Sunday, April 1, 2012

Some Mathematical FACTS about poverty in the U.S.


   According to the Dept of health and human services, the poverty threshold in the U.S is as follows.
2012 Poverty Guidelines for the
48 Contiguous States and the District of Columbia
Persons in
family/household
Poverty guideline
1
$11,170
2
15,130
3
19,090
4
23,050
5
27,010
6
30,970
7
34,930
8
38,890
For families/households with more than 8 persons,
add $3,960 for each additional person.















 

LET'S DO THE MATH


Let’s break this down a little bit.   For the family of 3 the chart indicates that to be considered in poverty you have to make less than $19,090 annually.   The National housing Conference gives the fair market average price of rent on a 2 bedroom as $960 monthly which is $11,520 annually.  The U.S. dept. of Agriculture gives the cost of food for a family of 3 as $439 monthly which is $5,268 annually. The average cost of utilities (natural gas, water, electricity) varies widely but sits around $250 monthly for most families. This is $3,000 annually. 
Now to add all of this data up we get a base cost of $19,788 that puts us close to the poverty threshold.   This base cost does not include
Average fuel costs as reported by CNN are about $368 monthly which adds another $4,416 to the annual cost of living. Our total is now $24,204 annually
Let’s stop at this number for now and see how it compares to wages.   The current minimum wage is $7.25/hour At 40 hours a week that is $290.00 weekly( $15,080 annually  before taxes)   Now if both parents were to be working 40 hours a week we double this to get $30,160 before taxes.(this puts you above the poverty level and makes public assistance unavailable)   Now this is $5,956 more than the annual cost we have above, but with this situation we have a new problem(child care) Which makes a new expense.   
USA TODAY reports that child day care ranges from $3,803 to $13,480 annually, for those lucky enough to live in an area on the low average that will still leave you with $2,153 a year. However we are talking about a family of 3 here with a child. Nowhere in our expenses did we include the other basics such as clothing and toys(yes toys they are essential for a child’s cognitive development)
If your child is in diapers and you shop wisely you will spend around $30 a week $1,560 annually on diapers (this number can vary slightly depending on special needs… sensitive skin allergies etc. )   Subtract this from the $2,153 we had left above we are now down to $593 However, with diapers we also need diaper wipes. A person could bargain shop and get away with around $12 month on those. That is only $144 annually, and when subtracted from $593 leaves us with $449 clothes, shoes, toys etc….
Another expense I left out is motor vehicle insurance which is now a legal requirement in most states. The average costs varies greatly but is around $1,500 annually leaving our money left over -$1051   There are more expenses that are “necessary expenses” That I have not included, but the fact remains It is impossible to live on minimum wage with a family of 3 and both parents working full time. This is why many people get caught up in major credit card debt, have poor credit and stay in a cycle of survival by destroying their financial future. Bad credit means higher interest and high payments on any loan they try to get, which keeps them always broke. .
For those that do manage to survive by whatever means they can are on a slippery slope. One emergency (car problems, health issues preventing work, cut in hours etc…) can completely devastate a family living off minimum wage.


6 comments:

  1. Great article! Thanks a lot for posting

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  2. It's so tough to encounter right information on the blog. I really loved reading this post.. terima kasih

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    1. Kembali... I did a lot of research before writing this blog. I also have personal experience with living below poverty level. The research and links to sources I put into this article will hopefully open a few people up to the situation that effects so many people in the U.S. We have huge unemployment numbers, and many of those looking for work are forced into minimum wage jobs that are not even close to what they need just to survive.

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  3. prodding at the head of the infinite headed dragon only distracts people from the body. the poverty trap is a huge problem in the us and around the world

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  4. hey. dude you forgot about toiletries like tp and soap wont be working long if you dont shower or wipe lol

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    1. There are actually many expenses left out of this that most people don't think about when determining cost of living. I omitted many of these because before I even got to those expenses the minimum wage budget was already in the negative for the year. It is also important to note that the income listed is assuming that both parents will maintain a 40 hour workweek, when in actuality a 40 hour work week doesn't really exist for a vast majority. They are willing to put in these hours or more, but the companies paying minimum wage also limit hours you are able to work. Most actually are working 25 - 35 hours per week. So if you look at the income of those in the middle of that range you are looking at 2 people working a 30 hour work week which brings their income to $11,310 single and $22,620 combined.This brings the family of three with two parents working to $7,540 further in the negative for the year.

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