There is a good chance I am going to regret this. This is long. Fun with numbers and the proposed minimum wage increase.

The ordeal with the proposed minimum wage hike. $15.00 an hour. Have you all worked out these numbers? Okay first of all the number doesn’t change overnight. Man oh man people are getting a little touchy feely on this subject. So did you know that California’s minimum wage in 2015 was $9.00? And now it is $10.00. Did you get all irrational and throw a fit?


This is part of our “Third Rail” series.

Fair warning. From time to time we get a wild hair and occasionally get a thought. It is not all Jeeping and Dogs. We don’t live in a vacuum. With that in mind we sometimes say stuff we shouldn’t. Not so much that we shouldn’t but that may offend some folks. You know actually have a well thought out opinion on a matter. It may not reconcile with your well thought out opinion. That does not mean we can’t be friends, it just means we disagree on that topic. To learn more about how we may offend you, simply read our fair warning statement.

But again, fair warning, please don’t turn into a cry baby. Nobody likes a cry baby.


It is slated to be $15.00 per hour …. By the end of the year 2022. That is a $1.20 change per year. Did you get all pissed off at the $1.00 increase this past December/January? Were you incensed that they are getting closer and closer in pay to (insert your favorite group to throw around).

So what is being offered, as is regularly done, go on look it up, is to increase the wages to a “living wage” over a period of time. We also have inflation. No seriously it is really a thing. And this is how it works. Casually, like not wanting to draw attention to itself it sneaks into the things that you and I buy every day. I know this is crazy and if you are 19 and don’t know anything about this all judgement will be held. But if you have been a grown up for at least 10 years then you have to have seen this! See, when I was a kid a Hershey candy bar cost $0.25. It does not cost that anymore. Oh, you would like real numbers? Let’s do this (there are calculators that you can use that tell you this magical stuff so you can put in any year and amount you would like. I chose the year 1985 because it was a really really fun year in my world.

$1,000.00 in 1985 has the same buying power now in 2016 as $2,203.63. So the reality is you cannot buy twice as much no, that is not what that says in fact it is telling us that we can buy a bit less than half as much. So that rocking apartment you had in 1987 for $1,000.00 now rents for $2,200.00.

More fun with numbers. $15.00 per hour taking into consideration a full time position has a gross income of $31,200.00 or roughly $2,600.00 per month. Before taxes.
But let’s be real, there have been some changes that affect this number. Why? Because employers who could no longer afford “full time” employees had to cut hours which then caused new ACA rules to be put into place 30 hours plus is now considered full time. 30 hours = $23,400.00. If the employer needs to skim under that because they cannot afford to provide healthcare for all of their staff we are talking a wee bit less.

For fun let’s use a 40 hour a week pace. $2,600.00 per month before taxes are taken out. There are those 3 months where you get an extra paycheck too. I remember those days fondly. The $2,600.00 per month is calculating $15 X 40 Hours X 52 Weeks / 12 for an average monthly income of $2,600.00. We are going to use 15% for federal. But let’s not forget there is state income tax that gets withheld as well as Social Security and other taxes. So $390.00 comes right off the top. State taxes vary from state to state. I looked up 2015 and the range is 2% to 10% so if we averaged that we have 5.5 percent. That is $143.00. Most employers offer health insurance at a discounted rate. My daughter has groovy insurance and she pays somewhere around $100.00 per month for it. That is much better than mine so we are going to use that number. So now we have this:

$2,600.00 Monthly Income
Fed Taxes – $390.00
State Taxes – $143.00
Health Insurance – $100.00

Monthly disposable income $1,967.00

Now we have some bills. For this example I am putting this single full time working human in an apartment by themselves, because roommates after the age of 19 is awful. But having a roommate or five is a great way to stretch your dollar. Unless they steal your food or other belongings. Just saying. It happens.

So for this number I utilized my apartment map. They provide an average for all fifty states. A one bedroom apartment average for the US goes for $1,015.00 per month. Which is fine until you are living in the more desirable places and that number changes significantly. But I digress. We are using averages. And just for fun California has an average rental rate for a one bedroom in the approximate amount of $1,245.00.

Now we are going to allow our humble worker to have electricity, phone, cable (no movie channels), and internet. Fortunately we can pull a bundle deal for the phone, cable and internet. The bundle runs about $100.00 per month and in some areas that does not include the fast internet so that sort of bites. Then you have your electricity which again varies by region but if we averaged out the summer and winter months $100.00 is likely less than the average. Water and trash is usually included in the rent of an apartment. Not so if you are renting a condo, house, etc. So now we have these numbers:

Disposable Income Monthly: $1,967.00

Rent -$1,015.00
Phone/Internet/Cable -$100.00

Left Over Money!!! $852.00

Our worker bee needs to get to work. So let’s allow him the pleasure of a vehicle. The average car payment in our country is $479.00. We are going to allow our worker bee a decent vehicle but not an average vehicle. $279.00 per month. Let’s hope he had a decent trade in and didn’t sign up for 6 years of payments. And he needs to insure that sweet ride, $100.00 per month. Anyway so now we have:

Still Spending My Check! $852.00

Less Car Payment -$279.00
Less Car Insurance -$100.00

Time for Me Money! $473.00

Oh wait! Gas and food! Okay 2015 average fuel cost in California was $2.77 per gallon. Let’s hope one tank per week will get our guy where he needs to go. The average car holds 12 gallons. That is $33.24 per week or $132.96 per month. Food. The grocery store. We are going to allow our guy $50.00 per week. That is pretty tight all in all. We have all done it but really our guy isn’t getting much. So that is less $200.00 per month. And here we go again…

Left Over Money! $473.00

Less Gas -$132.96
Less Groceries -$200.00

Free Money!!! $140.04

Now our guy has $140.04 left over! But wait – honestly a lot of apartments want you to have renters insurance – you can snag by with an $80.00 per year policy so we just lost $6.75 per month. Is our guy taking his lunch to work? If so he probably needs more than $50.00 per week grocery allowance. I know a lot of people that do but more than the average person will grab a taco. Working 5 days a week for the month is 20 meals at $5.00 is $100.00 so now our number is $33.29. At this rate our guy isn’t getting married anytime soon as the only way he can afford to take a date out is if he skips some lunches. Oh snap! Guess what I forgot and we all have them these days and it is pretty much anticipated you have one. In fact your boss may need to call you on one. That is right a cell phone. It has been my finding that an average monthly cost is about $100.00 but you can probably get that down to $80.00. Our guy is going to have to make some choices.

This is on a $15.00 an hour job. Take $5.00 per hour away or $866.00 per month and what are we left with? What if our starting number at the beginning of this was $10.00 per hour or $1,734.00 before taxes?

Pull up a list of minimum wage jobs. It is not only fast food service workers. There are quite a number of them. Various types of employment. Good hard working folks. And we have already seen an increase in grown children living with parents for longer and longer and quite frankly this is only going to get worse. So if you can still complain about this increase I really don’t know what to tell you. I know that our young people out there have to move to where the work is. Many stay in place because they can’t afford to move. Try having a family on this wage. Good hardworking folks should be able to pull themselves up by the bootstraps right? Because you did it? Did you start out with a minimum wage?  Here, look up what it was when you first started.

The simple fact is this:  If we have a minimum wage, and we do, and we have a stated inflation goal, and we do, then from time to time the minimum wage must be adjusted.

I guarantee your minimum wage job had its regular increases too. Oh and in case you are a little hard headed and didn’t think forward…. If the minimum wage goes up then all pay goes up. It is how it works.

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