Friday, January 29, 2016

Minimum Living Wage

***Disclosure: I am thankful for my current employment, if for no other reason than it helped us get back on our feet after relocating from Seattle. This is not intended as an indictment against them. Indeed, many similar positions in the area were only offering $12/hour with no benefits.***

I hear a lot of people that disagree with the $15 “Living Wage.” I'm here to contend $15 is hardly living, whether married or single. There may be areas of the country where that is more than enough. However, even in St. Louis county, which is certainly cheaper than many areas, it is barely enough. In order to adequately explain, I will be giving you an honest breakdown of our own family situation. Our budget, which is extremely conservative and only has approximately $80 built in for “fun” ends up at $2145 per month. My current pay is $14.67 per hour which comes out to $2542.80 per month before taxes, insurance, and 401k. To help boost this, I work evenings and Sunday, for which I get an average extra $0.90/hour, which adds $156 pre-deduction, totalling $2698.80. This sounds great, right? Since this month had the first paycheck with insurance deducted, I finally was able to get a grasp on what monthly would look like. Even with almost maxing out allowances on both state and federal, taxes come to about $122 each paycheck. Insurance (which, is fairly comprehensive, at least) takes away another $175 each time. Finally, about $75 from each check will go toward a 401k (6%, which then gets matched at 3%). In total, the average deductions per paycheck (not per month) will be around $372. If we multiply that by 26 paychecks a year and divide by 12 months, that is a monthly average of $806. That initial $2700 gets cut down to $1892.80. Therefore, the estimated budget of $2145 (which can be more or less based on cost of utilities) puts us $252.50 in the hole.

You may say that surely there is somewhere we can cut corners. However, if you knew me at all, you would know I have already cut corners enough. That $80 “fun”? $50 is specifically for date nights, which is far cheaper than if we went to biweekly marriage counseling sessions (and far more effective, in our opinion and experience.) The only entertainment we pay for is Netflix, at just under $10 a month, as my current employer provides free internet, TV, and home phone. (Normally we would only have internet, which is around $65, but as it is, that's an added $150+ benefit.) Every other category is as low as possible, even unfortunately food which we strive to stay under $250 per month. I bike as much as possible to save on gas costs (and vehicle maintenance costs, which are typically more expensive than bike maintenance.) This budget is even including a sub-10% tithe (gasp, the sinners we must be.) When I tell you there is no further room to trim the fat, I mean what I say. On our current salary and budget, there is no category for savings aside from the 401k, no extra breathing room even for essentials such as clothing. If we had car payments or student loans to pay off, it would be impossible, so please, save your Dave Ramsey talk for someone else.

I mentioned the current salary, even with my evening differential, still left us $252.50 in the hole. How do we survive? First, in years past in similar situations where we've lived, we have depended on either family helping with bills or prayed for tax refunds to come through as quickly as possible. Second, I have to do overtime. My overtime is calculated on my base rate not the differential, so that is just over $22 per hour. That means I have to do at minimum 13.5 hours a month extra to simply break even (taxes and 401k amount to about 16% of each paycheck, so 13.5 times $22 hours is $300 which comes out to right around $252 after 16% deduction.) This comes down to just over 3 hours of overtime a week, which isn't terrible. However, that is part of the issue. I have to do 3 hours of overtime a week just to make budget in a medium cost city when I am making $15.50 an hour.

To think there are people arguing that anything less than $15 per hour is feasible is not only frustrating but saddening. To think people want people to get off welfare and public assistance but they refuse to support a minimum wage that is what I would consider barely living is mind blowing. There are many cities that have moved up to $15 per hour as the minimum and it is not causing businesses to shut down en masse. However, for those cities that have done that, such as Seattle, $15 is a joke. When we lived there, pre-tax had to be around $3200 a month or it would not work. Our two bedroom apartment that was 10 miles from Seattle itself was $1425 a month plus $30 for a carport, compared to the $925 three bedroom house with a basement that we have here in St. Louis. To refuse to push for change that keeps the minimum wage with matching pace with the inflation is not only selfish but in my opinion immoral. At $15 an hour we don't have room to save for emergencies of any sort, let alone vacations. To quote the late, great FDR from a speech in 1933, “By living wages, I mean more than a bare subsistence level — I mean the wages of a decent living.”

Now, if after all this explanation from our personal experience, you still disagree with higher wages, fine. Then at least join the fight for rent control or anything else that can keep costs from being out of reach without having to work insane amounts of overtime or having both parents working full time. (We specifically choose to have Casey at home with Dante for both the purpose of raising him ourselves and because of the absurdity of the costs of daycare and preschool.) We fully realize we are far from the poorest of the poor, even in America. However, this affects everyone in the USA, not just us. Please, join the conversation on this issue. at minimum 13.5 hours a month extra to simply break even (taxes and 401k amount to about 16% of each paycheck, so 13.5 times $22 hours is $300 which comes out to right around $252 after 16% deduction.) This comes down to just over 3 hours of overtime a week, which isn't terrible. However, that is part of the issue. I have to do 3 hours of overtime a week just to make budget in a medium cost city when I am making $15.50 an hour.

To think there are people arguing that anything less than $15 per hour is feasible is not only frustrating but saddening. To think people want people to get off welfare and public assistance but they refuse to support a minimum wage that is what I would consider barely living is mind blowing. There are many cities that have moved up to $15 per hour as the minimum and it is not causing businesses to shut down en masse. However, for those cities that have done that, such as Seattle, $15 is a joke. When we lived there, pre-tax had to be around $3200 a month or it would not work. Our two bedroom apartment that was 10 miles from Seattle itself was $1425 a month plus $30 for a carport, compared to the $925 three bedroom house with a basement that we have here in St. Louis. To refuse to push for change that keeps the minimum wage with matching pace with the inflation is not only selfish but in my opinion immoral. At $15 an hour we don't have room to save for emergencies of any sort, let alone vacations. To quote the late, great FDR from a speech in 1933, “By living wages, I mean more than a bare subsistence level — I mean the wages of a decent living.”

Now, if after all this explanation from our personal experience, you still disagree with higher wages, fine. Then at least join the fight for rent control or anything else that can keep costs from being out of reach without having to work insane amounts of overtime or having both parents working full time. (We specifically choose to have Casey at home with Dante for both the purpose of raising him ourselves and because of the absurdity of the costs of daycare and preschool.) We fully realize we are far from the poorest of the poor, even in America. However, this affects everyone in the USA, not just us. Please, join the conversation on this issue.


2 comments:

Joshua Smith said...

Can you do a post about how you arrived at 2145?

Karl said...

We based this off our average usage of necessary categories. Auto:Gas, Auto:Insurance (includes rental insurance), Date Night, Family Fun, Groceries: Food, Groceries: Other (ie toiletries), Insurance (life), Internet, Sponsored Child, Dante clothing, Laundry (not clothing), Medical (not insurance, copays, etc), Pet (food, kitty litter), Rent, Tithe/Charity, Utilities (Electric, Gas, Phone, and Water), and Vehicle Repairs. Through the year, these tend to balance out but that's not a guarantee. Groceries food almost always goes over as we are trying to buying better quality.