he Truth About The Minimum Wage

[nerdy_guy]

Something that might be of interest to the guys in US
MWoriginal.jpg

[thiudiskr]

The states with the lowest hours appears to be W. Virginia and Arkansas, at 63 hours. Assuming the chart is using $7.25/h as minimum wage, that rounds out to about $450 for 63 hours. $450 per month for a 2 bedroom is really cheap, but one could find an apartment for even cheaper - 1br and efficiency/studio apartments can be as low as half that, or $225, and actually, I've seen cheaper apartments on Craigslist. Considering how rent is a monthly cost, it's not unreasonable to spend 31-63 hours of your paycheck on your monthly rent, if you're making minimum wage.

Your chart really doesn't say much.

[IndiReloaded]

What fraction of income is this chart assuming one spends on housing?

Also, for a 2 BR, you would likely be combining incomes of two adults.

Finally, in the states (I think?) one gets to claim rental expense as a tax deduction. Don't get me wrong, MinWg sucks (I pay my child sitter more than this) but Thiu is right that chart isn't very helpful as presented. Good start tho.

[nerdy_guy]

I think the basis for it is on a weekly rental since that seems to be the standard in the west. Of course, payment can be done on a bi weekly basis, or monthly depending on the agreement.

Data came from this document.

[URL="http://nlihc.org/sites/default/files/oor/2012-OOR.pdf"]http://nlihc.org/sites/default/files/oor/2012-OOR.pdf[/URL]

[IndiReloaded]

Okay, so there is an explanation on Pg6 of how they arrive at those numbers. They don't take into account the rental tax credit. But may be balanced out by those wages being gross income (I assume). Rent is paid out of net income. Also, as was pointed out, few ppl on min wage would be renting a 2BR. We have this problem here in Vancouver also. In our case tho, its b/c the housing market has been driven into a bubble by foreign asian investment.

Still, its pretty dire. So, what is the solution? The owners need to charge a certain amount to cover their own mortgage and upkeep payments (rental income isn't that much, despite what people think). Maybe renters should negotiate for other services, like upkeep of the property (lawn cut, snow removal) to obtain some relief? Or maybe people just need to move out of costly urban areas?

[nerdy_guy]

if the value of a currency appreciates then that would solve part of the problem. Other economic factors should also be considered.

[IndiReloaded]

This^ made no sense, NG. Or were you referring to the foreign investment in Vancouver? The solution here is to make foreign investors pay higher taxes on their property. These are not primary residences, and shouldn't be taxed at that lower rate. Our politicos are stupid tho.

[KingZ]

Poverty is a complicated topic, and I don't think it's in anyone's power here to truly determine the effectiveness of minimum wage or taxation. Economics is purely speculative, and you'll be hard-pressed to find unbiased information on the matter.

For what it's worth, here's an interesting TED talk on income inequality:

[url]http://www.youtube.com/watch?v=cZ7LzE3u7Bw[/url]

[IndiReloaded]

Didn't you have a problem with that 2nd figure at 1:24? Couldn't it just mean that sick people don't make high incomes (b/c they are sick)?

Showing causality is a bitch for these types of studies. What I want to know is how Japan is so far above the rest of us. I want whatever they are having, on the West cost of Japan, I should add.

[thiudiskr]

There are some property mgmts that will also adjust the rent to 25-33% of your income. There is also section 8 housing that folks in poverty can apply for. There are options.

[KingZ]

Didn't you have a problem with that 2nd figure at 1:24? Couldn't it just mean that sick people don't make high incomes (b/c they are sick)?

Showing causality is a bitch for these types of studies. What I want to know is how Japan is so far above the rest of us. I want whatever they are having, on the West cost of Japan, I should add.

No, because of the extreme linearity. The 2nd richest also have the 2nd best life expectancy.

[Lipp]

08:47 ;p

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[misombra]

There is no rental credit or deductible in the u.s. there is a deductible for home owners who rent out their homes.

[IndiReloaded]

My bad, thanks Miso. I've lived too many places and get confused. The tax is in Canada (shocked b/c usually tax breaks in US are better). You do get to claim interest on a mortgage payment still, I think? I suppose this is part of the reason why the housing market didn't tank in Canada. We don't get that tax break.

[url]http://www.canadataxcredit.ca/refundable-property-tax-credit/[/url]