daisylu
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Post by daisylu on Apr 1, 2011 13:25:37 GMT -5
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qofcc
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Post by qofcc on Apr 1, 2011 13:38:36 GMT -5
The result? To achieve economic security, a single parent with two children needs an income of just over $30,000 a year--nearly twice the federal minimum wage--while a two-income household needs almost $68,000.
A single parent with 2 children and an income of just over $30K is still eligible for housing and daycare assistance along with numerous tax credits. Is that how they define economic security? They must be if adding another adult requires another $38K.
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The J
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Post by The J on Apr 1, 2011 13:39:56 GMT -5
Minimum wage isn't meant to be enough to support a family of three. How does one extra adult cost $38,000 more per year? ??
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Post by Deleted on Apr 1, 2011 13:42:08 GMT -5
The wording is very odd. "A two income household"? How many incomes they have is irrelevant to how much money they need. ETA - "Forty-three percent of those jobs will meet the threshold for a two-income household." That sentance actually means that 43% of the jobs will pay the amount for two wages.
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stats45
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Post by stats45 on Apr 1, 2011 14:02:36 GMT -5
Just as an example of how the organization dervies their income thresholds, here is how they come up with their annual salary to promote a decent living standard for a single worker with no children.
Housing Expenses: $644 a month (calculated as the 40th percentile of rents averaged across the country - Source: Housing and Urban Development) Utility Expenses : $149 a month (calculated with figures used above - Source: Housing and Urban Development) Food Expenses : $244 a month (calculated using USDA Low Cost Plan - assumes making all meals at home) Transportation : $495 a month (assuming ownership of a 'small sedan' - this includes taxes, fuel, insurance and maintenance costs) Child Care : $0 a month (no kids!) Personal : $291 a month (this includes phone, internet, clothes, household items - Source: Consumer Expenditure Survey) Health Care : $136 a month (assumes health insurance (that is not an high deductible health plan) bought in the individual market) Taxes :$384 a month (mainly payroll taxes at this income level) Tax Credits : -$34 a month (not much for single workers without children) Emerg. Savings : $73 a month (calculated as a percentage of unemployment benefits to help deal with job loss or disability) Retire. Savings : $73 a month (savings needed with Social Security to support similar living standards in retirement)
Monthly Salary needed for decent living standard: $2,501 Yearly Salary needed for decent living standard: $30,012
Any thoughts on their methodology?
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Post by Savoir Faire-Demogague in NJ on Apr 1, 2011 14:02:58 GMT -5
According to a study done by the Gartner Group sometime last year, the biggest growth in the labor market is for knowledge based workers. These are good and decent paying jobs.
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stats45
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Post by stats45 on Apr 1, 2011 14:19:23 GMT -5
I think they are looking at the housing, utilities, and food costs in the right way, even though the costs will obviously differ greatly from place to place. I can't think of a more rigorous way to do this besides doing the calcuation for every metro area. Even then, there is huge variation in nearly every city depending on where you live.
I think transportation costs are high, and I don't like transportation costs in nearly any of these calculations. I drive an eight-year old import car that could probably be purchased for around $6000. Insurance costs go down as well for an older car. This would save at least $100-$150 a month in the calculations and not result in having an unsafe or unreliable form of transportation.
Personal items are calculated well (they use the Consumer Expenditure Survey to find average expenses), but I'm sure this is the place where the budget people on the board would advise people to cut if they are able to.
The health insurance costs have to assume a younger person. This could understate costs quite a bit for someone older or with a chronic health condition if a person has to purchase health insurance on the individual market.
I'm glad they put savings in the budget, and even though I'm sure we would consider it low, they choices they made make sense.
Overall, this is reasonably done. My main problem is with the transportation costs.
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qofcc
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Post by qofcc on Apr 1, 2011 14:26:59 GMT -5
I think the transportation is in line. I spend about $200/mo on gas. I drive a used midsize sedan and I have a 30 minute commute to work which I think is typical, car insurance is $50/mo so that leaves $245 for a car payment or car repairs, maintenance, tags, inspections, etc.
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sesfw
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Post by sesfw on Apr 1, 2011 14:35:06 GMT -5
Can you define 'decent living standard?'
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8 Bit WWBG
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Post by 8 Bit WWBG on Apr 1, 2011 14:37:03 GMT -5
...:::"How does one extra adult cost $38,000 more per year? ??":::... If she's like some of the spouses we hear about on here, I bet an additional $38k/year would fall short!
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Angel!
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Post by Angel! on Apr 1, 2011 14:42:06 GMT -5
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stats45
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Post by stats45 on Apr 1, 2011 14:42:52 GMT -5
Qofcc, that is true. I was assuming that their gas expenses were only 25% of total transportation costs. meaning their sedan was a few years newer than it might have needed to be. Gas expenses are also variable depending on where you live, commute, etc.
Sesfw, that is the point. What I posted above is how the organization defines a 'decent living standard'.
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Sum Dum Gai
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Post by Sum Dum Gai on Apr 1, 2011 14:46:37 GMT -5
The cost breakdown looks about right. I think the important take away from this is that you shouldn't have kids when your only job prospects are low wage positions. A single person can split a cheap apartment with somebody and get by just fine on a low wage job. Throw a kid in the mix and you're screwed though.
Well, not really screwed. You sign up for a bunch of welfare programs and have pretty much the same lifestyle. You'll be looked down on by society, but you'll have a roof over your head, food, clothes on your back, and medical coverage. It's more than most of the world gets.
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strider
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Post by strider on Apr 1, 2011 14:51:45 GMT -5
If the average person only graduates high school, has average debt, and has the average amount of kids then yes, they won't be able to support themselves sufficiently.
We need to raise the college graduation rate right now from 20% to close to 50% in order to compete. For those that don't go to college we should heavily emphasize trade schools and apprenticeships.
These jobs are ok for college students and teenagers but retail and fast food aren't meant to raise a family on.
Unfortunately we don't value education or training anymore.
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Sum Dum Gai
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Post by Sum Dum Gai on Apr 1, 2011 15:04:34 GMT -5
Unfortunately we don't value education or training anymore. Funny, I think it's the exact opposite. We place too much value on education, just not on the quality or applicability of that education. My generation was all told from birth to go to college no matter what. You'll make way more money if you just go to college. You'll have lower unemployment. Etc., etc. What happened? Well a whole bunch of us went to college and got degrees in whatever random thing sounded interesting to our 18 year old selves. We didn't know or care whether or not the skills we'd learn were valued by employers, after all, we were going to college so it was all going to be six figure job offers and smooth sailing from here on out. We also didn't have to worry about all the student loan debt we were taking on, I mean, everyone knew college grads made more so it would be a snap to pay it back. What happened next? Exactly what you'd expect. A whole bunch of people came out of college with too much debt and skills that are barely worth more than a high school grads to employers. Tons of us had to move back in with mom and dad when we couldn't find work that paid enough to support us and pay back our loans. Most of them are still blaming the economy instead of pulling their heads out of their butts and realizing that it was choosing poor majors in college, or choosing to get degrees from crappy colleges in the first place, that really sunk them. Some spent too long in college and are now "overqualified" for entry level positions in their field, even though they've never worked in their field. A big chunk of my generation will probably spend all their working years making a substandard wage and never realize what the root cause was. Pushing school as an end unto itself was a horrible idea. It drove up tuition costs, drove down the value of getting a degree almost across the board, and caused a whole lot of people to take on debt learning skill sets that they'll never make much money using.
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Deleted
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Post by Deleted on Apr 1, 2011 15:06:46 GMT -5
Dark -
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strider
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Post by strider on Apr 1, 2011 15:16:16 GMT -5
Many points I do agree with you on Dark. However, in my opinion it still is way better to have a college education. Of course I had the atypical experience of college (no parental support financially, worked 3 jobs, graduated early) but you are right in the fact that too many kids were told they'd have amazing job offers for any degree for any position. Even in underwater basketweaving.
Where I disagree is in the fact that tuition is skyrocketing, and the only people that will be able to go to college in the future will be the rich and the elite. Someone that isn't born with a silver spoon will be tossed away like yesterday's garbage. The goal to educate isn't the problem. The execution of that plan is where it all went wrong.
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stats45
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Post by stats45 on Apr 1, 2011 15:16:26 GMT -5
Excellent Dark!
We do need to increase college enrollment in math, sciences, more substantive business majors, etc. where good employment can be found and entrepreneurs can help to create businesses and more high paying jobs. Instead of just encouraging students to attend college, we should be encouraging students to put forth the extra effort needed to succeed in math and science courses in high schools (and before) to prepare them for the types of college degrees that help people to become solidly middle-class.
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Deleted
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Post by Deleted on Apr 1, 2011 15:17:23 GMT -5
Dark - X 2!
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qofcc
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Post by qofcc on Apr 1, 2011 15:21:12 GMT -5
Funny, I think it's the exact opposite. We place too much value on education, just not on the quality or applicability of that education. My generation was all told from birth to go to college no matter what.
I agree with you. I'm from the generation before you and any of us that were considered "smart" were pushed to go to college also, but many of us started out with 2 year degrees or on the job training and those of us that were good at our jobs worked our way up.
Now the jobs we're doing "require" 4 year degrees or higher even though many of the people in those jobs or sometimes even the ones supervising don't already have those degrees.
When it comes down to it, for many jobs, on the job training is much more valuable than classroom time but it's hard to find companies willing to do that anymore.
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sesfw
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Post by sesfw on Apr 1, 2011 15:31:48 GMT -5
The college I went to I earned an AASE (Assoc Applied Science in Electronics) and it is a dead-end degree. That piece of paper told my employer that I knew the definition of certain electronic terms and I was trainable.
This job gave me funds to enjoy my true love of life, music. It's true that everyone is told to get a college education but there are some people that college is wasted on. For every engineer that designs a road, there has to be someone to handle the shovel. I'm one of the shovel people.
Minimum wage is an entry wage, not a living wage for anyone. The only way to earn more is to get some training and prove your worth to your employer.
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AgeOfEnlightenmentSCP
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Post by AgeOfEnlightenmentSCP on Apr 1, 2011 15:45:45 GMT -5
Wait just a damn minute! You mean to tell me that to enjoy a middle class lifestlyle I have to actually earn the money to support it? I can't make $38K a year, live in a fabulous McMansion, drive a Hummer, and send my kids to private school? I can't borrow $200K on my credit cards and not worry about it because in two years my $400K McMansion will be worth $600K and I can just refi the debt (and then rack up the cards again) This is bullsh**!!!
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Poppet
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Post by Poppet on Apr 1, 2011 16:45:07 GMT -5
dark, well said about education, especially this part: " A big chunk of my generation will probably spend all their working years making a substandard wage and never realize what the root cause was."
Sad, but true. Karma-ed again.
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AgeOfEnlightenmentSCP
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Post by AgeOfEnlightenmentSCP on Apr 1, 2011 17:31:44 GMT -5
Only about 52% of millionaires have a college degree. Their median GPA is 2.9. Education plays a role, but it is not the primary factor in financial success. The primary factors, I believe, are: work ethic, persistence, courage to take calculated risks. The problem with the vast majority of Americans today- college, or no college; smart, stupid, or somewhere in between-- is that fundamentally, they are lazy.
They just flat never learned to work. They have no discipline, they shun responsibility, and they quit at the first sign of the most minor obstacles or challenge. They constantly pass on opportunitie to grow and improve, they throw work in someone else's lap, do shoddy work, or just plain ignore the work and let it pile up until it reaches a crisis point and then start pointing fingers.
I think this most recent downturn has and will continue to be instructive to the lazy- which is a majority of people. I think there are vast numbers of people who are not needed in the workforce, and we're just now realizing it. These people will NEVER be going back to work. A lot of people who think that it's an accomplishment to show up at work every day, but don't have any idea what the first thing they're going to do at work is until they've been at work for an hour, are going to be shocked into reality. Even the less lazy who remain in their jobs will be given more work, more responsibility, and they will be required to be more accountable for results.
America does, and always will have the greatest number of highly productive, smart, innovative, hard working people- but our great, fat, broke ass middle are in the midst of a rude awakening.
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Angel!
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Post by Angel! on Apr 1, 2011 17:45:56 GMT -5
Sure, it taught them how to blame everyone but themselves when life is tough. These people won't change & will forever be victims of their environment.
I agree that most people who are successful have a very different work ethic & traits than those that are min. wage workers their whole lives. Even for the successful who do well in college, education is only a stepping stone to help you get started in your career. I've met plenty of lazy & stupid people with college educations.
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DVM gone riding
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Post by DVM gone riding on Apr 1, 2011 21:33:08 GMT -5
stats--their methology makes sense where I got lost was how a "two-income" family needed more then TWICE what a single with two kids needed. Maybe things like this will help convince people to get married and stay that way???
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busymom
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Post by busymom on Apr 1, 2011 22:26:29 GMT -5
Good luck renting an apartment in this part of the country for $644! Is that really what the gov't thinks is average? Right now, you could rent or buy for between $800-$900 a month. Obviously, I think buying now when housing prices are down is the best thing to do.
I also have to laugh at what they think health care would cost. It's way more expensive than $136 per month. I'd love to know what part of the country has these low costs!
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Phoenix84
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Post by Phoenix84 on Apr 1, 2011 22:28:31 GMT -5
"I also have to laugh at what they think health care would cost. It's way more expensive than $136 per month. I'd love to know what part of the country has these low costs!" LOL, I thought the same thing . I have one of those "bloated" government employee healthcare plans and I even pay more in insurance than that. I'm even single.
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ameiko
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Post by ameiko on Apr 2, 2011 0:08:52 GMT -5
Don't be a single parent?
I would love to go back to the days of one parent at home, mind you but that doesn't seem to be in the cards right now. Who knows though.
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Post by Deleted on Apr 2, 2011 0:21:39 GMT -5
I kind of like these days when people can make up their own minds about how many parents they want at home... Just saying...
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