American Living Wage Calculator

[Lagmonster]

So Amy Glasmeier of MIT has created a "Living Wage Calculator" on this site:

http://livingwage.mit.edu/

The purpose, as I get it, is to illustrate that 'minimum wage' often isn't enough - depending on where you live and your family, you could need to earn much more than even the proposed minimum wage increases would offer. I post this as an interest point to our American posters - I'm curious if you could verify how close to accurate these figures are for the low-income earners in your situation and region. For everyone outside of the US, it may provide some insight about living poor in America.

[Elheru Aran]

First impressions:

It seems to assume that with two adults and one child there is no need for childcare. Of course, it's predicated upon a single person supporting the family unit and working full time. In that case one adult is at home to take care of the child.

$553 monthly for food? Ha ha ha! No. Try $160 or less. Admittedly this is with some federal assistance-- food vouchers via WIC-- but that's still only around $50 worth of food and soy-milk a month.

Housing... is an interesting one. It says $912. I pay 340. However, a.) I live in a trailer park, and b.) we own the trailer we're in-- we only pay rent for the park space as well as utility bills. If we were paying a mortgage, it still wouldn't be quite that high, I don't think. Of course it all depends on how comfortable you want to live. The thought does come to me that the $912 figure may also account for local property taxes? Can't say for sure. If you're dividing it up on a monthly basis I don't think it'd be as much as all that unless your house is particularly nice.

Medical-- our kid is on Medicaid. Before my insurance ended this year, we were paying around $200/paycheck... so around 400 a month on my insurance for the two of us. Hmm... guess it's not too far off.

Transportation-- does this include car payments? Repairs? I assume it does include gas. We spend about $200 a month on gas; our cars are both paid off. One is going to shit, mind you, and we'll need to replace it soon. Tag fees do take that up a notch, but they're only once a year...

What is "other"? Probably stuff like clothes and household maintenance and stuff, I suppose. In that case for me put 'zero unless something gets fucked up'.

Required monthly income after taxes is... 2743. I wish. Try $1200 or less.

Yeah, I don't know how we manage to survive, either...

[TheHammer]

At first I thought that maybe they weren't taking local cost of living into account (which can vary widely be location), but was glad to see they do break it down by state/county. I'm presuming in their dollar per hour they are talking "total compensation". Many jobs come with health benefits paid for in whole or in part which would need to be counted as part of the compensation. Of course most minimum wage jobs don't provide good health benefits, if any are provided at all.

I find it interesting that they break down the various jobs, and mark it as "liveable" or "not liveable" based on a 1 parent home supporting 1 child. I don't know why they are presuming that situation, rather than say a 2 adults, 2 kids scenario, but obviously a single parent should in theory be receiving child support which isn't accounted for. The child care figure also seems skewed towards the high end - which would most likely be only infants and toddlers. Typically the older the child, the less it costs since they aren't in daycare full time, and obviously require less direct supervision. This somewhat inflates the costs of the 1 adult + 1 child, and so on.

It seems that, in my county at least, the minimum wage is sufficient as a living wage for a single adult. Of course we probably benefit from living in a state that has Chicago, and minimum wage dictated by the cost of living up there, where as you might expect a minimum wage job is not liveable based on their figures. A minimum wage adjusted based on local cost of living would be an interesting concept, but I can see why many communities would be reluctant to do that, and how administration of that could be problematic.

[Guardsman Bass]

I'm doing okay, according to that. The living wage in my area for a single adult is $9.43/hr, and I'm earning about $12.50/hr. I thought that $638 a month for rent was a little bit on the too cheap side, but it looks like there actually are studio apartments for rent in my area for $600-650 (and it's not a cheap area in Utah).

[Broomstick]

Living here in Lake County, Indiana - I'm above poverty and minimum wage, but under "liveable" for my household. Our food bill is less than they estimate, but then, I have large garden for vegetables in the summer which shaves some pennies off. Our medical is way lower than what they allot, we only pay $24/month for heavily subsidize state program. Our housing is under their estimate, though not by much. Our transportation is much lower, probably because both our vehicles are fully paid off. The above are the only reasons we're scraping by. I really need about $400-800/month more in income to really get to a decent situation affording some sliver of comfort and ability to save for a rainy day.

[Lagmonster]

I didn't expect anyone to say that their "living wage" (ie the amount they would need to earn to pay all bills) could be lower than the suggested amount, actually. I assume that in any of your cases, federal minimum wage is still short of a living wage, no?

[TheHammer]

I didn't expect anyone to say that their "living wage" (ie the amount they would need to earn to pay all bills) could be lower than the suggested amount, actually. I assume that in any of your cases, federal minimum wage is still short of a living wage, no?

Well all of these answers are anecdotal. I sort of wonder how they came to the conclusion that something was "livable" or not. You also have to wonder about potential bias to what to push the agenda that the minimum wage is too low. That being said, i do believe the federal minimum wage is probably too low, but then again the idea of a federal minimum wage makes little sense given the wide variance in cost of living from state to state, region to region which is why many states have their own minimum wage that is above the federal. A region by region minimum wage makes more sense, but would be difficult and would pit regions against each other, so I don't know that would be a better solution.

Personally, I think the best solution is for slumlord employers like Walmart to start being charged additional taxes and fees for the government assistance provided to their employees. They are essentially using government subsidized labor since in many cases the wages they pay alone aren't sufficient for their employees to live.

[Elheru Aran]

I think part of the problem is that with some of us at least we manage to scratch and strive in various ways to live within our means. The downside of this is that, like right now, sometimes we're pretty light in the pantry and the bills are waiting until the next paycheck-- but our house isn't being repo'ed, we have gas in the car and (if rather low to save money) heat in the house...

But honestly? It's really no way to live if you think about it. The only reason people live this way is because we have to due to our current circumstances. If we were any less resourceful, we wouldn't make it.

In Broomstick's words-- 'really get to a decent situation affording some sliver of comfort and ability to save for a rainy day'-- that's what would really make a difference for most people.

[Broomstick]

I didn't expect anyone to say that their "living wage" (ie the amount they would need to earn to pay all bills) could be lower than the suggested amount, actually. I assume that in any of your cases, federal minimum wage is still short of a living wage, no?

Correct. I make more than minimum wage, but it is not truly sufficient to make us self-sufficient. I have required assistance from friends and family over the past few years.

Well all of these answers are anecdotal. I sort of wonder how they came to the conclusion that something was "livable" or not.

It based on the cost of certain essentials in an area, such as housing and food, and is based on averages for those items. So those of us who can, say negotiate a lower rent or grow/hunt some of our own food can get by on a little less than the "livable wage", but not much less.

That being said, i do believe the federal minimum wage is probably too low, but then again the idea of a federal minimum wage makes little sense given the wide variance in cost of living from state to state, region to region which is why many states have their own minimum wage that is above the federal. A region by region minimum wage makes more sense, but would be difficult and would pit regions against each other, so I don't know that would be a better solution.

The Federal minimum wage is the absolute floor for wages - any state or even county or city is allowed to mandate a higher minimum wage, and many do.

[Guardsman Bass]

The expenses seemed about right for me. Food for a little less than $70/week, rent for about $600-650 (I looked up studio apartments in my city to see if that was right), and so forth. The only stuff that seems off is the medical for $135/month (too low), and the gas for $285/month (for me, too high).

[fuzzymillipede]

I'd like to know more about how they came up with these numbers. I currently spend about 43% of what that site considers a "livable" after-tax wage for me. If I add their healthcare and transportation costs to my expenses (I consider myself fortunate to not have these expenses), it still only comes to 70%.

[Broomstick]

They're averages. As an example, an elderly person might have additional expenses you don't, such as daily medications or need to hire someone to shovel the snow off their walk in winter. Someone else might have an unusually good deal on rent, or be able to use a scooter instead of a full size car for transportation. These numbers are averages, or targets, or generalizations. They're a good rule of thumb but not absolutes.

[Napoleon the Clown]

I can say off-hand that the rent they offer for the city I'm living in is goddamn optimistic. Even a 1 bedroom apartment is north of $700 a month, unless you want to live next to drug dealers and have lead in your water.

[Broomstick]

When calculating things for poor people that is exactly the sort of housing presumed. What, you want safe? Get a job! Get a better job!

[Elheru Aran]

The very fact that they have specific listings for cities and counties is an indication that they're spitballing averages all over the place. They didn't actually (as far as I know) go everywhere and poll a bunch of people to get what they're actually doing, which has its own hazards but could've given a more accurate average. More likely they just looked up a bunch of demographic data for each county or something like that.

And, of course, there is no way to account for individual circumstances, so this is only really a very general guide. I make it on a fraction of what that guide suggests; if I was making anywhere near that much, I'd feel like I was rolling in cash.

Perhaps the issue is that it's called a "calculator", when it doesn't actually calculate... more like just presents some data. If you actually input your numbers it might be more helpful?

[Broomstick]

The calculations are set up with a presumption that the person(s) in question aren't getting aid from outside themselves. In reality, poor people network, barter, and scavenge like mad.