Q:  I’m a little confused, perhaps you can enlighten me.  What is the difference between the “poverty line“, and a “living wage”, and the “minimum wage”? 

A:  As a layperson it’s natural to be confused by what often sounds like an interchangeable use of these terms, but they are quite distinct.  Let’s see if we can make sense of what each of them mean and how they relate (or not) to each other.

The Federal Poverty Line. Adjusted yearly, this is the level that determines eligibility for many federal programs like Medicaid, it’s what the feds have determined an adult individual –not necessarily a worker– needs to survive ($12,880), considering costs for basics like food and shelter. However, it does not consider other costs such as healthcare, childcare and transportation, nor does it adjust for geographic area (which the living wage does).

The Living Wage. This is not set by the feds, but it’s what analysts and policy makers determine an individual (specifically a worker, thus the word Wage) needs to not just survive like food and shelter, but also to afford those things like healthcare, childcare and transportation that can determine “one’s ability to work and to endure the potential hardships associated with balancing employment and other aspects of everyday life.” livingwage.mit.edu)

It’s not cushy living, it does not include funds for pre-prepared or restaurant foods, or entertainment or leisure activities.

Unlike the federal poverty line, the living wage takes geographic location and the make-up of the household into account.  That’s why you can’t just look up “Living Wage” and find a number.  Whereas you’ll find a fixed number for “federal poverty line for a family of 4” ($26,500), a living wage will consider where they live, and whether there are two adults working or just one. To find a “Living Wage” you’ll need to find a “calculator” online.

The Minimum Wage.  This is the minimum pay per hour you must pay a worker, it’s set by the feds and at $7.25 an hour, it’s a joke that obviously isn’t tied to anything and hasn’t been adjusted since 2009. This is why states and some private companies have taken it upon themselves to increase their own minimum wage.

Reminder: In Florida, the minimum wage went up to $10/hour on October 1, 2021.

Hope this helps clarify.

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