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Ownership Myth

Ownership Myth

And The Two-Income Syndrome

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

31,050 views 113 replies
Reply #51 Top

Reply #50 By: Gideon MacLeish - 9/15/2004 8:32:16 PM
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


You are "very" correct. But they won't make it on $6.75 either. At least not in southern CA anyway.
Reply #52 Top
Just a little note: We have rampant homelessness here in Hawaii.

*Rent for a small (small here is much smaller than mainland small, btw) apartment with two bedrooms is at least $1,000/mo . . . that's a really ghetto apartment, and that's if you get lucky enough to find one that cheap.

*Add utilities at at least $100/mo

*Gasoline is a minimum of $2.10/gallon here. If the family owns a junker car that get decent gas mileage and carpool together, they will spend at least $100/mo on gas.

*Groceries are MUCH higher here . . . like $6 or $7 for things like a gallon of milk or a box of cereal. A family of four will likely spend at least $400/mo on groceries. That's bare minimum.

*Auto insurance will differ, but I'll assume a minimum amount of $75.

*Household items like cleaning supplies and toilet paper are much higher here as well, but I'll assume $25/mo.

*Most apartments here (especially like the affordable $1,000/mo ones) don't have space or hook ups for washers and dryers. Laundry at at a laundromat for four people will be at least $40/mo.

*Health insurance for a family of four will be at least $250/mo.

If this Hawaiian family never leaves the house to do anything and never buys a single thing except what is neccessary for survival *and if nothing is actually higher than my absolute cheapest estimate*, their cost of living is $1,990/mo. If the adults both work full time making $6.50/hr (HI minimum wage), they will have a whole ten bucks to spare each month! So long as no one gets sick or the car has no problems or no one needs new undies, they are doing great, aren't they?
Reply #53 Top

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.

You know this? What small business do you run?  What is your data to back up this claim? Why $8? Why not $9? Or $10? Or $12?

I always find it funny when people who don't run businesses start trying to say how much someone can afford to pay for a given service.

Reply #54 Top

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

And you know this..how? I've lived on that level of income, as an adult. I couldn't support a family on it but I could live on it. It requires having roommates and such but it can be done. This is how most people USED to live btw. Renting an entire apartment for yourself is a relatively new thing.

Heck, remember Three's Company? It was a given that young people would room together while they made their way up. Now people apparently expect to just leave home and be able to magically afford their own apartment.  You want to make money, get some skills.

Reply #55 Top
If you make minimum wage, you can't afford to live in Richmond, CA. So don't.


I simply meant this as an example. I am not at all saying that all single people who make minimum wage in SoCal should leave. However, as I said, I do believe that if your lifestyle is outside of your means, it is up to you to fix it. If a single guy making minimum wage can't afford to live in Richmond, CA, (or any other place) then why would he? Or perhaps he could, if he would make some sacrifices, or alter his lifestyle in another way. I am sure that there are jobs paying minimum wage in Redmond, CA. Somebody has that job, and lives close enough to do that work, and manages to survive by it. If it is difficult, yet he refuses to move or otherwise change his situation, why should he automatically demand or deserve a raise in pay?

If I am born and raised in a community that booms to a point that is very difficult to live there while making minimum wage, and cannot afford the taxes or other living costs, shouldn't I take care of the problem? Or should I ask everybody to pitch in, raise my salary, etc., so that I can continue to outlive my means? Is it their responsibility to make sure I can be where ever I want? Or should I have prepared when I saw the coming changes, and made a plan to stay self-sufficient?

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?


Have you ever seen a panhandler, and not given them money? I know I have. I don't think that makes me or you or any Joe a callous person. Is that person needy? Maybe, maybe not. I cannot be sure. However, when I offer to buy them food or a blanket, and they refuse, saying they just want money, this tells me they aren't really needy.

It is a similar problem. There are many options available to people besides asking for a pay raise. Unfortunately, some people don't wish to deal with their situation appropriately, and look for the easy way out, placing burden on others to take care of them.

Reply #56 Top

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.


This would definitely work better, since the cost of living varies from state to state.

Reply #57 Top
d'oh! I forgot about childcare . . . now my example family is completely screwed. $10 won't pay for full time child care for two kids.
Reply #58 Top


And you know this..how? I've lived on that level of income, as an adult.


Becuase I have lived on that income myself. I was in a position where I had to have multiple roomates as well. I wouldn't quite call it living as much as surviving - once again, why should the citizens of the greatest and wealthiest nation be forced to live in conditions unbefitting of such a nation?



You want to make money, get some skills.


I actually do possess the necessary skills to make a good income. But if you do some research you will find that there are millions of Americans with good skills who still can't find a job that pays well.

A friend of mine is an environmental engineer with a master's degree and graduated in the top five of his entire class. He cannot find a job that pays him what he should be making.

Real life isn't as simple as you make it out to be.
Reply #59 Top
Perhaps people complaining that you can't raise a family on minimum wage shouldn't be having kids in the first place. It would have the practical result of weeding out unsuccessful genes from the the human gene pool.
Reply #60 Top
Health insurance for a family of four will be at least $250/mo


I wish!! I can't imagine that it would be cheaper in Hawaii than in Minnesota, but for my family it's $417 for three of us, and would be an additional $127 for my other child if she wasn't covered under her biological dad's health insurance. This is private individual health care with a $500 deductable (I wonder if we shouldn't up it to save on premiums but that may come to bite us in the ass someday too). Neither of our employers offers health care as a benefit. My hubby's an upper level blue collar worker and I'm a lower level white collar. We both work very hard and are making ends meet.

There is definately a problem. I don't know if it's a minimum wage problem, or a health-care problem or what. I mean, if the minimum wage were higher, then that would ripple throughout the payscale structure and thus our income would be higher. Then the health care burden would be a little easier to bear. But if something could be done about the rising costs of health care then we would be more able to handle that. I'm sure that there's just so much more to the equation that these two issues though. I just don't know what the answer is.
Reply #61 Top

I actually do possess the necessary skills to make a good income. But if you do some research you will find that there are millions of Americans with good skills who still can't find a job that pays well.


I doubt raising the minimum wage would help these people, unless all they make is minimum wage.

Reply #62 Top
I've thought about it, and if 5.15 isn't enough for one person, then I doubt that 8 dollars will be enough for a family of four. Since the minimum wage is seemingly used for families of four, it should be raised to 20 dollars per hour. I think only then would a family of four actually be able to survive comfortably.
Reply #63 Top
As stated previously:

It should be a recognition that a minimum wage increase is only one small step that needs to be taken toward finding ways to ensure that all Americans aren't in a constant paycheck to paycheck struggle.

This discussion is about more than dollars and cents. It's about what constitutes an ethical society. In a society that has the means to provide for all people at a decent level, what conscionable argument can be made that we shouldn't?
Reply #64 Top

This discussion is about more than dollars and cents. It's about what constitutes an ethical society. In a society that has the means to provide for all people at a decent level, what conscionable argument can be made that we shouldn't?


It's easier said than done and the road to Hell is paved with good intentions?

Reply #65 Top
It's easier said than done and the road to Hell is paved with good intentions?


So what road are bad intentions used for
Reply #66 Top
You know this? What small business do you run? What is your data to back up this claim? Why $8? Why not $9? Or $10? Or $12? I always find it funny when people who don't run businesses start trying to say how much someone can afford to pay for a given service.


Taken from this Link.

Despite the fact that contemporary economic research casts a long shadow of doubt on the contention that moderate minimum wage increases cause job losses, opponents still lead with this argument. This so-called “disemployment” argument is particularly difficult to maintain given two relatively recent developments in the history of minimum wages. First, the quality of empirical minimum wage research rose steeply over the last decade, due largely to economists’ ability to conduct pseudo-experiments3. Such experiments, rare in empirical economics, typically utilize the fact that numerous states (12 as of today) have raised their minimum wage above that of the federal level. This variation between states gives researchers a chance to isolate the impact of the wage change and test its impact on employment and other relevant outcomes. As stressed in the Card and Krueger book cited above, these studies reveal employment elasticities that hover about zero, i.e., they solidly reject the conventional hypothesis that any increase in the minimum wage leads to job losses among affected workers.

Second, following the most recent increase legislated in 1996, the low-wage labor market performed better than it had in decades. The fact that the employment and earnings opportunities of low-wage workers grew so quickly following that increase continues to pose a daunting challenge to those who still maintain that minimum wage increases hurt their intended beneficiaries.

Recently, the Fiscal Policy Institute (FPI) released a study of the impact of higher minimum wages on small businesses4. Their analysis focuses on various outcomes for businesses with less than 50 employees, comparing these outcomes between states with minimum wages above the Federal level and those at the Federal level. If the theory that higher minimum wages hurt small businesses is correct, then we would expect there to be less growth in such enterprises in states with higher minimum wages. In fact, as shown in Figure 5, the opposite is the case.

• Between 1998 and 2001, the number of small business establishments grew twice as quickly in states with higher minimum wages (3.1% vs. 1.6%).
• Employment grew 1.5% more quickly in high minimum wage states.
• Annual and average payroll growth was also faster in higher minimum wage states.



Reply #67 Top

you can't live in southern CA and NOT have a car


wanna bet? 

several times a year i think about buying another car, but not seriously.  not owning a car means that i walk at least a couple miles each day--which is a good thing  (i havent been using my 10speed since the big bicycle gymnastics exhibition in 99 featuring a 1-1/2 with a twist over the handlebars and across 4 lanes of traffic ).  i dont spenda lotta time driving aimlessly around.   i dont have to hassle with registration, gas prices, insurance or parking tickets (not to mention, thanks to burger and rehnquist gutting the fourth amendment, a vehicle is THE  fast track to jail).  ive owned all the cars ive really wanted with the exception of a 60 tbird (should i find the right one of those, i might be very tempted).  i also dont have to feel like im wasting money if i dont do my own vehicle repairs...or like a total moron if i do. and i dont have to obsess over that inevitable first ding.


LA's mass transit system is easily the worst ive encountered (even in small cities) but if you wait long enough eventually a bus shows up.  

Reply #68 Top

Perhaps people complaining that you can't raise a family on minimum wage shouldn't be having kids in the first place. It would have the practical result of weeding out unsuccessful genes from the the human gene pool.
Be careful you're in a dangerous abortion alley: the Christian Right might hear you. 

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.
Good advice, Marie Antoinette!

Reply #69 Top
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.
Do I detect traces of Captain Queeg? The continuing negation of the working class by conservatives is going to result in very bad intentions of workers taking to picketing and disruptions; it's happened before. I suggest that a little respect for workers who hold the nation together should be at hand rather than derogated. It is not the likes of me that won't take responsibility but rather the precarious lack of responsibilty and gratitude from the corporate class that reaps outrageous reward by virtue of a nation that leans over backwards to protect the affluent. 
Reply #70 Top
Abe, great research.
Reply #71 Top
Stevendedalus, can you please explain to me why the first solution should be to raise, by law, the minimum salary they make, rather than expect an effort on their part to resolve the situation themselves, independent of government intervention? If it is possible and doable, and has been proven as such, why should the government intervene for those unable who choose not to help themselves when others in the same situation can, and do, do so?
Reply #72 Top

Reply #67 By: kingbee - 9/16/2004 12:13:14 AM
you can't live in southern CA and NOT have a car



wanna bet?

several times a year i think about buying another car, but not seriously. not owning a car means that i walk at least a couple miles each day--which is a good thing (i havent been using my 10speed since the big bicycle gymnastics exhibition in 99 featuring a 1-1/2 with a twist over the handlebars and across 4 lanes of traffic ). i dont spenda lotta time driving aimlessly around. i dont have to hassle with registration, gas prices, insurance or parking tickets (not to mention, thanks to burger and rehnquist gutting the fourth amendment, a vehicle is THE fast track to jail). ive owned all the cars ive really wanted with the exception of a 60 tbird (should i find the right one of those, i might be very tempted). i also dont have to feel like im wasting money if i dont do my own vehicle repairs...or like a total moron if i do. and i dont have to obsess over that inevitable first ding.


LA's mass transit system is easily the worst ive encountered (even in small cities) but if you wait long enough eventually a bus shows up.


I'll take that bet! You obviously live inner-city (LA) Just try doing the same thing in San Diego! It AIN'T happening!!!
Reply #73 Top
You know something "kingbee" I fell into the mindset most people from San Diego do. IE: They don't consider LA to be part of "southern CA". Even though you and I BOTH know that geographicaly it sure is in south CA. But seriously if you live in San Diego county say in Lakeside or Santee or El Cajon your trip to work can run anywhere from 20-40 miles "one way"! Especially since most of the work is in north San Diego county. And I don't know too awful many people who could make that trek on a 10 speedOR walk it for that matter. And having used CalTrans in San Diego before, to get to work usually means getting up 4 hours early to be able to get a bus and get to work on time! The trolley helps but it's not enough!
Reply #74 Top
If it is possible and doable, and has been proven as such, why should the government intervene for those unable who choose not to help themselves when others in the same situation can, and do, do so?
You're assuming that all of those disadvantaged possess the innate wherewithal of those under the same circumstances have. Not everyone can win the lottery. Omitting the lazy and the don't give a damn few--in all classes, by the way--there are honest people who are in distressful situations requiring a compassionate government to ease the burden.
Reply #75 Top
If the minimum wage had increased at the same rate over the past 7 years that CEO salaries have increased, the minimum wage would be over $15 an hour.