While I was making up my yet-again revised budgets thanks to my changing employment conditions, I started wondering where I would fare if I was in the same situation now as I was 25 years ago.
The current federal minimum wage is $7.25; at 40 hours a week, that’s $1160 a month (before taxes). The current average rent in the US is $997 a month, with a median value of $810. As you can see from the graph below, that’s only seven states below $800 average rent… which means that even if you manage to get 40 hours a week at a minimum wage job, and if there is no income tax, and you live in those seven states… you still have only $300 a month to pay all the rest of your utilities, insurance, food, and gas. Everywhere else, it’s even less, and in a third of the states, you literally are owing money every month.
You do the math.
No number of "skip the expensive coffee" is going to make a difference here.
What about household incomes, then? Sure, let’s presume that the household has two adults, with the same assumptions as above. That would increase the household income to $2320 (before taxes), and makes things a bit more doable.
At least, until you figure in children.
The current average cost of childcare in the United States is $930 a month, with a median of $908 a month.
Many families who make the median income in their states cannot afford to send their infant or toddler to child care. In some states, child care costs can take up to 18% of their family’s income.
In 28 U.S. states, the annual cost of child care exceeds the cost of college tuition. In Florida, for example, center-based infant care costs about $9,238 per year and public college tuition and fees cost about $4,455 per year. In Washington, D.C., infant care is $24,243 annual, more than four times the annual cost of college tuition.
The chart below shows monthly average child care costs per state. In fully a quarter of all states, that average childcare cost eliminates any income gain from a second minimum-wage earner working full time, and in nine of them, it actually would cost money for the second adult in the household to work a minimum wage job. And that’s if you only have one kid. [1]
I use these examples, because this is exactly where I was a quarter century or so ago, working a minimum wage job and trying to support my spouse and infant child. That wasn’t enough money then – and in West Virginia! – even before my minimum wage job cut my hours drastically, forcing me to join the military in order to support my family.
It’s not simply a matter of education, either. While the cultural capital of knowing how to create a skills-based resume might have helped, I still didn’t make enough to continue my college education at the time. Even when I did have the ability to go back to college years later, trying to attend college while working a full time job is freaking hard and will also put you further in debt if that education doesn’t immediately pay off in terms of higher income, starting the whole cycle over again. (And let’s not even mention "private" student loans.)
I want to stop and be clear here: These things I’m describing are not intentional or a conspiracy [2]. This is just free-market capitalism and people trying to maximize their profits inside that system. They’re playing the game the way it’s meant to be played. This is the way capitalism is supposed to work.
It also, as a side-effect, keeps people who don’t make a lot of money in a position where they cannot improve their situation. And that side-effect is really, really useful to the people who currently do make a lot of money.
This information is really easy to find. It’s really easy to add these bits of information together and see the bleak financial facing anyone who isn’t already independently wealthy. It’s pretty easy to see how keeping a bunch of workers barely able to stay afloat leaves them no time or ability to do anything but work for those who own the big businesses.
And the fact that our politicians and business leaders continue to do nothing about this… well, that, my friends, is intentional.
So what are you going to do about it?
Featured Photo by Sharon McCutcheon on Unsplash
[1] Reflect on this as you hear "pro-life" politicians spew their rhetoric; if they cared about children, this would not be the case.
[2] With the possible exception of private student loans, which are universally tools of evil.