First, here is a few things you should now about the US federal minimum wage and the poverty level.
- The current federal minimum wage is $7.25 per hour.
- A full-time minimum wage employee earns $15,080 annually.
- In 2012, the poverty threshold for a single person was $11,945. For a family of four with two children it was $22,283.
The good news is that most people make more than the official poverty level. But the bad news is that MORE THAN HALF of all American workers make less than $30,000, which is de facto poverty. Poverty is different from being “poor”. Poverty is not just when money is TIGHT, it’s when you lack the means to provide the necessities of life. When you are poor, you cannot buy nice things. When you are in poverty, you have to choose between paying for your utilities, your rent, and food because you cannot afford all three.
When you are poor, you make at least (but not much more than) a living wage: an amount of money you are paid for a job that is large enough to provide you with the basic things (such as food and shelter) needed to live an acceptable life. Not a comfortable life, mind you. Just one where you can not be starving or homeless or live without electricity for two weeks while you are waiting for your next paycheck so you can pay the electric bill.
The living wage varies from state to state, as you can see on this map:
Let’s pick my state of Indiana as a base line. To make a living wage – in order to earn the $47K needed to have an acceptable life like people had in the 1960s on minimum wage – you need to make $23.50/hr. If you work a minimum wage job 40 hours a week and take no vacations and no sick days, you will earn about 1/3 of what you need to survive without having to rob Peter to pay Paul.
For decades – from the 1980s onward – the lack between minimum wage and minimum living standards was made up by the average American plunging irreversibly deep into credit card debt to hide what they thought was their personal failing to make a living.
Many working Americans have to count on SNAP and other ‘welfare’ programs to help the subsist, even though they work full time or even more than one part time job. Companies, such as Walmart and McDonalds, benefit from this because it means the taxpayer picks up the tab for the salary the company doesn’t have to pay. That is on top of the other indirect or direct corporate welfare many big companies receive – to the tune of $92 BILLION a year.
That’s why my eyelid starts to twitch anytime I see a meme or rant about the “lazy” or “entitled” American worker, or how companies cannot afford to pay a higher minimum wage.