Les Minimunwage MMXIII

18 Feb

In 1776 when we declared our nation’s independence and announced to the world that all men were created equal slavery was still an option for America’s employers but in 1865 or four score and nine years later we put an end to that and began paying all workers for their labor. And today, still another seven score and 6 years later workers can happily expect a minimum of $7.25 per hour for their labor. Not bad huh? From nothing to $7.25 in 148 years; that’s a raise from nothing, of 5 cents per hour per year!  However, don’t forget that today’s employers no longer have to provide room and board for their employees like they did in the good old days of slavery. (not in favor of slavery, just making a point) That’s a savings for employers right? So slavery equaled no pay plus room and board (albeit, crappy room and board) while today’s’ workers enjoy a federal minimum pay of around $15,000 minus room and board. So how much of an advantage is that for today’s workers and high school graduates? Hmmm…let’s see if we can figure that out…

We’ll put you in one of the cheapest areas to live in the U.S: Fargo, North Dakota (oh boy!) where your minimum wage is a whopping $7.25/hr. That’s $15,080 dollars a year but of course you’ll have to pay taxes first before you get to bring that money home. You can expect to pay about $1,470 for FICA and SECA taxes and the North Dakota state tax. That will leave you with $13,609. The average rent in Fargo for a nice little 1 bedroom apartment will cost you about $650/month or $7,800 plus those pesky utilities like heat, water, and electricity so we’ll tack on another $2,700.

Now you have $3,109 left for fun and entertainment… or do you? I bet you’re probably going to want to watch television and use a cell phone and You do want the internet don’t you?! Let’s be conservative and say that all costs you $75 a month. That’s $900 for the year so now you’re down to $2,209 left but you are planning to eat aren’t you? You’ll need groceries and other supplies for your apartment too but if we just concentrate on food the USDA recommends $175-$200/month for food and groceries. That would cost a total of $2100 to $2400 for food and anyway you calculate it you are now officially broke and in debt and you haven’t even gotten around to transportation and figured in the cost of owning a car and paying for gas and repairs and we haven’t even mentioned entertainment yet.

You’re going to need another job even though you are already working full time! Or you’re going to have to live with someone who has a better paying job than you and who doesn’t need as much as you do. Or you are going to have to do without something. Of course there is always debt too but when you consider interest even debt is something that you have to buy.

So all in all, 7 score and 6 years after the end of slavery, our country will guarantee its citizens a wage for free workers that will place you above the national poverty line but unfortunately will not cover the price of living.

Today’s high school students need to know this. They need to be taught and they need to understand and they need to learn this sad fact more than they need to pass a basic skills exam. (Although they of course need those skills too)

Our society has given you the right to pursue your happiness. However, you have to provide the vehicle. Nothing comes easy and there are no guarantees. That is the price of student failure and all other lessons are for naught if this lesson is not acknowledged, fully understood and well learned!

And just to add some more perspective, in 1979 I began my first full time teaching job and was paid $10,000 per year. (that’s $5/hr by the way) That wasn’t a lot even then and when I went to apply for a rental at the local garden apartment complex I was turned away because I did not earn enough. Wow, I thought. I have a full time job in a public school and I can’t afford to live in that public’s town? Anyway, I managed… with a little help from my dad who let me use his car and paid for my car insurance and from a colleague who had a part time job as a realtor and helped me find an affordable apt. and even from the school board because they supplied health benefits along with my meager salary.

Today, with the help of an inflation calculator my $10,000 salary would be worth…

$10,000 of 1979 dollars would be worth: $31,545.74 in 2012 ($10,000 of 2012 dollars would be worth $3,170.00 in 1979)

That works out to be $15.16/hr in today’s dollars, which in my mind would be a realistic minimum wage to ask for in 2013.

What do you think?

16 Responses to “Les Minimunwage MMXIII”

  1. momshieb February 18, 2013 at 9:37 pm #

    I agree 100% and appreciate how cogently you were able to show this argument! Thanks, on behalf of my college age son and his brother.

  2. Barbara Backer-Gray February 18, 2013 at 9:39 pm #

    Hmm, I’m not sure. How is it that the minimum wage is above the poverty line but still not enough to live off? Isn’t that called poverty? Shouldn’t the poverty line be the line below which you can’t live? And shouldn’t the minimum wage be at least at that line? I think the way the poverty line is determined is deceptive, and it allows the minimum wage to be lower than it should be.

    • Tracy Goodwin February 19, 2013 at 10:37 pm #

      One would think so but that apparently is not the case. According to Census Bureau “Although the thresholds in some sense reflect families needs,

      They are intended for use as a statistical yardstick, not as a complete description of what people and families need to live.”

      http://www.census.gov/hhes/www/poverty/about/overview/measure.html

      It sounds like the orginal poverty thresholds were developed in 1963-64 then updated based on the consumer price index. I would think it is probably time to revisit their original calculations and see if they need redeveloped, 50yrs is a long time especially in a field changing as fast as statistics.

  3. mvschulze February 18, 2013 at 10:13 pm #

    Like your reality check. I muse about how difficult it would be to
    rectify in todays partisan climate.

  4. TechChucker February 18, 2013 at 10:15 pm #

    I feel simply raising minimum wage is an oversimplification of the problem. Higher minimum wages won’t solve the problem. Increasing minimum wage blindly will simply cause more inflation (i.e. cost of goods and services will go up). This will inevitably hurt those workers.

    I don’t think there is one solution to solve the poverty problem, but I fear when someone says that a cell phone, internet and cable tv are that important that it comes before food or even at all to a poverty stricken person, I have to question the persons priorities and understanding of budgeting.

    You keep throwing in Entertainment as if it’s a right, also. I’m sorry, but entertainment is not a given in this life. I grew up poor but happy and we didn’t have many of the luxuries others do/did, so we simply defined entertainment differently. Being happy doesn’t require money. I do agree, that minimum wage needs to keep up with the basic cost of living, but it also shouldn’t cause the cost of living to increase just because we raised the minimum wage.

  5. Anne February 18, 2013 at 11:18 pm #

    Well said! You have provided an excellent example and argument. Thank you.

  6. Harold Knight February 19, 2013 at 12:48 am #

    It astounds me that often the people I hear denouncing the minimum wage are the same people who denounce others who have to depend on food stamps, WICA, and other such programs. Why don’t those people get a job?!?! Well, they probably have a job. Oh, and God forbid you want a phone to stay connected to the world. What selfishness to want to have the means to call your doctor or your mother or your child’s school to tell them she is too ill to come to class. How entertaining that is.

  7. huntmode February 19, 2013 at 1:11 am #

    Good article for adding to my perspective, yet I find myself agreeing with TechChucker above. Here in Seattle, WA, the minimum wage is mandated at $9.19 and each city can throw on individual business taxes. I was speaking with my hairdresser, who just learned that she is now required to pay her employees vacation pay, which will cut into how many employees she can afford. Umm, puns all the way around.

    • gpicone February 19, 2013 at 1:46 am #

      So her employees aren’t entitled to vacations now? But if our recommendation to employees who have low paying jobs is to do without “luxuries” like phones, cable, internet, entertainment and vacations, then why must we recommend that employers fire people when they have to pay higher wages. Why can’t those employers just pay more and then do without some of their luxuries too?

      • TechChucker February 19, 2013 at 5:05 am #

        Paid time off is a benefit that some careers garner and others do not. I wouldn’t consider paid time off as a right. Minimum wage jobs are considered unskilled jobs that do not require higher education, some don’t even require a high school diploma. Shouldn’t those who have paid for all this education be able to reap the benefits of that hard work and investment?

        When I was going to college, I had a job as a bank teller making minimum wage. I paid rent, had a crappy car, and paid all my own bills. I didn’t have cable TV, didn’t have a cell phone (they didn’t exist), had a house phone, though which was cheaper, and ate as cheap as I could and I ended up coming out of college with no debt, and a little bit of savings. I ask, how could I have done this if minimum wage is too low to make it?

        I wish everyone could have success, but giving people success, doesn’t produce success, so I only say that caution is needed. It just gets frustrating for those of us with a different philosophy than that when we hear folks say raising minimum wage is just a solution to poverty.

  8. TamrahJo February 19, 2013 at 2:54 am #

    There are no simple answers, but the misfortune that is starting to strike the upper-and-middle classes, in addition to those lower on the economic ladder is making it harder for the general public to blame individuals for the problems- – –

    I’ve spent quite a bit of time looking at our financial system through the eyes of Thomas Grecco, David Harvey and others who dare to criticize our current ways of doing things – they aren’t sure of what a new system will look like either, but they agree- – -our current version of Capitalism is not sustainable – it never will be, no matter how much you regulate it, oversee it or legislate it – – –

    This information is nothing new – changes to monetary systems, labor systems and banking systems in the late 60’s and 70’s all contributed to the fine pickle we are in now – there were those who foretold doom back then and they say the same thing now….

    Sad that so many must become so uncomfortable before anyone is willing to admit that maybe most people are doing their best and our system is flawed and could use an overhaul..

  9. samsorbo February 19, 2013 at 6:02 am #

    Ah! If it were only that simple! Let’s put it this way. Minimum wage in China is, what, $1.25/hour? We compete with China, so if our minimum wage is higher than theirs, more than, say, costs of transpo of goods to and from that industrious nation, we lose jobs. THAT’s why everything is made overseas.
    What’s better, minimum wage, or $0.00 because the job is gone? Minimum wage isn’t supposed to be living high on the hog, it’s the MINIMUM, meaning, sharing an apartment, taking the bus, and eating frugally, while you work towards improving yourself so you don’t have to settle anymore for minimum wage!

    • drshyamalavatsa February 19, 2013 at 3:15 pm #

      Not being American perhaps I have no business getting into this discussion. . . However, I find that each response makes sense in some way. I live in one of the places that is “overseas where everything is made”. I know jobs come here only for the reason cited by samsorbo. I think “This is not fair.” Myself asks “To whom?” I say “To regular Americans”. Myself says “But the company has to make profits”. I say “At the expense of sending their countrymen into poverty while raising people in some other country out of theirs?” Myself mocks “This is commerce in the global village”. Working towards getting out out of the minimum wage category is all you can do, I guess.

  10. Jae February 19, 2013 at 10:07 pm #

    I think we should abolish the minimum wage altogether. It’s hard to get a job if you’re inexperienced or young sometimes because you lack the appropriate skills and training for that job. But then just how are you supposed to get that experience. Letting employers and employees voluntarily decide on what is an acceptable wage is a better option. If you’ve got skills and training, you’ll make more. If you don’t, you’ve got the opportunity to gain those skills and training and, eventually, a higher wage.

    Even still, raising minimum wage only effects about 1.8 million workers, half of which are teenagers from families who make at least twice the poverty level income. Most who live off of a minimum wage salary are teens or are going to school and work part time. In fact, only 4.7% of those getting paid minimum are using it to try and feed a family off of. Rather than make it harder for the inexperienced to get jobs, and for the cost of goods to go up by raising the minimum, we should instead focus efforts on getting those 4.7% educational opportunities to get better paying jobs. (All these stats came from the Bureau of Labor Statistics http://www.bls.gov/cps/minwage2010.pdf).

    It just doesn’t make sense to do something which has always raised the cost of living for everyone (including those we want to help) when there are better options to help those making minimum. That’s why I say abolish it. Then people with low or no skills can get jobs, get training and go on to get better pay.

    • gpicone February 20, 2013 at 12:18 am #

      This is a quote from the site you hyper linked: Among those paid by the hour, 1.8 million earned exactly the prevailing Federal minimum wage of $7.25 per
      hour. About 2.5 million had wages below the minimum. Together, these 4.4 million workers with wages at or below the
      Federal minimum made up 6.0 percent of all hourly-paid workers.
      In fact, 15 million workers earn at or below $9.00/hr and would be affected by the proposed minimum wage increase. That’s quite a lot more than the small group of “teenagers living at home” that you describe. And as for leaving it up to the employers to decide what’s fair? Well, we fought quite a big civil war over that one!

      • Jae February 20, 2013 at 2:24 am #

        To quote from the same document to support what I was describing. “1.8 million earned exactly the prevailing Federal minimum wage of $7.25 per hour” and “they made up about half of those paid the Federal minimum wage or less.” I was referring to minimum wage, which is $7.25, not what $9/hr workers were making. So the statistic is accurate on minimum wage (which I thought was the premise of this post). Even the proudly liberal NYT doesn’t deny that most min. wage workers live in families whose household incomes are well above the poverty level.

        But I’m slightly appalled that you are saying the Civil War was fought over employers deciding what’s fair. The Civil War was fought over whether it was legal to “own” a person. I find a dramatic difference in a person who can freely accept a minimum wage job and freely choose to quit it vs. a person who doesn’t get paid, can’t ever “quit” and can be killed, maimed or beaten for not doing their job to their owner’s liking. I’m sorry, but it seems disrespectful to me to equate the plight of slaves to wage issues. I’m hoping that’s not what you intended.

        Either way, please understand I do value reading your opinion, even if we probably mostly disagree. It’s been interesting to see there are things we do come together on.

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