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How do people survive on Minimum Wage?
With Acceptance, Humility, Faith, and learning to live without luxuries. Food and some staples can be had from Food Banks. Clothing comes from thrift shops. Neighbors share their resources. The price of gas is hurting a lot of people with low or fixed income. For people who live in the boonies, as we do here, it is actually cheaper now to shop online and pay the delivery charges than it is to drive into town. The nearest town with real options is a 40 minute drive, one way.
How do people survive on $20.00 per hour which is well above minimum wage?
There are people who make little more than minimum wage and survive, while there are people making 10 times that and sinking deeper into debt every day.
It was really difficult when one of my cats got sick. Luckily my vet was understanding and let me pay back $25/mo for months and months until it was paid off. I think it took me a year and a half. I ate a lot of macaroni and got fat because of it, so people who wonder how the poor can be fat, it's all those cheap carbs.
I don't know how people with families can stand the stress, always worrying about what if the kids got sick, or worse, what if you yourself get sick and can't work. I think I would go mad. And yet most of them soldier on with an enormous amount of grace and good humor.
So, let's look at someone in California making $20.00 per hour.
That's $38,400.00 per year.
Federal tax is $4,220.00 + 25% of the amount over $30,650 which comes to $1,937.50 bringing the total tax due to $6,157.50.
That leaves us with $32,242.50 per year. And don't forget "other deductions". From a California "cost of living" viewpoint, $32k per year is pretty much at poverty level. I'm serious.
I just can't see a single person, living by themselves, $32k per year, making it in California. It has to be very difficult. With gas at $3.50+ per gallon and people living 50+ miles away from their place of work to save on rent, etc., I just don't get how it is done.
Don't get me wrong, I am very thankful for what I have and I've worked hard for it. You know, those 16 hour days, 6-7 days per week, etc. I'm just trying to put myself in the position of that person wondering whether or not I can gather enough finances for next month's expenses.
From my perspective, the cost of living is way out of kilter. Minimum Wage is an embarrassment.
You can certainly live on $35K/year in So. Cal.- I've done it on less. Granted, that was several years ago, but I was socking away a lot of money as well. Even factoring in inflation, I'd bet I could still be able to put money into savings today on $35K/year.
At minimum wage? Probably not, living on your own. But if you're making minimum wage, you probably should not be trying to live on your own anyway- move back with your parents or share an apartment with several others. And there are other lifestyle changes that one should be making if they are forced to take a minimum wage job.
I don't see why anyone would be living 50 miles away from a minimum wage job- surely there would be minimum wage jobs closer to home.
Remember the image of destitute old geezers feeding pigeons from park benches? Remember Senior Citizen discounts that were popular 25 years ago?
Nowadays Grandpa owns his appreciated home free and clear and has a neat portfolio of stocks bought 30 years ago. As I get older, I find I own everything I need. I really can get by cheaply. My kids can't.
Stats I've seen indicate children do live with parents much longer now. For one thing, average home size is far bigger than in the 40s and 50s: 2,100 sq feet now vs 1,600 then.
This is a subject dear to my heart as its linked to my present employment. Not that Im on the minimum wage but I deal with people daily who are on the breadline, so to speak.
Most of the people I come into contact with, are on minimum wage, on the whole they are honest and lawabiding people, which in a warped way is why they are where they are.
Many of these people seem to lack a realisation of whats in their own hand, most struggle with the demands of a consumer society and the wants of their children, many just give up beliving they will ever get anywhere. They are just so down trodden.
The really sickening thing is, nearly all are women having had some barstool of a bloke leave them high and dry with the kids.
So how do they manage?
Paying Peter and not paying Paul until he comes knocking.
[edited by: Essex_boy at 3:47 pm (utc) on Nov. 18, 2007]
One can work two jobs (I've certainly worked two F/T minimum wage jobs when I was younger. Still had lots of time to drink and party.) Or one can work towards a better job, even if that involves getting better education. I paid my own way at university, others can as well if they're inclined to work as hard as I did back then.
If minimum wage is a problem, I don't think it's the real problem. The real problem is being unwilling to do what it takes to change your situation. Doing or not doing that is a choice.
In other words, it's not someone's right to make a decent living. It IS their right (or should be) to have the potential to make a decent living. And in most westernized countries we already have that potential.
Still, that's the employee's responsibility. I tend to think from an employer's perspective that paying a 'living wage' is the socially responsible thing to do. If you're paying someone who's got dependents minimum wage in a large metropolitan city you may be shirking your responsibilities (IMO). Having employees and ensuring that they have stable jobs is hard enough without worrying that you're contributing to people living broke all their lives.
My experience is that they have no concept of anything better, when they do their friends and family have often conditioned them since childhood that, 'that kind of thing is for others'
Theyd like a better way of life and have the ability to have one but they lack the confidence.
How do people live on minimum wage?
By giving cash subsidies to fat cat bonused managers and employers.
How is this you might ask.
Well, take for example someone who gets minimum wage and has a credit card.
As the weeks go by, whenever that minimum wage is not quite enough to pay the rent and buy groceries, it is put on credit cards.
As more weeks go by, more is put on the credit card because less is available after making the credit card payment.
This is all in aid of showing up at work every day on time and putting in an honest day's work without ever once saying that's not her job.
The employer got an honest day's work and the employee has to go into debt just to be alive the next day to go back to work again. That debt is pure and simple a wage subsidy to the employer.
The employer regularly trades in his and his wife's Jaguar convertibles for cash, his two sons drive Land Rovers, have wives at home, living in multi-million dollar homes.
The employee in the meanwhile has had to move into a shared apartment while struggling with interest payments of some $500 a month on a debt load of $50,000. I have calculated that it is going to take this person almost ten years to pay off this debt at the current rate. And, yes they have taken additional part time jobs to try to whittle it down a bit faster.
When an employer whines that he cannot afford a raise in the minimum wage, he doesn't own a business, he owns a sweatshop.
This is all in aid of making 100 times the average worker rather than 50 times. At some point, it becomes totally unreasonable.
In aid of changing this, I have a business discount policy. There is a formula, but essentially, if the CEO makes more than 10 times the lowest paid worker, they neither need nor deserve a discount.
BTW, the person is an experienced data entry operator, who is accurate and responsible.
[edited by: lawman at 2:34 am (utc) on Nov. 20, 2007]
[edit reason] No Solicitations For Sticky Please [/edit]
Is this a legally recognized definition of "sweatshop" or just a good sound bite?
BTW, what percentage of minimum wage earners have credit cards? I suspect it's very low. And of those who do, I suspect the cards are either secured or have low credit limits.
In rural India? Probably quite nicely.
Not rural. Urban India. Say $2 per hour is mim. wage.
1.00 USD = INR 40 ($2 = INR 80)
8 hrs = 640
1 month salary = 20k
Most graduate start with that kind of salary in India. I started much lower than that five years back. (In Mumbai)
BTW, in rural India mim. wage is INR 60 per day.
C'mon you should have sold that story to the press.
I'm not sure I understand - if you doubt my story, I can assure you it's absolutely true. The father worked for a contractor friend of mine, who could only afford to pay $10 per hour. They put in some 10-hour days together, but then they also didn't have work every day. I imagine the guy grossed about $400 per week.
They made it for quite some time just by living frugally (including generic groceries, cloth diapers, hand-me-down clothes, etc.) He eventually got a much better job and they're now doing well financially, but they made it on that $10/hour job for about a year, all without any previous savings, government aid, or going into debt. (It helped that they didn't have any debt when they got into that situation. They're also fairly devout and I have no doubt their financial situation was a subject of frequent prayer.)
I should add that this whole thing took place within the past five years, during which the economic situation around here really hasn't changed much. So I presume a careful family of seven could still get by on that kind of money.
In certain neighborhoods, you'll find 2, 3 and sometimes 4 families sharing a dwelling. Just picture 5, 6 or 8 people sharing a 1,400 square foot home. It's a common thing here.
Average rent in Orange County, California: $1,517.00 per month.
Orange County rents have risen 26 percent in the past five years.
One and two bedroom units accounted for 88 percent of the units in the survey. Average rents ranged from $1,124 a month for a studio apartment to $1,320 for a one-bedroom, one-bathroom; $1738 for a two-bedroom, two-bathroom; and $2,078 for a four-bedroom.
If you want to live by the beach, for example, Newport Beach, average rents are $2,000.00+. And I believe you are going to end up with less than 1,000 sf of living space.
I mentioned earlier about people driving long distances to their place of employment. That is a common practice here in California. One look at the freeways will confirm that. I'll agree that there probably are not many that are driving to a minimum wage job, those who are driving the long distances end up making minimum wage after expenses. Not to mention the stress of California driving. They drive the distance to save $300-$500 per month in rent although these days the expenses may not be worth it.
A little off topic...
There is a homeless guy who has taken up residence on the exit I take to come home. The first day I saw him, I gave em' a fiver and he was totally jazzed. He definitely fits the "homeless" part. He is also missing a limb.
After a few days of seeing him there, I decided to take a bike ride and see what his routine was. So, I sat there one day for 30 minutes and watched him. Man, what a scam that is! In 30 minutes time, I'd say he made a bit more than minimum wage and got "fat" in the process. Not only that, but he managed to get a new shirt during that time period. All of that in 30 minutes.
I watched closely and that dingy little night bag sitting there with his other things was more of a treasure chest.
Back on topic...
It really is regionally specific. Even so, the cost of living here in California is beyond that of minimum wage or anything close to that figure.
The American Pipe Dream. And people are risking their lives every day attempting to sneak in our country and most likely live in an upper class of poverty. I've come to accept that our world is not perfect. Not even close...
How do people survive on Minimum Wage?
By living a pretty spartan life.
Minimum wage is the lowest legal amount an employer is allowed to pay an employee for a job and so in an ideal society where there are plenty of job opportunities it would only be accepted by those who need to work a little bit to make ends meet but otherwise have other priorities (they may be full time students or they may be aspiring musicians or artists or writers).
You might consider living a spartan life to be acceptable when you're going to be a rich and famous artiste or when you're studying hard for an academic or vocational qualification, but it's not really acceptable when the job is not a compromise to achieve one of your more important priorities, but actually your job.
One of the fastest way to solve the issues I can think of is for governments, NGOs and internationalist organisations to encourage and sponsor lots of entrepreneurialism so that the number of employers increases, workers have more choice of who they want to work for and the employment-quality bar is raised across the board.
At the same time employers need to promote a culture of being employers not being exploiters. I'm not a Christian but I think the 19th century Quaker industrialists and social reformers like John Cadbury and Joseph Rowntree hold up an exemplary model.
So, can someone survive on $20/hour. You bet they can...many HAVE to. My first year out of university I was making $11/hour living right in Vancouver. I had to rent a very small place for $400/month (kitchen, living room and bedroom all in one). That was over 1/3 of my take home pay. I would make HUGE batches of spaghetti..with not very much meat..but loads of pasta noodles. I could get away with $35/week food budget. I was forced to find fun activities that either cost nothing, or next to nothing. Somehow I still managed to save money! I would say I was pretty happy...had friend..a girlfriend at the time...I wasn't depressed at all.
Fast forward 8 years from university. With the work ethic I learned..and money management skills..persistence, passion and patience..I am now bringing in the equivalent of $250/hour (based on a 40 hour work week). A 22+ fold increase from my $11/hour days! (Not bragging here, just for illustration purposes).
It's mostly about lifestyle...and what you Have to deal with...you can and do adjust. I still find it awkward/weird to lay down $500 for something I want. My childhood didn't have that kind of money..so I'm not used to it. (which is probably a good thing...forces me to be responsible with my money)
Point is...you can be born into poverty...but with the right attitude and outlook, hard work, patience and persistence ANYone can make it....Anyone.