The Head Of A Household Of Four Making Minimum Wage Has More Disposable Income Than A

[dex]

Anyone know if this analysis is correct?
The Head Of A Household Of Four Making Minimum Wage Has More Disposable Income Than A Family Making $60,000 A Year


In Entitlement America, The Head Of A Household Of Four Making Minimum Wage Has More Disposable Income Than A Family Making $60,000 A Year | zero hedge

I don't know why the child care costs would be lower for the lowest income person.

If true, his take away is a good one.

[Westernskies]

Dex, unfortunately this editorial is nothing more than a pack of lies designed to evoke class warfare between those evil haves and the downtrodden have-nots ; the facts notwithstanding. Since "entitlement" has become a verboten keyword, subsequent discussions will most likely result in an early appearance from the singing pig.

But I do appreciate you posting it.

[FinanceDude]

Gotta be one of the dumbest articles I unfortunately read in a long time..........

[haha]

Quote:

Originally Posted by Westernskies Dex, unfortunately this editorial is nothing more than a pack of lies designed to evoke class warfare between those evil haves and the downtrodden have-nots ; the facts notwithstanding. Since "entitlement" has become a verboten keyword, subsequent discussions will most likely result in an early appearance from the singing pig. But I do appreciate you posting it.

Hey, get off your tired old sense of middle class entitlement! Don't you know that we are the problem?

"Ask not...."

Ha

[donheff]

Yeah, that is an accurate chart. So, I guess millions of people are forgoing those $60K jobs and electing the minimum wage approach instead. After all incentives work.

[Texas Proud]

I have not read the article... and might not with the reviews so far....


BUT... back when my mom was a school teacher (in the early 80s)... she was making less than $20K... she worked at an elementary school that had mostly poor people... and many on welfare...

This one lady had 5 kids by 5 different men (never married)... she did not have a job.. all kids got free breakfast and free lunch... all kids got free clothes... free school supplies... Mom got a free 2 BR apartment... food stamps, etc. etc. (I can not remember all the programs she was on).... we calculated the total benefits she was getting and it was north of $28K...

Now, my mom was working hard to help feed her 6 kids and we did not qualify for anything... yet she made less.... my dad worked and made in the $30K to $40K range.....

Sooooo, yes... I have seen where someone that played the system can make more than someone who does not... I would not think it could still happen today, but I have been surprised at what I have learned at times...

[FUEGO]

Sadly I think the article is fairly accurate in that all these handouts add up quickly and get phased out quickly as your income rises above poverty levels.

The TANF is temporary in nature as I understand it, but it is zero for the minimum wage full time worker anyway (and a small part of "total compensation" for the part time min wage worker).

The free lunch program numbers are a little higher than what we would get in my state ($1080 a year for 2 kids). They say $1800. Curious if other dollar amounts are similarly inaccurate.

The effective marginal tax rate is VERY steep at low income levels. But keep in mind that assets are tested for many of these government handout programs.

One huge additional handout that we can get locally is paid child care for low income earners. You pay a percentage of your income above a certain threshold. I think it caps out at 10% marginal rates, so the min wage worker would get virtually all their $9600 in childcare paid for. There is a waiting list that was 18 months about 5 years ago, and is now much longer because of funding cuts.

FYI, my sister in law took advantage of many of these programs and lived higher on the hog than we did for a while. Single mom with 1 kid at the time. Nicer car, frequent vacations, cell phone, etc. She worked and made a little more than min wage, but not a lot.

[ERD50]

Quote:

Originally Posted by donheff Yeah, that is an accurate chart. So, I guess millions of people are forgoing those $60K jobs and electing the minimum wage approach instead. After all incentives work.

Well, turn it around for a minute.

I don't think it says that many $60K workers want to change places, there are plenty of reasons they would want that $60K job. Status, challenging work, good work environment, potential to make more in the future etc. And those numbers for the low earners represent the point when the kids are in school, a temporary situation.

But it might say that if you are in this position of being at minimum wage with a family, is there really much incentive to work your way up and stop collecting OPM?

After all incentives work. Both ways.

-ERD50

[FUEGO]

Quote:

Originally Posted by ERD50 I don't think it says that many $60K workers want to change places, there are plenty of reasons they would want that $60K job. Status, challenging work, good work environment, potential to make more in the future etc. And those numbers for the low earners represent the point when the kids are in school, a temporary situation.

And many of the non-taxable benefits of the 60k job are also appealing. 401k matches, vacation time, paid holidays, training, professional development, etc.

[Westernskies]

Quote:

Originally Posted by FUEGO And many of the non-taxable benefits of the 60k job are also appealing. 401k matches, vacation time, paid holidays, training, professional development, etc.

If these could be valued tangibly there are those who would want to implement a whole 'nother layer of taxation tomorrow AM...

[eridanus]

People are actually claiming that a minimum wage worker wouldn't take a $60k job if offered? Seriously?

PS. Following what Fuego wrote, Medicaid is included for the minimum wage worker but no insurance is included for the $60k job. Ask a doctor about Medicaid coverage sometime -- it's much, much, better to have BCBS.

PPS. Most of those programs have long waiting lists. Just being "minimum wage" doesn't give you Section 8 or utility assistance.

PPPS. If you really believe the chart, then go for it. Let us know how it goes (most libraries have free internet).

[BLS53]

I live in a small town that is a melting pot of socioeconomic groups. I get to see this stuff first hand. Get in a grocery check-out line of 10 people, and 7 will pay with a food stamp card.

Most of these folks don't have the savvy to work the system. Usually a government worker from social services advises them on what benefits they can receive, and does the paperwork for them.

Many have an aversion towards formal education and training. They accept minimum wage jobs as a lifetime endeavor.

In my town, two common themes:

Teenage pregnancies. Often middle class girls, whose parents have disowned them, because they ran off with Mr. Wrong. Mr. Wrong runs off. Baby is delivered on the government dime. Mom begins a career of low wage waitressing or retail jobs, subsidized with public/Section 8 housing, food stamps and Medicade. Mr. Wrong replicates come and go, producing other children for the government dole.

SSI bums. Middle age guys who because of substance abuse, haven't worked a day past age 30. Government deems them mentally incompetent. They get $674 a month, plus about $170 a month in food stamps, plus Medicaid. Public housing takes 30% of their income. Most are happy as a lark to live out their lives this way.

Other than housing and driving beater cars, their lives aren't much different than anyone else's.

[lets-retire]

When I was working at a local police agency we had one apartment complex that would accept section 8 reimbursement. The complex was sold and new management policies were put in place. They were attempting to clean the place up so one of the policy changes was two infractions within six months meant your lease was not renewed and three meant you were going to be evicted. Eviction meant loss of section 8 program for the recipient. Prior to that policy the only time anybody was evicted was when we (the po-po) reported violations of welfare laws. There were several women who always had a new man in their apartment. These people were very savvy and the man always had a different address. We could never prove they lived there so we could do nothing. The scam worked rather well. The women would shack up with a man who was working. The woman would receive all of the assistance (it was based on household income). The women received enough in hand outs that they didn't work and the man provided the luxury items. After a few weeks the man would move on and the women would find another sugar daddy. It worked well for both parties. The man got a little "free" lovin, a place to stay and free food for a few weeks and the women got new TVs, game systems, cars, or whatever. Since nobody checked on the living conditions in the apartment, the only time the government found out the women were cheating the system was when we would report the violation. The women's biggest fear was that we would be called and find out that the man was staying in the apartment. Once we started reporting the violations the women were kicked off the section 8 dole for one year. It was amazing, they were still able to find suitable housing (typically in one of the low rent trailer parks) for an acceptable price. The big difference is they had to go find a job until they could get back on the dole, then they could go back to being on vacation. My point is many of "those people not smart enough to scam the system" are very smart with regards to the system and are able to run the scam. Often these people are multi-generational recipients and learn to scam the system from their parents or from friend's parents. Those who were unable to learn from their parents, learn from their friends. There were some people who used the program for what it was intended and are not running scams but in my experience they are few.

Just before I left that agency I was talking with the complex manager about the reduced number of calls for service. She said they were running at about 40% occupancy rate and only about 20% of those were section 8. This was greatly reduced from when I started. This is also when I found out about the eviction policy. It took almost three years to get the complex under control. It was the wild west and when I left it was quiet and had relatively low crime.

[ERD50]

Quote:

Originally Posted by eridanus People are actually claiming that a minimum wage worker wouldn't take a $60k job if offered? Seriously?

No one said that. Seriously. Why are you claiming people said it?

What we are saying is that there appears to be relatively little incentive for someone in the position described to put in the time/effort to raise themselves up and get off of these programs. It is reasonable to expect a higher paying job to require more from someone than a min wage job. But if their 'total compensation' is barely moved by that extra effort (or even pulled backward, as in these examples), many just won't bother. Esp if they never picture themselves as reaching that $60K level anyhow. Why move from $14K to $30K - what do you gain?

I'll say, the numbers appear to be 'cherry picked' to show the peak of the effect. Some cases may even be worse, many may be better. But if the slope of risk/reward isn't enough to make many people want to get off the programs, you can't expect them to (there will be exceptions of course).

Quote:

Originally Posted by lets-retire When I was working at a local police agency .... There were some people who used the program for what it was intended and are not running scams but in my experience they are few.

Wow. I understand that any large program to help people will have scammers that take advantage. It can't be avoided, we have to accept it as the 'price of doing business'. Make the requirements too tight, and too many more needy people won't get the help that we want to provide. But I would have thought it was a minority. Your experience says the opposite. Wow.


-ERD50

[frayne]

Dumb article, ask anyone of those at or below the poverty level getting EITC and other aid, if they would like to change places with someone making $60K. Many of those poor souls are only where they are at due to the birth lottery.

[Texas Proud]

Quote:

Originally Posted by frayne Dumb article, ask anyone of those at or below the poverty level getting EITC and other aid, if they would like to change places with someone making $60K. Many of those poor souls are only where they are at due to the birth lottery.

I love how people keep making these statements of 'birth lottery' like it is destiny of what will happen to the people... so, a little info on some inlaws...

The oldest runs his own auto repair shop, kind of successful
Second oldest was a successful engineer, had 4 kids and retired at 60
The third is on welfare and taking care of kids from #5
The forth is on SSI as he fried his brain on drugs
The fifth is in jail... has been there before... has kids that all of us are paying to take care of...


So... all born in the same family... all had choices to make... some made good choices, some very bad choices... WE are paying to take care of 3 of these kids and a good number of their kids... I would not put their situation in a 'birth lottery'... maybe you would...

[target2019]

As stated, this kind of article intends to start class warfare. While the un-educated person on free money and the educated 60K worker are thinking about their fare share, the politician sits on sidelines with the money lenders, and grins.

My son's first job was 70K. He has 10% bonuses, travels frequently, and has lots of play time. He would never trade places with the low-income worker.

A 60K worker is usually married to a worker who also has income. Their kids play soccer on the weekend. In school they are exposed to peers who have instilled morals. They have two cars and live in a decent neighborhood. The grandparents are helpful, and probably kick in with baby-sitting chores.

So the issue of disposable income is a red herring, IMO. There is inequity. I never doubt that. However, the real problem is our leadership. Follow the money.

[target2019]

Quote:

Originally Posted by Texas Proud I love how people keep making these statements of 'birth lottery' like it is destiny of what will happen to the people... so, a little info on some inlaws... The oldest runs his own auto repair shop, kind of successful Second oldest was a successful engineer, had 4 kids and retired at 60 The third is on welfare and taking care of kids from #5 The forth is on SSI as he fried his brain on drugs The fifth is in jail... has been there before... has kids that all of us are paying to take care of... So... all born in the same family... all had choices to make... some made good choices, some very bad choices... WE are paying to take care of 3 of these kids and a good number of their kids... I would not put their situation in a 'birth lottery'... maybe you would...

In a way, some of this proves the point. First, birth lottery is not the best way of describing what happens. What I think is meant is that children who are born to poor families in poor environments tend to produce more of the same. If we move the family to better neighborhood, some of the children will socialize with upwardly mobile families.

Still, the key is education. Just high school gets you one type of job. College, you're talking better. However, these are just averages. Some will do very well, most will conform to the expectation, and some will require subsistence.

Have to keep in mind that the specific children you mention are not easily classified into statistical groups. My guess is that if they all came from one household, there was substance abuse rampant among their peers.

[DeborahB]

It's all kind of interesting to me. My first job out of an ivy league college was slightly more than minimum wage. I was going to be an artist and I just needed money to make ends meet. I didn't think career. It was 1971. I can't say this was a wise choice but at the time it was what I did. (Should have gone to art grad school... sigh). But I don't know that I was atypical for my time and place.

11 years later, divorced no kids, I was pretty broke. I had managed to be an artist for several of those years but financially it wasn't enough.

So - I did a one-year MBA thinking THAT would change my life. I really got into it - suits, professional hairdo, pearls (ugh...). I still had trouble getting a job - I guess my hippie past was just still visible.

Finally I started getting "real" jobs and ended up at 50 in IT making halfway decent money, and retiring at 62.

The thing I have seen is that the kids of today want a lot - and work to get it - if they are educated. They are bizarrely career-minded but I find a lot of them are pretty shallow. They are conservative and they marry and have kids. Maybe this is more in the midwest than the coasts. I'm not sure. I do know they buy all new furniture and so on. Coming right out of college and into a $70K job is amazing to me.

I think education is the key. I'm from the northeast and I see my cousins' kids doing very well - but in interesting careers. But we come from an atypical family where all of our parents were college-educated and most of our grandparents' generation (great uncles, etc.) were. I think it makes a huge difference.

I imagine that most of the people on this board have lots of books in the house (or equivalent). Have you watched TV or movies lately - and do you see books in the homes?

I know I'm rambling but I think family values about education and work and reading and thinking have a lot to do with motivation.

My cousins' kids (the ones who are out of college) are a doctor, film editor in Hollywood, record producer in NYC, magazine editor, programmer at Google, beginning US diplomat on her first assignment, facebook game company employee (not sure what she does)... But I think they are exceptions and they don't match what I see here.

Sorry for the rambling post, it just got me thinking! Always a good tihng...

[Texas Proud]

Quote:

Originally Posted by target2019 In a way, some of this proves the point. First, birth lottery is not the best way of describing what happens. What I think is meant is that children who are born to poor families in poor environments tend to produce more of the same. If we move the family to better neighborhood, some of the children will socialize with upwardly mobile families. Still, the key is education. Just high school gets you one type of job. College, you're talking better. However, these are just averages. Some will do very well, most will conform to the expectation, and some will require subsistence. Have to keep in mind that the specific children you mention are not easily classified into statistical groups. My guess is that if they all came from one household, there was substance abuse rampant among their peers.

Yes.. all from on household.. and they were poor...


Funny thing... my household was poor... lived in the same neighborhood as the above mentioned family... and all of us came out pretty good.... of 6 kids...

1 has 2 master degrees and the equivilent of two PHDS (another story).
2 others have master degrees
1 has a BS and did well
1 is an RN and did well
1 never graduated... but did well..

Both my parents were smart... so we happen to be also... but my mom and dad never made it... he never graduated college and my mom did not until her mid 40s... my dad was not that great... but we all made choices and our choices were to be better.. the in law family also made choices... and most of them decided to fall in with the crowd... we grew up with these kids.. so we were exposed to the same conditions outside of family...