Minimum Wage by leader6

VIEWS: 14 PAGES: 30

									Career Choice and How it
Effects Your Lifetime Income
   Holly Hunts, Ph.D., CFCS
   Montana State University
Occupational Outlook

  Millions of job openings between 2002 –
   2012
  42 million jobs will NOT require four-year
   bachelor’s degrees
      Vocational classes at technical school
      Some college coursework

      Training on the job, apprenticeship

      Associate’s degree
Occupational Outlook

    Between 2002 – 2012 14 million job
     openings for persons with a bachelor’s
     degree or graduate degrees.
Planning on earning minimum
wage?
  The facts on figures on minimum wage
   earners are clear.
  Full-time workers who earn $5.15 an
   hour, 40 hours a week, 52 weeks earn
   an income below the poverty threshold.
       $5.15
      * 40 hours/week
      * 52 weeks/year
      Total $10,712/year
Who is Earning Minimum Wage

  Most minimum wage earners are young
   and just starting out.
  Hopefully, as you progress in your career
   you can earn more than minimum wage.
  WATCH OUT THOUGH! Some people
   make career choices which involve them
   earning minimum wage or close to it for
   years and even an entire career.
Characteristics of Minimum Wage
Workers 2003
  570,000 report earning exactly $5.15
  1.6 million workers earn LESS than the
   minimum wage
  2.2 million workers earning minimum
   wage or less make up 3% of all hourly
   paid workers
  Part-time workers were much more likely
   than full-time workers to be paid $5.15
Who are minimum wage workers

  About ½ of all minimum wage workers
   are under 25 years old.
  Twice as many women (as compared to
   men) earn minimum wage
  Never married workers are more likely
   than married workers to earn minimum
   wage (they are also quite young)
  The lower your education the more likely
   it is that you will earn minimum wage
Minimum Wage Earners




  http://www.bls.gov/opub/ted/2003/dec/wk1/art03.htm
Real Purchasing Power of the
Minimum Wage
Single Person Qualifies For
Government Transfers when they
earn:

 Food Stamps $12,108/year
 http://www.fns.usda.gov/fsp/applicant_reci
  pients/fs_Res_Ben_Elig.htm
 Low Income Energy Assistance
  (automatically qualified in most states if
  Food Stamp qualified)
What’s wrong with qualifying for
government transfers?
    The short answer is, nothing. We have
     transfers to help low-income people.
What’s wrong with qualifying for
government transfers?
    The long-answer is, everything.
     Government transfers are possible only
     through taxation. It is much preferable to
     have workers being able to contribute to
     “the system” rather than drain from the
     system. It is one thing to have “the poor”
     to contend with – it is another thing to
     have to support “the working poor” with
     transfers.
How does the minimum wage
worker’s lifestyle compare?
  In addition to qualifying for government
   transfers it is important to look at
   average U.S. expenditures and compare
   them to those possible with minimum
   wages.
  The Consumer Expenditure Survey
   conducted the U.S. Bureau of Labor
   conducts surveys to see how Americans
   are spending their money. www.bls.gov
Average Annual Expenditures
Consumer Expenditure Survey
  Food             $ 5,375
  Alcohol          $ 376
  Housing          $ 12,283
  Apparel          $ 1,749
  Transportation   $ 7,759
  Health Care      $ 2,350
  Entertainment    $ 2,079
  Personal Care    $    526
Average Annual Expenditures
Consumer Expenditure Survey
  Reading              $ 139
  Education            $ 752
  Tobacco              $ 320
  Miscellaneous        $ 792
  Cash Contributions   $ 1,277
  Personal Insurance   $ 3,899

    Annual Total       $ 40, 677
If your annual income is $10, 712 and
average annual U.S. expenditures
are $40,817 (2003) then you will
have approximately 1/4th of the
average income to use for
expenditures
To live on roughly 1/4th of the
average annual expense each
month
  Food $111.98
  Housing $276.72
        Includes utilities, housekeeping supplies,
         home furnishings and equipment, household
         operations, shelter
    Transportation $161.65
      Includes car payments, repairs, gasoline
      Average gas expenditure $102.92 (20023)
To live on roughly 1/4th of the
average income per month (cont.)
    Health Care $43.32
        Includes premium, and out-of-pocket
         expenses. With no benefits – could you buy
         health insurance for $43.32 a month?
  Entertainment $43
  Apparel $36.44
Is it possible to live on 1/4th? Cost of
food at home per month/ USDA
     Single Male – 20-50 years
       Thrifty plan $141.10
       Low-cost $183.00

       Moderate cost $227.90

       Liberal $277.90

   Single mom and 1 child (age 3-5)
    $225.30
   Minimum wage food estimate of $111.98
 http://www.cnpp.usda.gov/FoodPlans/TFP99/TFP99Report.pdf
If a consumer needs to spend a
higher percentage of their budget on
food and shelter what happens?
 No health insurance (very risky!)
 Cannot afford reliable transportation
 Skimping on other areas
       Clothing
       Heat
       Gifts
       Retirement
Consequences of living on minimum
wage
 1.   How could you support a family on
      minimum wage – if minimum wage will
      not support an individual?
 2.   Your life is fragile. One thing goes
      wrong (i.e.,car repairs, health
      problems) and you will need to rely on
      credit.
 3.   Psychological cost of living on the
      edge, relying on government transfers,
      and working full-time.
Consequences of living on minimum
wage
 4.   You cannot build wealth for the future.
 5.   You cannot build even a savings
      account for emergencies.
 6.   You are victimized by alternative credit
      sources such as pawn shops, rent-to-
      own, paycheck lenders.
 7.   You may live a life of stress
Families on minimum wage

  Child care costs often take up a large
   portion of a minimum wage.
  The cost of child care often forces
   workers to work more hours.
  Then, the hours cause more need for
   child care.
  It can be a vicious cycle that takes away
   from family time and resources.
Career Choices: Escape Minimum
Wage
    Bureau of Labor Statistics Kids Page:
     http://www.bls.gov/k12/index.htm
        Great, interactive kids site to explore
         various careers and determine what the
         requirements and benefits are associated
         with various careers.
BLS: Both sexes, ages 25 and over
 Education               Median Weekly
                         Earnings
 Less than a high school $396
 diploma
 High school graduates   $554
 and no college
 Some college or         $639
 associate degree
 Bachelor’s degree and   $964
 higher
Job outlook by education:
Measuring demand for high
school and college graduates
Highlight of Women’s
Earnings 2003
Resources
    K-12 Kids Page for Occupations http://www.bls.gov/k12/index.htm This is a fun,
     interactive site for middle school/high school kids to visit and explore occupations.

    Consumer Expenditure Survey http://www.bls.gov/news.release/cesan.nr0.htm
     This is the site to visit for finding out consumer expenditure information.

    Occupational Outlook Quarterly http://www.bls.gov/opub/ooq/ooqhome.htm This
     site is an excellent place to visit for up-to-the-minute reports about rends in
     occupations.

    Highlights of Women’s Earnings in 2003 http://www.bls.gov/cps/cpswom2003.pdf
     This is a fascinating site to find the ratio of women’s earnings to men’s across
     numerous occupations.

    Income, Poverty and Health Insurance 2003
     http://www.census.gov/prod/2004pubs/p60-226.pdf This site provides easy to
     read and understand tables about income in the United States.
Resources
    Job outlook by education: Measuring demand for high school and college
     graduates http://www.bls.gov/opub/ooq/2004/winter/art01.pdf This
     paper gives and excellent overview of the top number of job openings
     and the top salaries for both high school and college graduates.

    Characteristics of Minimum Wage Workers:
     2003 http://www.bls.gov/cps/minwage2003.htm This site gives detailed
     demographic characteristics of those workers earning minimum wage

    Minimum Wage Laws in Other States
     http://www.dol.gov/esa/minwage/america.htm This site gives information
     by state about state minimum wage laws and federal minimum wage
     laws

    Fair Labor Standards http://www.dol.gov/esa/whd/flsa/
Resources
    Fair Labor Standards http://www.dol.gov/esa/whd/flsa/
     This site gives information on when the minimum wage is
     required for employers to pay.

    Economic Policy Institute
     http://www.epinet.org/content.cfm/issueguides_minwage_minwag
     e This is an excellent Frequently Asked Questions site regarding
     minimum wage, its real income value (as opposed to nominal
     income value). An ideal one-stop web-site

    Food Costs www.cnpp.usda.gov
     This site provides the thrifty, moderate, liberal food plans

								
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