The Reality (Check) of Minimum Wage

Recently, a national fast food chain partnered with a credit card company to make a website dedicated to show its employees how to properly budget salaries. The results were interesting because what it actually showed was that it is nearly impossible to get by on minimum wage.

Sample Monthly Budget for Fast Food Chain
Monthly Net Income
Income (First Job) $1,105
Income (Second Job) $955
Other Income 0
Monthly Net Income Total $2,060

Monthly Expenses
Savings $100
Mortgage/Rent $600
Car Payment $150
Car/Home Insurance $100
Health Insurance $20
Heating 0
Cable/Phone $100
Electric $90
Other $100
Monthly Expenses Total $1,260

Monthly Spending Money $800
(Monthly Net Income Total
minus Monthly Expenses Total)

Daily Spending Money Goal $27
(Monthly Spending Money
divided by 30 days)

At first glance, it might appear the top line was for a part-time employee. After further examination with a calculator, this actually represents what a person would make if they worked full-time at this particular fast food chain: $1,105 dollars a month.

Now let’s say that the “second” job that budgeted in here is also minimum wage. That would mean someone was working about 62 hours a week, on average. Oh, wait... Did I mention this only applied if they live in Illinois, where the minimum wage is $8.25. The national minimum wage is $7.25. That translates to 74 hours a week. That’s almost a whole other full time job.

And what does a person get for working 74 hours a week? Not heat, clearly. In some buildings, there are separate checks for gas and electric. This means mean that the person does not get to heat and cool their home. It also that demonstrates they do not get to heat their water, or cook on their stove, if they have a gas stove.

Also noticeably absent in this budget? Food. And gas. There’s a line for a car payment, but not for gas. This is criminal, because if an individual is working two jobs it’s possible they will pay more for gas than they would pay for their car.

Also… health insurance for $20 a month? There is really no such thing as health insurance for $20 a month if you’re buying your health insurance on your own. I think the least amount is going to be about $215 a month– and that only covers hospital emergencies.

And herein lies the great disconnect. Charts and graphs fail to adequate represent real people. Arguments rage over bottom lines and decimals but the reality of the matter is that too many people are too busy working too many hours for too little money. Creating a feasible and realistic living wage means more than altering the minimum one. It means we take into account the worth of a person and try to provide compensation that allows them to live more than a minimalistic lifestyle.

Information courtesy of deathandtaxes.com