Cost of Living (US) and minimum wage

For the stupidity of comparing minimum wages. Posted as a separate topic but apparently we get charged by the topic (which I have started here guess we don't actually get charged). But after all lets use a gun topic for an economics. I'm sure it makes sense to someone, not me.

Lets look at a couple of things for the US (maybe read read and post links to information). After all what I heard from my second cousin's best friend's wife's next door neighbor's brother-in-law. . . . Provides perfect justification for silly thoughts.

http://money.cnn.com/calculator/pf/cost-of-living/

I just picked a few at random. Not the ones I know from actually traveling around the US which are even more disparate.

But from this link as an example if your salary was $50,000 in New York City(Brooklyn) you would need to make $25,752k in Reno, Nevada. It is $25,259 Greenville, SC for comparison. Or LA Long Beach at $36,343, Bakersfield is $26,956(what ~100 miles makes the CoL change 35%).

The link also compares the cost of big ticket items.

The link only does select cities which is ridiculous but the only way you are going to do it. Once again demonstrating that comparing economies is virtually impossible. If I have to pay $4K a month rent in NYC compares to renting an apartment in Meadows of Dan, VA (if you could find an apartment there) Last I looked 4 years ago I could buy a house for less than 100K(before the bubble). Yet the minimum wage being the same makes as much sense, pull the other one it has bells on it.

Comparing minimum wages or what is heard about people are making compare inside the US much less in the rest of the world is stupid.

T2M

Minimum wage one size fits all solution that hurts the very people it is intended to help. Pricing them out of the market, and with Obama care making it difficult to get full time job.

Poker

PS cost to employer in extra costs and time to keep up with the paperwork is between two and three times your wage.

All right then poker. I will break it down state by state, and include New Zealand and Australia as well.
Im assuming 40 hours paid a week and 50 weeks work, with 2 weeks unpaid for days off, unpaid holidays etc.
I will treat New Zealand as if its a state, and the Australians as state by state.
Us data on median income comes fromhttp://en.wikipedia.org/wiki/List_of_U.S._states_by_income, their data of which comes from the US census bereau

New Zealand.

stats from http://www.stats.govt.nz/browse_for_stats/income-and-work/Income/NZIncomeSurvey_HOTPJun12qtr.aspx, data from nz stats department

min wage: $13.50 * 40 hours/week * 50 weeks/year
= $27,000 ( 540/week)

median wage: $20.86*40 ' ' * 50 ' '
=$41,720 (834/week)

41,720/27,000 = 1.54 times min wage
27,000/41,720 = 65% of the median


Australia

stats from http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/by%20Subject/1301.0~2012~Main%20Features~Household%20income,%20expenditure%20and%20wealth~193
Data from australian stats department

min wage (all states): $15.96* 40hours*50weeks
=$31,920

median income (couldnt find hourly, so used weekly)

New South Wales : 779/week * 50 = $38,950

Victoria: 732/week * 50 = $36,600

Queensland: 783/week * 50 = $39,150

South Australia: 726/week * 50 = $36,300

Western Australia: 780/week * 50 = $39,000

Tasmania: 668/week * 50 = $33,400

Northern Territory: 895/week * 50 = $44,750

Australian Capital Territory:
1009/week *50 = $50,450

Australia total: 765/week * 50 = $38,250

NSW: 38,950/31,920 = 1.22 times, or 82% of median

Vic: 36,600/31920 = 1.14 times, and 88%

QLD: 39,150/31,920 = 1.22 times, and 82%

SA : 36,300/31,920 = 1.13 times, and 88%

WA : " " = 1.22 times, and 82%

TAS: " " = 1.04 times, and 96%

NT : " " = 1.4 times, and 71%

ACT(similar to DC): " " = 1.58 times, and 63%

Total: " " = 1.2 times, and 83%




So, In New Zealand and Australia, the lowest income workers earn between 63% and 96% of the local median income, which can probably be assumed to be that of a normal middle class person.


United States







Lowest median income state: Mississippi

http://www.deptofnumbers.com/income/Mississippi/
Mississippi min wage = $7.25 * 40 * 50 = $14,500

Mississippi median: $19,583

19,583/14,500 = 1.35 times, and 74 % of median


Highest median income state: Washington

Washington min wage: $9.19 * 40 *50 = $18,380

Washington median wage: http://www.deptofnumbers.com/income/washington/ $29,278


29,278/18,380 = 1.6 times or 62 %, at rate of $9.19 an hour. at $7.25, 29278/14500 = 2.01 times and 49%


US total

Us min wage = 7.25*40*50 = $14500

US Median income (http://www.deptofnumbers.com/income/mississippi/)
=$26,708

26,708/14,500 = 1. 84 times, or 55%


Now, using those numbers, heres an extra factor. The OECD poverty line is set at 60% of median income. by these definitions, and using the median income of the states as a whole, your minimum wage earners are below the poverty line. http://en.wikipedia.org/wiki/Poverty_in_the_United_States furthermore states that using this definition, around 24% of the united states is in poverty, compared to 16% on average throughout the rest of the OECD.

Translating the NZ and AUS reasults into USD, with the AU/US current exchange of 1AU=1.03 US, and 1NZD = 1USD, the Aus poverty level at 60% = US$23,640, and from NZ, US$21,030. To stay out of our poverty zones, the US minimum wage would have to be at minimum around 50% higher.

So, despite higher wages, we have lower unemployment, lower poverty, and a much higher median of income.

For me, I am a worker at a supermarket, who works nights and other bum shifts. i'm paid $15 at the moment, soon to rise to $15.50. Were I to work full time, i would have pre tax income of $30,000, or US$25,500, which would place me, one of the lowest paid workers at work,above the median income of most of your states.



Sorry if this is too long a post. i got bored.

To prevent flaming I deliberately didn't immediately respond to being called stupid but went out to a sporting match (which I won). On return I see that my neighbor Spacekiwi has done an exemplary job of compiling almost all the facts and comparisons needed. Additional statistics for unemployment rates are Australia 5.4%, New Zealand 6.8% and USA 7.8%; however as discussed the USA figures include lots of people that we would not consider to be getting a living wage.
When you understand that these are minimum wages and employers are free to pay more, then a national minimum wage makes sense. To use USA locations as an illustration of how our system works, a waiter in a small town in Idaho would get the $16 an hour while to get the right person in New York an employer would pay twice that. Beats having to beg for money to buy food for your family as US hospitality workers do (we consider tips to be demeaning). Our minimum wage is based on what people need to live with minimum dignity not on what greedy employers want to rip them off with.
Having a national standard ensures some continuity across the national community, and leads to decentralization which leads to efficiency.
As to pricing them out of work if that's the case why is our UE rate at about minimal turnover levels? I used to manage $billion projects (among other things) and wage oncosts are about 50% extra, not 2 to 3 times unless your workforce is much higher regulated than ours which I don't believe. Comparing minimum wages across countries is not stupid if done with cost of living in mind. On average, Australia's cost of living is higher than the US but nowhere near twice.
A documentary I saw a week or so ago on the US minimum wage had lots of examples but one that stuck was a Disneyland worker who earned about $7.50 an hour and cleared about $235 a week out of which he paid $145 rent and fed his family of four out of the remainder. In Australia he would have been paid about $500 and probably got federal child support of about $100 as well, renting a 3 bedroom detached house for $250. Then he and his family would not have been living in what I'd consider 3d world conditions.

Woops. not only was it long, i broke the board.



again. my bad.

Nah, you didn't break it just bent it a little around the edges. Perfect example of that phrase, IMO.

Actually that is lot of work for boredom. Thank You. Not sure I understand all of it, yet. Or actually how the connection is made to the actual Cost of Living. Standard of Living maybe, Cost of Living no.

But a few of quick questions:
What is the cost for a package of 6 bagels at your store?
What is the cost for a pound of Italian sausage?
What is the cost of a pound of pasta?
Can't ask about rent as I don't rent and purchased the current house in 4 years 15 years ago. And I wanted something I could personally compare to here in Florida.

I would ask about a gallon of milk but the US is so stupid in New York State it is 33% cheaper than Florida except the state government subsidizes it then takes it away with taxes the state collects. Which is one of the many reasons that NY is one of our most taxed states. Government adds cost to purchasing the stuff in the long run. I didn't really see it improving the relative prosperity of low income people around there lst summer. See PS. Sort like comparing a gallon of fuel here in the US and Europe. Apples and oranges.

That was in the comparison link I provided (played with it more after posting). Cost of housing from Brooklyn to Queens went down ~40% just in one metro area. Resulting in I think a 20% change in the cost of living. So the minimum wage should be what in comparison to what. They are a subway trip apart.

The point of my post is the inherent stupidity of setting any fixed wage in Washington, DC (Heck as I demonstrated it is just as bad at our state level for counties/parish(nod to Louisiana) level it might work) when the cost of living that they are responsible for varies widely.

Fact of life here. A business has to make a profit or it goes out of business. If the cost of labor goes up everything else goes up more. I showed this way back when in the Honorverse the actual cost of materials is a miniscule cost of anything even today. Matters not whether it is minerals or grain or meat. The worst cost now and forever will be the cost of people's time to make, distribute and sell the stuff or the stuff that makes the stuff to get the stuff.

Remember here in the US half of our Social Security tax is paid by our employer. So in fact if a person's pay goes up employers cost goes up 6.4% more.

Great their wages went up. Wonderful, except they are now farther behind than before.

So using my sister from when she was a Grocery Deli Manager the stores in my area averaged around 4-6% profit margin you just eliminated it. So now everything has to go up. Of course the starting pay 10 years ago was over $10 an hour here in Florida. Supply and demand at its finest. Who cared what the minimum wage was, to get help (Johnny Suckfinger was going to get $10 if he could convince the manager to hire him after school hours). Not really a fair comparison as the Deli was the lowest paid by department according to my sister.

Enjoy and again thank you for the info,
T2M

PS: As sidenote I really don't like that definition of poverty. Poverty is when a person doesn't reliable a food and shelter. IE living in a cardboard box in an "Hooverville" 1930's term. Almost all US Citizens and I would assume the same for New Zealand as well have air conditioning, broadband internet, computers, TVs and so forth. Sorry if you have all that it ain't poverty. That is someone using arbitrary values to make a point.

From:
http://www.newworldencyclopedia.org/entry/Poverty
Poverty is a condition in which a person or community is deprived of, or lacks the essentials for a minimum standard of well-being and life.

PPS: You want to know how screwed up the US is the best maintained houses are in Mississippi which according to the information you provided they are the worst for income. Yet the houses are all neat and well maintained. Beats the living dog snot out of most of the other higher income areas in the care people take with their possessions.

PPS This was going to be a real short post. 2 hours later I am making myself stop. I need to learn to control this somehow.

Spacekiwi wrote:Woops. not only was it long, i broke the board.



again. my bad.

Very late here so a brief reply.

"What is the cost for a package of 6 bagels at your store?
What is the cost for a pound of Italian sausage?
What is the cost of a pound of pasta?
Can't ask about rent as I don't rent and purchased the current house in 4 years 15 years ago. And I wanted something I could personally compare to here in Florida.

I would ask about a gallon of milk but the US is so stupid in New York State it is 33% cheaper"

Bagels about $2
Half a kilo of choritzo $4
Half a kilo pasta (dry) $1
3 Bedroom stand alone house $250 week
Milk is $1 a litre or $4 gallon US
Petrol $1.40 litre or $5.60 gallon US (Ouch)
BBQ steak $8 a kilo
Bread from $1 to $4 depending
2 ltr hatchback $18,000
Aus$ about $1.04 US$
Household electricity $150 a month (Ouch - but I've got solar - no cost)


Cost of living is complex as we should include welfare supplements and government charges into mix.

thinkstoomuch wrote:Nah, you didn't break it just bent it a little around the edges. Perfect example of that phrase, IMO.

Actually that is lot of work for boredom. Thank You. Not sure I understand all of it, yet. Or actually how the connection is made to the actual Cost of Living. Standard of Living maybe, Cost of Living no.

But a few of quick questions:
What is the cost for a package of 6 bagels at your store?
What is the cost for a pound of Italian sausage?
What is the cost of a pound of pasta?
Can't ask about rent as I don't rent and purchased the current house in 4 years 15 years ago. And I wanted something I could personally compare to here in Florida.

I would ask about a gallon of milk but the US is so stupid in New York State it is 33% cheaper than Florida except the state government subsidizes it then takes it away with taxes the state collects. Which is one of the many reasons that NY is one of our most taxed states. Government adds cost to purchasing the stuff in the long run. I didn't really see it improving the relative prosperity of low income people around there lst summer. See PS. Sort like comparing a gallon of fuel here in the US and Europe. Apples and oranges.

That was in the comparison link I provided (played with it more after posting). Cost of housing from Brooklyn to Queens went down ~40% just in one metro area. Resulting in I think a 20% change in the cost of living. So the minimum wage should be what in comparison to what. They are a subway trip apart.

The point of my post is the inherent stupidity of setting any fixed wage in Washington, DC (Heck as I demonstrated it is just as bad at our state level for counties/parish(nod to Louisiana) level it might work) when the cost of living that they are responsible for varies widely.

Fact of life here. A business has to make a profit or it goes out of business. If the cost of labor goes up everything else goes up more. I showed this way back when in the Honorverse the actual cost of materials is a miniscule cost of anything even today. Matters not whether it is minerals or grain or meat. The worst cost now and forever will be the cost of people's time to make, distribute and sell the stuff or the stuff that makes the stuff to get the stuff.

Remember here in the US half of our Social Security tax is paid by our employer. So in fact if a person's pay goes up employers cost goes up 6.4% more.

Great their wages went up. Wonderful, except they are now farther behind than before.

So using my sister from when she was a Grocery Deli Manager the stores in my area averaged around 4-6% profit margin you just eliminated it. So now everything has to go up. Of course the starting pay 10 years ago was over $10 an hour here in Florida. Supply and demand at its finest. Who cared what the minimum wage was, to get help (Johnny Suckfinger was going to get $10 if he could convince the manager to hire him after school hours). Not really a fair comparison as the Deli was the lowest paid by department according to my sister.

Enjoy and again thank you for the info,
T2M

PS: As sidenote I really don't like that definition of poverty. Poverty is when a person doesn't reliable a food and shelter. IE living in a cardboard box in an "Hooverville" 1930's term. Almost all US Citizens and I would assume the same for New Zealand as well have air conditioning, broadband internet, computers, TVs and so forth. Sorry if you have all that it ain't poverty. That is someone using arbitrary values to make a point.

From:
http://www.newworldencyclopedia.org/entry/Poverty
Poverty is a condition in which a person or community is deprived of, or lacks the essentials for a minimum standard of well-being and life.

PPS: You want to know how screwed up the US is the best maintained houses are in Mississippi which according to the information you provided they are the worst for income. Yet the houses are all neat and well maintained. Beats the living dog snot out of most of the other higher income areas in the care people take with their possessions.

PPS This was going to be a real short post. 2 hours later I am making myself stop. I need to learn to control this somehow.

Spacekiwi wrote:Woops. not only was it long, i broke the board.



again. my bad.

prices for me are pretty much identical to daryls.

just under $5 for 2L of milk
1Kg pasta around $1 to $2 for cheap brands.
petrols expensive at the moment at $2.20 a litre, but a commisions looking into whether thats a really inflated price. ( our family has a friend who runs a petrol station, and he pays most of that money straight back to the oil companies. they are the ones making the big profits off it)
steak $6 to 8 a kilo, season dependent.
Bagels about $3.50 where I work.
BTW, this includes a tax of 15% on store price as a goods and services tax to go to the government.

Yes the definition of poverty sounds stupid in the way the OECD uses it for Western countries, but the complete name was Relative poverty, which represents the very hard off in a partciular country, when not compared around the world. so in a country where the median is $1million, the relative poverty level would be $600,000. But it still gives a reasonable place from which you can determine how well a country is doing in helping its poor i suppose.

Of interest to me was that while the median percentages showed that some states werent technically having their minimum income earners in the poverty bracket, the median wage of the 'middle class' was still low enough that in richer states, the median wage would still fall close to the poverty line, suggesting that the 'middle class' has different levels of middle class throughout the states.

A single minimum wage for the entire US is actually a fairly stupid idea. The cost of living can vary enormously just from one county to another even within a state. One example is car registation fees. In the county I live in, my 30+ year old truck would cost me approximately $60 to register, mostly in local taxes. The state gets its money by selling the licence plate and its annual renewal. The same vehicle would cost me $40 to register in the counties east, west, north and south of the one I live in. $25 of that in both cases is the state's money. The remainder is the difference from one county to the next in property tax rates. None of those counties is over 30 miles away.

The difference is not as great for new vehicles, as the state has a set of property taxes that drops off after 20 years. For those years, road taxes are imposed at both the state and local levels. Since the taxes are to be used specifically to maintain roads, streets and curb and gutter projects rather than general government expenses, we actually get a return for it.

Other questions that do not seem to get asked include: What are the differences in local and state income and sales taxes? In some places, each level of government has its own sales tax or income tax.

Another question that is often not taken into account is the cost of local as opposed to regional health care. Billings became a regional health care center because the big cities surrounding the area priced themselves out of competition and made it economically adventagious for the local hospitals to expand into areas of medicen that they had not previously covered.

With all of these differences, how can the Federal Government decide on a single country-wide minimum wage?

From personal experience when we moved from Richland Washington to 2 hours outside of Boston our rent for an equivalent apartment was triple. Most day to day expenses food etc were substantially higher. The only things which stayed the same were things which were nationally priced like books!