Living on $7.50/hr - or is it $71/hr?

[WiseOne]

Don't you love articles like this:

http://money.cnn.com/2015/09/03/news/ec ... -stack-dom

From the numbers listed in the article, this single mom actually has a monthly income of $1421 not counting the Medicaid benefit, nor the annual earned income tax credit.  She works 20 hours per week.  So her "income" is not $7.50/hour before taxes, but rather $71 per hour AFTER taxes.

And, since she has full time day care coverage, she could easily go out and get another job to fill the remaining 20 hours.  I would bet that these benefits, however, would be reduced if her income doubled, which is why she doesn't do this. 

Also note that she spends $100/month on a smartphone.  Excellent choice, that.

I'm glad these social safety nets are in place, but I just don't like how these articles pushing the need for minimum wage hikes grossly underestimate income.  If minimum wage were increased, her income wouldn't change much since she would lose her eligibility for some of these benefits.  It's just trading one form of welfare for another - and of course, also changing who gets to pay for it.

*** sorry, posted in the wrong section by mistake.  Can one of you moderators move this to "other discussions"?

[dualstow]

I wish I could live as extravagantly. I spend $22/mo on my smartphone (no data) and $33 on the wife's.

Anyway, thank you for this. Sometimes I like to get angry. 

[MediumTex]

I wish I could live as extravagantly. I spend $22/mo on my smartphone (no data) and $33 on the wife's.

Anyway, thank you for this. Sometimes I like to get angry. 

Sometimes I feel like a quartermaster for an army whose mission is to always have the latest consumer technology.

My cell phone bill is about $230 a month, but that is supporting four fully equipped soldiers in the field.

[Pointedstick]

I wish I could live as extravagantly. I spend $22/mo on my smartphone (no data) and $33 on the wife's.

Anyway, thank you for this. Sometimes I like to get angry. 

Sometimes I feel like a quartermaster for an army whose mission is to always have the latest consumer technology.

My cell phone bill is about $230 a month, but that is supporting four fully equipped soldiers in the field.

That could easily be halved (or better) by purchasing the phones outright one year used, signing up for service with a MVNO like Airvoice, and the parents at least committing to the using mobile data rationally (the kids may be a lost cause). My wife's monthly bill is about $10.

[Pointedstick]

Un-thread-jacking now…

Not sure I understand where $71/hr comes from. If that's including all the welfare benefits, that would mean her actual monthly "income" would be $5,680. I think you divided $1,421 per month by 20 (one week's worth of hours) rather than 80 (one month's worth of hours). If that's right, the real figure would be $17.76/hour.

Regardless, these kinds of articles are heartbreaking but always tell an untold story: how a small number of highly consequential bad decisions can alter the trajectory of your entire life. Like hooking up with someone who winds up in jail. Like not using birth control. Like deciding to keep and raise a child without any familial or financial stability (I'm not just talking about abortion here; adoption is another option). These kinds of personal holes can be very hard to pull yourself out of, especially if you're maybe not the sharpest knife in the drawer in the first place.

[Cortopassi]

I had no idea there were so many of these MVNOs.

I have Republic wireless, 3 Moto g phones ($99 each) $10/mo each for unlimited voice and text, and data only when in wifi areas.  Works out fine for us.

[WiseOne]

Oops you're right.  $17/hour then.  Still not that bad for unskilled labor, and my point was that minimum wage workers are actually getting more than minimum wage.  There was a recent article about how someone earning minimum wage in Manhattan can't rent an average-priced apartment, and it was based on the same flawed reasoning.

Not to say this isn't a sad situation.  However, I'm not sure the woman in question thinks it's sad.  She lives in a neighborhood where pretty much everyone has a similar lifestyle & story to hers - that's actually the saddest part.

[MachineGhost]

From the numbers listed in the article, this single mom actually has a monthly income of $1421 not counting the Medicaid benefit, nor the annual earned income tax credit.  She works 20 hours per week.  So her "income" is not $7.50/hour before taxes, but rather $71 per hour AFTER taxes.

Not even remotely comparable to someone that actually earns $71 per hour after taxes working just 20 hours a week.  And we all know who those spoiled pricks are.

And, since she has full time day care coverage, she could easily go out and get another job to fill the remaining 20 hours.  I would bet that these benefits, however, would be reduced if her income doubled, which is why she doesn't do this.

So working constantly is far more important than being a mother that is there for her developing son?  Would her son be better off as a full time latchkey kid?

Also note that she spends $100/month on a smartphone.  Excellent choice, that.

Also note she has no computer nor TV, so the smartphone is critically important.  Would she be better off being less connected?

I'm glad these social safety nets are in place, but I just don't like how these articles pushing the need for minimum wage hikes grossly underestimate income.  If minimum wage were increased, her income wouldn't change much since she would lose her eligibility for some of these benefits.  It's just trading one form of welfare for another - and of course, also changing who gets to pay for it.

How would saying this woman "earns" $71 an hour despite her shitty, stressful life change the reality of the situation, especially if it reduces the impetus for minimum wage hikes?