Written by the Fiveable Content Team • Last updated August 2025
Verified for the 2026 exam
Verified for the 2026 exam•Written by the Fiveable Content Team • Last updated August 2025
Definition
The minimum wage is the lowest hourly rate that employers are legally required to pay their employees. It is set by the government and varies from country to country.
Living Wage: A living wage refers to a higher minimum wage that is calculated based on what it takes for someone to meet their basic needs, such as housing, food, and healthcare.
Labor Market: The labor market refers to the supply and demand for labor in an economy, including factors like wages, employment opportunities, and job skills.
Poverty Line: The poverty line is a threshold set by the government to determine if individuals or families are living in poverty based on their income levels.