The Cato Institute, a libertarian think tank, is pushing the idea that being poor and living on government benefits in America is actually living high on the hog. But according to the Living Wage Calculator [LWC] designed by researchers at the Massachusetts Institute of Technology [MIT], a hypothetical single parent needs to make at least $20.14 per hour just to cover his or her family’s basic necessities.
And to do that, living in the cheapest state—South Dakota—is a prerequisite. MIT, which designed the LWC tool to provide a minimum estimate of the cost of living for low wage families, calculated that the nationwide living wage average is $24.09 per hour. The federal minimum wage, had it kept up with American workers’ productivity, would fall somewhere between $16.50 and $22.00 per hour instead of $7.25, MIT said.
In Ohio, the LWC says one adult with one child needs to earn $17.28-hour for a living wage or about $35,942 before taxes. For two adults with one child the annual salary before taxes dips slightly to $33,108, based on $15.92-hour.
Healthcare support and food preparation and servicing jobs pay $11.07 and $8.67, respectively. Management and business and financial operations top a list of 22 occupational areas with hourly wages of $42.38 and $27.26 respectively.
It has long been a held belief that "welfare queens," as President Ronald Reagan once referred to poor mothers in urban settings, drive fancy cars and eat steak all at the expense of hardworking taxpayers who subsidize their extravagant lifestyles. Cato's work feeds the widely held notion among fiscal and social conservatives that the poor are lazy and undeserving and enjoy the good life only by the grace of overburdened taxpayers who pick up the tab.
Because eligibility requirements have already become harder to overcome, government social safety net programs like TANF [Temporary Assistance to Needy Families] are helping fewer poor families get by. In 2009, around three out of four poor families with kids weren’t getting any TANF benefits. At the height of the economic crash, about 25 percent of those eligible for food stamps weren’t receiving them and during better times, that number hovers around 40 percent. The CATO study concedes that six out of seven poor families aren’t getting housing assistance.
With one in seven Americans either unemployed or underemployed, and the sequester already resulting in deep cuts to programs designed to help the neediest, the lingering Reagan notion of undeserved help is indeed a moral blemish for the richest nation in the world.
"In many American communities, families working in low-wage jobs make insufficient income to live locally given the local cost of living," the MIT study reported. In a number of high-cost communities, community organizers and citizens have successfully argued that the prevailing wage offered by the public sector and key businesses should reflect a wage rate required to meet minimum standards of living, which was the foundation for MIT's development of their LWC, which lists typical expenses, the living wage and typical wages for the selected location.
MIT cautions that their estimates "do not reflect a middle class standard of living" and that the "realism of the estimates depend on the type of community under study." MIT explains that metropolitan counties are typically locations of high cost, and in such cases, the LWC is likely to underestimate costs such as housing and child care. "As developed, the tool is meant to provide one perspective on the cost of living in America.".
ACNeilsen, the world’s leading marketing information company, reports that Americans once again rank near the top of global ratings when it comes to being strapped for cash. The rating company said it can’t exactly figure out why Americans are so strapped for cash, but notes that Americans don’t like to over spend and actually try to follow budgets. So what's the problem, ACNeilsen asks?
The answer is simple, it says: Americans are strapped for cash because of the difficulty of making ends meet on minimum wage jobs.
The Barringer Family of Scioto County in Appalachia Ohio was used to make their point. According to the Cleveland Plain Dealer, the adults in the Barringer family work five minimum wage jobs to raise three children in a rural part of the state. ACNeilsen said that even with five jobs they still can’t make ends meet.
David Callahan, author of "Indispensable Low-Wage Workers" at Demos, a public policy organization dedicated to reducing inequality among Americans, said, "There is so much in our lives that hinges on the lowest paid workers in America showing up every day and doing their jobs. Which raises the obvious question: If these people are so crucial to making our lives work, why are they so poorly paid?"
Callahan said, "We expect a bunch of crucial positions in the economy to be always filled, and our lives would be disrupted if they weren't, but we don't insist on a basic and humane level of security for everyone on the team: health insurance, a pension, and enough money to afford housing."
Heidi Shierholz and Lawrence Mishel at the Economic Policy Institute say the wage-setting mechanism has been broken for a generation but has particularly faltered in the last 10 years. Wage growth has subsided following the 1990s, but corporate profits are at historic highs, they write, noting that "income growth has been captured by those in the top 1 percent, driven by high profitability and by the tremendous wage growth among executives and in the finance sector."
In related news, Gallup reported that the self-reported average daily spending has climbed to $103-day, a dollar less than it was in 2008 before the Great Recession devastated Ohio and nearly every other state. At one point in 2010, it dipped to $63-day.
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