Many minumum wage workers are dealing with limitations that keep them from getting job, language social skills etc, once these wages go up the minimum wage employers will have access to what they feel are better more valuable employees. I am afraid it might backfire on them.
Define live. If you have no dependents, no (expensive) health problems, no debts, no expensive hobbies then you can live off of it.
$7.25x8x22=1276/month gross income. Maybe 1050 net income. If you get multiple people sharing a 2 or 3 bedroom apt then rent and utilities is about $250-350/month each ($750/month in rent and utilities for a 3 bedroom apt is possible if you shop around). $50/month for the bus. $120/month for food ($4/day). That leaves $630 for everything else.
Hell, a person can live off $60/month if they really need to. Live in a tent and eat nothing but bulk rice and spaghetti (without sauce). Walk and bicycle everywhere. Not a good life, but I’m sure it can be done.
Working a 40 hour per week job, that’s:
$290 a week OR $1257 a month
Let’s say that income tax is 25%, so in reality that’s $942.50.
A single man should be able to eat for $200 a month.
If he shares an apartment, he should be able to rent for < $500 (let’s say $450, though I bet lower could be found).
Utilities shouldn’t cost more than $150.
If he buys a bus pass, he should be able to get to work and back for $50 a month
You can get dental and health insurance plans for $70 a month.
There’s all the entertainment you could ever need at the library. So that’s just free (and potentially, educational).
$200 + $450 + $150 + $50 + $70 = $920
Now that’s if you’re dead-set on living “proper”. If you’re an immigrant, used to sleeping on dirt and herding goats, you could probably get a group of people together to rent a space to live in with a far greater number of people per room, at a much lower cost for both rent and utilities. You could also forgo insurance. You could also potentially (depending on where you are) walk to work and everywhere. Technically, you could also supplement your diet with dumpster diving and/or grow some food yourself, if you can find a plot of dirt somewhere.
Say that we pack 4 people to a room, for a 2 bedroom apartment that costs $1100 (including utilities) a month. Split 8 ways, that’s only $138 a month. With that sort of price reduction, compared to the $450+$150 above, you’re looking at $5814 savings per year. Do that for 3-4 years and you could put yourself through college, with no student loans or anything.
Basically, the OP needs to define “live on” better.
He’s going naked, obviously.
Clothes can be obtained at a thrift shop fairly cheaply.
If he doesn’t work too often, he should break even.
Well, in the original calculation there was a spare $22.50 per month, or $270 a year. As someone working on minimum wage, you can also expect a yearly income tax refund of basically everything that was taxed ($3770). Between those, the option of being hungry for a month to save up, seeking aid from a charity in the form of clothes, or borrowing something (like for an interview), I think a person could find a way to keep their clothes from being too tattered.
What people are ignoring are government and private benefits to the poor. You can argue all day long about whether those are a good or bad thing but they exist and they can add a substantial amount to a minimum wage income and have for decades. Once you combine food stamps, free or reduced medical care, school lunches. WIC, subsidized housing, need based college scholarships for the kids and much more, it adds up to a whole lot of money over time. Sure the people involved are fairly poor but generally not 3rd world poor.
Nobody is going to be starving and all kinds of services including healthcare are income scaled so that the people making minimum wage get the same level of care as people in the middle class and sometimes even more. The worst thing you can be if you have a serious medical problem is middle class. The poor have subsidized programs to help them and the rich can pay for it themselves. It is the people caught in the middle that get screwed.
I grew up in an an area with people that were technically below the poverty line because only one person in the household worked a minimum wage job. They certainly didn’t have a lot of disposable income but they all had adequate food, almost all had vehicles and a large percentage even owned their own homes (it might be in a trailer park but it was theirs). Most of them had houses including some government subsidized ones. It isn’t a great lifestyle especially if you don’t enjoy being around other poorer people much but most of them make it work reasonably well.
That is the big problem with minimum wage as a sole source of income calculations - it usually isn’t. The people that make that level of pay usually don’t pay any taxes except for sales taxes and get all kinds of other subsidies. I make decent pay and the subsidized housing in my area in much nicer and larger than my own condo. I asked about it once and was turned away because my pay is too high. Combine that with food stamps and every other subsidy available and the gap is a whole lot more narrow than people let on.
You have to do an honest calculation of all income and subsidies to a low income person versus that of a middle or upper-middle class person including taxes to know the real gap and I have never seen it done in a reputable way. It is much smaller than you think.
Minimum wage is enough to live on, at least in Las Vegas as of 2003 or so. I did it for several years, and I even had a (really, really shitty) car.
I had to share rent with a friend, in a 700 square foot apartment in a low-income part of town, but it was relatively comfortable living. I did NOT have health insurance. Also, I didn’t have a family, but I had a girlfriend, and alcohol, and a computer I paid for myself.
Minimum wage is absolutely not enough to support a family on, but it’s perfectly adequate for a 22-ish year old kid living with his friend.
Edit to add: no government assistance, no charity, no other sources of income, no money from parents, etc. I wasn’t savvy enough to even consider assistance programs, because by the very low standards I set for myself I didn’t really feel like I was poor, or needed help.
The answer to the question is self-evident. Of course it is enough to live on. The proof is the absence of bodies littering the streets from people that have held such jobs over the decades since the minimum wage was introduced. Whether it is a reasonable wage is a value judgement but I urge anyone that can do it to add up all the other likely benefits for a minimum wage wage worker that supports a family to translate that into actual wages based on other benefits compared to other workers (take home pay, tax refunds and the dollar value of all government subsidies combined). The number should already be substantially higher and it is the value that should be the focus.
Not necessarily. One reasonable argument is “minimum wage should be enough to live on without requiring excessive public assistance or charity.” In that case, it’s important to note what a person makes on minimum wage without public assistance, in order to highlight how deficient that number is.
I guess I can’t speak for other metros, but in the Twin Cities (relatively cheap compared to other cities), a bus pass is $85/month ($59 if you can get by with one that doesn’t work during rush hour, I guess), and you’re absolutely not getting health and dental for $70/month combined. A quick check of MNSure shows the cheapest, worst health plan available to a healthy 23-year-old male starting at $91/month. Admittedly, you don’t really need dental insurance, but still, that shoots right through your $22 cushion.
That being said, Shagnasty’s points about government assistance are good ones, and the value of the various welfare benefits should be calculated in.
I remember as a kid reading the “hard luck boy makes good” stories (but preferred science fiction). The ting that strikes me is expectations were MUCH lower then. As I tell people today, in Canada we live in a fool’s paradise where people expect to live a moderately middle class lifestyle on a minimum wage job like pumping gas or working McDonalds.
Those old stories used to figure prominently with living in rooming houses; this used to be a prominent feature of the poor lifestyle- even the not-so-poor. I believe it was John Adams who took the inauguration oath and afterwards went back to sleep in his room in a Washington rooming house. Today, if you qualify for housing assistance, you get your own complete apartment. (Though to be fair, one way governments cut back on spending is to limit supply. The waiting list for public housing is/was measured in years).
Needs were a lot fewer, as were possessions. In the early 60’s any TV at all was a sign of at least middle class. I remember right-wing kvetching as TV, cable, phones each in turn became considered a “necessity” for those on welfare.
When I was in college in the early to mid-70’s, a land line cost $8.95 a month (and I was one of the few in residence to have one). Cable TV was $6.95 a month, all 20 or so channels. Electronic toys was basically a record player, or if you had money, by the late 70’s, component stereo.
During a tour of the King’s apartment in Versailles, the guide opens the closet and point out - the King of the biggest country of the time had 3 pegs to hang clothes on. Of course, he had chests with special occasion clothes, and probably the royal couple acquired, wore, and passed on to others their clothes on a regular basis. But the idea one would have closets full of clothes, piles of shoes for all occasions - unless you were rich, that’s a feature of the modern system where clothes are made by people overseas paid a pittance. A pair of cheap pants from Old Navy costs $20-$30, whereas something similar from Woolworths in the 50’s probably cost $10 to $15. Poor people back then probably got by with a few changes of clothes because generally, everyone did.
What’s really destroyed our income comparisons are electronic toys. When I tally up my monthly bills - services, not even counting buying things - I probably pay about: $35 for a landline, $60x2 for cellphones, $35 for internet, $100 for cable services, $15 or more for Netflix and the USA proxy service; I have a few electronic magazine subscriptions… The toys that use these cost a massive amount that simply has no comparison to 50 years ago. Yet even a minimum wage person today wants (even if they cannot afford) high-speed internet, cell phones, and some form of TV - although internet is a substitute for a lot of that now.
Part of the problem is the lifestyle demands have elevated to the point where they gobble up the proceeds of women’s lib. Both spouses work. The costs of toys have increased to absorb the savings of sharing the rent and cooking. It takes two to have a decent lifestyle today.
Also, many of the people I worked with during the 70’s remembered the day of the $25 car. With a bit of knowledge and a few friends, you could buy an old clunker on its last legs, maybe fix it to run adequately, maybe feed it a can of cheap motor oil with each gas fillup, and Band-Aid it together to run adequately. Between “there oughta be a law” types, safety rules, and air quality laws (and noise laws, and safety inspections) that option has also disappeared. The bar to getting transportation has been raised substantially. Ontario used to have the uninsured driver fund. IIRC, for a nominal sum, $75 by the 70’s when they eliminated it (?), you could drive without insurance. If you had an accident, they paid out of the fund, and you simply lost your license until you paid the fund back.
the other problem - it used to be a job was full-time, or at least fixed hours. Modern “part time” minimum wage seems to be quie often along the lines of “we’ll tell you your schedule two weeks ahead of time but the shifts will be totally random”. This does not make it easy to hold down two jobs.
(I worked as a security guard when I started college. Minimum wage was $1.80 an hour. You could work 16 hours a day, 7 days week if you wanted - the work was there. With overtime, that worked out to 20 hours pay a day. Quite a few immigrants at the time were working 16x7. The story goes that one was fired when the patrol supervisor pulled into a gas station and this guy was pumping gas on his 8 hours off. They knew he wasn’t getting his sleep on the gas station job.)
A counterpoint to that md2000 is the fact that multiple people can split utility costs, making them manageable. If you are poor you probably have roommates. Even if cable, interest, Netflix combined come to $130/month, split 2-3 ways that is 43-65/month each, plus 35 each for a smart phone. Amortization rates for electronics are also low. A $500 TV or laptop with a 5 year life expectancy comes out to $8 a month each. I don’t think electronics will bankrupt anyone, especially when you factor in that other costs are lower compared to the past. Clothes, food, probably household energy bills, etc.
The concept of a $25 car is interesting. The cheapest cars go now is $900 or so.
As far as gov assistance to the poor, that seems more for people with kids. If you don’t have kids you are usually sol. With the aca you can get Medicaid and subsidies now, but not everywhere.
Some more numbers:
I pay $500 a month for a single-bedroom suburban apartment. Admittedly, that’s an inner-ring suburb, a block away from the metropolis, but it still means suburban schools, police, etc. Even living alone, I could go down another $100 by moving into the metropolis and accepting a studio apartment instead of a single-bedroom. I could go down considerably more with a roommate.
My food expenses range from $53 to $130 a month. The average is $98.
Bus passes around here run $85 a month, the same as the cost of 21 all-day passes, so you’re not really saving anything in buying bus fare in bulk. On the other hand, I can also bike most places I need to go. My previous bike (a cheap junker) cost me $100 plus about $50 in maintenance, and lasted for two years before it wore out. My current one was $200, and should last me well more than twice that long. In the event I need to go further, I can buy a one-day bus pass for that day only.
Clothes are a negligible expense. Much of what I wear came from thrift shops and church rummage sales, at a price ranging from $1 per item to $1 per bag. When I do buy new clothes, it’s usually from K-Mart, or maybe JC Penny’s if they have a good sale, for at most $10 per item.
I agree with Shagnasty’s excellent points about the necessity to include gov’t-provided benefits when calculating the lifestyles of the working poor.
But it seems to me that turns causation and public policy on it’s head. It seems self-evident to me that the world would be a better place if work paid enough and we didn’t have government (e.g. other better-paid taxpayers) stumping up the difference.
Simplifying this greatly into a vignette: In a sense we as a society have two choices:
A) We middle class folks can pay less for our goods at Walmart so WM can pay its employees a pittance and pass the savings on to us. And then we have to pay extra taxes to the gov’t to pay to those same people to top up what WM isn’t paying them.
OR
B) WM can charge us middle class folks more for our goods, and pass the extra revenue directly to the employees by paying a livable minimum wage. In this way we cut out the governmental middleman.
Given the above a naïve political analysis should make left-wingers more fond of option A & right wingers more fond of option B. Which is the opposite of what we see in the real world.
The other issue with my soliloquy is that it assumes all poor are working poor. Many of the benefit programs are intended for the folks with no jobs, not with a min wage job.
That and dealing with the explosion in part-time work with random-shift-du-jour (or du-hour) scheduling is IMO the central societal obstacle to moving towards a more logical and inherently fairer but more individualized result.
Comments?
Only about 4% of the US workforce makes minimum wage, and those who do are typically single, under 25, have no high school diploma, and are not supporting themselves, let alone a family. (Cite.) IOW it is mostly teenagers working for extra income. Those folks are not typically receiving Medicaid or WIC or food stamps or subsidized housing, and thus we are not going to reduce our tax burden by an increase in the minimum wage.
Roughly three quartersof poor households in the US do not have a full-time, year round worker in them.
Regards,
Shodan
Option B assumes that IF minimum wage is boosted, government assistance programs will be cut (and those earning the new higher minimum wage will be OK with that).
I don’t think that’s a viable assumption.
Actually, as I have shown, there is no net cost for food.
PastTense cite shows what some dudes consider the issue “* That’s $3,400 below the federal poverty line for a family of three.*”
In other word, yes, a single person can live fine on MW. But he or she cant support a family of three on a single MW job. This is hardly a surprise.
Actually, slightly different. SocSec would not be refunded but he’d get all Income taxes back (in fact would not have any withheld if he’s smart) and would get back EITC of around $500 more than he paid in. A family could get back up to $6000.
But yes, enuf money for clothes at a Thrift Shop, if he couldnt get them form GoodWill or the SA for free.