A living wage is a wage that's sufficient to support a decent quality of life. That is, access to basic needs such as food, housing, transportation, education. Living wages are directly proportional to an area's cost of living, the higher the cost of living, the higher wages must be in order to be considered "living wages."
Under capitalism, wages are constantly driven downward by the endless pursuit of profit, while the cost of living is also increased for the same reason.[1]
Under socialism, the cost of living is usually state-controlled (through subsidies or price controls) and wages are similarly regulated to ensure sufficient spending power.
References
- ↑ Richard V. Reeves (2019-04-29). "Capitalism is failing. People want a job with a decent wage – why is that so hard?" Brookings.