$2.50/hr is a Livable Wage, and That’s Generous

I calculated the “living wage” to be $2.50/hr, and that’s a generous plenty. My calculations and details are below. It’s easily possible to live on $2.50/hr, so Democrats are lying when they say that it takes a whopping $10-16/hr wage to “live”. Technically, I’m not even making an argument right now for abolishing minimum wage laws (those arguments are here), I just want, at this moment, to focus on the narrow question of ‘how much wage is needed to “live”?’ I’m not saying that $2.50/hr is enough to live comfortably, or to live like a typical American. After all, even the poor in America live like the middle class of most other countries. Many people throughout the world even live on only a couple dollars per day, and I’m talking about much more income at $2.50/hr, so $2.50/hr is easily enough. Let’s put aside our biased view of what lifestyle we think we are entitled to and just consider the actual requirements to stay alive. So, here are the basic necessities of life: food, water, shelter, clothing, and I’ll throw in some other stuff, too. Also, I’m not suggesting that this wage would ever be common in the real world. We’re talking about a rare extreme case of being very poor and living on very little, something that might occur to 1-2% of people if the minimum wage law and all govt welfare were abolished. Also, I’m not saying that I want people to live on only $2/50/hr, just that’s it’s possible to live on it.

So, let’s calculate. If one works 40 hrs/week, this results in 2080 hrs/year.

Food:  $10/day = $1.75/hr required. This is extremely generous because one can actually still get plenty of food to stay alive at only $5/day. And, this assumes that one buys food at all. In actuality, one could also get food by hunting and/or trapping all the bags of meat that roam our lands.

Water:  $1/day = $0.18/hr required. This is extremely generous because tap water actually costs 2 cents/gallon on average and a person only needs about 3-4 gallons per day for drinking and basic sanitation. However, I’m assuming that this poor person doesn’t get the mass scale rate and instead has to buy water by the gallon at a store that refills. And, this assumes he buys water at all. One could possible get free water at store water fountains, various natural streams, or rain collection. So, once again, $1/day is generous.

Shelter:  A sturdy shed at Lowe’s cost $1,000, paid for over 5 yrs is $200/yr, which equals $0.10/hr required. I’ll discuss the option of an apartment at the end. Another option is a good tent.

Clothing:  $230/yr = $0.11/hr required. Actually, this is a lot of money for clothing, especially considering how low cost thrift stores and Walmart are. One could also get free clothes from a charity, but I’m not even going that far. I’m assuming the clothes are bought.

Sleeping materials (pillow, cushion mats, blankets, etc):  $180/yr = $0.09/hr required.

Other miscellaneous stuff (flashlight, toothbrush, tools, knife, Advil, etc.):  $500/yr = $0.24/hr required.

This all adds up to $2.46/hr wage required, or I’ll round up to $2.50/hr. Interestingly, you can actually get more than $2.50/hr just by asking for change at an intersection.

What about taxes? Well, under our current tax system, the very poor don’t even effectively pay taxes at all. So, that’s 0% tax. Done. But, what would happen in a hypothetical libertarian society? That depends on what kind of tax system is used, and there’s no consensus on that. But, taxes would certainly be very low in a libertarian society, and I personally don’t think that any tax should ever be greater than 2-3%, and maybe 0% is also doable. Also, let’s say it’s a flat tax where no one gets special treatment, so even the poor have to pay this 2-3% tax. So, if you want, you can add on 3% max tax to $2.46/hr to get a required wage of $2.53, not a significant difference.

Now, if one wants to live in a cheap $600/month apartment (shared with three other people) instead of a shed alone, this bumps up the total to $3.52/hr required, still no where near what Democrats allege. You may think, ‘what if you live in an area where there are only really expensive apartments?’ Obviously, move to a different area. Besides, there’s almost always cheap apartments nearby somewhere.

So, if Democrats really want the minimum wage limit set to the “living wage” of what’s needed to live, they should lower it to $2.50/hr, or at most $3.50/hr, and these are overly generous numbers. One can still survive on much less if they decide to live “off the wilderness” or take advantage of charitable organizations who would probably give away free clothes. Does anyone dispute my calculation?

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