Ownership Myth

And The Two-Income Syndrome

Published on September 14, 2004 By stevendedalus In Politics

The current median income for a family of four is about $55,000 or approximately three times that of the poverty line at $19,000 for a family of four. The problem with these statistics when trying to arrive at a “living wage” that often is juxtaposed to the horrific rate of $5.15 an hour or $10,500, which if adjusted for inflation should be at $7.50 or $15,000, is in the difficulty of determining how much of the median and the poverty line owe to two salaries. If those at the four-family poverty line consists of two-incomes at the minimal wage the income would place the family at above the line by $2,000 or a total income of $21,000. This example, however, does not consider the costs of child care, whether governmentally assisted or out of pocket. Nor does it take into account the erosion of parental quality under such duress. For the median $55,000 may constitute some cushion for child care but leaving little room for building wealth or “ownership.” Moreover, the payroll tax, respectively, $1400 and $3500, substantially reduces the subsistence level of both groups. As for the income tax, chances are the minimal level will not be taxed at all, and those frozen on the median will be helped somewhat by having dependents; in spite of this, the move to “ownership” is out of the question.

If, however, the minimum wage rose the necessary 8.7%, it would also affect the median by perhaps an additional 5% so that the low level increased some $1800 and the median some $2700 and from there adjusted for inflation annually, some progress would be made on the road to ownership, but more importantly would increase the rolls of the middle class. This, of course, does not address the shame of the two-income family where it directly affects the degradation of raising children. Only those above the median can find the right child care through comfortably retired, or one-income grandparents or professional nanas. For the rest, most leave to chance the well-being of their children.

http://stevendedalus.joeuser.com

Comments (Page 3)

Jay Walker

on Sep 15, 2004

I'll ask again, if $8 per hour is a good idea, why not $80 per hour?

The problem, Brad, is that the employer - without some checks by society in general, holds almost all the cards. How is one individual to fight a General Motors etc. No one's arguing for $80 an hour here - IMO, it makes your argument appear weak that you have to turn to extremism. I guess the other side of that argument is to cut wages to 80 cents an hour to compete with the Chinese. Execpt for the factory owner of course. He'll have the lavish lifestyle to which his status should accord him.

JW

CrispE

on Sep 15, 2004

Draginol:

You ask and I haven't seen a reply about where to set minimum wage. The concept of minimum wage was that employers were paying the employees a "non-liveable" wage and thus causing hardship to the workers.

If you use that as a standard for what minimum wage should be then it should be set at a point that covers food, clothing, rent, plus an adjustment for living expenses in a community by community basis. What we do now is what we have always done, that is, throw some money at the problem and see who applauds. Conservatives always claim raising will ruin the economy, Liberals always point to crime and welfare.

Those of us who saved for 25 years, had smaller families and lived modest live styles are very irritating to those who haven't but the truth is that lifestyle in terms of job success is a choice. Is there compromise in the path to job success? Plenty! But only the individual worker can make his own decisions about what they can and cannot accept.

stevendedalus

on Sep 15, 2004

It should be a recognition that a minimum wage increase is only one small step that needs to be taken toward finding ways to insure that all Americans aren't in a constant paycheck to paycheck struggle.

Good show!

stevendedalus

on Sep 15, 2004

No one's arguing for $80 an hour here - IMO, it makes your argument appear weak that you have to turn to extremism. I guess the other side of that argument is to cut wages to 80 cents an hour to compete with the Chinese. Execpt for the factory owner of course. He'll have the lavish lifestyle to which his status should accord him.

I'm afraid this is precisely the long range objective of American business.

stevendedalus

on Sep 15, 2004

Those of us who saved for 25 years, had smaller families and lived modest live styles are very irritating to those who haven't but the truth is that lifestyle in terms of job success is a choice. Is there compromise in the path to job success? Plenty! But only the individual worker can make his own decisions about what they can and cannot accept.

Many unfortunately do not have your wherewithal or the right DNA.

messybuu

on Sep 15, 2004

If you use that as a standard for what minimum wage should be then it should be set at a point that covers food, clothing, rent, plus an adjustment for living expenses in a community by community basis.

For how many people though? I think most of us agree that minimum wage is livable for one person, but not when it's meant to support an entire family, and in some places, such as Silicon Valley, the cost of living is much higher.

Frogboy

on Sep 15, 2004

I'm going to try to put this as nicely as I can. The basic problem I see here are people who argue based on emotional feelings rather than basic economic sense.

How much people get paid is based largely on market forces. That is, the supply of people with certain skills vs. the demand for those skills. The more in demand your skills are, the higher your salary will be because different companies will be competing for those same workers. This is how it works, today, right now.

If you don't have any skills and thus can't earn enough to support a family, you have two real world choices: a) Improve your skill set or Don't have a family.

Stevendedalus and others argue for a third way - have the government force companies to pay more mnoey so that those people don't have to improve their skill and hence can afford to support a family.

In the post-NAFTA world, that's a recipe for disaster. If I'm a factory owner paying my people say $6 per hour to make widgets, and the government forces me to pay $8, then guess what? I'm moving my factory to Mexico or China because that's the only way I can compete in the market. So now, isntead of making $6 per hour, those people are on welfare.

So then the same people whose half-baked ideas led to outsourcing then blame "big business" for it. The Stevendedalus's of the world won't take any responsibility for the end result of their advocacy because they have "good intentions". Whereas people like me, who are forced to be the grinch in order to save these jobs, are villified.

eieio

on Sep 15, 2004

If I'm a factory owner paying my people say $6 per hour to make widgets, and the government forces me to pay $8, then guess what? I'm moving my factory to Mexico or China because that's the only way I can compete in the market. So now, isntead of making $6 per hour, those people are on welfare

Thanks for adding the outsourcing angle, Brad. I left that one out.

CrispE

on Sep 15, 2004

stevendedalus:

I don't think it's DNA. It's perspective. I've helped many families with debt and the key to doing so is always what they think they need. From what I've seen, families in debt prize the most:

1) Cable TV
2) Alchohol and Drugs
3) Expensive items (cars, boats, vacations)

I had one family with $12,000 in debt and both husband and wife working where by giving up the top 2 were able to get out of debt in 3 years. But oh! the fight to get them going?!

CrispE

on Sep 15, 2004

Messy Bu:

Well, that's the problem with a national program. What works in Ohio might be inappropriate in California. The thing is, it should be a state, not national issue because there's no way for a national program to determine the needs locally. Politics and poverty are a bad mix on all levels of government to a degree with the national being the worst.

kingbee

on Sep 15, 2004

1) Cable TV
2) Alchohol and Drugs
3) Expensive items (cars, boats, vacations)

clearly there's a fourth alternative. instead of increasing the minimum wage, impose price controls on all of the above (or take the british factory owner approach and pay workers with gin, thus eliminating the middleman costs)

Gideon MacLeish

on Sep 15, 2004

1) Cable TV
2) Alchohol and Drugs
3) Expensive items (cars, boats, vacations)

You're right about most. But you can't assume "all".

We have personally profited off the speed of obsolescence over the years. A 5 year old TV can be had for very little cost, as the new electronics are getting cheaper and cheaper. Same with computers. The machine I'm using right now cost us $20. Sure, the monitor doesn't have the best color display, and the computer can bog down sometimes, but dollar for dollar, we got a heck of a deal. Our VCR cost us $2. Our stereo, $25. We usually don't pay more than $1 for our books (the Friends of the Library book sales love us). And on top of it all, we've learned the golden rule: pay cash.

1tomot1

on Sep 15, 2004

Why not pay $80 an hour?

Simple. There is the obvious reality that the average small business could not pay that level of a wage withhout going under. Could that same business pay $8 an hour, definitely.

Why $8 to begin with?

Because that is an inflation-adjusted number based an an old formula for the base wage that will provide the most basic necessities of life for ONE person.

Should a set dollar amount apply across the board on a national level? The reasonable answer is definitely not. A simple solution should be a federally enforced formula that takes into consideration the cost of all basic necessities (e.g. food, shelter, clothing, utilities, transportation, as well as inflation). That way location ceases to be a factor. Inflation as well would be less of concern because it would be considered in the formula.

The argument regarding employers exporting jobs becuase they can't afford to pay higher wages displays a lack of study in history. If you look at the first major push of American corporations to move out of the country in the 70's the dishonesty of profit loss as a motivation is quickly revealed.

Not one single major American manufacturer outsourced to avoid bankruptcy. The motivation was purely profit driven, as opposed to an avoidance of loss. Ford, GM, and other major players in the manufacturing exodus all enjoyed massive profit margins before they shipped out their manufacturing. They outsourced because the average corporation wanted more profits by any means, as opposed to paying hardworking Americans their fair share for the products they produced.

As far as the comments regarding the desires and material wants of those living in poverty just think about it for a moment. The first two items (cable tv & drugs/alcohol) are transparent. These are implements, for better or worse, of escapism. When someone lives in abject poverty things that distract from the misery become much sought after, this is a basic survival instinct. The third item (expensive cars etc.) is also very predictable. We live in a society that reveres celebrity and extravagance in popular culture. When you are a member of the underclass in many ways you are considered to be worthless or a failure of one type or another. Expensive items such as cars and flashy jewelry become a form of self affirmation, because they represent what an underprivileged lifestyle is not. It's way of saying "see, I am worth something because I have this."

messybuu

on Sep 15, 2004

Why $8 to begin with?

If $5.15 is still livable for a single person though, then why raise it that high?

If it's because minimum wage isn't high enough to raise a family of four, is three dollars more per hour all they need to survive?

drmiler

on Sep 15, 2004

Reply #44 By: Messy Buu - 9/15/2004 7:12:09 PM
Why $8 to begin with?

If $5.15 is still livable for a single person though, then why raise it that high?

If it's because minimum wage isn't high enough to raise a family of four, is three dollars more per hour all they need to survive?

This all depends on where you live. I can with absolute certainty tell you that $5.15 WILL NOT support "1" person in southern California.

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