Can a Family Survive on the US Minimum Wage?
The US minimum wage is the lowest amount an employer is legally allowed to pay for a given hour of work. Since 2009, the federal minimum wage has been set at a flat rate of $7.25 an hour. Although 28 states and over a dozen cities have enacted their own, higher minimum wage law, there is a growing public debate about whether the US minimum wage is a livable wage for workers and their families. With that in mind, let’s take a close look at how a family could, hypothetically, survive on the US minimum wage.
What Is the US Minimum Wage?
The US minimum wage is the lowest amount an employer can legally pay an employee for each hour worked; this amount changes depending on the individual state or city. As of 2019, the federal minimum wage is set at $7.25 an hour. This rate has been in effect since 2009, when it was raised from its previous rate of $6.55 an hour, as part of former president Obama’s economic stimulus package.
While 28 states have adopted their own, higher minimum wages, many have called upon the federal government to raise the minimum wage again in order to keep up with inflation. In March 2020, the US House of Representatives passed the Raise the Wage Act, which seeks to gradually increase the federal minimum wage to the more livable rate of $15 per hour by the year 2025.
What Is the Median Family Income in the US?
When looking at whether a family could survive on the US minimum wage, it’s important to understand what constitutes a livable wage. According to the US Census Bureau, the median family income in the US was $63,179 in 2019. This amount is 2.5 times higher than the federal minimum wage.
What Living Expenses Must Be Considered?
In order to determine whether or not a family can survive on the US minimum wage, it’s important to consider the living expenses that are necessary for a basic quality of life. Such expenses include housing, nutrition, childcare, health care, transportation, clothing and other household costs.
The Cost of Housing
Housing is typically a family’s largest monthly expense. According to the National Low Income Housing Coalition, the US Department of Housing and Urban Development considers housing “affordable” if it costs no more than 30% of a household’s income. Therefore, in order for a family to afford a two-bedroom apartment at the federal minimum wage, their total household income would need to be at least $30,000. That is nearly double the median family income, and far higher than what a single parent would make at minimum wage.
The Cost of Nutrition
The food and nutrition needs of a family depend on family size and type. According to the USDA’s Food Plans report, the “Thrifty” food plan—which provides an adequate level of nutrition at a minimal cost—costs an average of $435 per month for a family of four (two adults, two children). This amount is equivalent to nearly seven full-time minimum wage jobs.
Childcare and Other Living Expenses
In addition to housing and nutrition, a family must also consider the cost of childcare, health care, transportation, clothing, and other household costs. According to the Economic Policy Institute’s “Family Budget Calculator,” a two-parent, two-child household living in Dallas County, Texas, would need a total annual income of $57,820 just to cover their basic living expenses. This amount is nearly three times the median family income and more than eight times the US minimum wage.
The Answer: Can a Family Survive on the US Minimum Wage?
Based on the costs outlined in this article, the answer is a resounding “no.” Even in states that have implemented higher minimum wages, a single parent working full-time would be unable to earn enough to support their family’s basic living expenses.
In order for families to have an adequate standard of living, something must be done to increase the purchasing power of the US minimum wage. Whether through passing the Raise the Wage Act or through a more incremental approach, something must be done to ensure that families can live comfortably under the current federal wage laws.
It’s clear that the US minimum wage is not enough to support a family. While states and cities have individual minimum wage laws that may raise the wage floor, it is ultimately up to the federal government to implement changes that will enable families to survive on the US minimum wage. Until then, the economic struggles of working Americans will continue.
