Wouldn't we expect (ok, hope) that income-based housing would be adjusted for changes to the Federal minimum wage?

So what about someone who's maybe worked at a company for a year and is already making $7.25 an hour. They don't get a raise, but some guy who's worked at the same company for two weeks now makes the same as him. Hardly seems fair to me.

"...if I get a raise, my rent would go up, and I would lose my assistance."

But presumably, the rent would go up and assistance would go down in an amount that is commensurate with her pay raise, right? So they just cancel each other out? Or am I being incredibly naive? I've been on unemployment in the past, and that's basically how it worked; but I've never been on public assistance so maybe it's different.

Since income-based housing is controlled by local government agencies, not the federal government, I think it would depend a lot on where you live and what your local housing authority considers a livable wage. I've known people in that situation, where if they take any more hours at work they'd lose their housing subsidy but still be too poor to pay the full rent. Welfare is a bitch.

I've been wondering, will the increase in the minium wage have a ripple effect on all wages? A job that was normally paid at $2 more an hour than a minium wage job (with slightly more skill requirements), will that be raised too? What if a job entails lots of physical labor? The employee could turn around and say, "With the higher minium wage, I could get paid the same ammount at an easier job."

**IN OTHER NEWS**

Every person living in low income housing in the United States has been evicted. Most common reason stated was people were making minimum wage which exceeded the income levels of low income housing.

**The next day...**

Walmart has just anounced its plans to buy all low income housing, bulldoze them and then build bigger better stores on the lots. Employees of these new improved Walmarts will be able to sleep in "The break room" at night if they dont want to go home.

no, because that's what welfare reform is all about.

Thats a good point AlteredBeast and its something im sure many people are wondering.

The problem with interfering with the market is all the unintended consequences. Every time the minimum wage goes up, the unemployment among teenagers (unskilled with unformed work habits) goes up. You might want ushers and clerks to be helpful, which a business could afford to hire (and note the social security tax paid by the business goes up with the wage, so the increase is larger on employers). Instead they have to find a way to get $10/hr of productivity out of anyone they hire to cover costs.

WTH is someone on public assistance doing having babies? If you can't make enough money to live honestly on your own, then keep the legs closed. Or at the very least marry one of those random guys that you met in the back of your car. So sad that people keep popping out babies without the ability to support themselves.

Christian Science Monitor did a couple stories on this topic too - and addressed the "ripple effect." http://www.csmonitor.com/2007/0110/p01s03-usec.html

WTH is someone on public assistance doing having babies? If you can't make enough money to live honestly on your own, then keep the legs closed. Or at the very least marry one of those random guys that you met in the back of your car. So sad that people keep popping out babies without the ability to support themselves.

In some cases this is correct, but I find this kind of generalization about who is on public assistance as bad as the generalization that all arabs are terrorists.

"But presumably, the rent would go up and assistance would go down in an amount that is commensurate with her pay raise, right? So they just cancel each other out? Or am I being incredibly naive?"

Sadly, public assistance is almost never this sane. In law school I did clinical work for people on public assistance, and the case that made me MADDEST was this woman with three kids whose husband left her and she worked her BUTT off for those kids, went through every single program she could get into to gain job skills and get her kids in HeadStart and so forth, and as soon as she got a full-time job and was starting to make headway, the state threw her off public assistance and out of all public assistance programs because she no longer income-qualified. On her salary (secretarial trainee, I think), she couldn't afford daycare for three kids AND housing AND food. So she quit her job and went back on public assistance, at least until they go to school and then maybe she can afford to be thrown out of subsidized housing and off state food assistance when she doesn't have to pay for daycare.

It was crazy. If they'd given her an 18-month grace period, or had a "transitional program" providing child care to mothers coming off welfare, she could have easily made the transition to working and being self-supporting. (Child care is a major stumbling block for women coming off welfare; it's simply not affordable.)

That's a system of perverse incentives.

I find this kind of generalization about who is on public assistance as bad as the generalization that all arabs are terrorists

Right on, AlteredBeast. Especially since the welfare reforms of 1996 mean that women who have additional kids while on welfare do not get any extra money for those children. That is, unless they can prove that the baby was conceived from rape or incest or failure of Norplant.

I work with low-income families and have encountered a number of women who are stuck in domestic violence shelters with the kids that their abusers forced them to conceive or bear (by denying access to contraception or abortion, usually). The minimal money they get from public assistance means they don't have enough money to move into permanent housing.

I guess, per Magister, they probably deserve that. God forbid an increase of the minimum wage meant that the work they were doing actually put them above the federal poverty line.

AlteredBeast, I think Magister was talking about the specific people in the article. They do seem to have made the decision to have a child during hard times.

In most places, $7.25/hr is plenty of money for one person (just ask a graduate student), but once you add dependents, all bets are off.

I have genuine sympathy for people who had kids in a time of prosperity, then fall on hard times. But if you've always made minimum wage and you decide to make a baby? That's just a bad decision.

I think Magister was talking about the specific people in the article. They do seem to have made the decision to have a child during hard times.

The only information I saw in the article was the woman's name, age, and the age of the kid. Nothing about the circumstances surrounding the birth, nothing about the father and whether he bailed unexpectedly - nothing at all to indicate that they "made the decision to have a child during hard times."

There are so many factors here we're not aware of. I meet 25 year old girls who have heard of a condom but aren't sure what it is. So many who are manipulated into sexual activity. So many who were raised by the tv and the streets and just don't know that they deserve any better. If we could make all those things equal, then sure, we could blame the decision to have a kid while poor on the individual. But since all those things are not and likely never will be equal, these judgments leave a very bad taste in my mouth.

i don't think shannon wilk will have much to worry about. after the minimum wage is jacked up, companies will simply start firing people to keep their revenues level. shannon could lose her job and end up getting MORE assistance.

perverse incentives, indeed.

I read the article and one thing I don't understand is why this guy who's making $7.25/hr (and supporting his parents) went out and bought a new car with $313/mo. payment?

I am in full support of the federal minimum wage increasing. In Oregon (where I live) it doesn't matter as minimum wage is increased every year for cost of living adjustments and we are closing in at $8.00/hr. Our family has seen a continuous growth in our bills and yet it seems that nothing has changed, ie. putting more on the credit card or making more long distance calls. For example, our car ins company raised our rate so the premium per month is $15.00 extra. Now the governor wants to tax (place a fee as he puts it) on car insurace to pay for extra state troopers on the road even though they were laid off due to his and the legislators budget cutting. If this passes we are now paying more for car insurance without ever getting in an accident or a change in our credit. The electric company is increasing their rates again this year. The list goes on and on.
I know the situation is different for every person and every state but after awhile you have to go when will it end or level off. All of these companies have watched their profit margin increase while my paycheck keeps depleting in order to play catch up to their increasing rates.
Don't get me started on daycare. They have such a monopoly on the system it is not even funny.

To read a firsthand account of what it's like to live on poverty-level wages, I encourage you to read Barbara Ehrenreich's "Nickel and Dimed--On (Not) Getting By in America."

Here's an excerpt:

My next stop is Winn-Dixie, the supermarket, which turns out to have a particularly onerous application process, featuring a twenty-minute "interview" by computer since, apparently, no human on the premises is deemed capable of representing the corporate point of view. I am conducted to a large room decorated with posters illustrating how to look "professional" (it helps to be white and, if female, permed) and warning of the slick promises that union organizers might try to tempt me with. The interview is multiple-choice: Do I have anything, such as child care problems, that might make it hard for me to get to work on time? Do I think safety on the job is the responsibility of management? Then, popping up cunningly out of the blue: How many dollars' worth of stolen goods have I purchased in the last year? Would I turn in a fellow employee if I caught him stealing? Finally, "Are you an honest person?"

To Magister:

You're joking, right? The whole idea of the welfare queen with dozens of babies driving a Caddy -- hasn't that been debunked enough times? You ask why the hell is someone in her situation having a baby, and I answer that it was her choice, economic impact, ripple effect, whatever, be damned.

Until we -- the good ole U.S. of A. -- come up with proper jobs programs (read: real economic development), proper health care (read: single payer national), and decent housing, we will always be judging the poor as financial miscreants un-entitled to the same life, liberty and pursuits of happiness guaranteed all citizens (and some non).

Put more personally, Magister: how rich or poor were your parents when they had you? What safety nets did they rely on to raise you? Were those nets completely economically neutral so that my tax dollars did not have to offset your use of them in any way whatsoever?

Thought so.

As an aside, this is probably the most politically charged posting I've ever seen on Consumerist. Go Meghann & Ben.

I find it fascinating that we can rationally discuss a subject like this that always stirs a lot of emotion in people but when BlueGus32 says that WalMart ain't all that bad we all jump down his throat (myself included).

Interesting....

I avoid posting in Wal-Mart related topics. I was a former department manager...so I know how bad they can be.

@Rusdude

The high car payment may be a necessity. For many people who live in rural areas (or urban areas lacking efficient public transportation), reliable transportation is the key to finding and maintaining a job. If your car breaks down and you miss even one day of work, you lose your job to anyone who can get there on time. The guy is young, his family isn't in a position to help him out, and he probably has very little credit.

Making car payments you can barely afford is better than not making any money at all.

Let's see:

40 hours/week multiplied by 52 weeks a year, no holidays or vacation time: 2080 hours.

$6/hr times 2,080 hours: $12,480.

Electricity (and I'm being generous here): $100/m * 12 months: $1200.

19yr male car insurance: $600 for 6 months: $1200/year.
Gas for the car: $60/m, $720/year

Groceries (again, generous): $100/m, $1200/year.

Misc. (Water, gas, etc): $150/m, $1800

Rent: $400/m, $4800/year

Total expenses per year, not including tax and greatly generalized: $10,920
Total "earned" after expenses: $1,560

Consider that a lot of things in here have been greatly simplified and reduced based on speculation, and recall that taxes/other off-the-wall expenses (clothing, furniture, etc) aren't accounted for at all, and you see the severe problem with minimum wage.

Keep in mind that this rent is based off an old, run-down apartment complex nearby that was built in 1970 and looks like it could collapse at any time.

Magister, you're obviously a complete douche.

radiofree - there are a lot of improvements that need to be made, but better infrastructure (not just health care, etc, but education, training, specific plans to get off welfare) needs to be set up so the taxpayers don't end up just throwing money at the problem. The government is good at taking money, but not so good at actually doing something constructive with it.

In most places, $7.25/hr is plenty of money for one person (just ask a graduate student), but once you add dependents, all bets are off.

So $7.25 per hour x 40 hours per week x 52 weeks per year yields $15,080 before taxes. That's assuming you can get 40 hours per week at your job(s). And God help you if you get sick, because most minimum wage jobs don't provide paid sick days.

So if you're generally supposed to spend 25% of your wages (I can't remember if that's gross or net) on housing -- 25% of $15,080 is $3,770. Divide that by 12, and you get $314 per month. Not too many housing markets where you can even get a studio apartment for $314 per month.

So unless you ARE a dependent (either on your parents, a significant other, or the government), $7.25/hour is NOT "plenty of money."

Yeah, you know, women who can't afford babies really shouldn't be having them, should they? Too bad that's not a good enough reason to pull the religious-freak chokehold off of the health and education systems, so that we can have real birth control options and educate young women (and men) in how to use them. Guess it's more important for us to feel righteous than to not go down the economic toilet.

Raising the minimum wage was the wrong thing to do, if helping poor people with families was the goal. Over 70% of all minimum-wage workers are teenagers, most of whom didn't need the raise, and the strain it puts on small businesses will cause people to lose jobs in the long run.

An easy, available, better-targetted solution would have been to increase the Earned Income Tax Credit, which directly benefits working people with kids, and which pays in a nice inverse proportion to the amount of money made (it goes away at about 38K/year). The EIC puts tax breaks (or cash) directly in the hands of the people who need it most, and it doesn't overly strain business.

As a working student mom making 17K/year (I was making 35 when I had my daughter; pardon me for not expecting the job market to crash and result in 3 consecutive layoffs), I could have really used the extra money from the EIC. But now, my customers--small businesses--will be even less likely to buy my service, and money may be even tighter next year. Yay.

Yes, life at or near minumum wage sucks.

So try not to start squirting out kids before you are 16. Maybe think about at least finishing high school.

If you are trying to raise a family by flipping burgers in America, YOU have made some profound mistakes in your life.

God, I just read the article. He did buy the car used, but the article says he bought it shortly after his raise in February 2006, and he'll be making loan payments until 2012.

$313/month for 7 years = $26,302.92 for a 2005 Dodge Neon. I wonder how much a 2005 Neon would be if it weren't financed over 7 years with no money down.

My favorite part of the article that I posted on is how the guy in the photo was going to celebrate getting paid, by eating chimichangas.

The things that really stuck out in this article for me when I read it in the Post the other day were that it takes place in Kansas, which has the lowest state minimum wage in the country: $2.65, with no raise since 1988 (nineteen years ago! in 1988 I was making $3.75 an hour, and I was fifteen); and that while Robert Iles's car payment is $313, the mortgage payment on the half-collapsed trailer where he and his parents live is $90. 10% of his income to pay the loan on a place that's probably worth absolutely nothing, that's hardly even a roof over his head.

There's a breakdown of his expenses in one paragraph, and it adds up to $908 a month. That's what immediately precedes him saying what he did about making $900 and "rarely" having money for himself. I don't see how he ever does. Where does that other eight bucks come from, I wonder.

The article made me count my blessings, which is of course the whole point.

I think that raising the minimum wage is a good thing for people who have nothing, but what about the people who already have all they want? I totally dont think its fair to those who get 7.25 an hour already and have been working in the same place for over a year or two to not get a raise either.