into consideration costs like childcare and health care that not only draw from one’s income, but also are determining factors in one’s ability to work and to endure the potential hardships of everyday life.

Many individuals earning the federal minimum wage live below the poverty line.

The federal minimum wage, which is $7.25, has not gone up since 2009, and has not kept up with the cost of living since the 1960’s. There are state minimum wages, and some are higher than the federal amount. The minimum wage does not provide enough income to survive as it doesn’t rise with inflation; it can only increase with congressional action.

How Qwick pays wages differently

It is vital for businesses to be aware of the cost of living in their area and the livable wage. This can be a guide for paying fair wages not just to employees, but offering fair wages to contractors as well.

We understand how detrimental the wage crisis is to the workforce, and that the hospitality industry needs to make a change. We’ve made a commitment to our Professionals so they never have to worry if they will be paid more than minimum wage, if the shifts they work will actually make a dent in their bills, or if their time is valued.

At Qwick, we work with business partners to pay our hard working Professionals approximately $9.00 over minimum wage. The following is a breakdown of our percentage paid over minimum wage per market:

Qwick does not set the pay for jobs posted on our app; companies set the pay, we work with them to determine a livable wage, and workers choose which jobs to accept. Qwick also offers additional pay for Holidays and referral bonuses for Professionals and Businesses Partners.

Why a Livable Wage in the U.S. is needed

Paying a livable wage creates an economy that works for everyone. Paying a livable wage leads to increased worker morale, worker health, and improved quality of service. It also attracts talent, lowers turnover rates, and saves money long-term for employers. Consider paying employees and workers a living wage as a means to show you care for their wellbeing.

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