Minimum, Fair & Living Wages

Wage concepts, Minimum, Fair and Living wage

BY – Neha Jain

Type of wages 

The main types of wages are: 1. Subsistence wage; 2. Minimum wage; 3. Fair Wage; and 4. Living Wage

Subsistence Wage

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The wage that can meet only bare physical needs of a worker and his family is called subsistence wage.

Minimum Wage 

Minimum wage is the wage that is able to provide not only for bare physical needs but also for preservation of efficiency of worker plus some measure of education, health and other things.

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A minimum wage is the lowest hourly, daily or monthly remuneration that employers may legally pay to workers. It is the lowest wage at which workers may sell their labor.

Fair wages 

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Fair wages is an adjustable step that moves up according to the capacity of the industry to pay, and the prevailing rates of wages in the area of industry. A fair wage lies between the minimum wage and the living wage which is the goal. Wages must be paid on an industry wise and region basis having due regard to the financial capacity of the unit.

Living wage A living wage is the minimum hourly income necessary for a worker to meet basic needs (for an extended period of time or for a lifetime). These needs include shelter (housing) and other incidentals such as clothing and nutrition.  This standard generally means that a person working forty hours a week, with no additional income, should be able to afford a specified quality or quantity of housing, food, utilities, transport, health care, and recreation.  The wages must be fair, i.e. sufficiently high to provide standard family with ,food, shelter, clothing, medical care and education of children appropriate to the workmen. 

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Living wage, the hourly wage that, at a minimum, supports a standard of living above the poverty level in a given locality.

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It differs from the minimum wage, which often provides a less than adequate standard of living.

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A fair wage lies between the minimum wage and the living wage which is the goal. Wages must be paid on an industry wise and region basis having due regard to the financial capacity of the unit.