Earlier today, a link to an article from the AARP came up on my Facebook wall. The article listed 10 cities where a retiree could live on less than $100/day (both Pittsburgh and Morgantown were on this short list). Well someone left a snarky comment along the lines of, “Well jeez…I work; and I wish I could have $100 per day to live on. What’s the big deal?”
Well this person either didn’t read the article, or is completely exaggerating their situation. The article laid it out very plainly: $100/day is an annual income of $36,500. They took into account a tax rate of 25%, which leaves you with $27,375. Now, let’s make some conservative cost of living estimates:
- Rent/Mortgage: $650/month or $7,800/year
- Transportation: $200/month or $2,400/year
- Food: $350/month or $4,200/year
- Clothing & household goods: $100/month or $1,200/year
- Healthcare (after insurance): $500/year
All this comes up to $16,000. Which leaves $11,375 or $947.92 a month to spend on everything else – including additional insurance, communications (phone/cable), entertainment, and travel. It’s definitely doable — but it’s far from living high on the hog. Also if anything unusual pops up; like a major car repair, that can easily sap a month or two of the extra disposable income. So while you can live, you don’t have a big safety cushion really. Even if you were to save $250/month of the disposable income, after a year, you would only have $3,000.
Later in the day, I came across another story where an Australian billionaire tried to espouse a pay of $2/day (yes day, not hour) for her [African] mine workers. While this is obviously extreme and cruel, it does make me wonder at what employers consider to be a fair wage. As an employee myself, employers should pay a wage that at least ensures that a person can take care of their needs. However on the business side of the equation, salaries to employees takes up a huge portion of cash flow. And the payments can’t be deferred or reduced without layoffs, or more infrequently, wage reductions.
But employers and the general public need to be in touch with the cost of living. Basically if you feel that a salary of $30K per year is sufficient to pay a college graduate, then you should expect a high turnover rate in that position. While that is double the rate of minimum wage, it is not enough for a single adult to support themselves and start building a life; much less raise a family. Yes, you always have those people who eagerly share their stories about how they lived just fine on $200/month and survived. But living that way is not sustainable or healthy; and shame on those people who feel otherwise.
Here in the United States, salaries are very “hush-hush”. I wonder what would happen if everyone’s salary was public knowledge…if that would help or hurt matters at all.