Living wage vs minimum wage: What caregivers need to know

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Living wage vs. minimum wage: What caregivers need to know

Learn the difference between minimum wage and a living wage, so you can ask for the wage you need to live on as a nanny, caregiver or domestic worker of any kind.

Living wage vs. minimum wage: What caregivers need to know

Experts generally agree that minimum wages are too low for Americans to make ends meet. However, many caregivers, whether you work with children or seniors, are paid minimum wage or less. A 2020 report by the Economic Policy Institute found that the typical (median) domestic worker is paid $12.01 per hour, much less than other workers (who are paid $19.97 per hour) and less than what’s needed to adequately support a family.

Nannies, for one, are often underpaid in America since they aren’t treated as professionals, says nanny coach and matchmaker Stella Reid, who moved to the United States from Northern England, where she was trained as a nanny. “Why should a nanny expect to be any different than any other professional career person?” Reid asks. “In America, they are still viewed as a glorified babysitter.”

While the United Kingdom isn’t perfect, Reid says, being a career nanny is taken more seriously there, and there is even a nanny union to protect and support caregivers. Meanwhile, many nannies here in the U.S. are still fighting to be taken seriously and get paid a living wage, she says.

A living wage, says Caitlin Connolly, chief of strategy at the National Employment Law Project, is a wage that allows someone to afford basic expenses such as food and transportation in their area and support their families. A living wage is a necessity, she says, for every worker.

It’s important that you know the laws around pay, as well as the difference between a living wage and. minimum wage, so you can ask for the wage you need to live on as a caregiver or domestic worker of any kind.

What is the minimum wage?

The minimum wage is the minimum amount an employer is legally required to pay employees although it’s generally acknowledged that it’s not adequate to live on.

Since it was enacted in 1938, the federal minimum wage has been increased 22 times, but, despite inflation, it hasn’t increased since 2009, and remains stuck at a meager $7.25 per hour. Some states have their own minimum wages that are higher, but many don’t.

“When we’re looking at the federal minimum wage,” says Connolly, “we know it’s woefully inadequate and absolutely needs to be increased so that people can support themselves and their families.”

While “babysitters on a casual basis” are excluded from minimum wage laws, caregivers and domestic workers are typically required to be paid at least minimum wage by law. However, according to the National Domestic Workers Alliance report, 23% of domestic workers and 67% of live-in workers reported being paid below their state’s minimum wage.

Nathalie Novak, who lives in Roseville, Minnesota, has been nannying off and on for a decade. She says when she first started nannying, she had no idea what she was doing, so she accepted a job for only $5 an hour — far less than the legal minimum wage.

Sineca Williams, a full-time caregiver for several families in Clarksville, Tennessee, views nannying as her career and is working to obtain a degree in child psychology. Despite her experience and qualifications, she says she’s been in many situations when a potential employer undervalues her and wants to pay less than a livable wage.

Williams has seen parents justify low rates since the kid will be sleeping some or all of the time the nanny is on duty. “But what they don’t realize is we still are watching your kid; we are on standby if something happened,” she explains.

What is a living wage?

A living wage isn’t legally mandated, but it means being paid a fair wage you can live on rather than the bare minimum.

“When we’re talking about a living wage, we’re talking about an income that allows for people to be able to afford living in their community and supporting themselves and their families,” Connolly explains. “That means being able to afford housing, food, transportation, as well as the ability to attend to all the other costs that people face on a daily basis.”

Of course, since there are no laws around a living wage, many workers are forced to advocate higher wages for themselves, which isn’t always easy.

Novak realized over time that she was underpaid and needed to earn a living wage, so she began to advocate for herself. Now that she’s a seasoned caregiver and can claim 10 years of nannying experience, she’s able to command the pay she needs to not only make ends meet, but save for her family’s future.

How does the minimum wage compare to a living wage?

For comparison, using the Massachusetts Institute of Technology’s Living Wage Calculator, here’s how the minimum wage stacks up against a living wage in some major metropolitan areas of the U.S.

It reveals how insufficient a minimum wage is, especially if you’re a caregiver living in an area with a high cost of living. The numbers below are for one adult working full time with one child; however, the living wage increases if there are more children or other dependents and decreases if there are other working adults in the household.

Minimum wage vs. living wage in several metropolitan areas

Metro areaMinimum wage (hourly)Living wage (hourly)
Austin/Round Rock, Texas$7.25$33.88
Orlando/Kissimmee/Sanford, Florida$10.00$33.68
Washington, DC and Arlington/Alexandria, Virginia$15.20$42.51
New York City/Newark/Jersey City, New York $15.00


San Francisco/Oakland/Hayward, California$15.00 $51.91

It’s important for our country to get to a place where domestic workers are paid better wages that acknowledge the value they bring to their work, says Connolly. “I think when we look at people who are providing care for our children, for elders in our family, for people with disabilities … these are the people who we love and care for, who are most important to us in our lives,” she says. “Certainly the people providing that invaluable care need to be recognized for the important role they play in doing that.”