A Low Minimum Wage and an Outdated Poverty Line

Topics: Minimum wage, Household income in the United States, Poverty threshold Pages: 4 (1486 words) Published: March 29, 2013
With cost of living being different from state to state and minimum wage being so low why do we wonder there are so many individuals working multiple jobs, or the crime rate raising or the unemployment being at its highest it has been. How do we expect to be putting money back into the market and getting this country out of debt if we cannot even get ourselves out of debt. Someone once said, “More money, more problems.”

The federal minimum wage was just recently increased from $7.25 to $7.36 (Department of Labor, 2011). While an increase seems to be a good thing for those relying on minimum wage jobs, the questions still remains as to whether or not it is even possible to survive on a minimum wage job. The first assumption to be made is that a job at minimum wage can even be found, which as we are increasingly aware, is a big assumption right from the start. However, assuming there is a job to be had, and assuming that this job has the option to work 40 hours a week, the person in question will make $294 a week, about $1472 a month, and $17,664 a year assuming 52 weeks of work a year, with each of these numbers representing wages before taxes. For a single person household, this theoretically puts the person in question above the poverty threshold, which was $10,991 for 2008. In fact, a two person household has a poverty threshold of $14,051, so one minimum wage job is enough to keep this household above the poverty line also. However, a three person household where one of the people is under 18 would be unable to push above the poverty line, which for them is set at $17,330 (Census Bureau, 2008). So a minimum wage job is in supposedly enough to keep two people above this theoretical poverty line. However, this poverty line is based on a very outdated way of thinking about affordable living, and does not realistically take into account the wide disparity of costs of living across the nation. For instance, a two person household living in Missouri...

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IRS. 2007 Federal Tax Rate Schedules. Retrieved from http://www.irs.gov/formspubs/article/0,,id=164272,00.html
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Top 50 States. Cost of Living by State; List of Wages; Income Data. Retrieved from http://www.top50states.com/cost-of-living-by-state.html
U.S. Census Bureau. Poverty. Retrieved from http://www.census.gov/hhes/www/poverty/threshld/thresh08.html
United States Department of Labor. Wage and Hour Division. Retrieved from http://www.dol.gov/esa/whd/minimumwage.htm
United States Department of Health and Human Services. The 2009 HHS Poverty Guidelines. Retrieved from http://aspe.hhs.gov/poverty/09poverty.shtml
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