A living wage standard: A case study of the US Virgin Islands

Abstract

While a minimum wage standard refers to the lowest wage allowed by law, a living wage attempts to address issues of well-being and dignity. A minimum wage is not a living wage; a minimum wage may not allow low-wage workers a minimally secure way of life. For many communities, their minimum wage—even those set above the federal level—does not allow low-wage workers to meet their very basic living needs such as food, shelter, and basic medical care. If a community is successful in the passage of a living wage standard, the living wage becomes the legal minimum wage for the regulated businesses and institutions. Thus, living wage initiatives represent an approach to raising the minimum wage for the affected businesses regulated by the law. In 2008, the US Virgin Islands ( USVI ) Legislature decided to pass Act 7027 which required the USVI Bureau of Economic Research to develop an economic Self-Sufficiency Standard for the USVI. This current study, conducted by the authors, does not address arguments for a living wage based on morality; rather this study addresses the economic logic of a living wage by assessing the economic effects for the USVI.