I’ve just finished reading Nickel and Dimed: On (Not) Getting By in America by Barbara Ehrenreich. Let me just say, this is a terrible depressing book. It was good, don’t get me wrong, but it was depressing to realize that a large part of our population is trying to get by on minimum wage. It isn’t just high school and college kids who are trying to come up with beer money or book for the upcoming semester.
I remember way back when I was in high school and the government was considering raising the minimum wage to $3.35/hr. I was THRILLLED!!! Wow! A whole $3.35/hr. I could almost fill my car with gas for that (remember, it was a LOOOOONNNG time ago. And my father, being the good, hard-working Republican that he was (and is) claimed that it would ruin the country to raise the minimum wage that much. Small business would go under and certainly places like McDonald’s (where I worked), would lay everyone off and close their doors for forever.
The last I looked, McDonald’s is still thriving even thought the most recent sign for minimum wage that I saw was that it is a staggering $7.25/hr. I pulled out a calculator and discovered that is a whopping $290.00 a week if you work a 40 hour week, and $15,080 a year. The average people in a household in Pennsylvania is 2.48 (I’m not going to ask about that rounding issue). I’m going to make a leap and say that is parent (don’t want to be accused of being sexist) with his/her 2 kids. Poverty level is $18,310/year. So right there, a person with a FULL TIME job is below poverty level. Makes you wonder why they’d want to work. But stating that just makes me a communist.
|Persons in family||Poverty guideline|
I decided to do some quick looking online–I was just curious how far someone could go in the Montgomery County, PA area on minimum wage.
Granted, there are public assistance options available for low income individuals and families, but when I went to their web site, they said they were not accepting applications for housing because they had no openings. However, it did say that if a family was accepted, they would have to pay 30% of their gross income for housing. So on minimum wage, I would be earning $1255.70 a month. IF I received some type of public housing, I would be paying $376.71/month. BUT what if there weren’t any openings. Then what would I do?
Apartments.com showed the least expensive 2 bedroom (remember, for this blog, I’m a mom with two kids) was 849.00/month. I don’t think that is going to happen, my friend. Even if I downsized to a 1-bedroom and slept on the sofa, I’d need to shell out $779/month. Remember, I’m GROSSING $1255.70 a month. I’d be bringing home less after taxes. I’d pretend that electric is actually covered by the apartment (unlikely) but I’d still need to pay for groceries, a phone and probably some type of child care. There is fairly reliable public transportation in this area, but I’d need to cough up some money for that. Really doesn’t sound too possible.
I was curious to find out how many people receive minimum wage and found some very interesting statistics–in that they are very hard to come by. The Bureau of Labor Statistics states that for 2007:
75.9 million American workers were paid at hourly rates, representing 58.5 percent of all wage and salary workers.
Among those paid by the hour in 2007, 267,000 were reported as earning exactly the prevailing Federal minimum wage. Nearly 1.5 million were reported as earning wages below the minimum. Together, these 1.7 million workers with wages at or below the minimum made up 2.3 percent of all hourly-paid workers.
Minimum wage workers tend to be young. Although workers under age 25 represented only about one-fifth of hourly paid workers, they made up almost half of those paid the Federal minimum wage or less. Among employed teenagers paid by the hour, about 7 percent earned the minimum wage or less, compared with fewer than 2 percent of workers age 25 and over.
Most web sites speaking about minimum wage tended to be conservative, pro-business sites that claimed most people weren’t affected by minimum wage. At the same time they were saying that raising it would hurt businesses. How can both be true? If so few people receive minimum wage, why will raising it cause such hardship. The Heritage Foundation actually claimed, “Only 17 percent [of those receiving minimum wage] live at or below the poverty line, while 65 percent enjoy (my emphasis) family incomes over twice the poverty line.”
Let me just point out that twice the poverty line is $36,620 for a family of three. That has you grossing $3051 a month so you probably can swing the $849/month apartment and still be within that 30% guideline. While 36K isn’t chump change, I don’t know how much “enjoying” a family of three will be doing on that salary.
The Heritage Foundation concludes by saying:
Many support raising the minimum wage because they want to help low-income Americans get ahead. But while some minimum wage-earners do live below the poverty line, these workers are far from representative. Only one in five minimum wage-earners lives in a family that earns less than the poverty line. Three-fifths work part-time, and a majority are under 25 years old. Minimum wage-earners’ average family income is almost $50,000 per year.
The problem I have with their argument is, while 1 in 5 may earn less than the poverty line–how many are just right at it? Are the 3/5ths working part-time able to find full time work or are they trying to work around children in school so they avoid childcare costs? The fact that the majority are under 25 just seems to support the idea that it is the young, uneducated women with small children who ARE most affected. And finally, what is the size of the average family that the Heritage Foundation is citing as earning $50,000/year? For a family of 5, that’s still less than twice the poverty level.
Barbara Ehrenreich had some great insight from this minimum wage world, having lived it for several months. She stated that in all the jobs she had, she never met the druggies, slackers thieves or those trying to work the system.
She ends her book with this great quote:
When someone works for less pay than she can live on … she has made a great sacrifice for you … The “working poor” … are in fact the major philanthropists of our society. They neglect their own children so that the children of others will be cared for; they live in substandard housing so that other homes will be shiny and perfect; they endure privation so that inflation will be low and stock prices high. To be a member of the working poor is to be an anonymous donor, a nameless benefactor, to everyone. (p. 221)