I don’t deduct any of my food or housing costs even though I need those to live
This seems like a big one. Your biggest expenditures are necessities: food and housing. You might be ok with cheaper housing and food, but certainly bringing your expenses to $0 in these categories would be extremely PWPF. On the other hand, people’s normal understanding of “living on minimum wage” includes things like “paying for housing and food”. So deducting the cost of minimally acceptable housing and food as PFPW wouldn’t make much sense.
I don’t track taxes
Do you mean that you don’t count the money you pay in taxes as part of your spending, or something else? The former makes sense to me: someone living on minimum wage would probably pay negative tax on net, via EITC.
My choice of minimum wage was originally motivated by Peter Singer’s “if it is in our power to prevent something very bad from happening, without thereby sacrificing anything else morally significant, we ought, morally, to do it.” Going below minimum wage seemed like as good a threshold as any for “morally significant” sacrifice.
I no longer think that’s true, partly because of the various welfare benefits people on minimum wage the US get (like you point out), and also partly because I no longer think cutting expenses is the best way for me to improve the world.
Anyway, that long-winded introduction is just to say that, when I deviate from some general understanding of “living on minimum wage”, it’s not clear to me whether that’s a bad thing.
On the other hand, people’s normal understanding of “living on minimum wage” includes things like “paying for housing and food”.
Yeah, that’s a fair point. Although at least in Wisconsin I think an individual on minimum-wage would qualify for food stamps, and possibly a rent subsidy as well?
Do you mean that you don’t count the money you pay in taxes as part of your spending
an individual on minimum-wage would qualify for food stamps, and possibly a rent subsidy as well?
My (MA) understanding is that food stamps are relatively easy to get, and most people with low enough income can get them, but housing subsidy is very hard to get, with a queue of several years.
Which is another thing that makes this tricky: there are a lot of benefits that people are technically entitled to but often don’t get in practice, and often take up a lot of time to get. So if you look at the CBO’s “Effective Marginal Tax Rates for
Low- and Moderate-Income Workers in 2016” pdf (figure 1) you can see that there are significant benefits at the low end, but lots of people don’t get them.
Thanks for writing this up!
This seems like a big one. Your biggest expenditures are necessities: food and housing. You might be ok with cheaper housing and food, but certainly bringing your expenses to $0 in these categories would be extremely PWPF. On the other hand, people’s normal understanding of “living on minimum wage” includes things like “paying for housing and food”. So deducting the cost of minimally acceptable housing and food as PFPW wouldn’t make much sense.
Do you mean that you don’t count the money you pay in taxes as part of your spending, or something else? The former makes sense to me: someone living on minimum wage would probably pay negative tax on net, via EITC.
Thanks for the feedback!
My choice of minimum wage was originally motivated by Peter Singer’s “if it is in our power to prevent something very bad from happening, without thereby sacrificing anything else morally significant, we ought, morally, to do it.” Going below minimum wage seemed like as good a threshold as any for “morally significant” sacrifice.
I no longer think that’s true, partly because of the various welfare benefits people on minimum wage the US get (like you point out), and also partly because I no longer think cutting expenses is the best way for me to improve the world.
Anyway, that long-winded introduction is just to say that, when I deviate from some general understanding of “living on minimum wage”, it’s not clear to me whether that’s a bad thing.
Yeah, that’s a fair point. Although at least in Wisconsin I think an individual on minimum-wage would qualify for food stamps, and possibly a rent subsidy as well?
Yeah, that’s what I meant.
My (MA) understanding is that food stamps are relatively easy to get, and most people with low enough income can get them, but housing subsidy is very hard to get, with a queue of several years.
Which is another thing that makes this tricky: there are a lot of benefits that people are technically entitled to but often don’t get in practice, and often take up a lot of time to get. So if you look at the CBO’s “Effective Marginal Tax Rates for Low- and Moderate-Income Workers in 2016” pdf (figure 1) you can see that there are significant benefits at the low end, but lots of people don’t get them.