Living wage is a term used to describe the minimum hourly wage necessary for shelter (housing and incidentals

such as clothing and other basic needs) and nutrition for a person for an extended period of time (lifetime). € It is the highest of the three and is aimed at providing a comfortable living for the employee and his family. € It includes providing health, educational and social facilities.

concept differs from the minimum wage in that the latter is set by law and may fail to meet the requirements of a living wage. It differs somewhat from basic needs in that the basic needs model usually measures a minimum level of consumption, without regard for the source of the income. € In developed countries such as the United Kingdom or Switzerland, 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.
€ This

Traditional wage plans include the piece-wage plan, based on the units produced by the employee and the time-wage plan, based on the total working time of the employee € Modern wage plans include skill-based wage plan, competency-based wage plan and broadbanding. € Variable compensation programs are designed to reward employees in accordance with their performance and not in accordance with their hierarchical position in the organization. They motivate individuals and groups to perform better and also enhance employee involvement in organizational management

€ Central Advisory Council in

its first session (November, 1948) appointed a Tripartite Committee on Fair Wages. The Committee consisted of representatives of employers, employees and the Government. Their task was to enquire into and report on the subject of fair wages to labour.


The living wage, according to the Committee, represented the highest level of the wage which should enable the worker to provide for himself and his family not merely the basic essentials of food, clothing and shelter but a measure of frugal comfort including education for children, protection against ill health, requirements of essential social needs and a measure of insurance against more important misfortunes including old age. But the Committee felt that when such a wage is to be determined, the considerations of national income and the capacity to pay of the industry concerned has to be taken into account and the Committee was of the opinion that living wage had to be the ultimate goal or the target.


Sign up to vote on this title
UsefulNot useful