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The calculation of a living wage: the UK’s experience

Author

Listed:
  • Conor D’Arcy

    (Resolution Foundation, London, UK)

  • David Finch

    (Resolution Foundation, London, UK)

Abstract

Translating the concept of a living wage into a cash figure presents a number of challenges. A recent review of the approaches used in the UK explored these, with the aim of creating a unified and improved calculation. Designing a living wage relies on some technical decisions, such as which data sources are most appropriate. But many of the building blocks underlying a living wage require judgements on societal values, expectations and norms. The living wage rates in the UK are voluntary and promoted by campaign groups; this means any methodology needs to be empirically sound but also recognise the realities facing employers. No perfect approach can exist. But through analysis, consultation with stakeholders and a clear governance structure, the method used in London and the rest of the UK offers a robust, respected and up-to-date way to calculate the income needed to meet a decent standard of living.

Suggested Citation

  • Conor D’Arcy & David Finch, 2019. "The calculation of a living wage: the UK’s experience," Transfer: European Review of Labour and Research, , vol. 25(3), pages 301-317, August.
    • Handle: RePEc:sae:treure:v:25:y:2019:i:3:p:301-317
    DOI: 10.1177/1024258919847313
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    References listed on IDEAS

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    1. Cengiz, Doruk & Dube, Arindrajit & Lindner, Attila & Zipperer, Ben, 2018. "The effect of minimum wages on low-wage jobs: evidence from the United States using a bunching estimator," LSE Research Online Documents on Economics 88682, London School of Economics and Political Science, LSE Library.
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