I'm lucky enough not to be near the poverty line, but I thought I would do the calculation for exercise. Family of four poverty line is $23,850. Minimum wage full time work is (~15K), so with two adults at minimum wage and working 32 hrs/wk would be poverty line.
If 10% of that poverty line income go to taxes and Social Security, unemployment deductions, then the monthly net income is $1,789 per month.
Affording normal childcare is out on that income. So one of the two adults must be home taking care of the kids. Either that or the kids are left with grandparents or some other situation like a neighborhood grandmother in a trailer being paid $20 per child per day, taking care of 10 kids in a small room -- watching TV. Great for America's future. Even that costs $840 per month. So actually, that's not feasible for the poverty line family. This means the parents need to either work different shifts or one has to stay home (and the one staying home therefore has less social security, retirement options--usually the female, so there is partial source of the societal problem of elderly women who are poor).
Anyway, let's budget for this family. Remember, they live in the same universe as you and me. So same bills, same market! I'm using a suggested budget percentage break-down from Junior Achievement.
Housing (25% of income: $447.25):
Rent or mortgage & HOA: probably need to live in a trailer, with in-laws, or in a tiny studio, all squished together. Honestly in my market, there's no living situation within this price range, even to share a place as a roommate if as a single person.
Transportation (15% of income: $268.35):
Carless is not an option for a family with kids outside of public transportation footprint. Most people live outside of public transportation footprint. The bus pass is usually this much per month or more for riding everyday to work and back.
If there is a car, then it is probably a beater car bought for $800 or so, hoping it will last a couple of years without breaking down.
Car payments, if any (probably none because nobody would lend on an old car)
Car insurance (assuming great history) - $80
Gas (assuming good gas mileage and living within 5 miles of work) - $150
Maintenance - $38.35 (oil change, tire swap or buying used tires, wipers, and anything like bulb going out)
Parking (hope there's no need to pay, because there's no funding left)
Registration - $10
Repairs (hope there's no need to pay, because there's no funding left)
Food (15% of income: $268.35):
Obviously, can't do restaurants. Maybe occasional fast food. The grocery shopping fund is $63.89 per week to cover 84 meals = 4 people x 3 meals per day x 7 days. Free school lunches would assume the kids are school age. But let's assume that... and that's only 10 meals less. So 74 meals a week on $63.89. That's $0.86 per meal. Hey, that's the price of ramen noodles. Or can of beans. Or rice.
Paleo diet is obviously out. So is organic, or most of the fresh vegetables. Fresh tomatoes are way more expensive than just a Ragu on sale. Meat is way more expensive than Oscar Meyer's hotdogs. So the digestive system is obliterated with poor diet choices in the interest of saving money, with processed foods, high carbohydrate diet with less nutrition, just to feel more fulfilled. If what you eat is how you feel, then this family is feeling pretty depressed and toxic regularly.
Using a lot of coupons is has the depressing feeling of knowing that you can't afford regular prices... and the whole system feels rigged. In fact, life is so rough the parents may be self-medicating with some smoking or alcohol. If that is the case, then the food budget is even less.
This is also not accounting for expense of diapers, toilet paper, shampoo, conditioner, tampons, toothpaste, cleaning supplies, and other necessities that would blow this budget if expensive kinds are bought. Hello, Kroger versions of everything.
Entertainment and Activities (10% of income: $178.90):
Our poverty line family wants to have fun and offer the kids the chance to go to soccer club and to the movies occasionally just like any other family. Most likely though, with $42.59 per week, the entertainment is just getting basic Cable and maybe Netflix. Maybe saving up funds for a family computer or TV, which comes from this category. Probably these are acquired second hand because brand new would put them in debt (or deeper debt).
When they buy a TV, people judge. When others buy a TV, it's normal. That's the other stupid thing. It's like, if you buy a TV when you don't have as much money, you are suddenly a bad parent that puts kids in front of TV, a couch potato that's lazy, and have nothing better to do... but in fact, the truth is, the other activities for entertainment are simply too expensive. That Soccer club is $20 per session! For one kid. At least watching a show on TV is together time.
Clothing (5% of income: $89.45):
The parents are probably hoping the kids don't grow so fast. The kids are probably getting second hand clothes usually and only occasionally get new ones as gifts from better-to-do family members, instead of getting toys as gifts. Parents usually wear the same clothes over and over. The kids develop holes on clothes, shoes, and get yelled at. Laundering too often wears clothes and adds to electric bills, so laundry is not done as often -- maybe once a week or once every two weeks.
Brand name stuff? What's brand name? These kids will be the ones growing up, the other kids just know to stay away from. They smell funny, their clothes are shabby... and they never invite other kids over, they eat free lunch, and they are overcompensating for feeling inadequate by some kind of hiding or overt behavior, which makes them even more of outsiders.
Other Expenses (15% of income: $268.35):
Electricity - 40
Water/Trash - 18.35
Natural Gas - 50
Internet - 20 (rural is 50, urban is maybe 20)
Phone - 60 (Honestly, have you seen people with no cell phones these days? It's become a necessity, and an assumption of society, so that people will judge you if you don't receive their calls. For example, a lot of prospective employers are surprised if you don't call back within an hour. Friends and family will blink in surprise if you don't text. And yet, this family can't afford it. Not without going into debt.)
Savings (10% of income: $178.90):
Most likely, this family is behind from using debt as emergency funding for things. So this portion is going to pay credit card debt, rather than setting aside funds for the future for emergencies.
Also things that are forfeited:
College savings
Retirement funds
Investing of any kind
Vacations
Mental health resources
Grandparents/parents get sick and need home care, or for any funeral expenses
Forget about pets...
Any little thing is a financial obstacle -- bank overdraft fees, getting a speeding ticket, college application fees... not to mention losing a job.
Giving (5% of income: $89.45):
Giving is a luxury. And so are parties, planning for birthdays, holidays, or anything different or special. A bouquet of flowers would blow this budget. So, kids draw and learn not to expect. Parents only buy necessities as "gifts."
People think not a lot of families live this way. Truth is almost 2 out of 10 kids you see in Colorado live in families like this. Approximately 3 of 10 black or Latino kids live in families like this. The "middle class" is largely, a slightly modified version of this lifestyle. The part that's different is slightly larger budget across the board, but with more debt including student debt, car payment debt, mortgage debt, and credit card debt.
Looking at this makes it hard to argue from economics point of view, the supply/demand argument against raising the minimum wage. Companies need to compete, but not at the expense of the future of America. Companies need to learn to compete while giving people a better way to live. Also, if this family made more money, do you think they would put it in a fund and let it sit? No. They would spend it... solves the economic recession problem.
If 10% of that poverty line income go to taxes and Social Security, unemployment deductions, then the monthly net income is $1,789 per month.
Affording normal childcare is out on that income. So one of the two adults must be home taking care of the kids. Either that or the kids are left with grandparents or some other situation like a neighborhood grandmother in a trailer being paid $20 per child per day, taking care of 10 kids in a small room -- watching TV. Great for America's future. Even that costs $840 per month. So actually, that's not feasible for the poverty line family. This means the parents need to either work different shifts or one has to stay home (and the one staying home therefore has less social security, retirement options--usually the female, so there is partial source of the societal problem of elderly women who are poor).
Anyway, let's budget for this family. Remember, they live in the same universe as you and me. So same bills, same market! I'm using a suggested budget percentage break-down from Junior Achievement.
Housing (25% of income: $447.25):
Rent or mortgage & HOA: probably need to live in a trailer, with in-laws, or in a tiny studio, all squished together. Honestly in my market, there's no living situation within this price range, even to share a place as a roommate if as a single person.
Transportation (15% of income: $268.35):
Carless is not an option for a family with kids outside of public transportation footprint. Most people live outside of public transportation footprint. The bus pass is usually this much per month or more for riding everyday to work and back.
If there is a car, then it is probably a beater car bought for $800 or so, hoping it will last a couple of years without breaking down.
Car payments, if any (probably none because nobody would lend on an old car)
Car insurance (assuming great history) - $80
Gas (assuming good gas mileage and living within 5 miles of work) - $150
Maintenance - $38.35 (oil change, tire swap or buying used tires, wipers, and anything like bulb going out)
Parking (hope there's no need to pay, because there's no funding left)
Registration - $10
Repairs (hope there's no need to pay, because there's no funding left)
Food (15% of income: $268.35):
Obviously, can't do restaurants. Maybe occasional fast food. The grocery shopping fund is $63.89 per week to cover 84 meals = 4 people x 3 meals per day x 7 days. Free school lunches would assume the kids are school age. But let's assume that... and that's only 10 meals less. So 74 meals a week on $63.89. That's $0.86 per meal. Hey, that's the price of ramen noodles. Or can of beans. Or rice.
Paleo diet is obviously out. So is organic, or most of the fresh vegetables. Fresh tomatoes are way more expensive than just a Ragu on sale. Meat is way more expensive than Oscar Meyer's hotdogs. So the digestive system is obliterated with poor diet choices in the interest of saving money, with processed foods, high carbohydrate diet with less nutrition, just to feel more fulfilled. If what you eat is how you feel, then this family is feeling pretty depressed and toxic regularly.
Using a lot of coupons is has the depressing feeling of knowing that you can't afford regular prices... and the whole system feels rigged. In fact, life is so rough the parents may be self-medicating with some smoking or alcohol. If that is the case, then the food budget is even less.
This is also not accounting for expense of diapers, toilet paper, shampoo, conditioner, tampons, toothpaste, cleaning supplies, and other necessities that would blow this budget if expensive kinds are bought. Hello, Kroger versions of everything.
Entertainment and Activities (10% of income: $178.90):
Our poverty line family wants to have fun and offer the kids the chance to go to soccer club and to the movies occasionally just like any other family. Most likely though, with $42.59 per week, the entertainment is just getting basic Cable and maybe Netflix. Maybe saving up funds for a family computer or TV, which comes from this category. Probably these are acquired second hand because brand new would put them in debt (or deeper debt).
When they buy a TV, people judge. When others buy a TV, it's normal. That's the other stupid thing. It's like, if you buy a TV when you don't have as much money, you are suddenly a bad parent that puts kids in front of TV, a couch potato that's lazy, and have nothing better to do... but in fact, the truth is, the other activities for entertainment are simply too expensive. That Soccer club is $20 per session! For one kid. At least watching a show on TV is together time.
Clothing (5% of income: $89.45):
The parents are probably hoping the kids don't grow so fast. The kids are probably getting second hand clothes usually and only occasionally get new ones as gifts from better-to-do family members, instead of getting toys as gifts. Parents usually wear the same clothes over and over. The kids develop holes on clothes, shoes, and get yelled at. Laundering too often wears clothes and adds to electric bills, so laundry is not done as often -- maybe once a week or once every two weeks.
Brand name stuff? What's brand name? These kids will be the ones growing up, the other kids just know to stay away from. They smell funny, their clothes are shabby... and they never invite other kids over, they eat free lunch, and they are overcompensating for feeling inadequate by some kind of hiding or overt behavior, which makes them even more of outsiders.
Other Expenses (15% of income: $268.35):
Electricity - 40
Water/Trash - 18.35
Natural Gas - 50
Internet - 20 (rural is 50, urban is maybe 20)
Phone - 60 (Honestly, have you seen people with no cell phones these days? It's become a necessity, and an assumption of society, so that people will judge you if you don't receive their calls. For example, a lot of prospective employers are surprised if you don't call back within an hour. Friends and family will blink in surprise if you don't text. And yet, this family can't afford it. Not without going into debt.)
Health Insurance - 80
(Forget about it if there is medical expense with copays, then that's most likely on payments or straight going to collections because the family simply can't afford much.)Savings (10% of income: $178.90):
Most likely, this family is behind from using debt as emergency funding for things. So this portion is going to pay credit card debt, rather than setting aside funds for the future for emergencies.
Also things that are forfeited:
College savings
Retirement funds
Investing of any kind
Vacations
Mental health resources
Grandparents/parents get sick and need home care, or for any funeral expenses
Forget about pets...
Any little thing is a financial obstacle -- bank overdraft fees, getting a speeding ticket, college application fees... not to mention losing a job.
Giving (5% of income: $89.45):
Giving is a luxury. And so are parties, planning for birthdays, holidays, or anything different or special. A bouquet of flowers would blow this budget. So, kids draw and learn not to expect. Parents only buy necessities as "gifts."
People think not a lot of families live this way. Truth is almost 2 out of 10 kids you see in Colorado live in families like this. Approximately 3 of 10 black or Latino kids live in families like this. The "middle class" is largely, a slightly modified version of this lifestyle. The part that's different is slightly larger budget across the board, but with more debt including student debt, car payment debt, mortgage debt, and credit card debt.
Looking at this makes it hard to argue from economics point of view, the supply/demand argument against raising the minimum wage. Companies need to compete, but not at the expense of the future of America. Companies need to learn to compete while giving people a better way to live. Also, if this family made more money, do you think they would put it in a fund and let it sit? No. They would spend it... solves the economic recession problem.
