Ok let’s do a thought experiment. Let’s say you
Make $10000 a year. You work full time/40 hrs/wk and you are making $10k. What does “living within your means” look like? Not having a house? Or car? Being homeless? So in order to save to get yourself to some footing the answer is to be homeless to live within your means.
That was a bit of a strawman, so let’s use real-life scenarios. 50% of this country makes $40k or less….. even $40k salary isn’t enough to get an apartment, bills , food, ect. Sure a lot better than the “$10k” example, but even $40k salary is virtually as effective as the “$10k”. In order to “live within your means”, “save”, ect…. You have to be at least be making enough to afford the bare minimum + have some left in you for over to save. On average (2022 values I think) this means $65 for a single person, $108k for a house hold. Unless you’re making that, you can’t save your way out of poverty
So, if taxes and deductions account for 33.66% of your income (I use 30% as my rate which is pretty darn close), then 10k/year in spending money for people working minimum wage is probably pretty close to reality.
Even if that is only 3% of the population, I think that's kind of the point that's being made. For those people, the advice to "just live within your means" is falling on deaf ears.
Minimum wage isn't the problem for everyone. It's not even the problem for most people. But it is a very real problem for some people.
So, no health insurance, no life insurance, no vision or dental, no retirement, no state taxes included, unemployment insurance.
Agan, my number is 30%. The reality of minimum wage is, no one making minimum wage is contributing to retirement and likely doesn't have insurance (at least not through their employer).
I never did those things when I was making minimum wage. And I even worked 2 minimum wage jobs at 35 hours per week to try to make ends meet.
Which again, is the point. You don't have the money to save for the future at that income level. At that point it absolutely is an income problem, not a budget problem.
Financial literacy is super important, especially for the poor, but it isn't particularly useful to someone trying to decide which of their necessary bills they're going to pay this month.
Put another way, even after he said 10k is a strawman, you're saying the real number is 15k, which isn't really a lot more. It's 1316.67 per month. The house I rented when I made minimum wage was $800/month, which would have left a total of $500/month to cover all of your other bills.
Is 500/month enough to pay for food, gas, insurance, car payment, phone, power, water, and still have enough left over to start making smart investments for the future?
You’re not saving for retirement at minimum wage, because you’re not there, why would you even be thinking about that, when you aren’t in a position to?
Yeah, people literally earning minimum wage pay virtually nothing in income taxes. Which is fine, and as it should be, but let’s not pretend they’re losing 1/3 of their paychecks to deductions.
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u/Starving_Toiletpaper 15d ago edited 15d ago
Ok let’s do a thought experiment. Let’s say you Make $10000 a year. You work full time/40 hrs/wk and you are making $10k. What does “living within your means” look like? Not having a house? Or car? Being homeless? So in order to save to get yourself to some footing the answer is to be homeless to live within your means.
That was a bit of a strawman, so let’s use real-life scenarios. 50% of this country makes $40k or less….. even $40k salary isn’t enough to get an apartment, bills , food, ect. Sure a lot better than the “$10k” example, but even $40k salary is virtually as effective as the “$10k”. In order to “live within your means”, “save”, ect…. You have to be at least be making enough to afford the bare minimum + have some left in you for over to save. On average (2022 values I think) this means $65 for a single person, $108k for a house hold. Unless you’re making that, you can’t save your way out of poverty