Living wage vs. Minimum wage
There is often a lot of confusion around the concepts of a living wage and a minimum wage. So what is the difference?
Firstly a minimum wage is defined as the lowest possible wage permitted by law. A minimum wage often does not take in to consideration things like location, inflation rates or other factors. By comparison a living wage is considered to be the minimum income necessary for a worker to cover the cost of basic needs for themselves and their families.
Why is this cause for concern?
If the cost of living was the same in every city, town or village in a country then perhaps a national minimum wage would be sufficient. Sadly, the cost of living varies drastically depending on your location and the differences can be seen in the cost of housing, transportation, education and groceries. For this reason, minimum wage may be sufficient in some areas but entirely inadequate for basic needs in others.
That is why a living wage is a more appropriate and ethical system of calculating a fair and honest wage for employees. Milano Formals believes that by providing a living wage as opposed to a minimum wage, it takes away the worry and stress that burden our employees so they can take care of their families and themselves. In return, our employees are able to dedicate their focus on the jobs they were hired to do, instead of the debilitating worry of a growing stack of unpaid bills and not enough food to feed their families. While it may equate to higher costs in the short term, the long term effect becomes apparent with increased productivity and less frequent employee absences or turnover.
Milano Formals does not pay living wages for the sole purpose of ensuring smooth production in our factories. We also implemented this system because it is the right thing to do. Successful business is just as much about caring for the people you work with as it is about financial statements. It is far more rewarding to see dozens of smiling faces in the workplace than it will ever be to stare endlessly at mountains of profit and loss statements.