Escape from Working Poverty: Steps toward Sustainable Livelihood

Working poverty affects over half the world's working population, yet we know remarkably little about the role of wages in transitioning toward sustainable livelihood. We develop and test a model whereby as pay approaches a living wage range, pay fairness becomes clearly associated with work-life balance; this in turn links to job satisfaction, which is a four-step process at the psychological level. We further extend this by testing a moderated mediated model, whereby income level is tested as a boundary condition. Using data from N = 873 New Zealand employees, we focus on relatively low-waged employees across three levels of income: up to $20,000, $20-40,000, and $40-60,000, with the last band straddling the New Zealand Living Wage. We find strong support for pay fairness predicting work-life balance and job satisfaction, with work-life balance mediating the relationship toward job satisfaction. In addition, we find direct effects from income to work-life balance, although not job satisfaction. Furthermore, two-way moderation is supported toward work-life balance and job satisfaction, with higher income employees reporting higher outcomes when fairness is high. The index of moderated mediation is also significantly supporting, indicating that work-life balance has a stronger mediation effect as income rises. Thus, as workers emerged from working poverty, pay fairness, and in turn work-life balance, became psychologically more salient for happiness at work, implying that a pathway to Sustainable Development Goal 8 includes at least three psychological steps, in addition to the pecuniary issue of pay: fairness, work-life balance, and job satisfaction.