My latest article for the U.S. News My Money Blog is about getting ahead on minimum wage. It was republished at Yahoo News and is getting a strong negative reaction. Check it out and let me know what you think.
Here are some clarifications of stuff in the article. I came up with the $15000 figure based on a person working full-time at minimum wage and didn’t subtract taxes. Even at $15000 a person would pay some payroll taxes although one should receive a refund of all their federal income tax. My income was a little over $15000 after tax so I did make more than someone working minimum wage. Also, I worked much less than full-time hours which gave me the luxury of time which can also save you money.
My near minimum wage income was by choice. I understand that it is much harder for someone that is working a minimum wage job because they have no other choice.
It is true that if you are making minimum wage you are not going to get ahead if you have dependents, or are sick, or have any other physical limitations. Most people making minimum wage do not fit this description. The majority of those who earn minimum wage are young. If you are interested here are some statistics on who makes minimum wage.
If you are making minimum wage and get sick you are probably screwed. That applies to a lot of people making more than minimum wage too.
It seems that a lot of people reading the article think that I believe that one should be happy to make minimum wage. That isn’t true. As I stated in the article you will want to increase your income. Although you can get ahead on minimum wage it isn’t easy and you don’t have any margin for anything to go wrong.
If there is anything else in the article that you want me to address let me know.
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Why do you pay attention to those readers at Yahoo? Most of them seem to have mental deficiency problems in my opinion. There’s always something wrong, and guess what, the author is to blame. I really hope you are getting paid well however for those articles, or at least you are generating decent traffic off of them.
I am getting decent traffic from them although I don’t think any of them are staying around. I have noticed from looking at the comments on others’ posts that the Yahoo readers are mostly negative.
I read your article and at least it is thought-provoking for the reader. A lot of the negativity probably stems from people who have lived beyond their means for years and are having a tough time accepting the reality of what living within one’s means requires.
Maybe you should follow-up with comments about the snowball effect of saving and investing. Building up regularly occurring passive income means you don’t have to work as hard for earned income. It starts out slow but, like a snowball, accumulates.
I agree with you that you could live adequately with $15,000 per year. If you can earn more, all the merrier. But it’s certainly doable. $500 per month for housing, by the way, is quite generous in most parts of the country, particularly if you have roommates.
Nice job, Andy.
The $500 figure was an upper limit. I have never actually paid that much by myself. The most I have ever paid is $435. My half of the rent is currently $335 and before that my rent alone was $360. You are correct that in many parts of the country it is doable to find housing for $500 a month but many people from more expensive areas are ignorant of anywhere but where they live.
Maybe it was the title “Getting Ahead on Minimum Wage” that threw everyone. Perhaps, surviving on minimum wage? Andy, I do get your point, and yes, bravo well written, however, I think the “getting ahead” thing, threw the general public off. Mainstream America is not ready for our points of view yet.
The reaction didn’t totally surprise me. I’m doubtful that mainstream America will ever be ready for our points of view.
This is exactly the kind of article I would have been looking for a few years ago when I was beginning my early retirement plan. After many years of living below my means on $1,000 or less a month (with the rest of my salary going to investments), I know it can be done and it isn’t that bad. I think many people can’t imagine living without cable, movies, shopping, eating out, etc… It is their lifestyle and they are hostile to the suggestion of change.
The article was good, the audience was not open to your ideas. Too bad for them.
You are right. People can not see outside of their own little box and reject any idea that things could be done differently.
You have come up with a great retirement plan for yourself but I suspect most of your co-workers don’t really understand it.
Here we have Andy preaching to the choir. Bravo for going into the Lion’s den on Yahoo and USN – and what better way to get noticed for the eventual book deal?
While I support the notion that “one” can get ahead at a low wage, and “two” could do so even faster, the typical minimum-wage employee isn’t going to so succeed.
Holes in your theory:
1) 40 hours. Many of the underemployed don’t get 40 hours. Indeed, many hold two or even three positions to try and get 40+ hours.
2) Health Insurance. While our recent “Healthcare Reform” may shift the cost of healthcare to the rest of us and off the minimum-wage worker, it doesn’t lower costs. Going without isn’t responsible – you’re just shifting the primary risk to the taxpayer.
3) Family. For those with dependents, especially “single parents”, even conservative overhead and logistics can exceed a minimum wage salary.
4) Housing. Finding the mythical $350 apartment/roommate within biking distance of a potential employer isn’t so easy. I’m particularly skilled at doing it for some single people in our town, but the average person isn’t going to do so well. How many “roommate” situations will rent to a mom with two kids?
That said, I’m all for the lone voice in the wilderness. If only we could get some of these voices in Congress.
I wouldn’t worry too much. The article was well written. The last paragraph is where I think you might have pissed some people off. I always think though that unless someone is pissed off you didn’t say anything interesting.
Personally I get annoyed by discussion of “relative poverty”. 80% of worlds population earns less than $10/day, things like lighting, refigeration, heating, clean water, accomodation and literacy are issues. Personally I feel this needs to be the frame work we look at income from. If you’re earning $15,000 a year you’re earning 500% more than 80% of the worlds population. When you’re getting pissed off at those wealthier than you remember there’s 80% of worlds population thinking exactly the same thing about YOU!
For those who disagree with you by saying something about supporting a family, I have to ask, “Why do you have kids?” I get so angry when I hear about adults who have kids and then receive welfare. If you can’t afford to pay for your kids, why did you have them? Accepting government support should obligate the recipient to work for it – there are plenty of streets with trash on the side of the road that needs to be picked up.
I think this is the best form of empathy – don’t let someone go without (especially kids), but attach some strings to that support in the form of community service.
Sorry if I am getting off topic, but people need to learn to live within their means. If you aren’t going to wear a condom, you ought to have a detailed Excel spreadsheet laying out the expenses you will incur to raise a child as well as a hefty amount of money in reserves to pay these costs.
Same goes for other expenses. One of my tenants, who is also a friend of mine, receives a disability check, which is currently his only source of income. Half his check goes to rent. He was complaining to me today that he owed the cable company $88 and wasn’t sure how he was going to pay for it. My question to him was, what the heck were you thinking when you got cable?
Frugal Miser- you are assuming that single parents got that way by being careless and/or irresponsible. I had 4 children while married to a man with a career, worked part-time on and off during that marriage, was a homeowner, etc. Then someone introduced my spouse to cocaine and I lost everything except the kids. I went on welfare as a safety-net so that I could return to college to earn a degree to support my family with more than minimum wage, because $3.25/hr didn’t cover necessities for 5 people, not even with 2 jobs. I worked part-time throughout school, moved in to a 2 bedroom apt with another single mom (yes, 7 people in 2 bdr/1 bath with no a/c and no heat-it cost too much), accepted welfare, food stamps, Medicaid, and subsidized daycare. We didn’t have TV, much less cable. Did I plan to be on government handouts when I had kids? Absolutely not! But it was a temporary way to make sure my kids were provided the basics while I worked on a more permanent way to provide for them myself.
Please remember that not everyone is the same, that each individual has their own history, when you start generalizing about “empathy” for those not living within their means.
At risk of being a post troll there are a myriad of holes in the surviving on minimum wage. I’ve lived below my means for a number of years. I am now making it on $7.65 an hour at 32 hours a week. I bought a house I could afford three years ago (30,000k with 10k down) back when I made decent money ($15/hr). I lost my job soon after that and have been struggling ever since.
I am single, live in the upper midwest, in a house that is 12 miles from the nearest town which is tiny. Out here a car is a necessity not a want. There is no public transit, no biking to work. The furnace blew out a few years ago. I actually lived with no running water during my first winter here because I didn’t want my pipes to freeze (not enough money for heat). Unlike an apartment I have to pay for my own heat which in an 100 year old house with no insulation is quite costly. I nearly blew through all my savings last year heating with baseboard heat (baseboards which were used and the only thing I could afford). I averaged 350 dollar a month electric bills heating the downstairs. When it was 25 below it was 35 in the house. The pipes froze up every day from the end of December till the beginning of March. I used one of those portable kerosene reddi heaters (I picked it up off the side of the road for nothing) which while did make the house stinky it did unthaw the pipes. I blew through an additional 50 bucks a week. I spend 60 bucks on gas to go to my job 20 miles away which was the only place that called back out of the few employers that are within commuting distance. I’ve been selling my stuff to make ends meet.
You have to be in a very particular situation to survive on minimum wage and never ever have anything go wrong. I have had a sub pump blow out, a blown water pipe, a furnace that blew out and I wasted a bunch of money on and still isn’t fixed, car troubles, missed days from work due to a medical emergency. The once decent savings is now near nothing. One more disaster and I’ll be living paycheck to paycheck. I have a room-mate once he leaves I think it’ll be time to read by candle light and heat up water from a creek for baths.
Also regarding how bad people have it in other countries, sure they have it bad. But consider this, the only areas that you are going to get away with squatting in this country are so far from a source of income and are so inhospitable that the comparison is near meaningless. Not to mention that in most locations even if you own the land living in a shack with no running water will warrant your home condemned and if you have kids CPS will remove them. The only reason why we don’t have widespread shanty towns is because the general population and the government does everything they can to chase such people out so the only option they have is to either live in a car if they are lucky or take their chances out on the streets.
There are areas right here at home that are equal to any run down slum anywhere in the third world. I suggest you take a break from your world travels and start visiting the various reservations within our borders and go to extremely rural areas. I’ve seen it first hand, no running water, no electric, with a satellite dish outside that was put up years ago but no service. My friend lived with out electric off and on for years growing up in a poor household. Till this day his mother still has the kerosene lamps left over from those days and he is in his mid 20s.