# Max's Living Wage **URL:** \ **Category:** In My Humble Opinion\ **Created:** [November 30, 2021, 5:40pm UTC](https://boards.straightdope.com/t/maxs-living-wage/955237 "2021-11-30T17:40:57Z")\ **Posts on this page:** 1\ **Showing post:** 29
**Author:** ![Max\_S](https://avatars.discourse-cdn.com/v4/letter/m/46a35a/32.png) [@Max\_S](https://boards.straightdope.com/u/Max_S)\ **Post date:** [December 2, 2021, 12:39am UTC](https://boards.straightdope.com/t/maxs-living-wage/955237/29 "2021-12-02T00:39:24Z")
> [@Ruken](#): > > Max, you can find your county or metro area in MIT’s calculator and see how their assumptions match against yours. I’m curious if there are any large discrepancies. Here is a comparison of MIT’s estimate and my budget as revised in post #5 and adapted to MIT’s categories, | | MIT budget | My budget | | --- | --- | --- | | **living wage** | **$15.44** | **$12.20** \* | | pre-tax annual income | $32,117 | $25,376 | | taxes | $4,480\*\* | $4,314 | | post-tax annual income | $27,636 | $21,062 | \* In post #5 I erroneously gave the living wage for my budget as $11.51. I had forgotten to take out Medicare and Social Security taxes in addition to the federal income tax. \*\* MIT's estimate on taxes may be a little over $1,000 short. The federal income tax rate for that bracket is $995 + 12% of income over $13,900 (see [IRS Publication 15-T](https://www.irs.gov/publications/p15t#:~:text=%246%2C275-,%2413%2C900,%2413%2C900,-%2411%2C250)). With an annual income of $32,117 the employer would withhold $3,181. Then the employee's Medicare tax rate is 1.45% and the Social Security tax rate is 6.2%. That makes for an additional $2,457 in taxes. The total taxes levied on the income given by MIT should be, by my calculation, $5,638. Some of the withheld money will probably come back, so maybe that's where the discrepancy is. One would have to understand the "Urban-Brookings Tax Policy Center Microsimulation Model", version 0217-1, to close this mystery. | | MIT budget | My budget | | --- | --- | --- | | food | $3,177 | $3,000 | | medical | $2,792 | $3,240 | | housing\*\*\* | $11,868 | $13,500 | | transportation | $5,113 | $360 | | civic | $1,811 | $0 | | other | $2,875 | $960 | | | | | **total** | **$27,636** | **$21,060** | \*\*\* MIT's housing category includes utilities but not telecoms (which are "other"). My budget as presented in this table reflects that categorization. MIT also assumes a I'd be renting a bedroom rather than an apartment or house, or co-renting a dwelling. I didn't search for those arrangements when making my budget because its so circumstantial. The largest difference is transportation, which I cut entirely from my original budget in favor of a $30/mo bus pass. In the “other” category, of note, MIT includes equipment and service for broadband (at $60/mo) _and_ a cell phone ($48.64/mo), whereas I only include cell phone service (at $45/mo). I can’t tell from the whitepaper but it is possible MIT counted the cost of broadband and cell phone service twice in their “other” category estimate - once with their own dedicated cost factor, and again when drawing on the BLS Consumer Expenditure Survey. See pages 7 and 8 [here](https://livingwage.mit.edu/resources/Living-Wage-Users-Guide-Technical-Documentation-2021-05-21.pdf#page=7), where after describing their own “cost element for broadband and cell phone service”, they write “expenditures for other necessities are based on 2019 data […] including: […] (5) Broadband and Cell Phone Service.” ~Max --- _[View the full topic](https://boards.straightdope.com/t/maxs-living-wage/955237)._