Living Wage

This is something that's been getting increasingly common, and is supported by liberals and hated by conservatives. For my part, I'm generally seen as fairly liberal, but I don't love it or hate it. The idea behind the living wage is pretty simple - some areas are more expensive to live in than others, so the federal minimum wage simply doesn't cut it. Of course, that is likely the case nationwide - that the federal minimum wage doesn't cut it. But, as I've said before, wage increases simply don't work like we'd like them to. Rather than execs or business owners taking a cut in their pay, they lay off workers and raise prices, thus causing more unemployment and higher cost of living across the board, thus being a self-perpetuating problem. It's ugly, but that's the way it works. A city raising its living wage also will encourage businesses to either open up just outside of town or to move just outside of town to avoid having to pay the living wage.

That is not to say however that current, even living wages, are sufficient to get by on, as many Republicans suggest. For my part, I live in the southwest, so that's the area I'm most familiar with. The federal minimum wage is, if memory serves, $7.50/hour. The Santa Fe living wage is $10.29/hour - the highest in the nation, or so I've heard. Now, Santa Fe has always had a high cost of living - that's no secret. A big part of it is that they have ordinances saying that it shall always remain a small city, no buildings over two or three stories without a special permit, that sort of thing. It's for the tourists.

So, let's do the math here:
$10.29/hour ˣ 40 hours per week = $411.60 per week, or if we go by the average 2 week pay period, $823.20 per pay period. Using two pay periods (4 weeks) to represent a month, as most bills are due monthly, that's $1,646.40 per month.

That's before taxes.

For filing single, the federal income tax looks to be about 15% in this bracket. So, $1,646.40 ˣ 0.15 = $246.96. So, we subtract that from our original figure: $1,646.40 - 246.96 = $1,399.44. But, we're not done yet. Let's look at the state income tax. The state income tax for New Mexico is 4.9%, so subtract 4.9% from the original figure: $1,646.40 ˣ 0.049 = $80.67, so let's go ahead and take that out of the $1,399.44 figure = $1,318.77. Looking around online, it seems that the Social Security withholding is 6.2%, although I think it's probably more. We'll go with the 6.2% though. $1,646.40 ˣ 0.062 = $102.08. So, let's take that out of the 1,318.77 = $1,216.69. There are other deductions, but the big three will work as a jumping-off point. We already know that Santa Fe has a high cost of living, so let's apply there living wage numbers to a nearby larger city with a lower cost of living. Because I have some experience with it, I'll use Albuquerque as an example.

I used to have a low income apartment there, where they got their profits in part from tax credits for providing the low income housing for qualified tenants. I was paying $600/month for a one-bedroom apartment, all utilities included. Not bad... so let's take that out of the $1.216.69 = $616.69. Me, I don't have car payments - my car was bought straight-away from a private individual rather than a dealership, and I get pretty reasonable mileage. But, if you have car payments, that can take anywhere from another $200-$400 out of that $616.69... and someone with this kind of income, well... often, the predatory types are the only ones who will sell a vaguely modern/reliable car to someone with this sort of income. Let's do kind of a conservative estimate and say payments are $250, and take that out of the remaining monthly income = $366.69. Insurance is probably another $70/month, roughly, so that brings us down to $296.69. $200 a month seems about right for groceries, right? Assuming one's not going on an all-Ramen/mac and cheese diet (really unhealthy). How about gas? Right now, it's about $3.70/gallon.

Well, with those figures, you'll be lucky to break even... that's assuming no incidentals, like medical bills, car repairs, etc. With those, hopefully you'll have some savings, but not too likely. Your option then is to get a roommate or to find a cheaper apartment. Like I said, that was already a low income apartment. Maybe find a studio? Maybe a cheaper part of town (like the war zone)? And roommates aren't often all that great, either. I've known best friends to turn into worst enemies for that.

"But minimum wage is just for people flipping burgers!" Not really. People working call centers/customer service make about that Santa Fe living wage. As do many people working in the medical field with "certified" or "assistant" in their titles - medical assistants, certified pharmacy techs, certified nurse's assistants, etc. They often have to take more than one job to make ends meet, and their hours don't always make it easy to plan around to have another job. Also think of your waitresses - they generally make below minimum wage (there are special exceptions for jobs that get tips), and survive off their tips. Bank tellers also make around that Santa Fe living wage.

Yet, with all that financial stress of their own, all these people are nonetheless expected to show up every day dressed nice and with a smile and cheerful attitude to help you out.

While a living wage is not the answer for the reasons I've mentioned in previous posts as well as toward the beginning of this post, I think that we do need to find an answer.