Sometimes, the supermarket sticker price is just there to make the sale price look better. Anchoring expectations matters.

And so the living wage movement’s push for $19.80/hour was a masterful piece of political tactics.

The $0.50 hike in the minimum wage, 3.4 percent when inflation is running at or below one percent, should have drawn criticism for being too large. Minimum wages were hardly low to begin with: relative to the median wage, ours is one of the highest in the developed world. Are we trying to throw people out of work?

Instead, the hike mainly drew criticism from the left as being inadequate. Why? Because the living wage advocates timed their updated $19.80/hour figure to coincide with the minimum wage increase.

It is worth going through that living wage figure just a little bit.

The living wage is advertised as being the wage necessary to support two kids with one parent on 40 hours per week and the other on 20 hours per week. The minimum wage then gets criticised to the extent that it fails to live up to that standard.

But the living wage fails to withstand critical scrutiny.

The calculations began with focus groups of poorer people, asking what level of expenditure would be necessary for an adequate lifestyle. The resulting figure suggested that 80% of the country has inadequate income. But the Household Economic Survey shows strong majorities of people, even in the lowest income bands, say their incomes are adequate.

And so they re-did the figures, building up from some estimated levels of expenditure on basic items. But they assumed everyone shops at the most popular supermarkets and that nobody ever buys anything on special. It seems just a little implausible.

But there is a bigger problem here, even if the numbers were right. Not every job has to provide a sufficient income for raising a family with a couple of kids, and living costs vary across the country. Entry level positions on lower pay give people a chance to build up experience to move up. Knocking rungs out of the ladder is poor policy.

And, minimum wages are poorly targeted: many minimum wage workers are in richer households.

Wage subsidies like Working for Families target aid while doing less damage to employment. But too high an anchor on minimum wage expectations can be an anchor on employment.