Ownership Myth

And The Two-Income Syndrome

from JoeUser Forums

The current median income for a family of four is about $55,000 or approximately three times that of the poverty line at $19,000 for a family of four. The problem with these statistics when trying to arrive at a “living wage” that often is juxtaposed to the horrific rate of $5.15 an hour or $10,500, which if adjusted for inflation should be at $7.50 or $15,000, is in the difficulty of determining how much of the median and the poverty line owe to two salaries. If those at the four-family poverty line consists of two-incomes at the minimal wage the income would place the family at above the line by $2,000 or a total income of $21,000. This example, however, does not consider the costs of child care, whether governmentally assisted or out of pocket. Nor does it take into account the erosion of parental quality under such duress. For the median $55,000 may constitute some cushion for child care but leaving little room for building wealth or “ownership.” Moreover, the payroll tax, respectively, $1400 and $3500, substantially reduces the subsistence level of both groups. As for the income tax, chances are the minimal level will not be taxed at all, and those frozen on the median will be helped somewhat by having dependents; in spite of this, the move to “ownership” is out of the question.

If, however, the minimum wage rose the necessary 8.7%, it would also affect the median by perhaps an additional 5% so that the low level increased some $1800 and the median some $2700 and from there adjusted for inflation annually, some progress would be made on the road to ownership, but more importantly would increase the rolls of the middle class. This, of course, does not address the shame of the two-income family where it directly affects the degradation of raising children. Only those above the median can find the right child care through comfortably retired, or one-income grandparents or professional nanas. For the rest, most leave to chance the well-being of their children.

        

Copyright © 2004 Richard R. Kennedy All rights reserved. Revised: September 14, 2004.

http://stevendedalus.joeuser.com

politics
30,973 views 113 replies
Reply #1 from PolMach Forums Top
The far left may say single mom families are just fine and the far right may argue that no one who is working minimum wage deserves a "raise" anyway, but some know that between these extremes is a struggling family unit being torn in two and falling to the ground with no socio-cultural safety net.
Reply #2 from JoeUser Forums Top

I think there's a basic disagreement here though that can't be easily reconciled: The poverty rate.

The poverty rate is something that is arbitrarily determined. $10,500, like you said, is what someone making the minimum wage would get if they worked full time.

The question is, can they live on that? The answer is, yes. Yes they can.  You can afford food, clothing, and shelter on that.  You may not be able to have the lifestyle that you like, but you can live on it.

I don't see what business it is of some outside group to decide how much someone should have to pay for a product or service.  That's a matter between the service provider and the customer.

If $7.50 per hour is a good minimum wage, why not make it $50 per hour? What's magical about $7.50 or any arbitrarily arrived number?

Multiplicity - Control multiple PCs using one keyboard and mouse
Reply #3 from JoeUser Forums Top

The poverty rate is something that is arbitrarily determined. $10,500, like you said, is what someone making the minimum wage would get if they worked full time.
I agree--for a young single person and should be patient that if he hangs in there he will be upgraded--however, it surely is not livable if one is trying to support a family. The "arbitrary" $7.50 is simply an inflation adjustment from the '60s. I trust you yield that the cost of living has increased since then. Then again, maybe not: I observed in your comment a few weeks ago wherein you compared the rent you were paying in your struggling youth without accounting for the double rent one pays today.

DEF, "safety nets" are taboo for the right[eous] let them eat week old cake.

Reply #5 from PolMach Forums Top
$7.50


$8, saw that one on the news, it needs to be $8 now, not four or five years from now. Think the news, if I remember right, that they were enforcing an $8 minimum wage but could only do it with local businesses in New Mexico or Arizona, but anyways I remember the important part that is the minimum wage needs to be 8.00 dollars now, not some years down the road, and neither Bush nor Kerry have that plan or even support it.
Reply #6 from JoeUser Forums Top
agree--for a young single person and should be patient that if he hangs in there he will be upgraded--however, it surely is not livable if one is trying to support a family.


Why in God's name would somebody intentionally raise a family under minimum wage? With Planned Parenthood and other programs available, it's not as if they have no choice.
Reply #7 from JoeUser Forums Top
I don't see what business it is of some outside group to decide how much someone should have to pay for a product or service. That's a matter between the service provider and the customer.


It’s society’s business. It’s generally accepted that the common interest is greater than the interest of a person or business. It is in society’s best interest to insure that people get paid a minimal amount for their labor.
Reply #8 from JoeUser Forums Top
It is in society’s best interest to insure that people get paid a minimal amount for their labor.


BWAHAHAHAHAHAHAHAHA!!! Sorry, the first time I read that, it looked like you were saying that people should only be paid as little as possible. Context tells me what you meant, but still... pretty funny!
Reply #9 from JoeUser Forums Top
The question is, can they live on that? The answer is, yes. Yes they can


Holy cow, you CAN'T be serious? In California, that wouldn't even pay rent for the year in a "low-income" apartment. I was renting a one bedroom apartment in a pretty ghetto neighborhood in Richmond, CA. Rent: $985/mo. You tell me how I'm supposed to pay for food/clothes/gas/water/electricity etc? Welfare? Food stamps? I thought that was temporary assistance. I urge you to reconsider that statement, and maybe take a good look at how little $10,000 a year is.

-- B
Reply #10 from JoeUser Forums Top
I remember hearing that in Silicon Valley that people who were making six-figure incomes were sleeping in cars because the rent was so high. Therefore, I think the minimum wage should be raised so that people will make a minimum of seven-figures.
Reply #11 from PolMach Forums Top
I remember hearing that in Silicon Valley that people who were making six-figure incomes were sleeping in cars because the rent was so high. Therefore, I think the minimum wage should be raised so that people will make a minimum of seven-figures.


Damn right, I want to be living in a Rolls Royce too.
Reply #12 from JoeUser Forums Top
Why in God's name would somebody intentionally raise a family under minimum wage? With Planned Parenthood and other programs available, it's not as if they have no choice.


Simply because people DO get unemployed, messy...and look for work at any cost. MAYBE you should try a little less judgementalism!!!
Reply #13 from JoeUser Forums Top
Welfare?


Welfare isn't even temporary assistance. For all intents and purposes, it doesn't exist for many Americans.
Reply #14 from JoeUser Forums Top
steven: This is a brilliant and incredibly relevant article.
Reply #15 from JoeUser Forums Top
Am I loving this article, or what? The minimum wage should be at least $8.50 an hour. But it should actually be a living wage, decided by the location you live in. Wonderful blog, stevendedalus!!
Reply #16 from JoeUser Forums Top

Stevenendaous, my "struggling youth" was only a decade ago. I don't think costs have exactly sky rocketed.

The problem with the poverty rate is that it is a meaningless number. How much does it cost to pay for food, clothing and shelter? Less than $10,000 per year.

Can you afford to support a family on that? Of course not. So don't have children until you can afford to do so.  There's nothing in the constitution that implies that the government will provide you with the means to pay for children.

I don't see in the constitution anything that implies that it's any of the government's business how much I charge for or pay for a product or service.

Reply #17 from PolMach Forums Top
If the Government wants to get in the Minimum Wage Business it should be raised to 8 dollars now, and adjusted with inflation, problem was last time they did it people were worried about losing jobs but I don't think that had anything to do with it.
Reply #18 from JoeUser Forums Top

Holy cow, you CAN'T be serious? In California, that wouldn't even pay rent for the year in a "low-income" apartment. I was renting a one bedroom apartment in a pretty ghetto neighborhood in Richmond, CA. Rent: $985/mo. You tell me how I'm supposed to pay for food/clothes/gas/water/electricity etc? Welfare? Food stamps? I thought that was temporary assistance. I urge you to reconsider that statement, and maybe take a good look at how little $10,000 a year is.

Well then you better get roommates.  10 years ago I was living in Kalamazoo Michigan with 4 roommates.  I had one room in there. And my yearly income was well below the "poverty" line.

Since when is every citizen entitled to their very own apartment? If you can't afford the rent, find a roommate. 

I'll ask again, if $8 per hour is a good idea, why not $80 per hour?

Reply #19 from PolMach Forums Top
I'll ask again, if $8 per hour is a good idea, why not $80 per hour?


Well, I am not an economist, so I don't know what I don't know about that subject and that's all I know.

After all, I believe that what I do not know I simply do not know.
Reply #20 from JoeUser Forums Top
Well, I am not an economist, so I don't know what I don't know about that subject and that's all I know.

After all, I believe that what I do not know I simply do not know.


If I had an insightful left today, that would get it, ShoZan.

*I used them up giving a severe trolling to a deserving blogger*
Reply #21 from PolMach Forums Top
Thank Socrates, not I, for he has opened up my mind, from now I on, I will simply state what I know and what I don't know.
Reply #22 from JoeUser Forums Top
One problem with raising the minimum wage that no one seems to look at is return on investment.

It goes like this. Suppose I own a factory making widgets. It's manual repetitive labor where the workers produce widgets at whatever rate they are able. Ideally I want to have workers that produce at a rate high enough to produce a profit for the company. So if I pay them $6.00 an hour, I need for them to produce enough widgets in an hour to pay for their wage and any overhead plus enough for a profit, so I can get more machines, hire more workers, etc.

Now suppose the government forces me to pay them $12.00 an hour. That means any workers that can't or don't produce at a higher rate to offset the wage increase must be replaced with workers that can produce at the higher rate. Well, I guess I could hire illegal aliens that would work for less, but let's say I choose not to do this. Also, if I can't find any workers that can produce at the increased rate, I go out of business. But, let's say I can and do replace the slow workers.

My point is that it evens out. There's a short term increase in the amount of money people make, followed by an increase in churn as the job market readjusts with workers changing jobs. Assuming the displaced workers find jobs.

The increase in minimum wage only works if there is sufficient profit margin in the majority of companies to be able to absorb the increased overhead caused by country-wide wage increases. And that profit cushion does not exist for the majority of companies, despite the few companies that are usually cited, by proponents of the minimum wage increase, as making 'huge' profits.

The simplistic (and short-sighted) solution often proposed is for businesses to raise the prices on the goods they sell to offset the wage increases. Ok, let's follow that. Prices increase substantially, so everyone pays more for everything. But who gets hit the hardest? The minimum wage folks. There goes that extra money they were earning and they are back in the same boat barely scraping by. Additionally, the people that were already in the middle income levels, who don't get an increased wage (they are called middle class, btw), now find themselves closer to scraping by, because of the increased pricing with no additional income.

Call it government sponsored inflation.
Reply #23 from JoeUser Forums Top
Well then you better get roommates. 10 years ago I was living in Kalamazoo Michigan with 4 roommates. I had one room in there. And my yearly income was well below the "poverty" line


I didn't realize your target group here was college aged kids with the only worry about scraping together beer money. From what I read of the article, steve was concentrating primarily on the issue of a family of three or more subsisting on such a wage. Now, I'm neither for nor against raising the minimum wage, however I think it is a tad unrealistic to assume that any family can exist on $10k a year. It's hard enough for my family right now getting by on about $35k/yr, and we've been trying to pull together for a house for some time. This is on two incomes, and soon to be a third (I'll probably have to pick up a second job). It seems like everytime we're about to "break even" so to speak, something comes and puts it's foot up our financial ass. I couldn't imagine trying to live off $800 a month.

-- B
Reply #24 from JoeUser Forums Top
Mr. Frog, at 35K a year I would guess you wouldn't qualify for an increase in pay if the minimum wage went up.

If it did, get ready for the increased prices to come along and put their foot up your 'financial ass'.
Reply #25 from JoeUser Forums Top

Simply because people DO get unemployed, messy...and look for work at any cost. MAYBE you should try a little less judgementalism!!!


Don't people receive unemployment though, or is that only in some states?


It’s society’s business. It’s generally accepted that the common interest is greater than the interest of a person or business. It is in society’s best interest to insure that people get paid a minimal amount for their labor.


Isn't it also society's business to make sure that people are employed? What's the point of raising minimum wage if layoffs will be made to compensate?