Living wages, decent work, and need satisfaction: an integrated perspective

Abstract

ABSTRACT Recent efforts to consider quality of (work) life rather than mere economic subsistence in determining living wages have received increasing attention. However, it remains unclear how increased income translates into quality of life. Previous research found curvilinear relationships between income and capability development, suggesting contextual influences. This conceptual paper proposes a framework of decent work with five dimensions (reproductive–material, social–communicative, legal–institutional [participation], status and recognition, meaningful–subject-related) with living wages at its core, enriched by employment- and work-related factors. Furthermore, we argue that capability development results from both living wages and decent work contributing to need satisfaction. Since different needs are satisfied differently, we propose each of the five dimensions of decent work to be predominantly related to a specific set of hierarchically ordered needs. Finally, we apply this framework to explain the shape of the curve that links income and capabilities. While higher income satisfies basic needs and triggers capability development up to a satiation point, psychological and self-fulfilment needs become more salient for capability development beyond that point. Individual, organizational, and country-level context factors outlined in this paper should be considered in future investigations of how living wages impact individuals.