Analysis: Want To Financially Survive At Minimum Wage? Work 379 Hours Per Month.
It’s worse now but this data in 2022 is eye-opening. The minimum wage is best understood as a poverty wage. It is not a living wage, or a thriving wage, and is so woefully inadequate that even two jobs fall short of a morally acceptable outcome.
For part of this exercise, we will call Walmart back to the podium, because WallyWorld is the most readily accessible store for most Americans.
Walmart, perhaps undeservedly, has a reputation for being cheap. Some things, yes, but mostly they are just coasting on reputation. Their produce is ridiculous and selection is poor. But nevertheless, I decided to conduct an experiment.
What does roughly $7 purchase? Good question. Not much. But before we do this, the cart has to get placed back behind the horse. Let’s see first what housing costs:
Housing costs vary from state to state, and it seems as though rent prices all across the United States are increasing. That’s because, in most states, it is. The U.S. rental market has seen an increase in the demand for apartment house rentals. Renting is often seen as an affordable alternative to buying a home, with less stress and commitment; however, rent prices in major cities and metro areas around the U.S. are becoming increasingly expensive. That is until the COVID-19 pandemic hit.
The average monthly rent for a one-bedroom apartment in 2020 was $1,098 a month.
Trust me when I say this is not likely very luxurious. But say you want one anyway. Full-time minimum wage of $7.25 per hour grosses $1160 per month. The problem is very few apartments will accept you if you earn less than 2.5-3 times income. We will be generous and call it 2.5. In order to get this apartment, you would need to work 379 hours per month, or close to 93 hours per week, or working, literally, 55 percent of your life, which at this pace, well, how long could someone last?
So you make $2747 dollars per month. But there will be taxes, and FICA at 7.65 percent. So that is $210 gone. Taxes run 12 percent, that is another $329. So now that $2747 becomes $2208. Your apartment is $1098. So now you are down to $1110. Electric, insurance, fuel, internet (don’t say that is optional it is as essential as a phone) uh, phone, credit cards, car payments, call all that $700.
So now you are down to $410.
Ground beef runs $4 per pound if you find it on sale. But for these purposes we will explore the three items I purchased.
1. Marketplace Lobster Bisque, $2.87. Not much lobster. Enough for two people, one small bowl.
2. Great Value Sausage Egg and Cheese Croissants, $3.28. Pack of 4, a bit over 4 oz. each. Enough for a small breakfast.
3. One pack of bakery French bread, $1.00. Exactly as described, to go with the soup. Total? With tax, $7.49. So one hour of minimum wage will buy, no, scratch that it comes up .24 cents short.
For this cost we have two inadequate lunches, and two so-so breakfasts. That’s it. But let us run through the cycle, and say we got four meals for the cost. We will call that $1.87 per meal for both people. So if you did nothing other than eat from Walmart at this bare bones pace you would spend $224.40.
You are now down to $185.60. Remember you work 55 percent of your life, or you and your partner have to work 6.5 hours of overtime each to knock this down by half.
But you have to bathe. You have to clean. Lysol, soap, towels, toiletries, you know, the stuff that makes you a hygenic human, that is going to be at least $100 per month.
Congrats! You have saved $85.60! And you only had to work fifty-five percent of your life to do it! If we assign one hour of commute time for driving, checking in, having a cup of coffee, we are down to sixty hours in a week you are not working. If you get the recommended 8 hours of sleep per night you have a grand total of four hours per week for free time.
If you save $85.60 per month from say, age 22 on to 65, this is what you might show for it at about a 7 percent return the whole time, no screw-ups, no stock crashes, everything perfect. $260,759. Of course that is over 43 years, so at that point the value of that will be closer to $65,000 in today’s dollars. It won’t even buy you land to place a shabby trailer on. But wait there is Social Security right? Sure. Let’s run the numbers!
If you were born in 1998 and you make $7.25 today, and you continue on that same career course, at the end in future dollars, your monthly benefit is around $4197. However that value is projected to be roughly $950. If you took the other funds above, and added a small three percent annuity, you would get about $1250, or roughly half of what you work 55 percent of your life to earn today. (Does that seem moral that a retirement system does not at least guarantee your current wage averages in retirement?)
Congrats. In this hypothetical scenario you might work until the very day you die.
Which could be at work.
But it doesn’t have to be this way. SNAP, formerly food stamps, is a program that can help low wage workers.
You can learn all about SNAP here:
Below is a snippet explaining what workers can most benefit:
The main industries and occupations in which SNAP participants work demonstrate that the features of low-wage jobs make it difficult for participants to put food on the table. For example, all ten of the most common occupations among SNAP participants had median wages below the national median for all occupations, according to the May 2016 Occupational Employment Survey of the Bureau of Labor Statistics. (See Appendix Table 8 for the most common occupations and median wages.) And three of the top five occupations among SNAP recipients — cashiers, cooks, and maids and housekeeping cleaners — had wages that would leave a single full-time earner supporting two children in poverty.[35] Many of these workers may participate in SNAP to supplement these low wages.
Because SNAP participants work in many industries (such as retail and hospitality) and occupations (such as service and sales) where features such as involuntary part-time work and irregular scheduling are common, they may participate in SNAP to supplement their low incomes due to insufficient or fluctuating hours. Similarly, because workers often cycle in and out of these jobs, workers may participate in SNAP during periods of unemployment or underemployment.
I hope this has been helpful I also hope for those that don’t need the help that it has brought some perspective.
-ROC
I need to add to my The Claw News family. I work tirelessly each week to bring useful content that fights for real progressive change. Join me. If you don’t get your $3.99’s worth, I will personally refund you the month and take the loss on the fees. Guaranteed.
Click below!
Love,
-ROC
Don’t like email? Join my Patreon by clicking here!
Editor’s note: Since working on this story some pricing mentioned has risen significantly.