Expensive is the American Dream

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Expensive is the American Dream


So, the other day I tweeted about minimum wage and it got me to thinking which then lead me to some questions and before I knew it I working on a full blown research project. Not really sure if anyone cares but I figured since I had gone through the trouble I may as well share.

Before I get too deep into this I want to say that all the numbers I got from online resources and they do not account for taxes. All of the monthly calculations are based on a 40, 50, or 60 hour work week with each month having exactly 4 weeks. I know this isn't exact but again theses are just rough estimates based on simple math and information found on the Internet.

Alright, the first thing I looked into was the state minimum wages, federal minimum wage. Now if you look at the table below it basically shows you all the state minimums and what that would be per month.

State
Federal Wage
State Wage
State month
Fed Month
Difference
Poverty Line
Alabama
 $            7.25
 $             -  
 $           1,160.00
 $         1,160.00
 $             -  
$12,760
Alaska
 $            7.25
 $      10.19
 $           1,630.40
 $         1,160.00
 $    470.40
$15,950
Arizona
 $            7.25
 $      12.00
 $           1,920.00
 $         1,160.00
 $    760.00
$12,760
Arkansas
 $            7.25
 $      10.00
 $           1,600.00
 $         1,160.00
 $    440.00
$12,760
California
 $            7.25
 $      13.00
 $           2,080.00
 $         1,160.00
 $    920.00
$12,760
Colorado
 $            7.25
 $      12.00
 $           1,920.00
 $         1,160.00
 $    760.00
$12,760
Connecticut
 $            7.25
 $      11.00
 $           1,760.00
 $         1,160.00
 $    600.00
$12,760
Delaware
 $            7.25
 $        9.25
 $           1,480.00
 $         1,160.00
 $    320.00
$12,760
D.C.
 $            7.25
 $      14.00
 $           2,240.00
 $         1,160.00
 $ 1,080.00
$12,760
Florida
 $            7.25
 $        8.56
 $           1,369.60
 $         1,160.00
 $    209.60
$12,760
Georgia
 $            7.25
 $        5.15
 $              824.00
 $         1,160.00
 $  (336.00)
$12,760
Hawaii
 $            7.25
 $      10.10
 $           1,616.00
 $         1,160.00
 $    456.00
$14,680
Idaho
 $            7.25
 $        7.25
 $           1,160.00
 $         1,160.00
 $             -  
$12,760
Illinois
 $            7.25
 $        9.25
 $           1,480.00
 $         1,160.00
 $    320.00
$12,760
Indiana
 $            7.25
 $        7.25
 $           1,160.00
 $         1,160.00
 $             -  
$12,760
Iowa
 $            7.25
 $        7.25
 $           1,160.00
 $         1,160.00
 $             -  
$12,760
Kansas
 $            7.25
 $        7.25
 $           1,160.00
 $         1,160.00
 $             -  
$12,760
Kentucky
 $            7.25
 $        7.25
 $           1,160.00
 $         1,160.00
 $             -  
$12,760
Louisiana
 $            7.25
 $             -  
 $           1,160.00
 $         1,160.00
 $             -  
$12,760
Maine
 $            7.25
 $      12.00
 $           1,920.00
 $         1,160.00
 $    760.00
$12,760
Maryland
 $            7.25
 $      11.00
 $           1,760.00
 $         1,160.00
 $    600.00
$12,760
Massachusetts
 $            7.25
 $      12.75
 $           2,040.00
 $         1,160.00
 $    880.00
$12,760
Michigan
 $            7.25
 $        9.65
 $           1,544.00
 $         1,160.00
 $    384.00
$12,760
Minnesota
 $            7.25
 $      10.00
 $           1,600.00
 $         1,160.00
 $    440.00
$12,760
Mississippi
 $            7.25
 $             -  
 $           1,160.00
 $         1,160.00
 $             -  
$12,760
Missouri
 $            7.25
 $        9.45
 $           1,512.00
 $         1,160.00
 $    352.00
$12,760
Montana
 $            7.25
 $        8.65
 $           1,384.00
 $         1,160.00
 $    224.00
$12,760
Nebraska
 $            7.25
 $        8.25
 $           1,320.00
 $         1,160.00
 $    160.00
$12,760
New Hampshire
 $            7.25
 $             -  
 $           1,160.00
 $         1,160.00
 $             -  
$12,760
New Jersey
 $            7.25
 $      11.00
 $           1,760.00
 $         1,160.00
 $    600.00
$12,760
New Mexico
 $            7.25
 $        9.00
 $           1,440.00
 $         1,160.00
 $    280.00
$12,760
New York
 $            7.25
 $      11.80
 $           1,888.00
 $         1,160.00
 $    728.00
$12,760
North Carolina
 $            7.25
 $        7.25
 $           1,160.00
 $         1,160.00
 $             -  
$12,760
North Dakota
 $            7.25
 $        7.25
 $           1,160.00
 $         1,160.00
 $             -  
$12,760
Ohio
 $            7.25
 $        8.70
 $           1,392.00
 $         1,160.00
 $    232.00
$12,760
Oklahoma
 $            7.25
 $        7.25
 $           1,160.00
 $         1,160.00
 $             -  
$12,760
Oregon
 $            7.25
 $      11.25
 $           1,800.00
 $         1,160.00
 $    640.00
$12,760
Pennsylvania
 $            7.25
 $        7.25
 $           1,160.00
 $         1,160.00
 $             -  
$12,760
Rhode Island
 $            7.25
 $      10.50
 $           1,680.00
 $         1,160.00
 $    520.00
$12,760
South Carolina
 $            7.25
 $             -  
 $           1,160.00
 $         1,160.00
 $             -  
$12,760
Tennessee
 $            7.25
 $             -  
 $           1,160.00
 $         1,160.00
 $             -  
$12,760
Texas
 $            7.25
 $        7.25
 $           1,160.00
 $         1,160.00
 $             -  
$12,760
Utah
 $            7.25
 $        7.25
 $           1,160.00
 $         1,160.00
 $             -  
$12,760
Vermont
 $            7.25
 $      10.96
 $           1,753.60
 $         1,160.00
 $    593.60
$12,760
Virginia
 $            7.25
 $        7.25
 $           1,160.00
 $         1,160.00
 $             -  
$12,760
Washington
 $            7.25
 $      13.50
 $           2,160.00
 $         1,160.00
 $ 1,000.00
$12,760
West Virginia
 $            7.25
 $        8.75
 $           1,400.00
 $         1,160.00
 $    240.00
$12,760
Wisconsin
 $            7.25
 $        7.25
 $           1,160.00
 $         1,160.00
 $             -  
$12,760
Wyoming
 $            7.25
 $        5.15
 $              824.00
 $         1,160.00
 $  (336.00)
$12,760







*states that have a minimum wage under the federal minimum wage default to the federal minimum wage
**some states do have minimum wages that are set to increase in the coming years

After compiling all this information, I wanted to see what the average person pays for some of those things that people would commonly agree is part of an average American lifestyle. 

Average Person bills w/out College
Per Month
Per Year
Rent
 $ 1,180.00
 $ 14,160.00
Car
 $    381.00
 $   4,572.00
Phone
 $      40.00
 $      480.00
Health Insurance
 $    321.00
 $   3,852.00
Car Insurance
 $    126.00
 $   1,512.00
Total
 $ 2,048.00
 $ 24,576.00

Average Person bills w/out College&Health Insurance
Per Month
Per Year
Rent
 $ 1,180.00
 $ 14,160.00
Car
 $    381.00
 $   4,572.00
Phone
 $      40.00
 $      480.00
Car Insurance
 $    126.00
 $   1,512.00
Total
 $ 1,727.00
 $ 20,724.00

Average Person bills w/ College
Per Month
Per year
Rent
 $ 1,180.00
 $ 14,160.00
Car
 $    381.00
 $   4,572.00
Phone
 $      40.00
 $      480.00
Health Insurance
 $    321.00
 $   3,852.00
Car Insurance
 $    126.00
 $   1,512.00
Student Loans
 $    393.00
 $   4,716.00
Total
 $ 2,441.00
 $ 29,292.00

Based on this information even a person that forgoes college would need to make $20,724 per year just to cover those bills and as you can see I left a few things like groceries and utilities out. After looking at this information I wondered how many how hours and at what rate I would have to work to get that much money. You can see the information below. 

W/O College
Amount
Hours/Mo
Rate

 $ 2,048.00
160
 $    12.80
40 hours/wk
 $ 2,048.00
200
 $    10.24
50 hours/wk
 $ 2,048.00
240
 $      8.53
60 hours/wk

W/O College&Health Ins
Amount
Hours/Mo
Rate


 $ 1,727.00
160
 $    10.79
40 hours/wk

 $ 1,727.00
200
 $      8.64
50 hours/wk

 $ 1,727.00
240
 $      7.20
60 hours/wk


W/College
Amount
Hours/mo
Rate

 $ 2,441.00
160
 $    15.26
40 hours/wk
 $ 2,441.00
200
 $    12.21
50 hours/wk
 $ 2,441.00
240
 $    10.17
60 hours/wk

So if I don't go to college and I skip health insurance I can work 160 hours at $10.79 per hour and make enough to pay rent, car insurance, car payment, and my phone bill. What about actually living life? I mean none of that includes living expenses outside of those core bills. 

This is the part where I got a little more curious and decided to put together a sample budget. All the numbers from the next chart were either the lowest of national average or the lowest I have paid. It's not perfect but my point still remains the same. 

Sample Budget
Rent
$    400.00
Utilities
$    135.00
Phone
$      40.00
Car
$    100.00
Car ins
$    125.00
Health Ins
$      75.00
Food
$    200.00
Gas
$      75.00
Internet
$      60.00
Yearly
Total
$ 1,210.00
$ 14,520.00

You can see that even at minimum a person will need about $15,000 per year to be able to live with someone else because let's be real, there aren't too many places in America that you can get a one bedroom apartment for $400 per month. 

Last stop before I land the plane. I just wanted to see where this simple budget stacked up against the wages of the states and see where I could live on that budget. 

State
 State Per month
Yearly
Test Budget
 Difference
Poverty Line
Alabama
 $               1,160.00
 $ 13,920.00
$14,520.00
 $    (600.00)
$12,760
Alaska
 $               1,630.40
 $ 19,564.80
$14,520.00
 $   5,044.80
$15,950
Arizona
 $               1,920.00
 $ 23,040.00
$14,520.00
 $   8,520.00
$12,760
Arkansas
 $               1,600.00
 $ 19,200.00
$14,520.00
 $   4,680.00
$12,760
California
 $               2,080.00
 $ 24,960.00
$14,520.00
 $ 10,440.00
$12,760
Colorado
 $               1,920.00
 $ 23,040.00
$14,520.00
 $   8,520.00
$12,760
Connecticut
 $               1,760.00
 $ 21,120.00
$14,520.00
 $   6,600.00
$12,760
Delaware
 $               1,480.00
 $ 17,760.00
$14,520.00
 $   3,240.00
$12,760
D.C.
 $               2,240.00
 $ 26,880.00
$14,520.00
 $ 12,360.00
$12,760
Florida
 $               1,369.60
 $ 16,435.20
$14,520.00
 $   1,915.20
$12,760
Georgia
 $                  824.00
 $   9,888.00
$14,520.00
 $ (4,632.00)
$12,760
Hawaii
 $               1,616.00
 $ 19,392.00
$14,520.00
 $   4,872.00
$14,680
Idaho
 $               1,160.00
 $ 13,920.00
$14,520.00
 $    (600.00)
$12,760
Illinois
 $               1,480.00
 $ 17,760.00
$14,520.00
 $   3,240.00
$12,760
Indiana
 $               1,160.00
 $ 13,920.00
$14,520.00
 $    (600.00)
$12,760
Iowa
 $               1,160.00
 $ 13,920.00
$14,520.00
 $    (600.00)
$12,760
Kansas
 $               1,160.00
 $ 13,920.00
$14,520.00
 $    (600.00)
$12,760
Kentucky
 $               1,160.00
 $ 13,920.00
$14,520.00
 $    (600.00)
$12,760
Louisiana
 $               1,160.00
 $ 13,920.00
$14,520.00
 $    (600.00)
$12,760
Maine
 $               1,920.00
 $ 23,040.00
$14,520.00
 $   8,520.00
$12,760
Maryland
 $               1,760.00
 $ 21,120.00
$14,520.00
 $   6,600.00
$12,760
Massachusetts
 $               2,040.00
 $ 24,480.00
$14,520.00
 $   9,960.00
$12,760
Michigan
 $               1,544.00
 $ 18,528.00
$14,520.00
 $   4,008.00
$12,760
Minnesota
 $               1,600.00
 $ 19,200.00
$14,520.00
 $   4,680.00
$12,760
Mississippi
 $               1,160.00
 $ 13,920.00
$14,520.00
 $    (600.00)
$12,760
Missouri
 $               1,512.00
 $ 18,144.00
$14,520.00
 $   3,624.00
$12,760
Montana
 $               1,384.00
 $ 16,608.00
$14,520.00
 $   2,088.00
$12,760
Nebraska
 $               1,320.00
 $ 15,840.00
$14,520.00
 $   1,320.00
$12,760
New Hampshire
 $               1,160.00
 $ 13,920.00
$14,520.00
 $    (600.00)
$12,760
New Jersey
 $               1,760.00
 $ 21,120.00
$14,520.00
 $   6,600.00
$12,760
New Mexico
 $               1,440.00
 $ 17,280.00
$14,520.00
 $   2,760.00
$12,760
New York
 $               1,888.00
 $ 22,656.00
$14,520.00
 $   8,136.00
$12,760
North Carolina
 $               1,160.00
 $ 13,920.00
$14,520.00
 $    (600.00)
$12,760
North Dakota
 $               1,160.00
 $ 13,920.00
$14,520.00
 $    (600.00)
$12,760
Ohio
 $               1,392.00
 $ 16,704.00
$14,520.00
 $   2,184.00
$12,760
Oklahoma
 $               1,160.00
 $ 13,920.00
$14,520.00
 $    (600.00)
$12,760
Oregon
 $               1,800.00
 $ 21,600.00
$14,520.00
 $   7,080.00
$12,760
Pennsylvania
 $               1,160.00
 $ 13,920.00
$14,520.00
 $    (600.00)
$12,760
Rhode Island
 $               1,680.00
 $ 20,160.00
$14,520.00
 $   5,640.00
$12,760
South Carolina
 $               1,160.00
 $ 13,920.00
$14,520.00
 $    (600.00)
$12,760
Tennessee
 $               1,160.00
 $ 13,920.00
$14,520.00
 $    (600.00)
$12,760
Texas
 $               1,160.00
 $ 13,920.00
$14,520.00
 $    (600.00)
$12,760
Utah
 $               1,160.00
 $ 13,920.00
$14,520.00
 $    (600.00)
$12,760
Vermont
 $               1,753.60
 $ 21,043.20
$14,520.00
 $   6,523.20
$12,760
Virginia
 $               1,160.00
 $ 13,920.00
$14,520.00
 $    (600.00)
$12,760
Washington
 $               2,160.00
 $ 25,920.00
$14,520.00
 $ 11,400.00
$12,760
West Virginia
 $               1,400.00
 $ 16,800.00
$14,520.00
 $   2,280.00
$12,760
Wisconsin
 $               1,160.00
 $ 13,920.00
$14,520.00
 $    (600.00)
$12,760
Wyoming
 $                  824.00
 $   9,888.00
$14,520.00
 $ (4,632.00)
$12,760

After looking and doing some math, based on my sample budget any state that pays less than $8.25 would require me to get a second job just to maintain those bills and that does not include having a social life, savings account, investing, retirement, and the rest of the stuff people have to consider financially. 

Based on this research, I think that minimum wage being set at $7.25 per hour sends a message that just above poverty is what a company is federally required to pay someone and they don't even have to guarantee that because they don't have to give you 40 hours a week. 

I know some people will look at this and try to find some way to justify why things are fine the way they are but before you drive down that lane, take a look at this information the way I did. Look at it as someone who is just starting out and trying to figure out what path to take in life. Then throw on top of that the racial and gender disparities in pay and it's significantly more difficult to achieve the American dream. 

Personally, I don't think anyone should have to work more than 60 hours a week to make decent life at any job or jobs. People want to live an experience life just like everyone else and it makes no sense that people have to work 60 hours just to get by. I am not saying that everyone should make the same; I am saying that if someone gets up everyday and works a minimum of 40 hours a week at any job they shouldn't be just barely getting by and if they are then it's because they living outside their means and that something completely separate. 

Fixing the issue of fair wages and compensation isn't easy but I think it starts by defining the cost of a decent minimum lifestyle. 

Resources

https://www.ncsl.org/research/labor-and-employment/state-minimum-wage-chart.aspx
https://www.thestreet.com/personal-finance/average-income-in-us-14852178
https://aspe.hhs.gov/2020-poverty-guidelines
https://worldpopulationreview.com/states/average-income-by-state/

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