The image from page 1 by slayer69 truly puts things into perspective. We are still fortunate. However, for how long?
I know the OP did a post awhile back on things still being fairly even with income/expenses (ratio wise) - what the stats said. I didn't agree with
those stats then and I don't now. When the minimum wage was 3.35 an hour (i was a kid but able to work), I recall a gallon of milk being .99 (where I
was living). I could buy a candy bar for .35 and gas was about a dollar a gallon. That was 1981.
So 3.35 could buy me 3 gallons of milk and a candy bar.
7.25 (if earning federal minimum) can buy a person 2 gallons of milk and "maybe" a candy bar.
The federal poverty level is where we ultimately place it so I agree with the OP in this thread. Prices keep going up and people lose hope. They have
to attain higher standards to survive - yet not everyone can earn top wages (nor wants to). Not everyone wants to be a doctor or politician. Money
isn't the most valued prize to many - some people value time with their families or happiness above the dollar. Most simply want to work in a job they
enjoy and not go for the big bucks (if the job they enjoy is low paying). We are seeing people being forced onto assistance or into poverty if they
don't attain higher monetary achievement. Why? Look at 1962 below to see why I ask this.
Looking at taxes - basing all on minimum wage since cost of living should match that.
The median house price back in 1981 was 70,000.00. Let's say pymt over 30 years (taxes/ins thrown in with 4.127% int to keep it even). 533.00 payment.
All taxes for biweekly single claiming 1.
3.35 x 160 hours a month - 536.00 gross. SS rate - 5.35% = 22.51; MC - 1.3% = 6.97. Federal tax - unsure but estimate high - at 50.00.
Net pay 456.52
The national median rent in 1981 was 350.00 so you would have 106.52 left over at minimum wage in 1981.
So in 1981 a person could work at the lowest paying wage job and still find an affordable place to live. They would need to earn about 22% more to
afford a mortgage payment but there is hope.
The median home price in 2011 was 212,300.00. = 1,482.00 per month (4.127% interest).
The minimum wage in 2011 was 7.25.
7.25 x 160 hours a month - 1,160.00 gross. SS in 2011 - 4.2% = 48.72; MC = 1.45% = 16.82 and fed withholdings = 74.30.
**Net pay - 1,020.16
The national median rent was 871.67 so if earning min wage would have 148.49 left over if you rented at the average cost and are making minimum wage.
You still can't buy a house at minimum wage and would need to earn about 46% more to be able to make the mortgage payment.
If you earn the same gross wage in 2013/2014 you will have less net pay due to social security increases.
1,160.00 gross. SS 71.92. Medicare 16.82, and federal is 68.22.
**Net pay 1.003.54 less than 2011
2013 moving into 2014 - "Rent prices across the country average about $1,231 each month." You won't be able to afford the median rent. Will have to
search for below that.
Let's assume the average home price is the same for 2014 as it was for the end of 2013 - 270,000.00. 1,866.00 per month (4.127% interest).
In 2014 the minimum wage "federally" is still 7.25 I believe.
You still can't buy a house and you need to earn about 88% more to even pay the mortgage. Of course they would take more taxes so really you would
need to earn about 100% more to pay the mortgage.
Moving back even further to 1962
About 1.15 per hour was minimum wage - and all except state and federal was 3.125% so take .04 cents plus take off another .04 for the Fed and State
tax per hour. Truly earning 1.07 per hour.
171.20 per month. The average rent was 110.00. The average home price was 12,500.00 (payment would be about 150.00 a month at 4.127% int and insurance
rates as they are today).
In 1962 you could make a dollar an hour and afford to rent or to buy with money left to spare. It sounds like hope could survive in this scenario. I
bet the poverty level looks different in 1962.
Here is a look at inflation between 1962 - 1998. It also explains the consumer price index, and challenges one to figure out whose fault it might be -
when inflation is worse (democratic/republican). I see it happening regardless of either - something else is causing this and I just want someone to
turn back time.
Of course - these numbers are far higher in 2014.
Averages 1962 to 1998.
1962 Price Hershey bar $0.05 and 1998 - $0.64. 1180% increase.
1962 New York Times $0.05 and 1998 - $0.60. 1100% increase
1962 First class postage $0.04 and 1998 $0.32. 700% increase
1962 Gasoline (gallon) $0.31 and 1998 - $1.19. 284% increase.
1962 Hamburger (McDonald's double) $0.28a and 1998 - $2.69 861% increase
1962 Chevrolet (full size) $2,529.00 and 1998 - $22,500.00. 790% increase.
1962 Refrigerator freezer $470.00 and 1998 - $750.00. 60% increase.
edit on 1-2-2014 by Dianec because: Because I'm tired and made a few mistakes - probably more so sorry about that.