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Minimum wage = living wage

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Minimum wage = living wage

I wish I got raises in this %

from JoeUser Forums

Being that I manage HR where I work, I get to see all the "news" about minimum wages (both in the state and federal).  Our State's minimum wage has always freaked me out at how high it has gotten, but the current changes in FEDERAL minimum wage has me down right fearful.

Why?  Because it is now becoming a living wage.  Either companies will quit hiring non-skilled workers (where will they work?) or they will start using their non-us factories more.

If you don't know the amounts, don't worry, I'm about to give you the stats.

In 1997, the Federal (don't confuse this with your States, which you may not even have, or it may be higher) the minimum wage was set at $5.15.  As of July 24th of this year, it was raised to $5.85. No big deal- that's only a bit over 13% over the course of 10 year.  Now, this is where I start to worry- the *second* step will raise the minimum wage to $6.55 on July 24, 2008 (12% over ONE year) and the Third step will raise the minimum wage to $7.25 on July 24, 2009 (10% more).

Now, I don't know about you, but I doubt that I will see raises like that during that time.  However, you can bet that cost of living will rise since it will cost business more to employ unskilled workers.

I always looked at minimum wage as the wage that you paid people that were doing completely unskilled jobs (bagging groceries, stocking shelves, collecting carts, making photocopies, packing boxes, etc.)  ~$5.50 an hour seems like a good pay for that type of labor.  But $7.25????  That's not minimum, that is "living".

When I started the job that I have now, I started out answering phones, taking orders, doing data entry, shipping orders and managing the office.  I made $7.00 an hour, and I had a lot of responsibility. 

What is $7.00 per hour, anyway?  It is $14,560 per year.  After tax, that is $11,503, which is $958 per month.  Can you live on it?  You bet....

This is what my living cost me back then (1995) per month:
apartment: $410
car payment: $120
Insurances: $110 (car and renters)
food: $175
phone: $30
Gas: $40
Misc.: $25
Total: $910 - $48 to spare- that's what I got for being over minimum wage!

Yep, it was tight, but it covered my NEEDS (something that a lot of Americans seem to have a hard time separating from "wants").

So, what about $7.25 an hour 12 years later?
That's $15,080 per year.  After taxes: $11,914 (per month: $993)
Same Apartment: $470 (checked on their rates to have the actual number)
car payment: $120
Insurances: $115 (car and renters)
food: $175
phone: $30 (except now it would be mobile!)
Gas: $55
Misc.: $25
Total: $990 - only $3.00 left over- but needs are still paid for...no skills required.

Now, before somebody says "but,that can only support one person!"  I shall say- it's meant to.  If you have a couple- both of you will have to work, and will be better off (rent won't be higher, as an example).  Have a kid?  Alternate shifts.  Sure, it isn't ideal, but it will pay the bills.

So, we no longer have a real minimum wage- we actually have a living wage.  One that many will find "good enough" and never strive to do better.  Does this help our country in any way?  I don't think so.  I think it will hurt it in many ways, especially if this trend continues.

 

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Reply #51 from JoeUser Forums Top
As for bread, I don't pay $1.99/loaf, but I suppose the same crowd that's too good for rice and beans would be too good to buy their bread at a thrift store, where it's less than HALF that...for GOOD quality, whole grain bread!


Honestly, i try my best to find the cheapest market around.and i try to get them when they put them on sale but these are the regular prices. the same also apply to the cost in 1970's. and who said rice and beans are not good enough for anyone? I love rice and green beans and peas too. are you kidding. believe it or not whole grain around here is more expensive than white bread. but i dont like whole grain.

these two cars are not the same


of course it is not. there is 35+ yrs technology difference ..... in everything

but that is what we live with.

Reply #52 from JoeUser Forums Top
If someone wants to shovel snow in your drive way, why should the government be involved in forcing a certain price that must be paid for it? And how exactly is forcing price controls a form of "freedom".


Good point Brad! I wonder if all these proponents of a "living wage" pay their babysitters, the kid who mows their lawn, or as you pointed out, the kid who shovels their driveway that "living wage".

I also wonder if they make sure they tip their servers enough to equal that "living wage"?
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Reply #53 from JoeUser Forums Top
If someone wants to shovel snow in your drive way, why should the government be involved in forcing a certain price that must be paid for it? And how exactly is forcing price controls a form of "freedom".


Good point Brad! I wonder if all these proponents of a "living wage" pay their babysitters, the kid who mows their lawn, or as you pointed out, the kid who shovels their driveway that "living wage".

I also wonder if they make sure they tip their servers enough to equal that "living wage"?
Reply #54 from JoeUser Forums Top
Honestly, i try my best to find the cheapest market around.and i try to get them when they put them on sale but these are the regular prices. the same also apply to the cost in 1970's. and who said rice and beans are not good enough for anyone?


Actually, that was pretty much Jeremy's reply when he trashed the whole idea of rice and beans.

I buy whole grain bread for 83 cents a loaf, TA. And I have found similar deals in almost every city where I've lived.
Reply #55 from JoeUser Forums Top
And even at 83 cents a loaf, we could save more by baking our own bread.

Our time is limited, though, so we settle. For now.
Reply #56 from JoeUser Forums Top
Another option for the bread...and a little bit cheaper than buying fresh loaves...buy the frozen loaves. WM has a brand...forgot the name and I believe they have two sizes...one with three loaves and another with five or six. Ive made a couple of loaves and they always turn out pretty good. Haven't mastered the "cut the loaf without squishing it flat" technique yet however.
Reply #57 from JoeUser Forums Top

Draginol Wrote:

Freedom and opportunity would imply that a person is free to pay what he wants for a given job to be done and another person has the freedom to choose whether they are willing to do that job for the offered fee.
I find it rather odd to see someone actually argue that the government forcing people to pay certain amounts and other people to be forced to accept certain amounts to be a matter of "freedom".
If someone wants to shovel snow in your drive way, why should the government be involved in forcing a certain price that must be paid for it? And how exactly is forcing price controls a form of "freedom".
You also totally ignored the economic reality -- you force employers to pay Americans more than they are willing to pay unskilled labor then they will turn to foreign sources.

Again, you decide to comment in a way that has nothing to do with what I was talking about.   I was not talking about economic reality...i'm talking about perception.   It's not that enforcing minimum wage creates more "freedom", its that having a solid minimum wage gives us, as a country, a certain amount of reverence and compassion from other nations (and their citizens), and makes america a desirable place to move to.    Reverence and compassion are two things America is going to need a lot of in the new "global economy".

Reply #58 from JoeUser Forums Top
Reverence and compassion are two things America is going to need a lot of in the new "global economy".


Yeah, because we pay less than Indonesia, Haiti, and a buncha third world countries, Jeremy. The homeless die on our streets in the millions per year.

Oh wait. They don't. We ARE taking care of our wage earners.

Do you have to wear special slacks to talk out of your rear end, or will off the shelf WalMart slacks do?
Reply #59 from JoeUser Forums Top

Reverence and compassion are two things America is going to need a lot of in the new "global economy".

If that were true, India and China would be tanking it, and ostracized by the global community.  But the reality is the opposite. 

Reply #60 from JoeUser Forums Top

 

I said "an extra $500", meaning $48 x 12 months is about $500 a year left over. I greatly disagree that you can get a brand new car for $10,000. Lowest I see online is a Kia Rio for $11,395 before tax and fees. If you're going to buy a $5,000 car and "restore it" well there's a significant inherient cost that you are not including.

I know where you got the $500- my point was that the $48 an hour was due to working at $7.00 an hour, which was ABOVE the minimum wage of $5.15 an hour back then.  Could I have even thought about living on minimum wage then?  No.

Can't find a new $10,000 car?  I have a car that's 2 years old that I bought new for under $10,000.  What was it?  A Saturn Ion.  Sure, the sticker price was higher, but I waited until they had offers, and I bought a last years model (still new) that didn't have any bells and whistles on it.  Ended up paying $9,500 for a $12,000.  I guess if people are too stupid to shop and get deals, then it's their own fault that they have money problems.

a certain amount of reverence and compassion from other nations (and their citizens), and makes america a desirable place to move to.

Uh...why would we want to encourage people to move here if we already have issues with welfare, unemployment and health care?  Do we want to encourage a higher population?

I think that you are totally missing the point of this article.  It was written to show that you can LIVE on minimum wage.  Is it a comfortable living?  No.  But you can live on it.  It can pay for food and shelter.  Anything that is past the necessities is a WANT.

But, you have really helped to prove my point- many Americans can not differentiate what is a "need" and what is a "want".  If you need transportation to get to work (no public) then a car is a need- a $10,000 car is a want.  Hungry?  Basic food is a need- going out to eat isn't just a want, it's a LUXURY.

Man, the more I read some of these comments, the more it really shows that America (in general) is out of touch completely.

We eat rice and beans a couple of times a week. But apparently us "po'folk" ain't up to your standards, and as long as we're not eating Beef Wellington

lol, I have a "beans and rice" dish for lunch (it's also for dinner tonight).  I dressed it up with a few veggies (high class beans and rice!).  It's nutritional and tasty!  It also saves on the grocery bill.  Even if you have extra money to spend, why waste it? 

The co-op that I go to now and then has a "hungry man meals" sack of groceries.  It's an interesting concept.  What they do is place a whole week of staples in a bag and sell it for $15.50.  If you want, you can buy a bag and donate it to somebody who doesn't have any money, or you can just buy it for yourself.  It consists of beans (dried), rice (large bag which is probably more than a weeks worth), dried milk, peanut butter, a box of saltines, 7 cans of veggies and 7 cans of fruit.  It also gives you the option of having a small jar of instant coffee or a small box of tea.  As I see it, that covers "needs", and would only cost $62 a month (that gives an extra $113 to the budget of somebody living on the $7.25 an hour scenario). 

Are Americans really getting so spoiled that "needs" consist of $10,000 cars, the ability to eat out, and even having phones?  I grew up with the understanding that food and shelter were needs, anything above that was something to work hard and get because I wanted it.

 

Reply #61 from JoeUser Forums Top
remember there is only one group of people that benefit from raising the minimum wage. and it isn't the people making minimum wage.
Reply #62 from JoeUser Forums Top
I didn't think there was any group of people that benefit from raising the minimum wage.

I think there needs to be a minimum wage, and I also think it should be tied to the same increase we have on the tax code. It should increase every year based on that. It would avoid the huge jumps we seem to have now and it would stay tied to inflation.

But, then again, that might just cause a spiral effect and give us super-inflation.
Reply #63 from JoeUser Forums Top
I didn't think there was any group of people that benefit from raising the minimum wage.


Unions. That is why it was created. To eliminate the competition to them. By making unskilled labor as expensive as skilled labor, only a fool would hire an unskilled mason instead of a skilled one at the same price.
Reply #64 from JoeUser Forums Top
remember there is only one group of people that benefit from raising the minimum wage. and it isn't the people making minimum wage.


politicians because it makes them look like they care. i remember the last minimum wage vote. not the one that just passed. the one before that that didn't pass. i was watching cspan. they voted on the same bill twice. everyone that voted for it the first time voted against it the second time. the only thing that remand the same was that it failed both times.
Reply #65 from JoeUser Forums Top
The raising of the minimum wage is only going to get more jobs sent to a place without it, or replaced by machines. But, I'm guessing most people who make minimum wage don't understand that. So yeah, great idea, raise the unemployment rate and increase the job export market. Even so, if they left the minimum wage alone at this point, it would not hurt anybody. At least we have one there, and we needed it at one point. Not anymore, though, now it can only hurt.

If your time isn't worth that much, now you'll never get a job. If it is, then you would have been hired anyway.
Reply #66 from JoeUser Forums Top
I think one of the main issues that's not addressed here is that most people who are just entering the workforce (ages 18-21) have absolutely _no_ idea about how to manage money. How will that affect minimum wage and the future? Heck, I barely know how to manage my money, and I have college loans hanging above my head. All I know is that I need to get a job ASAP out of college. I at least know enough to not impulse buy, make a list before going grocery shopping, and put money in my savings account. It worries me that most people my age (I'm 19!) don't even THINK about stuff like that.
Reply #67 from JoeUser Forums Top

Raising the minimum wage only helps those getting it as long as it takes to raise prices to compensate for tha cost of paying that higher wage.  I assume about a nanosecond after the implementation date.

It's a feel-good fix for a non-existant problem.  Let a free market determine worth for unskilled labor just like it does for skilled labor.  That seems to have worked for most of the folks posting here.