Problem is, everyone else will be paying for these people one way or another, either by directly paying through taxation, or by paying higher costs on goods and services due to a higher minimum wage.
Mrs. Homie and I will be moving to her hometown in the woods of southeastern Missouri in a few weeks. Let me tell you something about living there:
I know of a landlady who rents “sleeping rooms,” which are essentially ~300 square foot efficiencies, for $125/month, utilities paid. A single man or lady, working 40 hours per week at Casey’s (a convenience store, for those not familiar), would have ~$700 per month to blow after expenses.
So yeah - find a rural area where times have been hard for a decade or so, and you may be able to scrape by, or even thrive, on minimum wage, if you don’t mind cutting some corners.
For a family, however, the cell phone might be more. 4 people at 30 a month = 120 a month.
The household phone bill would be less than 120 a month (ours is about that but it includes cable and internet).
For a single person, yeah - a cheap cell phone plan might well be cheaper than a land line.
We visited Hawaii a few years back and I was talking to this guy who was basically a beach bum.
For his home, he stayed at the youth hostel where we were most of the time. For a little work he could stay for free and even get a meal there.
Now get this - he was well known in local circles as a trustworthy person so many of the wealthy people in the area would have him house-sit when they were away. So this “poor” beach bum was living in some nice digs every so often. AND they also paid him.
For money - for about a month of the year he worked the pineapple harvest which back then paid about $16 an hour. Rest of the year he did odd jobs for people. If he needed just a few bucks he could make up a pretty cool looking"sculpture" out of leaves and sell it to a tourist.
Sometimes for food he would just throw in a fishing line. Actually many of the locals in Hawaii did this. We were on Maui.
For his clothes he went to a thrift store. For health care he went to the local clinic.
He said he loved the life and for comparison, his brother was a wealthy New York City attorney living the rat race, and he had no desire for his brothers life.
I’ve thought of doing this but I don’t have the balls. Kudos to that guy. This recession has terrified me of leaving my comfort zone.
The weather in Hawaii is especially conducive to the life of a beach bum. Even in mid-winter in the pouring rain (of which there is a LOT), it’s comfortably cool and not at all cold.
Then that single man is doing it wrong. I live in a 2 person household, and my total monthly grocery bill is only about $160-170.
Many assumptions are very location-specific and highly dependent on social networks and individual skills.
For example, many places do not have buses and are developed in a way to discourage walking if not prohibiting it. Moving to a more convenient area might cost more in rent and/or safety considerations. Having roommates requires knowing people or perhaps knowing shady business people and/or dealing with those AirBnB type people who put 30 bunks in a 2 bedroom apt.
I think in general the answer is “Yes,” but the How really depends. I pretty much managed to “retire” at 25 from a slightly above minimum wage job (but I got a lot of OT, which I understand is not usually available from the larger/typical hourly employers), but this required taking advantage of a lot of circumstances and earlier decisions. For example, I bought a reliable car for cash (savings form minimum wage job) when I was 16 and managed to turn it into 2 newer cars without spending more. I knew a friend who bought a large house for a very low price and I was able to rent a room and negotiate a cash discount. Up until being retired/laidoff, I ate all my meals at work (I worked 7 days and my on-clock time covered breakfast and lunch) for free, including high quality meats and seafood. Split utilities 4-ways but still had a lot of personal space. I managed to start several side businesses on a shoestring, including one stroke of luck that gave me a lot of free advertising from Google (no,nothing like what your aunt’s mother-in-law does on her laptop for $157/hr)
Do you cook all your meals from scratch, or eat a lot of staples? $85 per person per month is $3/day.
And those medical insurance calculations assume you don’t actually need any medical or dental care. All of those plans have deductibles and copays. If you take even one maintenance medication, there goes your cushion, let alone if anything bad actually happens to you.
The trouble is that things add up. $8/month for a TV, again for a computer, again a cell phone or two with a $10 premium on the contract. Video gaming (seems to be a necessity for the younger set) plus some sort of monthly sign-up for that…
I agree, when there simply isn’t the money a PS or Xbox is not a necessity. But there’s a basic limit to what you can get by without and still consider life as worthwhile. For some people it’s about the social life, for others it’s the toys, and so on. Simply going to the bar could (I assume, don’t do this) cost $20 or a lot more for a night. At what point are you expected to eat nothing but rice and get all your entertainment at the library?
Then there’s the problem of up-front costs. A TV may be “only $8 a month” but you still need the $500 up front. Part of the problem with minimum wage earners is poor money management skills in the first place.
Yeah, even for lower middle class, in some cities a roommate or two is a necessity. Shows like “Notting Hill” or “friends” may use the annoying roommate(s) as a cheap laugh, but it’s based on real life, and it’s an alternative to rooming houses, which most cities seem to be increasingly hostile to (maybe because they are increasingly slum landlords’ turf). But, the aspiration is to have “your own place”. This is a bit more difficult at minimum wage.
The $25 car goes back to the days when you could sell anything. My brother-in-law in the mid-60’s sold an old de Soto with two cracked cylinders. Nowadays you need to safety a car, it needs a good muffler, relatively new tires and some brake pads left, can’t be burning oil badly… if the car has passed any of these milestones it may cost more to make it pass the sales safety test than the car is worth. Add to that the fact that in some states and provinces, minimal insurance can be fairly expensive, as is gas today - the entry costs to being a drive are much higher. Bureaucracy in a heavily regulated society is driving up prices.
For starters, I buy a lot of generics and store brands, so that saves money. I also stock up when there’s a sale.
Otherwise, just a lot cheap/simple food, like canfood, ramen, frozen chicken tenders, frozen burritos, sandwiches, chips, etc.
I’m on the other end of things. I try to live in the Dominican Republic on my social security which due to the amount I paid in is just short of $1000 per month. It is barely possible here where I rent a 3 bedroom house for $188.00 which would bring $1200 in Miami area. But find it not quite possible to do so. I have to find a few odd jobs around.
But it is a lot cheaper than even Mississippi.
I live on fixed income, and have plenty of disposable income every month, including money for video games. I keep a very tight budget.
I don’t have a cell phone or car, so no expense there. For home phone, I have Ooma, which is less than $4/month.
Have Dish, but my eliminating the extras, it’s only about $85/month, splitting with a roommate. Comcast Internet is about $78, splitting with a roomate.
For video games, services like PS+ helps. Also, unless something is a “must have,” I usually only buy a video game if there’s a sale. Even Nintendo seems to be getting better as of late.
For upfront cost, like a TV, or PC, that’s where sites like Slickdeals come in handy.
Edit: Also having rewards credit cards helps.
There is no income tax on that small of an amount.
But you don’t need a land line or pay long distance charges.
Housing, whether renting or “owning”, has gotten more expensive. It should be getting cheaper. Most housing was built in the past, so it is paid for . Rent or mortgage, in economic terms, is mostly just interest on loans created by banks. Don’t forget, banks actually CREATE the money they “lend” People think banks lend out EXISTING money; not true.
Classical economists consider interest as rent. Rent is considered parasitical.
Why does this matter. It matters because you are paying for something you do not consume. You consume maintenance and replacement of a house, and you need to pay for that, but that is but a small part of the cost of housing.
In other words, housing is a scam. People are blind to it because they accept the argument that if you gave up consumption from your income to build a house, you should be reimbursed for your costs and efforts, but that is as much a myth as the “free market”. Most landlords are merely collecting interest for banks and hoping to make money by the increase in the price of housing. It works, but it scams the people.
As I recall from back in the day, minimum wage would get you two of these three things – an apartment (maybe one that was not so hot but still livable), food, a car (of sorts). If you wanted all three, you had to make more.
I don’t know if that last statement is true or not, but it has nothing to do with the price of a good or service. The price is determined by supply and demand, and (in the case of housing) by the subsidy the government gives for owning a house.
Goozex was an awesome site for buying and trading video games but that is down now. Craigslist is still good, people will sell an entire collection for $3-5 a game there.