3 ms·
>The Fight for $15 movement came from expensive cities, and it might be the right policy for those places. But it would severely distort and crush lower-cost ci
by nobody9999 6y ago
>The Fight for $15 movement came from expensive cities, and it might be the right policy for those places. But it would severely distort and crush lower-cost cities and states. The right policy for San Francisco isn't necessarily right for Birmingham.
Your point is a valid one. At the same time, if you look at how these numbers actually play out in reality, $15/hour (assuming 40 hours/week -- certainly not a given and 50 weeks per year) works out to $30,000/annum. Figure in the 12%[0] Federal income tax plus the 6.25% FICA (Social Security/Medicare) withholding and that $30,000/annum nets (not including state and local income taxes, which vary) to ~$25,000/annum.
Assuming (a big assumption) no income tax at the state/local levels, that leaves ~25,000/annum at $15/hour, 40 hours/week.
This works out to ~$2100/month for a single earner. Given that rent, food cost, transportation requirements, etc. vary widely across various localities, it's difficult to determine how well folks can get by on that amount of money.
The median rent in the US[1] is ~$1000/month. That represents ~50% of net income (again, assuming zero state/local income tax. Which doesn't bode well for those making $15/hour, given that many don't get 40 hours/week.
Even in the places with the least expensive rent[2], that's still ~25% of income. That's often considered an appropriate level of housing cost relative to income.
What's more, given that the median income in the US is more than twice as high[3] as 40 hours/week at $15/hour, a $15 minimum wage wouldn't put any upward pressure on median income (how relevant such an eventuality might be is arguable, but is interesting to note).
So yes, a national $15/hour minimum wage isn't a panacea. Those living in the poorest/cheapest places could likely live pretty well on $15/hour (again, assuming 40 hours/week, 50 weeks/year -- which doesn't apply to many).
Contrariwise, those who live in places with costs around the median for the US would likely struggle with $15/hour, and those living in the most expensive places would likely not be able to live on just one full-time job.
So yes, $15/hour nationally is a bad idea. In fact, it should be significantly higher in places that are more expensive.
[0]https://en.wikipedia.org/wiki/Income_tax_in_the_United_States#Marginal_tax_rates_for_2019 https://en.wikipedia.org/wiki/Income_tax_in_the_United_State...
[1]https://www.deptofnumbers.com/rent/us/ https://www.deptofnumbers.com/rent/us/
[2]https://dailyhive.com/mapped/10-cheapest-cities-rent-usa https://dailyhive.com/mapped/10-cheapest-cities-rent-usa
[3]https://www.census.gov/library/stories/2019/09/us-median-household-income-up-in-2018-from-2017.html https://www.census.gov/library/stories/2019/09/us-median-hou...
[Edit: Fix spacing typos]
- wccrawford 6y agoBut it's okay to have a national minimum wage and also a state, county or city minimum wage that's higher than the national. That doesn't mean we shouldn't at least start with the national one. Individual areas can fight for their own raised minimum wage in their area. Everyone can fight for the national one, which would still be a big increase over what minimum wages are everywhere.
- nobody9999 6y ago>But it's okay to have a national minimum wage and also a state, county or city minimum wage that's higher than the national. That doesn't mean we shouldn't at least start with the national one. You won't get any argument about that from me. My point was that, except in the poorest places in the US, $15/hour is not a living wage. Especially since many, if not most folks earning the minimum wage don't get health care benefits (a big additional cost) and often are not afforded 40 hours/week either.
- deleted 6y ago[deleted]
- jefftk 6y ago> Figure in the 12%[0] Federal income tax You're forgetting the standard deduction: $12k for an individual. This brings taxable income to $18k. Per https://www.irs.gov/pub/irs-pdf/i1040tt.pdf https://www.irs.gov/pub/irs-pdf/i1040tt.pdf that puts tax at $1,929, so $30k becomes $28k after Federal income tax and not $26k.
- nobody9999 6y ago>You're forgetting the standard deduction: $12k for an individual. This brings taxable income to $18k. Per https://www.irs.gov/pub/irs-pdf/i1040tt.pdf https://www.irs.gov/pub/irs-pdf/i1040tt.pdf that puts tax at $1,929, so $30k becomes $28k after Federal income tax and not $26k. A fair point. I'd point out (again) that many folks earning minimum wage don't get 40 hours/week. What's more, once you add in health care costs, not to mention any children or other dependents, that extra ~$175/month won't go too far.