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Ownership Myth

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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
31,050 views 113 replies
Reply #26 from JoeUser Forums Top
Don't people receive unemployment though, or is that only in some states?


If the employer who terminated them doesn't fight it.

Not to plug my own blog, messy, but you might want to read my "Down and Out in America" series. We are on the brink of homelessness because every safety net we thought was there has failed us. My employer fought the unemployment (lying through her teeth), and TANF refuses to help. It's not as rosy a picture as critics want to paint it to be. Besides, even if I was getting unemployment, it pays less than minimum wage in our case (it's a percentage of your earnings).
Reply #27 from JoeUser Forums Top
Moreover, the payroll tax, respectively, $1400 and $3500, substantially reduces the subsistence level of both groups.

This is a good reason why the payroll tax should fund ownership instead of entitlements.
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Reply #28 from JoeUser Forums Top

This is a good reason why the payroll tax should fund ownership instead of entitlements.

The priority is to establish a safety net for the agéd, disabled and poorchildren, not to own a yacht.

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.
Thanks for reminding them.

Reply #29 from PolMach Forums Top
There is something very simple currently being ignored in this discussion. Time and time again history shown that neither initial establishment of a minimum wage, nor any subsequent raises have wreaked any of the feared economic repercussions. Businesses have never failed because they have to pay the petty margins of increase in the minimum wage. Nor has it ever harmed the economy.

One kernel of truth in prior arguments is the reality that inflation eventually does catch up with gains in minimum wage. But where the argument goes from there misses the bigger point. The argument shouldn't be that 'inflation eventually negates wage increases, so why bother?' It should be a recognition that a minimum wage increase is only one small step that needs to be taken toward finding ways to insure that all Americans aren't in a constant paycheck to paycheck struggle.

If anyone ever beleived (does anyone still?) that America is the greatest nation, why accept that so many of us have to live on wages that are far less than great?
Reply #30 from JoeUser Forums Top
If anyone ever beleived (does anyone still?) that America is the greatest nation


Some of us still do!
Reply #31 from JoeUser Forums Top
I'll ask again, if $8 per hour is a good idea, why not $80 per hour?


The problem, Brad, is that the employer - without some checks by society in general, holds almost all the cards. How is one individual to fight a General Motors etc. No one's arguing for $80 an hour here - IMO, it makes your argument appear weak that you have to turn to extremism. I guess the other side of that argument is to cut wages to 80 cents an hour to compete with the Chinese. Execpt for the factory owner of course. He'll have the lavish lifestyle to which his status should accord him.

JW
Reply #32 from JoeUser Forums Top
Draginol:

You ask and I haven't seen a reply about where to set minimum wage. The concept of minimum wage was that employers were paying the employees a "non-liveable" wage and thus causing hardship to the workers.

If you use that as a standard for what minimum wage should be then it should be set at a point that covers food, clothing, rent, plus an adjustment for living expenses in a community by community basis. What we do now is what we have always done, that is, throw some money at the problem and see who applauds. Conservatives always claim raising will ruin the economy, Liberals always point to crime and welfare.

Those of us who saved for 25 years, had smaller families and lived modest live styles are very irritating to those who haven't but the truth is that lifestyle in terms of job success is a choice. Is there compromise in the path to job success? Plenty! But only the individual worker can make his own decisions about what they can and cannot accept.

Reply #33 from JoeUser Forums Top
It should be a recognition that a minimum wage increase is only one small step that needs to be taken toward finding ways to insure that all Americans aren't in a constant paycheck to paycheck struggle.
Good show!
Reply #34 from JoeUser Forums Top
No one's arguing for $80 an hour here - IMO, it makes your argument appear weak that you have to turn to extremism. I guess the other side of that argument is to cut wages to 80 cents an hour to compete with the Chinese. Execpt for the factory owner of course. He'll have the lavish lifestyle to which his status should accord him.
I'm afraid this is precisely the long range objective of American business. 
Reply #35 from JoeUser Forums Top
Those of us who saved for 25 years, had smaller families and lived modest live styles are very irritating to those who haven't but the truth is that lifestyle in terms of job success is a choice. Is there compromise in the path to job success? Plenty! But only the individual worker can make his own decisions about what they can and cannot accept.
Many unfortunately do not have your wherewithal or the right DNA.
Reply #36 from JoeUser Forums Top
If you use that as a standard for what minimum wage should be then it should be set at a point that covers food, clothing, rent, plus an adjustment for living expenses in a community by community basis.


For how many people though? I think most of us agree that minimum wage is livable for one person, but not when it's meant to support an entire family, and in some places, such as Silicon Valley, the cost of living is much higher.
Reply #37 from JoeUser Forums Top

The problem, Brad, is that the employer - without some checks by society in general, holds almost all the cards. How is one individual to fight a General Motors etc. No one's arguing for $80 an hour here - IMO, it makes your argument appear weak that you have to turn to extremism. I guess the other side of that argument is to cut wages to 80 cents an hour to compete with the Chinese. Execpt for the factory owner of course. He'll have the lavish lifestyle to which his status should accord him.

I'm going to try to put this as nicely as I can. The basic problem I see here are people who argue based on emotional feelings rather than basic economic sense.

How much people get paid is based largely on market forces. That is, the supply of people with certain skills vs. the demand for those skills. The more in demand your skills are, the higher your salary will be because different companies will be competing for those same workers.  This is how it works, today, right now.

If you don't have any skills and thus can't earn enough to support a family, you have two real world choices: a) Improve your skill set or b) Don't have a family.

Stevendedalus and others argue for a third way - have the government force companies to pay more mnoey so that those people don't have to improve their skill and hence can afford to support a family.

In the post-NAFTA world, that's a recipe for disaster.  If I'm a factory owner paying my people say $6 per hour to make widgets, and the government forces me to pay $8, then guess what? I'm moving my factory to Mexico or China because that's the only way I can compete in the market.  So now, isntead of making $6 per hour, those people are on welfare. 

So then the same people whose half-baked ideas led to outsourcing then blame "big business" for it.  The Stevendedalus's of the world won't take any responsibility for the end result of their advocacy because they have "good intentions".  Whereas people like me, who are forced to be the grinch in order to save these jobs, are villified.

Reply #38 from JoeUser Forums Top
If I'm a factory owner paying my people say $6 per hour to make widgets, and the government forces me to pay $8, then guess what? I'm moving my factory to Mexico or China because that's the only way I can compete in the market. So now, isntead of making $6 per hour, those people are on welfare


Thanks for adding the outsourcing angle, Brad. I left that one out.
Reply #39 from JoeUser Forums Top
stevendedalus:

I don't think it's DNA. It's perspective. I've helped many families with debt and the key to doing so is always what they think they need. From what I've seen, families in debt prize the most:

1) Cable TV
2) Alchohol and Drugs
3) Expensive items (cars, boats, vacations)

I had one family with $12,000 in debt and both husband and wife working where by giving up the top 2 were able to get out of debt in 3 years. But oh! the fight to get them going?!
Reply #40 from JoeUser Forums Top
Messy Bu:

Well, that's the problem with a national program. What works in Ohio might be inappropriate in California. The thing is, it should be a state, not national issue because there's no way for a national program to determine the needs locally. Politics and poverty are a bad mix on all levels of government to a degree with the national being the worst.
Reply #41 from JoeUser Forums Top

1) Cable TV
2) Alchohol and Drugs
3) Expensive items (cars, boats, vacations)

clearly there's a fourth alternative.  instead of increasing the minimum wage, impose price controls on all of the above (or take the british factory owner approach and pay workers with gin, thus eliminating the middleman costs)

Reply #42 from JoeUser Forums Top
1) Cable TV
2) Alchohol and Drugs
3) Expensive items (cars, boats, vacations)


You're right about most. But you can't assume "all".

We have personally profited off the speed of obsolescence over the years. A 5 year old TV can be had for very little cost, as the new electronics are getting cheaper and cheaper. Same with computers. The machine I'm using right now cost us $20. Sure, the monitor doesn't have the best color display, and the computer can bog down sometimes, but dollar for dollar, we got a heck of a deal. Our VCR cost us $2. Our stereo, $25. We usually don't pay more than $1 for our books (the Friends of the Library book sales love us). And on top of it all, we've learned the golden rule: pay cash.
Reply #43 from PolMach Forums Top
Why not pay $80 an hour?

Simple. There is the obvious reality that the average small business could not pay that level of a wage withhout going under. Could that same business pay $8 an hour, definitely.

Why $8 to begin with?

Because that is an inflation-adjusted number based an an old formula for the base wage that will provide the most basic necessities of life for ONE person.

Should a set dollar amount apply across the board on a national level? The reasonable answer is definitely not. A simple solution should be a federally enforced formula that takes into consideration the cost of all basic necessities (e.g. food, shelter, clothing, utilities, transportation, as well as inflation). That way location ceases to be a factor. Inflation as well would be less of concern because it would be considered in the formula.

The argument regarding employers exporting jobs becuase they can't afford to pay higher wages displays a lack of study in history. If you look at the first major push of American corporations to move out of the country in the 70's the dishonesty of profit loss as a motivation is quickly revealed.

Not one single major American manufacturer outsourced to avoid bankruptcy. The motivation was purely profit driven, as opposed to an avoidance of loss. Ford, GM, and other major players in the manufacturing exodus all enjoyed massive profit margins before they shipped out their manufacturing. They outsourced because the average corporation wanted more profits by any means, as opposed to paying hardworking Americans their fair share for the products they produced.

As far as the comments regarding the desires and material wants of those living in poverty just think about it for a moment. The first two items (cable tv & drugs/alcohol) are transparent. These are implements, for better or worse, of escapism. When someone lives in abject poverty things that distract from the misery become much sought after, this is a basic survival instinct. The third item (expensive cars etc.) is also very predictable. We live in a society that reveres celebrity and extravagance in popular culture. When you are a member of the underclass in many ways you are considered to be worthless or a failure of one type or another. Expensive items such as cars and flashy jewelry become a form of self affirmation, because they represent what an underprivileged lifestyle is not. It's way of saying "see, I am worth something because I have this."
Reply #44 from JoeUser Forums Top

Why $8 to begin with?


If $5.15 is still livable for a single person though, then why raise it that high?


If it's because minimum wage isn't high enough to raise a family of four, is three dollars more per hour all they need to survive?

Reply #45 from JoeUser Forums Top

Reply #44 By: Messy Buu - 9/15/2004 7:12:09 PM
Why $8 to begin with?



If $5.15 is still livable for a single person though, then why raise it that high?


If it's because minimum wage isn't high enough to raise a family of four, is three dollars more per hour all they need to survive?


This all depends on where you live. I can with absolute certainty tell you that $5.15 WILL NOT support "1" person in southern California.
Reply #46 from PolMach Forums Top


If $5.15 is still livable for a single person though, then why raise it that high?


Because $5.15 is NOT a viable wage even for one person, let alone a family.

Which brings us back to the idea that if we're going to go the minimum wage route it should be calculated on the actual cost of living where a person holds residence.

Or at the absolute least the minimum wage should be raised to meet inflation annually. Congress apparently thinks at least that much is reasonable as they have given themselves a raise to meet inflation every year for the past four years.

The most recent raise just occurred last week to the tune of an additional $4,000.00 a year per conrgressperson.

In a country that is supposed to be of, by, and for the people our representatives see the necessity of increasing their income through wage increases. If we believe in this country then how can we possibly argue that what's good for our representatives in office isn't good for the people?
Reply #47 from PolMach 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.


If you can't afford the lifestyle, change it. If you make minimum wage, you can't afford to live in Richmond, CA. So don't. It is really that simple. That may seem cruel, or "unfair" that someone may be forced to move from a location they like just because they can't afford, but its not. It is simply realistic.

My aunt and uncle both work full time making minimum wage. They have four children. Years ago, they moved from San Bernardino up here to Vancouver, WA, simply because they could not afford their lifestyle. They had the intelligence to realize this, and rather than complaining, and asking why the government didn't fix their problem, they decide to fix it themselves.

I will admit, they may not have many possessions, or wear the nicest clothes, or drive the nicest cars. They may not have cable and do still use 5.99$ a month dial-up, but they survive. They are proud of the fact that they do not require outside support to operate daily.

Too many people look to others to fix things for them. If these same people would choose a livable lifestyle for themselves, whether by relocating, sacrificing vices, and quite simply not living outside of their means, they might find it easier to get by than they think.
Reply #48 from JoeUser Forums Top

Reply #47 By: guy in the sky - 9/15/2004 7:55:58 PM
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.


If you can't afford the lifestyle, change it. If you make minimum wage, you can't afford to live in Richmond, CA. So don't. It is really that simple. That may seem cruel, or "unfair" that someone may be forced to move from a location they like just because they can't afford, but its not. It is simply realistic.

My aunt and uncle both work full time making minimum wage. They have four children. Years ago, they moved from San Bernardino up here to Vancouver, WA, simply because they could not afford their lifestyle. They had the intelligence to realize this, and rather than complaining, and asking why the government didn't fix their problem, they decide to fix it themselves.

I will admit, they may not have many possessions, or wear the nicest clothes, or drive the nicest cars. They may not have cable and do still use 5.99$ a month dial-up, but they survive. They are proud of the fact that they do not require outside support to operate daily.

Too many people look to others to fix things for them. If these same people would choose a livable lifestyle for themselves, whether by relocating, sacrificing vices, and quite simply not living outside of their means, they might find it easier to get by than they think.


So by your line of thinking ALL the single people in southern California who were "born" there and make minimum wage should move????
first point, you can't live in southern CA and NOT have a car. They will NOT survive without one!
second point at $5.15 per hour there is NO living within your means. At that rate you would have to work "3" jobs just to make a "living"!
third point low price housing in that area starts @ $250,000 for a lousy 1000sq ft home.
I can say all this in absolute honesty because, I lived there, done that!!!
Reply #49 from PolMach Forums Top


If you make minimum wage, you can't afford to live in Richmond, CA. So don't.


It isn't cheap to move. That includes finding transportation costs if you don't have a vehicle, not to mention being able to come up with enough money to pay the deposit and first month's (or more) rent at a new location.

Your example is a tragedy not a triumph. It is admirable that two people could manage such a task under the circumstances and I applaud that, but it's tragic that somebody should be forced to flee their hometown because they have been priced out by the economy.

Another thing, the government doesn't have any money. They don't earn or possess anything that doesn't come directly from the American people. So when somebody is "asking the government to fix their problem" it is an address to all of us as citizens.

Who is so callous that they would turn up their nose at a fellow citizen in need?
Reply #50 from JoeUser Forums Top
first point, you can't live in southern CA and NOT have a car. They will NOT survive without one!
second point at $5.15 per hour there is NO living within your means. At that rate you would have to work "3" jobs just to make a "living"!
third point low price housing in that area starts @ $250,000 for a lousy 1000sq ft home


California's minimum wage isn't $5.15 an hour anyway (It's $6.75), so it's pointless to speculate on whether $5.15's liveable in Cali anyway.