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If "everyone" were handed $1100 a month, living costs would increase, and a nominal increase in income might not increase purchasing power.
The same as with the proposed/demanded increase in the minimum wage.
Quote:
Originally Posted by freemkt
Since handing everyone $1100 a month would not magically increase the supply of housing, the additional money would merely enable rents and home prices to be bid up further.
If I knew all of my potential renters suddenly had a guaranteed additional $1100 (or $2200 in the case of a couple), you can be darn sure the rent is going up.
(How old would one have to be to receive this proposed stipend? If they have qualified kids, the rent would go up even more! )
Of course you can survive off of $1100 a month. You're just going to need some roommates, but you can totally do it and live okay. Won't be able to do much in life...which seems pointless, but you can definitely surive and if you don't want to try to save any money to let it grow, well, you'll be able to afford a little pizza every so often, or maybe go see a movie once or twice a month.
If you and someone you're with both live in the same place and earn your little $1100/mo, that's $2200/mo which means you'll have a little more breathing room. In fact, if you and your friend who both make minimum wage bring home $2200 and you live in a $1000/mo apartment, you'll actually have about $500 left over each month after bills and food...as long as you don't pay more than your rent, electric, medium speed internet, and maybe car insurance if you choose the right place to live. Then you spend some on food, and save $500 a month.
Do that for 5 years, you've got yourself a $30,000 college education totally paid for. Then you can earn more money.
On paper, what you have here is a "best case" scenario for the most lucky of frugal people in an area with a lower cost of living. It assumes that this hypothetical couple literally has everything they need for their apartment and that not a single thing would need replacement or repair over five years. That they will have $0 in healthcare costs? And not even a single minor or major car repair?
Come back to the real world. Where five years means at least a serpentine belt, at least 2 tires (if not all 4), car battery, at least one set of brake pads. Possibly an alternator, bearings, drums, tie rods, motor mount, etc. Come back to the real world. Where most people would want to replace worn out socks and underwear. Where women aren't going to wear the same bra for 5 years. Where cheap shoes will need more replacing than nicer shoes, but nicer shoes cost a LOT more up front.
In the real world, a household income of $2200 after taxes and having to pay $1000 to rent would be able to save a bit here and there, but would definitely not have $30,000 after 5 years.
$1100 for a month is literally pittance for actually trying to forge a really comfortable future. But it could absolutely serve as a good UBI starting point. For kids graduating high school, having a guaranteed income of $1100 would mean being able to prepare for the future instead of spending every moment worrying about the "now". We'd see less people taking out massive student loans to cover basic living expenses. Guaranteed income would also be better for students who wish to go to a trade school as well as those who could break into careers through apprenticeships or even internships.
actually that would be very easy for a min wage worker to save
let's run the numbers
85% of employers offer 401k's (to include walmart and mcdonalds)
of that 45% offer matching (usually up to 5%)
average return on 401k's ...10% over the last 40 years
min wage 7.30
Adults employed full time report working an average of 47 hours per week... we will use 45
7.30x45hrs equals.....328
you put 10% into the 401k weekly .... 32.85...employer matches 16.42.... total going into 401k weekly 49.27..... this is before taxes, so it lowers your taxable income
that's 2562.04 yearly.... earning (we will use half of the average of 5% instead of 10%) 2690.14
we are NOT going to compound for simplicity sake
2690.14 yearly over a 30 year period.....80k
80k over 30 years with out compounding..without expecting raises/promotions, using half the expected gain from the average 401k...........
yet you say highly doubtful......
most people are not going to stay at min wage there entire life... most people move up as they gain experience
actually that would be very easy for a min wage worker to save
let's run the numbers
85% of employers offer 401k's (to include walmart and mcdonalds)
of that 45% offer matching (usually up to 5%)
average return on 401k's ...10% over the last 40 years
min wage 7.30
Adults employed full time report working an average of 47 hours per week... we will use 45
7.30x45hrs equals.....328
you put 10% into the 401k weekly .... 32.85...employer matches 16.42.... total going into 401k weekly 49.27..... this is before taxes, so it lowers your taxable income
that's 2562.04 yearly.... earning (we will use half of the average of 5% instead of 10%) 2690.14
we are NOT going to compound for simplicity sake
2690.14 yearly over a 30 year period.....80k
80k over 30 years with out compounding..without expecting raises/promotions, using half the expected gain from the average 401k...........
yet you say highly doubtful......
most people are not going to stay at min wage there entire life... most people move up as they gain experience
$328/week before taxes.
Gross Pay -> 328.50
Federal Tax -> 20.72
Fica -> 20.37
Medicare -> 4.76
State -> 4.25 (VA)
401K -> 32.85
Net Pay -> 245.55
Without the 401K, it'd be $273.71 after taxes. So, all in all, a $28 difference per week. Numbers-wise, it doesn't sound terrible, but it also based on the "salary" of someone who likely be one car repair from insolvency. Whereas I can put away 10% of my salary without concern, I make considerably more and thus it cuts less into discretionary funds... A bit different for someone whose income barely afford them the "luxury" of fresh produce over canned fruit.
Location: Live:Downtown Phoenix, AZ/Work:Greater Los Angeles, CA
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Quote:
Originally Posted by gallowsCalibrator
$328/week before taxes.
Gross Pay -> 328.50
Federal Tax -> 20.72
Fica -> 20.37
Medicare -> 4.76
State -> 4.25 (VA)
401K -> 32.85
Net Pay -> 245.55
Without the 401K, it'd be $273.71 after taxes. So, all in all, a $28 difference per week. Numbers-wise, it doesn't sound terrible, but it also based on the "salary" of someone who likely be one car repair from insolvency. Whereas I can put away 10% of my salary without concern, I make considerably more and thus it cuts less into discretionary funds... A bit different for someone whose income barely afford them the "luxury" of fresh produce over canned fruit.
It's the same reason we have progressive taxation. Ability to pay is a big factor
It would be very interesting to see HOW they do it.
It would be difficult for an American to live on that amount IF they had to pay current "market rates" for everything, especially for housing.
My hypothesis is that millions - and perhaps most - of these so-called "poor" Americans do not, in fact, have to pay current market rates for everything. It's easy to live on $12,070 a year if you're enjoying discounted or free consumption.
About 40 percent of "poor" American households own their home; most of these do not have to make mortgage payments. (Most "poor" homeowners are elderly retirees who bought homes decades earlier when they were working, their incomes were higher, and home prices were much lower.) Much easier to live on $12,070 without mortgage or rent than it is to live on $12,070 when rent consumes half your income.
All "current market rates" in a nice little area in a nice little state that I used to live in:
Rent: 800
Electric: 55 average year round (including heat in very cold winters and a/c window unit in summer)
Car insurance: 45 (car paid for...it's older, but it's paid for)
Internet with "free" phone: 50 (higher speed that I actually had was $100)
Food: $300 for me AND my pets
Total: 1250 if I lived on my own in a 2 story, 2 bedroom rented house. (Which, I did...and my total bills were $1300 including food for me and the pets, but I was making far more than minimum wage.)
If I got a roommate, since that was a 2 bedroom house:
Rent: 400
Electric: 35 (would be more electric used, but I'd only pay half so I'm saying half of 70)
Car insurance: 45
Internet: 25 (unless I wanted that high speed that I did have for $100)
Food: 300 for me AND my pets
Total: $805 Left over: 295/mo
All current market rates. If you don't make a lot of money, you will have to be creative, and you won't always get to live alone. Again, it is totally doable and you don't have to live in a crappy place with no room, nor do you have to live in the worst part of town, nor do you have to live out of boxes and no furniture. Take that $295 to the Salvation Army, the Goodwill, or some other thrift shop and find some furniture. If it needs work, sand it down, refinish it or paint it, protect it, bam, nice, new furniture. Same for pretty much every single thing that you need. Not "want". NEED.
Only thing you might need help with is a bed, if you don't have one, because sleeping on a used bed by a stranger is disgusting. May as well their disgusting underwear while you're at it. Everyone needs their own bed with their own germs, not someone elses nasty germs.
Everything else, get it used, fix it if it needs it, repair it, stitch it, dye it, hem it, color it, paint it, refinish it, whatever...for really, really cheap.
One good thing that comes out of being poor is that you are forced to be creative if you don't want to live in total misery. If you have money, you don't have to be creative. If you're too lazy and only want to complain, you lose out on strengthening your creative mind and learning how to find the good in anything.
If you think making minimum wage means that some people are getting some kind of a deal or are getting lucky somehow, it's because you haven't taken the time to actually find that for yourself. It sucked. But then I got creative so that I could have some feeling of normalcy while I worked hard to actually have normalcy. Complaining about it never did a damn thing for me.
The same as with the proposed/demanded increase in the minimum wage.
If I knew all of my potential renters suddenly had a guaranteed additional $1100 (or $2200 in the case of a couple), you can be darn sure the rent is going up.
(How old would one have to be to receive this proposed stipend? If they have qualified kids, the rent would go up even more! )
Quote:
Originally Posted by workingclasshero
actually that would be very easy for a min wage worker to save
let's run the numbers
85% of employers offer 401k's (to include walmart and mcdonalds)
of that 45% offer matching (usually up to 5%)
average return on 401k's ...10% over the last 40 years
min wage 7.30
Adults employed full time report working an average of 47 hours per week... we will use 45
7.30x45hrs equals.....328
you put 10% into the 401k weekly .... 32.85...employer matches 16.42.... total going into 401k weekly 49.27..... this is before taxes, so it lowers your taxable income
that's 2562.04 yearly.... earning (we will use half of the average of 5% instead of 10%) 2690.14
we are NOT going to compound for simplicity sake
2690.14 yearly over a 30 year period.....80k
80k over 30 years with out compounding..without expecting raises/promotions, using half the expected gain from the average 401k...........
yet you say highly doubtful......
most people are not going to stay at min wage there entire life... most people move up as they gain experience
If "everyone" were handed $1100 a month, living costs would increase, and a nominal increase in income might not increase purchasing power.
Since handing everyone $1100 a month would not magically increase the supply of housing, the additional money would merely enable rents and home prices to be bid up further.
Do living costs increase every year at tax return time?
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