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Relevant quotes from Chapter 5 of the Player's Handbook:

Laborer's wages

A silver piece buys a laborer’s work for a day, a flask of lamp oil, or a night’s rest in a poor inn.

(Page 143)

Laborer's Lifestyle

A modest lifestyle keeps you out of the slums and ensures that you can maintain your equipment. You live in an older part of town, renting a room in a boarding house, inn, or temple. You don't go hungry or thirsty, and your living conditions are clean, if simple. Ordinary people living modest lifestyles include soldiers with families, laborers, students, priests, hedge wizards, and the like.

(Page 158)

In the chart, it shows a cost of 1gp / day for a Modest lifestyle.

The question

How do these prices add up? If a laborer makes about a silver piece for a day's wages, how in the world are they paying ten silver (one gold) per day for a modest lifestyle? Page 158 shows a price of three silver per day for meals alone at a modest lifestyle level. Even if we ignore all other expenses and just look at the cost of food, it seems like they would be paying three times their daily wage just to eat at that level. We're not looking at the cost of supporting a family right now - even assuming a single person, the prices don't seem to add up.

How is a laborer able to sustain a Modest lifestyle while only making one silver per day?

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  • \$\begingroup\$ They have a little business on the side ... ;) Doesn't everyone? \$\endgroup\$ – KorvinStarmast Aug 2 at 20:27
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Different laborers

This is likely the difference between an employed laborer (the equivalent of a construction worker) and the "odd jobs" laborer. Practicing a Profession downtime (PHB 187) yields the modest lifestyle expected.

In the US we see statistics like this:

General laborer median wages = $15 per hour (Google search) This is a moderate lifestyle wage but many immigrants, for example, are paid much less for certain jobs since there is excess supply in the workforce (source).

This same principle can be expanded to the Forgotten Realms. If you want experienced laborers you need to dish out the 1 gold per day that equates to the modest lifestyle. If you just need someone to chop down some trees in your yard, 1 silver will suffice.

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    \$\begingroup\$ A Now Hiring sign advertising "Need random muscle to carry heavy crap around in an extremely dangerous dungeon" isn't going to attract the skilled laborers around town. You're going to get the people who are flat broke and are willing to do crazy stuff like that for enough money to eat. \$\endgroup\$ – guildsbounty Feb 17 '18 at 14:33
  • \$\begingroup\$ There is also support for this when you look at service costs, an untrained hireling costs 2sp a day, but a skilled laborer (basically anything that involves a skill proficiency) costs 2gp a day. The latter would apply to almost any PC character. \$\endgroup\$ – John Aug 2 at 19:44
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D&D is not an economic simulator

5th edition least of all, given its deliberate choice to avoid valuing consistency or coherence in mechanics. Labor prices have always been a problem in D&D, whether the exorbitant prices charged by sages and the like in the earliest editions or the never-high-enough price for a sellsword. The fundamental problem is that the game wants (and has always wanted) a gp to be a large amount of money, enough to impress common folk and to make adventurers stand out and be notable in the fiction of the game world, and usually enough to justify a 'fantastic wealth-- if you survive' description of adventuring, but it also wants and has always wanted to charge players an arm and a leg for things, usually to ensure they must keep adventuring and taking risks and such. Unfortunately, this doesn't work. There are lots of epicyclic explanations that people have used at various points over the years to various effect, but ultimately it just doesn't work. The prices are too high and the given incomes are too low and the relationships between all the things make a mess out of any potential explanation if explored too deeply.

The solution is to ignore it. A laborer who gets paid on screen should receive roughly 1 sp for each day of work they're being paid for, and they enjoy a modest lifestyle consisting of roughly 1 gp a day in expenses if the PCs stay at their house a while. The PCs don't ask how much the laborer makes or how much he spends to supplement his crops, and everything goes smoothly.

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    \$\begingroup\$ And then there's the "black market" and "underground ec0nomy" to consider ... \$\endgroup\$ – KorvinStarmast Feb 17 '18 at 22:21
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    \$\begingroup\$ Yeah, the D&D economy is pretty broken. A player in a campaign I'm in took it upon himself to redesign the entire economy in a way that makes more sense... \$\endgroup\$ – V2Blast Feb 17 '18 at 23:21
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Upon re-reading the PHB inspired by David Coffron's answer and Phil Boncer's answer, I think I actually found the answer to this question. The numbers as written fit perfectly in the PHB without any hand-waving at all. The confusion comes from different uses of the word "laborer" in different places. Essentially, based on the text, there seem to be three tiers of people you could conceivably call "laborers". All quotes come from the Player's Handbook pages 157-159 unless otherwise noted.

Untrained, day-job laborers

Wage: These laborers are making 1sp for a day's labor (PHB 143), doing things that require no real training or skill. They also don't have a set, day-to-day job (which would pay more). These could be analogous of the real-life immigrant workers David Coffron mentioned, or they could be someone who has suffered a setback.

Lifestyle: By default, these people would be living a Squalid lifestyle (1sp/day):

You live in a leaky stable, a mud-floored hut just outside town, or a vermin-infested boarding house in the worst part of town. You have shelter from the elements, but you live in a desperate and often violent environment, in places rife with disease, hunger, and misfortune. You are beneath the notice of most people, and you have few legal protections. Most people at this lifestyle level have suffered some terrible setback. They might be disturbed, marked as exiles, or suffer from disease.

This would fit someone who isn't able to find a job because they were fired or injured or fell sick. These people are poor and desperate, and would do basically anything for 1sp/day, because the alternative is being knocked down to a "Wretched" lifestyle (you don't have to read the PHB to know that's bad).

However, there are several possible ways they could be living at or near a Poor lifestyle (2sp per day) without long-term employment:

  • They could be living in "Poor" conditions, but with twice as many people. This would lead to better, if more cramped, conditions.
  • They could be essentially "working two jobs". If they get up early and go to bed late, it's conceivable that someone particularly industrious could keep themselves out of Squalid conditions (similar to the people in real life forced to work 80 hours a week to get by).
  • They could have something else on the side - perhaps they also rob houses at night, or help smuggle, or work as a loader for the carpenter for 5cp a night.

Untrained Laborers with jobs

Wage: These people would be paid the 2sp/day cost shown in the "Untrained hireling" section of the services table. If you read the section on services, it tends to describe people with more of a set job and long-term employment. It would make sense that someone with a long-term job would get paid more (this would be equivalent to the $15/hour figure David Coffron quoted.

Lifestyle: With a 2sp/day wage, these people are living exactly at the Poor lifestyle:

Poor. A poor lifestyle means going without the comforts available in a stable community. Simple food and lodgings, threadbare clothing, and unpredictable conditions result in a sufficient, though probably unpleasant, experience. Your accommodations might be a room in a flophouse or in the common room above a tavern. You benefit from some legal protections, but you still have to contend with violence, crime, and disease. People at this lifestyle level tend to be unskilled laborers, costermongers, peddlers, thieves, mercenaries, and other disreputable types.

Had I noticed the bolded section of that quote the first time through, I may not have posted this question. It makes it much more clear. The numbers match up more easily for these people, and it seems a thematic fit as well. Unskilled laborers with steady jobs would still have "simple food and threadbare clothing", but they wouldn't necessarily live in the vermin-infested slums.

Untrained laborers with jobs at the castle

Wage: I believe the wage for these laborers would still be the same (around 2sp/day). However, the Player's Handbook says the following under the services section:

If a high-level adventurer establishes a stronghold of some kind, he or she might hire a whole staff of servants and agents to run the place, from a castellan or steward to menial laborers to keep the stables clean. These hirelings often enjoy a long-term contract that includes a place to live within the stronghold as part of the offered compensation.

Lifestyle: I believe these are the laborers mentioned under a "Modest" lifestyle:

A modest lifestyle keeps you out of the slums and ensures that you can maintain your equipment. You live in an older part of town, renting a room in a boarding house, inn, or temple. You don't go hungry or thirsty, and your living conditions are clean, if simple. Ordinary people living modest lifestyles include soldiers with families, laborers, students, priests, hedge wizards, and the like.

These people might only be making a few silver a day, but as part of the arrangement they are able to live in the servant's quarters of a castle. It would also be reasonable to assume that, at least at some castles, food is provided. Their living conditions in this situation are much, much better than anything they'd be able to afford with their own wages. They're still living in "simple" conditions, but they are clean and safe, and they are "kept out of the slums".

This also explains why someone would want to come work at your keep - the wages are the same, but they get a much nicer and safer place to live inside your castle. Those living conditions are accounted for in the cost of constructing a such a facility (e.g. 50,000gp for a small castle). Without this difference, they wouldn't have any real incentive to leave their friends and family to come work for you at the same wage.

Beyond Untrained laborers

Beyond untrained laborers, the numbers actually make pretty good sense. It costs 2gp/day to hire a skilled hireling, the Comfortable lifestyle costs 2gp/day, and "skilled tradespeople" are listed among the people you find living a Comfortable lifestyle. Beyond skilled tradespeople, we've left the common folk and are looking at the upper class of merchants and nobility.

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To complicate things further, on PHB p.159, it lists the cost of service for an untrained hireling as 2 sp per day, and a trained hireling at 2 gp per day.

I would go with those prices, which actually allows a skilled laborer to maintain a comfortable lifestyle for himself, or support a spouse at modest, or a family at between poor and modest.

Likewise an untrained hireling, at 2 sp per day, can support himself with a poor lifestyle, which seems appropriate. Or a family at somewhere around squalid to wretched.

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