I haven’t always supported raising the minimum wage. In fact, I have been adamantly against it. It makes sense to me, from a math perspective, why minimum wage shouldn’t increase at too rapid of a rate. Inflation…economy….$10 loaf of bread…blah, blah, blah. You see, I like to think of minimum wage jobs as entry level positions, not as careers. After the compelling State of the Union Address, I decided to take President Obama up on his offer to try living (hypothetically) on minimum wage, which has just gone up to $8.05/hr here in the Sunshine State.
Let’s say I’m a single mom of two children, a boy and a girl. I work a minimum wage job, 40 hours a week. Stay with me here, we’re gonna do some math. At $8.05/hr I would make $322/week (x52 for annual salary) would come up to $16,744.00 per year. Our President is correct, that is not much money to live on! In fact, for my (hypothetical) family of three, we are below the Federal Register poverty level which is $19,790.00 per year for a family of three. Raising minimum wage to $15/hr would put me at $31,200.00 per year. Great! I’m above the poverty level to support my little family. Let’s ignore, for one moment, the inconvenient fact that almost doubling the minimum wage will most certainly increase the cost of important commodities (like food, clothes, eating out, pretty much everything).
Thank you, Democrats, for raising my family above the national poverty level with your minimum wage hike. I would be so much better off…..except for one thing. My little family of three used to qualify for a lot of government assistance that we no longer qualify for!
At below the poverty level, I qualified for SNAP (food stamps). According to the USDA I should still qualify for some assistance at up to 200% of the poverty level. At minimum wage, I qualified for $140.80 per month in SNAP benefits, but at $15/hr, after doing the math, I don’t qualify for any SNAP benefits.
Assuming my children are under 5 years old, they would qualify for WIC while I was under the poverty level. According to the USDA, the average monthly WIC value is $43.00 per person. At $15/hr my children no longer qualify for WIC.
My poverty status while making minimum wage also qualified me for Section 8 housing. The government subsidized my rent of anything over 30% of my income . That means I paid $370.20 per month in rent and the government paid the rest. Since the average median income (AMI) for my county is $48,039.00 (according to the Census Bureau), I no longer qualify for subsidized housing (I must fall below 50% of the AMI). The HUD fair market rent for a three bedroom home in my area is $1193.00/month. I must now come up with the $822.80 difference!
We all used to qualify for no-cost insurance through Medicaid, but no longer. Even under the healthcare.gov website, an equivalent, subsidized plan will cost me and my kids about $350/month. Yet, if we get sick, I will pay much more in out-of-pocket expenses. Pray I don’t get sick or the kids don’t break a bone!
One last and vital thing. While making minimum wage, come tax time, we would qualify for Earned Income Credit (EIC) of $5372.00 (monthly that would come to $447.67). Now, with my new wage, I still get EIC, but only $2487.00 (207.25/month).
Now, lets add it up shall we?
Making minimum wage:
Monthly gross Income: $1395
SNAP Benefits: $140.80
Section 8 Subsidy: $822.80
Insurance Payment: $350.00
Monthly Gross Income: $2600.00
Of course this is a hypothetical situation (that many single moms are living right now). These numbers are estimated as close as possible using the information I had readily available. There is no warranty of accuracy. Just my best effort. Isn’t it strange? On the surface, raising the minimum wage seems like a good idea. These calculations don’t take into account the (unknown) affect that the minimum wage hike will have on the cost of everything.
Before long, the Federal Register poverty level will rise exponentially, I would again fall below the poverty level and qualify for government subsidy. Only this time it will be much more money, because everything now costs more due to inflation. Will we then hear shouts of protest for the minimum wage to be increased yet again…..maybe $20/hr would do the trick.