There is some clamour in the media for the “Minimum Wage” to be replaced by a higher “Living Wage” and for more lower-cost “Affordable Housing” to be built. I will leave detailed analysis of the concepts of those terms to a future blog-post where I will look at the issue of “poverty in a modern economy”; here I will concentrate on assessing whether the combined impact of a Living Wage + Affordable Housing would result in less need for “in-work” welfare benefits.
In compiling the table below I have used the following assumptions:
- A couple in their early thirties with 2 dependent minor offspring;
- Rent for a 3-bed semi-detached house with garden of £520 per calendar month;
- A Minimum Wage (M.W.) of £6.19 per hour, Living Wage (L.W.) of £7.45 per hour;
- Scenario 1: both work 37.5 hours per week (p.w.) on the M.W.;
- Scenario 2: both work 37.5 hours…
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