thumb|300x300px|Cost of a basic but decent life for a family
A living wage is the minimum income required for a worker to meet their basic needs. This is not the same as a subsistence wage, which refers to a biological minimum, or a solidarity wage, which refers to a minimum wage tracking labor productivity. Needs include food, housing, and other essentials such as clothing. The goal of a living wage is to allow a worker to afford a basic but decent standard of living through employment without government subsidies. Due to the flexible nature of the term "needs", there is not one universally accepted measure of what a living wage is and as such it varies by location and household type. A related concept is that of a family wage – one sufficient to not only support oneself, but also to raise a family.
The living wage differs from the minimum wage in that the latter can fail to meet the requirements for a basic quality of life, which leaves the worker to rely on government programs for additional income. Living wages have typically only been adopted in municipalities. In economic terms, a minimum wage is a price floor for labor created by a legal threshold, rather than a reservation wage created by price discovery. The living wage is one possible guideline for setting a target price floor, while a minimum wage is a policy that enforces a chosen price floor.
thumb|300x300px|Calculating a living wage Living wage advocates have further defined a living wage as the wage equivalent to the [[poverty line for a family of four. The income would have to allow the family to "secure food, shelter, clothing, health care, transportation and other necessities of living in modern society". The definition of a living wage used by the Greater London Authority (GLA) is the threshold wage, calculated as an income of 60% of the median, and an additional 15% to allow for unforeseen events. A living wage, by increasing the purchasing power of low income workers, is supported by Keynesian and post-Keynesian economics, which focuses on stimulating demand to improve the state of the economy.
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The concept of a living wage, though it was not defined as such, can be traced back to the works of ancient Greek philosophers such as Plato and Aristotle. Both argued for an income that accounts for needs, particularly those that ensure the common good. As he placed the responsibility in ensuring that people with low incomes could earn a sustainable living in the state, his ideas are seen as an early example of support for a living wage.
The evolution of the concept can be seen later on in medieval scholars such as Thomas Aquinas, who argued for a "just wage".
In Wealth of Nations, Adam Smith recognized that rising real wages lead to the "improvement in the circumstances of the lower ranks of people" and are therefore an advantage to society. Growth and a system of liberty were the means by which the laboring poor were able to secure higher wages and an acceptable standard of living. Rising real wages are secured by growth driven by increased productivity, with stable price levels (i.e., prices unaffected by inflation). A system of liberty, secured through political institutions, where even the "lower ranks of people" could secure the opportunity for higher wages and an acceptable standard of living.