How do people survive on minimum wage?
You know it's not much, but once you crunch the numbers you see just how meager it is.
This guest post comes from Andrea at So Over Debt.
One of my clients recently reported getting a job at a fast-food restaurant. Since she's been unemployed and desperately looking for work for nearly a year, I was thrilled for her. She was very excited that she'll be making $7.50 an hour -– a whole quarter more than minimum wage.
After she left my office, I got out a calculator. I've never worked for minimum wage, so I didn't know exactly how much -- or how little -- money that is.
Assuming 80 hours per pay period, my client will be bringing home around $462 every two weeks. That's with no health insurance or retirement contributions.
If I brought home $924 a month, would I even be able to survive? I decided to find out.
My minimum-wage budget
First, I decided which of my expenses are absolute necessities. This is what I came up with:
- Rent (My parents own my home, and I don’t currently pay rent, but most people do)
- Phone (People will say this isn't necessary, but I have a child. No way would I go without a phone.)
- Car insurance
Note that I left out my car payment. If I were making minimum wage, I know I'd have to drive something, but not something with a huge monthly payment. So I'm pretending my car is paid off.
The budget in action
Here's how those costs would add up:
- Rent: $400 (the amount I would be paying if my parents would let me -– I realize it would be much higher in some areas)
- Utilities: $200 (current average of electricity, water and gas for my house)
- Food: $200 (assuming we could survive on $50 a week)
- Phone: $25 (prepaid phone)
- Car insurance: $100 (full coverage)
- Gas: $140 (this is what I currently spend to drive to/from work)
- Total: $1,065
OK. I ignored my car payment. I don't have anything fun, like cable or Internet access. And I'm still over budget by about $100.
What about government assistance?
I checked on that. In Kentucky, a family of two making $1,200 a month before taxes qualifies for $165 in food stamps. Even if I could make that cover all the groceries for the month, that leaves me with only a little more than $100 a month for everything I didn't list above.
Post continues below.
My son would qualify for Medicaid, but as an able-bodied adult, I wouldn't. So if I got sick or had to take a prescription medication every day, I'd fly through that $100 in no time.
How the heck does this work?
There are so many things I didn't account for in my minimum-wage budget. Clothing. Car maintenance. Birthdays. Christmas. School field trips. Toilet paper and toothpaste.
With these numbers, is it any wonder so many people are in debt? Personally, if I knew I was going to spend more than I made just to exist, I’d try to drown out that misery with TV or Internet access at home, even though I know I couldn't afford it. I'd probably use store credit cards to buy clothes (if I could even get approved for them). Payday loans would be my backup plan for emergencies. And retirement? Pfft, what's retirement? I couldn't even afford to get my oil changed!
Honestly, the first thing I would do is drop my car insurance. This would free up another $100 a month, but I would risk getting a ticket or totaling my car in a wreck. I don't even want to think about what would happen if I was injured while driving and had no insurance of any kind.
I complain about my student loans constantly, but if I hadn't gone to college and could qualify only for minimum-wage jobs, there is simply no way I could make it. Even if I made stellar financial choices at all times, I would run out of money every month. I can't figure out how any single parent could make this work.
Could you make it on minimum wage?
I feel like I must be missing something here. With 4.4 million American workers making at or below minimum wage (and remember, I gave myself an extra quarter an hour), there has to be some kind of secret I don't know about. It hurts my soul to think that there are people struggling with this every day -- not because they are curious but because it's their reality.
Have you ever worked for minimum wage? How about doing it while supporting a household? Could you find a way to alter your budget to make it work?
More on So Over Debt and MSN Money
So minimum wage actually affects very few adults, and most of them can work their way out of the situation with a little effort and perseverance.
so that's it? black or white? No College = Min Wage?
This article is a sham. Any self respecting adult can go out and find a job over min wage. It may not be what you prefer, it may involve a higher level of physical exertion, may be 3rd shift, and might even be very smelly. There ARE jobs out there that pay well even with no college. For example, some warehouses in northern illinois START upwards of $30k a year. you may have to work temp for them for a little while but its worth it.
In the interim between higher paying jobs, i had to work multiple jobs to keep ahead of bills and have a life outside of work. I tended bar, served food, cooked at a bowling alley, worked cashier, did ANYTHING until i was able to find the job i wanted.
Too many people depending on Government, Milking the very system that was created to aid in the struggle of Americans' to get back on thier feet! (NOT) make a living off of the Government, not trying to work, If It Rains' too hard get disaster releife (when You do not need it!,). The People that do this are the Major Tick on the American System!. If I could afford to live in Fla, and make forty thousand or even one thousand Dollars' a month I would be happy too!
I Rember J.F.K. Ask wht You can do for Your country, We all blame the Government for our problems'! (But) WE are the Government!.
Could YOU make it on minimum wage?
Been there, done that (w/twins + school + wife).
Not a great situation and probably shouldn't be an end goal for most as in: "I just want to make minimum wage and exist". It's America and if that's your choice, fine, but it is a pretty gritty existence. If it is your choice to live in this manner (like this author assumes) don't complain.
I didn't get the choice of waiving a car payment either. Used car, actually repairable broken down used car(s) that I fixed for myself and wife. Some cars I bought with no engine. Buy low, fix 'em up, drive 'em, sell for more later (trick is to buy a car somebody really wants later, ie not a Honda). Gotta have skills if you want to succeed.
...Personally, if I knew I was going to spend more than I made just to exist, I’d try to drown out that misery with TV or Internet access at home, even though I know I couldn’t afford it....
That's the spirit! I've put myself into this situation doing the LEAST I can for myself SO my only options are give up and park it on the couch watching TV (poor in America means big screen TV, oh and Internet access of course).
This article looks like the OWS deadbeat handbook.
So... I dont make Min Wage any longer. I did coming up ! If you're gonna do this thing it is imperative to be in the "Dirty South". Any damn yankee will tell you, " wood heat SUX". The simple pleasures are cheaper. Assistance is EASIER to GET ! It's also ok to have an ok job in the south,I did John Shnatter proud and proudly year in/year out. (papa johns delivery). North the M/D Line however you GOT to hustle!!! Some call it sidework, some moonlight, others sell on the blackMKT. It,s survival of the swiftest and the last Zombie standing wins the planet. To all my young pups out there keep tryin,stop dyin, and be cool/stay in school... K Dawg out WOOOOF
ALSO ****ry dont meen dum
This is why minimum wage should be higher and we need a salary cap for the rich. I think 50 million should be enough for anybody. The extra money could be used to pay workers what they deserve, which would mean they would buy and produce more and the economy would be booming for everyone.
if you have a minimum wage job, its normally near public transportation areas... and that helps.
My husband and I eat on $50 a week and we eat well and healthy.
"Do you hear the people sing?
Singing a Song of Angry Men!
It is the music of a People who will NOT be SLAVES again!
Will the beating of your hearts
Echo the beating of the drums!
It is the music that we bring when tomorrow comes!"
to MrMrs -
You say all workers need to paid "fairly". what exactly is "fair" and who decides that?
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