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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.

By MSN Money Partner Nov 9, 2011 7:46PM

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)
  • Utilities
  • Food
  • Phone (People will say this isn't necessary, but I have a child. No way would I go without a phone.)
  • Car insurance
  • Gas

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

Nov 10, 2011 11:10AM
1.) Very few actually make minimum wage, and the majority of them are teens working fast-food jobs. 2.) If an adult is making minimum wage, he or she can typically work much more than just 40 hours a week. 3.) Many of them have more than one income-earner in the household. 4.) Cost of living varies greatly from place to place. 5.) If you raise the minimum wage, then costs also rise to make up for it.

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.

Nov 10, 2011 12:21PM
"...but if I hadn't gone to college and could qualify only for minimum-wage jobs..."

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.
Nov 11, 2011 8:13PM
I guess I would be questioning why I am only making minimum wage. Minimum wage is usually reserved for teens.
Nov 10, 2011 1:53PM

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!.

Nov 11, 2011 7:49AM
Anybody can live cheap and make it on minimum wage! Get a bunch of roommates and share a cheap apartment or rent a small room. For transportation use public buses or trains or walk/bike around town. For communications, share a cheap landline with roommates or get a used Skype device and use it at free wifi hotspots like McDonalds. DO NOT use cell phones as they cost too much and may cause brain cancer. For food, start a garden and grow your own. Supplement that with food from community food pantries. Volunteer at churches and other community institutions and they will often reward you with meals. There are so many ways you can live a basic life without much money. You'll be happier too as you realize that you really don't need much money at all! You'll have less stress and appreciate the simple things in life.  
Nov 10, 2011 6:02PM
I just ran the numbers for you -- I haven't read ALL the comments so maybe it's been said,  When you do your taxes you will get $1000 refundable child tax credit, $400 Making Work Pay credit and $3,050 Earned Income credit.  That $4,450 (an extra $370 per month) will take you a long way... Combine that with the other suggestions such as shopping at thrift stores, and don't forget that most single parents have other family who help them out with gifts, meals, used clothing, free babysitting, etc and it doesn't seem so bad.
Nov 10, 2011 10:13AM

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.



Nov 11, 2011 9:45AM
And one more thing: I make it on about $1050 per/month paying rent, utilities, food, gas, ins., personal items.  I'm on Social Security disability so I have health ins. deducted. I still have money left over to $ave every month. You CAN survive on minimum wage. I've been doing it for many years now. After my health ins. premium is taken out, I'm living on $6 dollars per hour at 40 hrs. a week, 160 per month of "government employment." These articles make me laugh.
Nov 11, 2011 3:01AM

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

You left out the $2,000 plus in (EIC) Earned Income Credit, $1,000 in Additional Child Tax Credit (this is based on having one child and one can double it if there are 2), free child care, free breakfast and lunch on school days, free cell phone. I am sure there are many more programs I didn't list. I have had many people, with children, tell me they are much better off financially not working than if they worked for minimum wage. The government is only enabling the high unemployment rate by continuing to increase the time for drawing unemployment. 
Nov 11, 2011 12:47AM
Actually, it goes more like this.

This is as a single person, monthy.

-Rent $250 (room rental from Craigslist)
-Food $200 (Aldi)
-Bicycle $8.25 (Walmart), or Public transit ($45), or Walk
-Phone $8.33 (Tmobile $100, 1000 minutes, valid for 365 days)
= Approximately $500 a month (imagine that, you still have money to get tanked at the bar a couple times a week)

You see, beggars can't be choosers. Since we're talking minimum wage, there's no need to have a car and drive to work. Those jobs are local, and a dime a dozen. Now, if you don't mind being a worthless, s****ing leech, you can get some cash assistance, a free Obama phone and food stamps. Hell, you can get a computer and a big screen TV with those savings. You can even plan your move-out around tax time, since you get everything back at those income levels. Now you have a nice lump sum of last years taxes to completely offset the taxes on this year's income.

If you want to live even better, get a working girlfriend. Double the rent, add 50% to the food bill and add $100 for electricity. Want to live like kings? Both apply for government assistance. Either way, it can EASILY be done on minimum wage.

Nov 10, 2011 2:42AM

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.

here's something to think about in all of this - the GOP is against the minimum wage - says it hurts businesses and kills jobs - despite studies and economic indicators saying it is not so - so if you think minimum wage is excessive, vote GOP
Nov 10, 2011 10:49PM
What a sad little article. Was this written by a twenty year old white middle class idiot? Nice adolescent speculation and use of guess work. How about publishing an actual article on a real person making it on minimum wage? I am pretty sick of **** like this.....go to the real stories, they're out there. Believe it or not you don't need your college degree to write eye opening and meaningful essays on the truth of minimum wage. THIS is a waste of our time. I feel bad for this person, they ought to be embarrassed to advertise this livel of ignorance. You'd think MSN could find a real writer.

Nov 10, 2011 3:36PM
the biggest problem to living standards in usa is china. Chinese make so much less than us but rising the minimum wage would increase the trade defect. it is a catch 22. only way to at get more wealth is to invest and start business. labor market follow the law of supply and demand. right to there is to much supply.
Nov 11, 2011 8:55PM

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.

Nov 10, 2011 8:09AM
Why did you assume a 40 hour work week?  If need be you get another one or two jobs. Run the numbers at 60-80 hours a week.
Aug 17, 2012 7:59PM
hello, yes been there more than once. i did start out as a young mom. but in school basically concentrated on one subject to beable to go to a college. well the child came first and would not trde her for anything. ex-husband no pay situations etc. thrown out of apts.Tried the medicaid, food stamps etc. And my 2nd child by the same first husband had heart issues. My parents lived 3500 miles away and I solely depended on my inlaws to help with sitting on weekends. Paid mega daycare for the week days for many years and worked as much overtime as I could. My husband use to ask me how much money do i need.Finally after my two children were getting older my 2nd hard working husband and I brought up our 3 children and bought a nice little house and a nice little town. Due to health issues on my side of the family brought us to changing our lives. We moved back to the state we left due to the illness and was made business promises from our old boss. He put us up in his rentals and gave us our jobs back. Well the our boys got into some trouble which put us in some more life changing situations. Well now we are empty nesters about 7 years ago. Bought another house in a retirement state. Had good jobs, had nice things, bought our dream. Then again, illness on my side of the family. got her straightened out. Then I had surgery which went bad, now i am still very young, lost evverything due to my husdand lost his job and mine due to the bad surgery.Thank god for my moms home or we would be in the street. Have tried thru the system many times being denied. My son and his wife works two jobs so my son can go to school. He has been looking for a p/t job for a year. Keeps getting denied and their reasons are they do not have children. She works her biggest job is on commissions. its just not fair. We are all good people. My daughter has diabetes and celiac disease which is the opposite if diabetes. She can't get help either.She is not a young person, not married and no children. Not know why we work so hard and get treated like we are immagrants.
Aug 26, 2013 5:31AM
This country needs a revolution.
"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!"
Nov 10, 2011 6:05PM

to MrMrs -

You say all workers need to paid "fairly". what exactly is "fair" and who decides that?

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