The idea of a living wage is built on a simple premise: workers should be paid wages that allow a decent standard of living. Since workers live alongside other members of society – cooperating and competing across many areas of life – this standard must reflect the particular time and place in which the workers live, and not be based on arbitrary comparisons with the past or other societies with less means.
A living wage that households need in Singapore
|Monthly amounts, $||Two children (below 2, 2–6 years old)||Two children|
(2–6, 7–12 years old)
(7–12, 13–18 years old)
(13–18, 19–25 years old)
|Household work income needed to reach MIS budget after taxes and transfers||5,224||5,810||6,400||7,688|
|Work income needed per working parent||2,612||2,905||3,200||3,844|
|Living wage (average)*||2,906||–|
This amount—$2,906 per month—provides a starting point and a reasonable target for considering a living wage for Singapore. Any living wage, since it is a single wage level that applies to all workers regardless of what households they live in, will produce household incomes that are more than what some households need (e.g. smaller households), and less than what others require (e.g. larger households or those with special needs).
How the living wage is calculated
Although there are many variations in the way living wages are calculated internationally, the core method has three steps:
- The first step is to define what standard of living the living wage should enable and what this will cost. Different approaches may vary in terms of how far they draw on experts or public consensus to establish the definition and costs.
- The second step is to decide what types of households to take into account and the assumptions about their working patterns. In some instances, living wages are based on the needs of a few stylised, or the most common, household types. In other cases, calculations consider a wider range of household types and their distribution among the population. The assumed number of working persons in the household and their total work hours affect the amount of wages that each hour of work must generate in order to cover household costs. The lower the assumed amount of work, the higher the hourly wage rate needs to be.
- Finally, decisions must be made about what policies (i.e. taxes and benefits) to incorporate, how and how often to update these rates, and whether to allow variations across geographical regions that have different costs of living.
For more detail about the MIS findings, please see:
For information about living wages in other countries, please see: