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Tue Mar 18, 2014, 09:31 AM

Typical Minimum-Wage Earners Aren’t Poor, But They’re Not Quite Middle Class

On Tuesday, I tried to answer a much discussed question: How many people are supporting themselves on the minimum wage? After taking out teenagers, young people living with their parents, and people with higher-earning spouses, the answer’s about 1.6 million people, or about half of all minimum-wage workers.

There’s another way to address the same question: Consider family income. A high-schooler working evenings at the local coffee shop might make the federal minimum of $7.25 an hour, but her parents might run Fortune 500 companies. Family income can tell us how many minimum-wage earners are teenagers working after school and how many are adults trying to support a family.



How you interpret these numbers depends on your perspective. The data shows a large majority of minimum-wage workers are in low- to moderate-income families, and a significant minority are flat-out poor. These are the people who could use a raise.

A substantial number of minimum-wage workers come from better-off families. Close to half a million minimum-wage earners are in households with six-figure incomes, and a million more are in those that earn at least $60,000. Any increase in the minimum wage would benefit those people, too — and that’s not the goal of an anti-poverty effort.

This is one reason many economists prefer the Earned Income Tax Credit and other programs that more precisely target low-income populations, although others argue that the minimum wage complements those policies.


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Reply Typical Minimum-Wage Earners Aren’t Poor, But They’re Not Quite Middle Class (Original post)
Capt. Obvious Mar 2014 OP
Warren Stupidity Mar 2014 #1
Recursion Mar 2014 #2
Capt. Obvious Mar 2014 #3
Recursion Mar 2014 #5
hfojvt Mar 2014 #6
baldguy Mar 2014 #4
starroute Mar 2014 #7

Response to Capt. Obvious (Original post)

Tue Mar 18, 2014, 09:43 AM

1. Well rightwing horseshit is fascinating stuff.

 

Half of their graph there is households earning 30,000 or less. Only in rightwing world is that "not poor". The argument that we shouldn't raise the minimum wage because 15% of min wage workers are from well off households is more interesting restated as we shouldn't raise the min wage because it would benefit the 85% of households that could really use the money.

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Response to Warren Stupidity (Reply #1)

Tue Mar 18, 2014, 10:03 AM

2. Half make less than $40K, half make more than $40K

If you actually read the article, that's exactly Casselman's point.

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Response to Recursion (Reply #2)

Tue Mar 18, 2014, 10:06 AM

3. His point is in the eye of the beholder

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Response to Capt. Obvious (Reply #3)

Tue Mar 18, 2014, 10:16 AM

5. He also doesn't make the claim of his headline

Without knowing the distribution, we don't know what the typical (ie, median) minimum wage earner's household income is. Just that the mean is about $40K.

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Response to Warren Stupidity (Reply #1)

Tue Mar 18, 2014, 10:31 AM

6. depends on the size of the family and the cost of living

$28,000 a year for my one person household in small city midwest is not even close to poor. And for a two person household, it would not be poor either.

Depends on your benefits too. $28,000 + health insurance from work or $28,000 without it.

My W-2 tells me that my employer spent $7,539 on health insurance for me. Which is a little bit like shadow income.

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Response to Capt. Obvious (Original post)

Tue Mar 18, 2014, 10:07 AM

4. Carrot & stick

 

The carrot is always just out of reach & can never be attained, but the stick is always there ready to inflict pain.

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Response to Capt. Obvious (Original post)

Tue Mar 18, 2014, 12:23 PM

7. If the idea is to have employers pay their fair share, EITC doesn't do it

We're already paying for food stamps and other benefits to shore up Walmart's profits. Increasing the Earned Income Tax Credit would just take more out of taxpayers and let the Walmart heirs keep raking it in.

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