The "minimum" in minimum wage has proven hard to define. In practical terms, it has meant little more than the highest floor that can be wrestled through Congress. A more sensible definition, of course, would attache the level of the minimum wage to a threshold of minimum living expenses or self-sufficiency. The poverty level,
which began as a hasty back-of-the envelope calculation of food costs in 1962 and has simply been adjusted for inflation since then, is a poor measure. The
supplemental poverty level does a bit better--adjusting for regional differences, accounting for the value of in-kind benefits (like food stamps), and including a broader range of expenses (including child care and health care).
A more meaningful measure is provided by living wage or self-sufficiency thresholds.
The Self-Sufficiency Standard (or here, via Wider Opportunites for Women), developed in the mid-1990s by Diana Pearce, defines the amount of income necessary to meet basic needs (including taxes) without public subsidies (e.g., public housing, food stamps, Medicaid or child care) and without private/informal assistance (e.g., free babysitting by a relative or friend, food provided by churches or local food banks, or shared housing).
Poverty In America's Living Wage Calculator lists typical expenses, the living wage and typical wages for selected locations.
EPI’s Family Budget Calculator compiles the costs of essentials such as housing, food, child care, transportation and health care in different regions of the country to provide an estimate of how much families need to get by.
On the calculation of family budgets, see Jared Bernstein, Chauna Brocht, and Maggie Spade-Aguilar,
How Much Is Enough? Basic Family Budgets for Working Families (EPI, 2000); Sylvia Allegretto,
Basic Family Budgets (EPI, 2005) David Johnson, John Rogers, and Lucilla Tan,
A Century of Family Budgets in the United States,
Monthly Labor Review (2001).
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