Living in Poverty?
by Andrew S. Fischer
In an earlier article, I wrote (indirectly quoting Economist magazine) that poverty could be overcome fairly effectively if teenagers do just a few things: finish high school, don’t have babies, and find a job and keep it. I also stated that two people working full time, each earning just $7.50 per hour, should have over $24,000 a year after income taxes. My belief was that they could spend a third of that on rent and have enough left over to live decently.
A few e-mailers challenged my budgeting skills, and, since our national socialists – oops, I mean our federal socialists – are planning to increase the minimum wage to approximately that hourly rate, I thought it might be a good time to explore my previous assertions. There's no need to discuss how our fearless leaders' misguided wage increase will also amplify unemployment, since Austrian economists and others have explained this many times over.
Let's use the impending $7.25 per hour wage this time, and assume that the two people in question, who could be in a committed relationship or just roommates, work a moderate thirty-five hours per week, fifty weeks a year. The resultant annual gross income for each, before taxes, is approximately $12,687. The household thus earns $25,375 annually, which I'll round downward to $25,000, or $2,083 per month. Household budgets typically allocate up to 30% of gross income toward rent; in the case of our hypothetical couple this would be $625 per month. So the first question is: can a decent $625 per month rental be found, anywhere in the United States?
Full article at:
http://www.lewrockwell.com/fischer/fischer23.html