Local Living Wage Definition

The term “local living wage” is often used to describe a wage that meets the basic costs of living in a specific geographic area. The cost of living can vary greatly from one place to another, so the amount needed to earn a local living wage also varies.

There is no single definition of a local living wage, but most estimates consider the cost of housing, food, transportation, child care, health care, and other essential expenses. Some estimates also account for taxes and other government benefits. Based on these factors, the local living wage can be significantly higher than the federal minimum wage or a state’s minimum wage.

In general, families need an income that is two to three times the federal poverty level to make ends meet. For example, a family of four would need an annual income of at least $48,000 to cover basic expenses in most parts of the United States. That’s why many families rely on multiple earners or public assistance programs like food stamps and housing vouchers.

A full-time worker earning the federal minimum wage of $7.25 per hour would bring home just over $15,000 annually before taxes. That’s not enough to support even one person let alone a family. And it’s certainly not enough to cover the costs of living in high-priced areas like San Francisco or New York City.

In contrast, workers in some cities who earn a local living wage can bring