Living on the "New" Federal Minimum Wage

In just a few short months, the federal minimum wage (minimum hourly pay rate allowed by law for companies making more than $500,000 a year in revenues) will be set to $7.25 an hour. The government expects that the nation as a whole should be jumping for joy with the $2.10 per hour raise which has been being reached in stages over the last three years. With the economy at the worst it has ever been, I thought I would take a look into the reality on the effect of the minimum wage increase.

I am currently living in Morgantown, West Virginia the home of West Virginia University. I live in a cheaper part of the city with my wife and two kids. Due to medical conditions, I am the only one currently employed. Fortunately, I make a little more than minimum wage (around $500 a week) but I had to become the 2^nd highest person in my store to get this finance level.

Let's start taking a look at the basic cost of living for a family of four in a relatively cheap place to live with this "new and exciting minimum wage increase. Typical low end rent on a three bedroom one bath apartment here is $800 a month. Electric is estimated at $150 a month. Cable phone, Internet, and television (who announced another huge increase with the February 19^th digital mandate) is around $150 a month. We pay water and trash here too at $50 a month. Then we assume two cars are both insured at a total of $250 a month along with the cost to gas both cars (also going back up) averages a total of another $300 a month. A extremely low cut estimate of food and paper costs for four comes to about $400 a month. We need to add extra baby needs of at least $200 a month. Leaving no margin for incidentals, repairs, emergencies, or extras that makes the total monthly cost to live here about $2300.

At minimum wage and assuming you always get paid for the full forty hours a week (which almost never happens), your monthly net income after taxes would be around $986. Even with a two income family, it is impossible to live one these wages! Yet, more than half of the country is forced to try to survive with these conditions. And what exactly is our government going to do about it? Nothing.

I will be honest with you, I make almost one and a half times the new to be minimum wage and we really cannot make it on this. There needs to be governmental control to be applied as price caps of common items in the country's markets in order to rebound the economy!