October 21, 2012

• Basic Living

  I was just crunching numbers, in a more detailed manner than usual.

  When you job hunt, everyone hopes for a “decent salary”, but have you ever sat down and worked out what that might be?

  I’ve written in the past about the gap between a “minimum wage”, and a” living wage.” If you want to be real about it, you have to think not only about the numbers, but what they mean. There’s a LOT of tripe out there about people refusing to take low income jobs…but I have a feeling most of it comes from people who make decent salaries, and don’t really worry about the bills. So let’s do a little math.

   

  In most states, the minimum wage is about $7.50 an hour. Since 40 hours entitles one to benefits. many employers will only give you 35 hours a week, and call it “part time”. If you work 35 hours, your pre-tax income per month is a modest $1050.00. Even assuming zero debt, you’re going to have a hard time paying your bills on that. I’ve recently moved, and while the rentals are less expensive here, you’re still looking at 800- 1200 a month for rent alone. We’re not talking lavish digs here…one bedroom, not counting utilities. I did mention that figure was “pre-tax”. It’s also pre-Social Security, Unemployment, etc. That means your wages will not cover rent…much less food, or transportation. Now some people would say that you need ANOTHER job. They usually don’t grasp that when you’re already working 35 hours, getting a second job can be tricky. But let’s say you pull it off. Now you’re working 70 hours a week, for $2100.00 (again…pre-tax, and pre deductions.) You might be able to cover that 800 dollar rental. You might even be able to cover food, and utilities…but…you’re going to be tight. One unusual bill, and you are screwed. (Call it a 500 dollar bill for tires…not unusual.)

  Say you are a college grad with student debt to pay off. OUCH.

  So I sat down and worked out what sort of wage you’d need to cover the basics. Not surprising, but minimum wage doesn’t come close.  You need closer to $15.00 an hour, just to not run in the red. Last year, we had IDIOTS running for President who thought it was a fine idea to abolish the minimum wage. They seemed convinced that employers would pay better, without it. When people talk about us being “more competitive” about basic wages, I feel the need to remind them that it is pretty much impossible for an American to live on 60 cents an hour. That’s what it would take to be competitive with China. And yet I still hear the bilge about it. When our country was new, we “encouraged” the citizenry to buy American made goods with stiff tariffs. Now that’s regarded as heresy. Of course, the founding fathers found it sensible.

   

  I’ve long believed that there should be a penalty for outsourcing American jobs, in the form of a tariff. The money from the tariffs could then be used to support American workers who lost their jobs—so Nike can make a pair of sneakers for $5.00, that it will sell here for $120.00. Workers in Indonesia make about $3.00 a WEEK. We’re told it’s good business for the companies to make products elsewhere. They can sell them here at an amazing profit…but the people selling them are usually working for…you guessed it! Minimum wage.  So for the people who think that no one should be “too proud” to take work…ANY work…I ask a question.

   

  If I will make less money than I need to LIVE working…if every week I work plunges me into deeper debt, what exactly is the point?

   

  I’m not anti-business, nor anti-capitalism…I just wonder where there incentive is.

  Years ago, my husband worked in management briefly. The company he worked for sent him on a seminar to encourage managers to find NON-Monetary ways to motivate their workers. They wanted them to focus not on their paychecks—but a nice work ethic. I couldn’t believe how stupid it was. The managers themselves expected decent salaries. When they did particularly well, their reward was usually a cash bonus. Clearly, that was INCENTIVE. But the people who worked under them were expected to work without that.

  In the decades since, I have watched as CEO’s get HUGE bonuses—sometimes for running companies into the ground. Others benefited hugely from down sizing, or outsourcing jobs…and they ended up on the covers of Business magazines. I remember Chuck coming home from the seminar half amused, and half pissed off.

  “You won’t believe it…they actually tried to convince us that people DON’T want money, as much as “job satisfaction”.

   

  The point is, if you make enough money to pay your bills, cover your taxes, put aside some for savings, and your kid’s college, and retirement, you really have no idea about the “real world” where people are making a whopping $7.50 an hour. You might even believe they should be grateful to have a  job at all. And if you believe that, you might just be Mitt Romney…or think it’s a good idea to vote for him.  I find it strange, that we think it’s good business to give people millions of dollars as a reward to take away people’s jobs…but think that a living wage is going to give workers “the wrong idea”.

   

  I guess I just think sauce for the goose, is sauce for the gander. I just have no idea why others don’t.

  • 2:25 am
  • 5 Comments