Minimum wage better than $60k/year salary?

[TripletDaddy]

The chart doesn't use the term "disposable income." Those were the words of the newspaper writer and editor who carried the story. They didn't create the chart, I don't think.

I think most people are smart enough to understand the point.

I understand the political point being made. I don't understand the economic point being made, at least not with the data provided. You seem to grasp it, so walk me through it if you don't mind. What does this chart show us?

[Indy Coug]

I think Jacob's point is that minimum wage needs to be even higher, so the government is on the look for even less than they are right now.

[Jacob]

So it's guaranteed that everyone in those income brackets will receive exactly that much in government benefits/subsidies?

Those are the subsidies that are available to most people with those incomes. I'm sure there are exceptions e.g. if a good chunk of the $14k were in unearned income, that person wouldn't be eligible for the earned income tax credit. I believe the article describes the situations more fully. They are for single heads of household, not married couples.

[Jacob]

I understand the political point being made. I don't understand the economic point being made, at least not with the data provided. You seem to grasp it, so walk me through it if you don't mind. What does this chart show us?

He who has ears to hear, let him hear.

[TripletDaddy]

He who has ears to hear, let him hear.

Why not just take some time to explain? You obviously felt it important enough to post.

I think the overall tone of this thread indicates that your chart isnt worth the e-paper on which it is printed. Very sloppy, misleading, and not nearly as shocking nor informative as you had supposed.

[statman]

The Medicaid / CHIP info doesn't belong in there - not in a discussion about disposable income. Even still, take it out, and the story is just as disheartening:

Job Description////////////////////Adjusted Take-Home $
1 Day/Wk MinWage////////////////////$15,130
FT MinWage////////////////////////////$21,277
FT $15/hour////////////////////////////$16,489
FT $30/hour////////////////////////////$34,366

The reality of the situation is that the guy making $60K has way more disposable income. But the real damage is the disincentive it puts on people to improve their earning potential from unskilled to having some sort of training. Unless you're in a big labor state, if you're making $15/hour (roughly $30K/year), you have some kind of job skills, or you're at least good as doing something that might not require a tremendous amount of training.

And these data show that because of all the welfare benefits that disappear as income increases, the adult working full-time making minimum wage is actually significantly better off than the one with a semi-skilled job making $30K per year.

Regardless of the illogic of including Medicaid/CHIP in the original equation, I think these numbers are actually fairly close to reality. The behaviors exhibited by our 'perpetual underclass' are indicative of a reality that's similar to the picture painted with the numbers above.

Those who are working 9-to-5 at dead-end minimum wage jobs see their welfare benefits diminish when they work more, try harder, get training that leads to a 'better' job. In reality, the marginal benefit of the 'better' job is very very small. So they are content to stay put. They're not really happy that they're stuck in a dead-end job going nowhere. But it's not like they see significant benefit when they try hard and do 'the right thing.' All they see there is increased taxes and reduction in benefits.

Roughly figured, the marginal hourly benefit to working 5 days a week at minimum wage instead of 1 day a week is about $4 an hour. They make about $6000 extra a year - $500 a month - roughly $120 a week. A significant amount after tax. But they're working 40 hours instead of 8. For 32 extra hours a week, they're getting $120. Not hard to see why many choose to stay home.

For the poor schlub who makes $15 an hour instead of minimum wage, life seems truly unfair. And it should. Except for the simple fact that the that the extra money enjoyed by minimum wage earners is paid for virtually entirely by people making a lot more money than even the guy making $60K. It's REALLY unfair to them. The guy making $15 an hour is ALMOST paying his way - and it hurts. But for him, a major portion of every extra dollar earned actually goes toward improving his take-home pay and his standard of living. Once you get to be paying your way, you have every incentive to make more. Prior to that, however, you're actually given significant incentives to stay at the bottom of the food chain.

Our system sucks.

[wuapinmon]