Minimum Wage Does Not Provide Minimum Standard of Living

People must earn more than minumum wage to afford minimum standard of living.

People must earn more than minumum wage to afford minimum standard of living.

The cost of living has increased for low income earners due to inflation.  According to a study by the Joseph Rowntree Foundation a single person must earn 14,400 pounds a year to be able to afford a minimum standard of living.  That amounts to 7.38 pounds per hour.  The earnings needed by a couple with two children is 26,900 pounds per year.  Taking into consideration that both work full time jobs they would need to earn 7.60 per hour.  The hourly wage needed for a single person and the working parents is considerably higher than the 5.80 per hour minimum wage.

The Center for Research in Social Policy at Loughborough Univeristy conducted the study for the Rowntree Foundation.  They determined how much money it took a person to afford a minimum standard of living such as food, housing, transport, public social activities and a week’s holiday.

“This new research underlines how people living close to the minimum income standard can end up not having enough, if economic trends start going against them,” said one of the report’s authors, David Hirsch of Loughborough University.

Researchers reported the cost of a minimum budget had risen 38 per cent over the past 10 years.  Part of the rise comes from the fact that food has had a 37 per cent increase, bus fare has risen 59 per cent and council tax has risen a whopping 67 per cent.

The consumer price index (CPI) has reported a lower inflation rate than that reported by the RPI.  Since the Government uses CPI figures to raise benefits then people dependent on benefits will find it increasingly difficult to meet their needs.  The RPI takes into consideration things that would allow someone to participate in society such as transportation needs.

“This research shows what ordinary members of the public think is needed – not just to survive but to take part in society,” said Julia Unwin, Chief Executive of the JRF.  “It proves powerful evidence for the new government to use as it develops policies to deal with poverty.”

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