Are Welfare Thresholds Too High or Too Low? What Does It REALLY Take To Survive In America?

MANY HUBS HAVE BEEN DEVOTED TO THE SUBJECT OF POVERTY AND WELFARE and I have had my share. My most popular has been Poverty: What % of Your Tax Dollar Really Goes to Help the Free-Loading, Indigent, Ought-to-Get-a-Job American's? [56] which is also my second most popular hub as well. Brought up in many of these is the subject of what is the minimum amount of income is needed to provide for the basic needs in American society. The Federal government has one idea based on an archaic formula derived from some study back when the Social Security law was passed. We each have our own idea and I certainly have mine, which I am sure is recorded in one of my hubs on the topic.

What I propose to do with this hub is to discuss a little bit about what goes into basic survival, at least from my point of view, and then, if you aren't "polled out" from my hubs, go through a series of polls to see what you think the minimum income for a working family of three is to barely survive in America.

To give you a sneak peek, the answer, according my Hub audience, is that the official poverty level does not come close to providing what you consider a barely survivable living. Hubbers think it takes about twice as much to survive than the Federal government does.

POVERTY DURING THE GREAT DEPRESSION
POVERTY DURING THE GREAT DEPRESSION | Source

What Does It Take To Survive In America?

IT ISN'T TOO HARD TO THINK OF WHAT THE MINIMUM ESSENTIAL items are that it takes for a family three to barely make it in American society while still keeping their pride intact. The first two the come to mind obviously are food and shelter. We said this is a working family, so at least one member has a job and will need transportation. Depending on where one lives, that might be mass transit or a personal vehicle. But at this point, it becomes more complicated. If you have a vehicle, then you have gas, insurance, and maintenance.

Assume the third person in the family is a school age child. Now you have a lot more to deal with. Until I moved in with my wife and became an instant grandfather of first a day-care kid and then an elementary age boy a few years later, did I understand how bad school funding really has gotten. In my day, the 1950s, all my parents had to buy for school was the close on my back and some pencils and paper. Today, my stepdaughter has to take out a loan to get her 6-year old through 1st grade; and that is just for the mandatory stuff!! In addition to that, teachers often have to spend out of their own pockets to provide for decent materials with which to teach their charges. Fundraisers are held to buy basic necessities got school now, not to do special outings which we did when I was in elementary school; times have certainly changed.

Anyway, that is another cost facing our family as are utility bills, some form of minor entertainment, health insurance and medical bills, and the like. All-in-all, here is the list of things I came up with that our family of three is likely to spend money on in a year, whether they want to or not:

  • Rent or a mortgage, whichever is cheaper
  • Food for three (no dining out or fast food)
  • Auto loan
  • Fuel for auto
  • Auto insurance
  • Health insurance/Medical bills
  • Water/gas/electric/garbage/telephone, etc (no Internet or cell phones)
  • Minor entertainment
  • School
  • Laundromat
  • Personal care for three
  • Clothing costs
  • Other (no pets)

On To The Polls

FOLLOWING ARE A WHOLE LOT OF POLLS to determine what y'all think our working family of three will need for a year as a minimum. The polls will work as follows: For each of the items listed above I will have a range of costs to choose from, for a given time period. Depending on the item, some periods will be monthly, some weekly, others daily, and some annually.

The first poll, however, will be your initial estimate of how much you think it should in total for a year. Please do this one first, before moving on to the rest or looking at the bottom for the total of the parts. Then move on to the parts. At the bottom, I will total the individual items up and present a table which represents the ranges of total costs on an annual basis.

I hope this will be fun and educational for all of you and encourage you to participate!

PLEASE START WITH THIS POLL FIRST (Assume this is a suburb of Omaha, NE)

What Do You Think is the Minimum Annual Income a Working Family of Three Needs to Barely Survive With Dignity In America Today

  • Less than $10,000
  • $10,001 - $15,000
  • $15,001 - $20,000
  • $20,001 - $25,000
  • $25,001 - $30,000
  • $30,001 - $35,000
  • $35,001 - $40,000
  • $40,001 - $45,000
  • $45,001 - $50,000
  • More than $50,000 per year
See results without voting

With 72 responses, I am reasonably convinced the pattern you see in the poll above will not change substantially. While the mean may move noticeably, the shape (which is for the most part Normal) will probably not. Consequently, I can start deriving some statistics regarding what you see that have some relevance.

RENT OR MORTGAGE (whichever is cheaper) - PER MONTH

  • Less $300
  • $301 - $500
  • $501 - $700
  • $701 - $900
  • $901 - $1,100
  • $1,101 - $1,300
  • More than $1,300 per month
See results without voting

FOOD (PER DAY for Two Adults and 1 Ten-year old)

  • Less than $30 per day
  • $31 - $36
  • $37 - $42
  • $43 - $48
  • $49 - $54
  • $55 - $60
  • Greater than $60 per day
See results without voting

AUTO LOAN (PER MONTH)

  • Less than $250 per month
  • $251 - $450
  • $451 - $650
  • $651 - $850
  • Greater than $850 per month
See results without voting

FUEL FOR AUTO (PER WEEK)

  • Less than $20 per week
  • $20 - $40
  • $41 - $60
  • Greater than $61 per week
See results without voting

AUTO INSURANCE (PER YEAR)

  • Less than a $1,000 per year
  • $1,000 - $2,000
  • $2,001 - $3,000
  • $3,001 - $4,000
  • $4,001 - $5,000
  • Greater than $5,000 per year
See results without voting

HEALTH INSURANCE AND MEDICAL COSTS (PER YEAR) (out-of-pocket max for Obamacare is a little over $5,000 per year)

  • Less than $500 per year
  • $500 - $1,000
  • $1,001 - $2,000
  • $2,001 - $3,000
  • $3,001 - $4,000
  • More than $4,000 per year
See results without voting

WATER/GAS/ELECTRIC/GARBAGE/TELEPHONE, ETC (PER MONTH, no Internet or cell phones)

  • Less than $100 per month
  • $100 - $200
  • $201 - $300
  • $301 - $400
  • More than $400 per month
See results without voting

MINOR ENTERTAINMENT (PER MONTH)

  • Less than $50 per month
  • $50 - $100
  • More than $100 per month
See results without voting

SCHOOL RELATED EXPENSES (ANNUALLY)

  • Less than $100 per year
  • $100 - $200
  • $201 - $300
  • $301 - $400
  • More than $400 per year
See results without voting

LAUNDROMAT AND OTHER CLEANING (PER MONTH)

  • Less than $25 per month
  • $25 to $50
  • $51 - $75
  • $76 - $100
  • More than $100 per month
See results without voting

PERSONAL CARE (PER MONTH)

  • Less than $50 per month
  • $50 - $75
  • $76 - $100
  • $101 - $125
  • $126 - $150
  • $151 - $175
  • $176 - $200
  • More than $200 per month
See results without voting

CLOTHING COSTS (ANNUAL)

  • Less than $100
  • $100 - $300
  • $301 - $500
  • $501 - $700
  • $701 - $900
  • $901 - $1,100
  • Greater than $1,100 per year
See results without voting

OTHER (MONTHLY-No Pets)

  • Less than $100 per month
  • $100 - $500
  • $500 - $1,000
  • $1,001 - $2,000
  • Greater than $2,000 per month
See results without voting

Demographic Survey #1

Do you think of yourself as politically leaning to the

  • Right, most of the time
  • Left, most of the time
  • Right or the Left, depending of the issue
  • Something else entirely
See results without voting

Demographic Survey #2

Are you

  • Male
  • Female
See results without voting

Summary

BELOW IS THE SUMMARY TABLE OF THE RESULTS OF THE POLLS ABOVE WHERE N = 46 with only 4 of respondents considering themselves on the Right (and 8 something else); the other 34 are split between the Left (21) and Moderates (13).

Those on the Right, we need your input, please.

Notice that has we keep adding more results, the change in averages keeps getting smaller, generally, as N gets bigger, but not by a lot. Further, the changes are steady, not wild swings. But most telling is that even with such a small size of 46, and granted there is a bias to the Left, the chances of Hubber's estimates of the poverty line going as low as that established by the Federal government seem pretty slim.

I am happy to see that about equal number of male and female readers (and presumably taking the rest of the survey)

CATEGORY
RESULT
 
INITIAL ANNUAL ESTIMATE
 
$32,625/YR or $15.69/HR
RENT
$745/MO
 
FOOD
$30/DAY
 
AUTO LOAN
$289/MO
 
AUTO FUEL
$39/WK
 
AUTO INSURANCE
$1,555/YR
 
MEDICAL
$2,438/YR
 
UTILITIES
$258/MO
 
MINOR ENTERTAINMENT
$61/MO
 
SCHOOL
$238/YR
 
LAUNDRY
$50/MO
 
PERSONAL CARE
$77/MO
 
CLOTHES
$421/YR
 
OTHER
$262/MO
 
SUM OF PARTS, ANNUALIZED
 
$38,381/YR or $18.44/HR
Median Wage Nationally
 
$16.87/hr
Mean Wage Nationally
 
$22.33/hr
I HOPE THIS PUTS THINGS IN PERSPECTIVE FOR YOU - KEEP IN MIND, THIS IS WHAT YOU THINK IS NEEDED JUST TO SURVIVE ... AND NOT TO LIVE COMFORTABLY IN AMERICA

SO, BY ONE MEASURE, OVER 50% OF THE AMERICAN PUBLIC earn less than what you think is the poverty line, if you think the "sum of the parts" is a better measure. If you like your "gut feel" instead, just less than 50% of Americans live below the poverty line, by your collective measure.

Does this surprise you? Is this the way it ought to be? Is the half of America that lives at or below the Hubber poverty line simply lazy and could do better if they simply look for a job or asked for higher paying jobs, as many on the Right believe is true?

I know what I think the answer to that is, which is why I am socially moderate to liberal. What do you think?

In the table below, I will keep track of estimates over time as the number of respondents increase. The estimates will be larger than the above results because I have added in the tax impact. In other words, if you think a family of three needed $30,000 to survive, they actually have to earn about $32,432 in order to pay just the social security and medicare taxes. No income tax will be owed and I assume sales tax is part of your estimates. Property taxes are excluded as well given home ownership is beyond this families means. Only State income tax, if any, is not accounted for.

Changes over Time

# of Results
INITIAL FEELING w/tax
SUM OF ESTIMATES w/tax
DIFFERENCE
5
$31,892
$45,430
$13,538
6
$31,514
$45,272
$13,758
10
$35,405
$43,285
$7,880
15
$36,135
$42,118
$5,983
24
$34,757
$41,010
$6,256
52
$32,275
$37,089
$4,814
72
$32,625
$38,368
$5,743

WHEW!

THANK YOU FOR POLLING ALONG! Please check back to see how things develop and please comment (especially if you want to add or subtract from my list of items of bare necessities) as time goes on. As the numbers come in, I will have more to say about them.

New Information

ONE OF THE MOST COMMON COMPLAINTS FROM THE RIGHT is that once someone who begins receiving public assistance will rarely get off of it. Why you ask? Because it is the good life and you can live high-on-the-hog when you get something for nothing rather than working non-existent jobs for it. This actually use to be a bit of a problem prior to the changes in the welfare laws in 1995 or 1996. But, it really isn't today, except when the Tea Party or their kin tell the story.

So, as always, I try to be fact-based and here are the facts I found.

Lengths Of Time People Were On Various Assistance Programs

Public Assistance Program
1 - 12 Months (%)
13 - 24 Months (%)
25 - 36 Months (%)
37 - 48 Months (%)
One or More Major Programs
31.2
13.9
11.9
43.0
Medicaid (15% of pop)
35.6
15.5
13.7
35.3
SNAP (13%)
30.4
17.1
14.0
38.6
Housing
24.8
14.9
10.8
49.4
SSI
35.6
16.0
11.9
38.2
TANF (Cash) (1%)
62.9
16.0
11.3
9.8
% Toward Necessities
77%
65%
 
 
Without Car
25%
3%
 
 
Rents
75%
25%
 
 
Family Size
3.7
3.7
 
 
Purchasing Power has Declind
 
 
 
 
Value of SNAP
$1.40 per meal
 
 
 
Households Skip Meals at least once a week
14%
 
 
 
Chronically Hungry Kids
20%
 
 
 
Who Gets 65+
53%
28 million
 
 
Non-Elderly Disabled
20%
10 million
 
 
Working, not elderly or disabled
18%
9 million
 
 
None of the Above
9%
5 million
 
 
Bottom 20% get
32% of benefits
 
 
 
Middle 60%
58%
 
 
 
Top 20%
10%
 
 
 
Including tax break benefits
 
 
 
 
Bottom 20% gets
3%
 
 
 
Middle 60%
31%
 
 
 
Top 20%
66%
 
 
 
Top 1%
24%
 
 
 

Amazon on Living Wage

© 2014 My Esoteric

More by this Author


13 comments

HSchneider 2 years ago from Parsippany, New Jersey

Very thought provoking Hub, My Esoteric. I was the first to vote and I am very interested on how the results ultimately look. I know the cost of living will be far above even the modest Obama Administration proposal of $10.10. I would guess it would be more like $15.00 an hour. Of course, it will depend on where you live. I based my poll question answers on your Omaha premise which I am sure are way below the cost of living in New Jersey where I live.


My Esoteric profile image

My Esoteric 2 years ago from Keystone Heights, FL Author

Thanks HS. I had considered trying to do a high-low, to account for big cities and rural areas, but that just got way too complicated. I came up with my own number a few months ago and, like you, am real curious as to where this will settle down to.


My Esoteric profile image

My Esoteric 2 years ago from Keystone Heights, FL Author

By the way, using the midpoints, your total was $39,100.


JayeWisdom profile image

JayeWisdom 2 years ago from Deep South, USA

Great hub, My Esoteric. By the way, HSchneider, my votes are close to yours in most categories, though I was using costs where I live as a measurement rather than those of Omaha.

I live in the Deep South, where we don't usually have a harsh winter, but this one has been (and continues to be) a doozy. My home is all-electric, including my heating system, andI live here with my dog and occasional guests (a great-grandson stayed over this past weekend). My past three months of electricity use (December through February) cost nearly $1,200, for which I'm still in shock. That's not counting my phone and water/garbage pickup/sewer bills, which boost that figure another $315.

Utility costs alone eat up so much income (summertime in a hot climate demands air conditioning to survive) that I don't see how families with children can make ends meet even if there are two incomes.

I think the minimum hourly rate should be $15. Most of all, I believe the federal government should penalize corporations that send jobs out of the U.S. and provide incentives for those that bring them back. Too many educated and trained people are working for a pittance and no or few benefits, often at less than full-time hours just so WalMart can sell inferior Chinese merchandise in huge volume at low prices. I begrudge the greedy Walton heirs every dime they make from this practice! (Okay, it's time to end this comment which is about to turn into a rant. Haha.)

Voted Up++

Jaye


My Esoteric profile image

My Esoteric 2 years ago from Keystone Heights, FL Author

Thanks Jaye.


Shyron E Shenko profile image

Shyron E Shenko 2 years ago

My Esoteric, this is a hard one for me. I can only go by what I know.

Housing, a mortgage would be cheaper, but poverty level people can't buy a home, they would not have the collateral.

In Omaha, NE the rent is probably less than Dallas and a studio apartment would probably cost at least $500. + utilities.

Health Insurance, I can only guess $800. Hubby and I retired pay almost $700. No Medicare is not free, we still pay even though we paid all our working lives.

Electric, $400 is not enough, out electric was $754 just for January.

I am about to join Jaye on a rant (lol)

Voted up +++ shared.


My Esoteric profile image

My Esoteric 2 years ago from Keystone Heights, FL Author

Thanks Shyron, it is hard for sure. Someone in poverty certainly couldn't get into a house, but someone in a house, if they are careful, who find themselves sinking into poverty and happen to live in the right area will find their mortgage cheaper than the surrounding rent. That would be true, for example, if they had bought a townhome in 2001 in Woodbridge, VA and lost their job last year.

I am seeing that my top line for electric is too low, but I can't change the poll without losing the results I already have. But, what I can do is change my algorithm for calculating the average for Utilities in that category from $500 to say $600. I know my business partner is paying more than a grand in her house because it is propane heated, even though she has cut her heated living area down by half. That said, her house is still larger than our hypothetical family of three's apartment would be.


JayeWisdom profile image

JayeWisdom 2 years ago from Deep South, USA

I just read Shyron's comment and your reply, My Esoteric, and, although I'm still smarting from my high electric bills of the past three months, Shyron has my sympathy that hers was higher!

There are so many factors that influence an American's financial situation at this point in time. My own is the result of a "perfect storm" that began nine years ago and drastically changed my lifestyle in more ways than one. While I'm not on the poverty line, I can understand and empathize with those who find themselves there--especially those who are struggling to rear children. That is such a sad situation.

I read a news article yesterday that reported wealth has increased in the USA in 2014, but--you guessed it--only among the very wealthy! The chasm between the "haves" and the "have-nots" continues to widen and, with it, The American Dream gets farther out of reach for non-wealthy Americans.

Shared again....Jaye


My Esoteric profile image

My Esoteric 2 years ago from Keystone Heights, FL Author

Thanks for sharing again, Jayne. Although our friends on the Right hate this, it is the tax code that goes a along way in allowing all American's to share in our prosperity, not just the wealthy. It has nothing to do with not taking advantage of opportunity or being lazy, but it has everything to do with a characteristic of capitalism; the rich naturally get richer while everybody else gets relatively or actually poorer.

By having multiple tax brackets with a significant difference between the high and low tends to bring things back into balance where each working American gets to participate at the same rate in America's growth as all other working American; it evens out the inherent bias toward the wealthy in our economic system.


JayeWisdom profile image

JayeWisdom 2 years ago from Deep South, USA

I worry about the Congressional politicians who are trying to change the tax code to remove that balance. While I agree that the U.S. tax code is too complex and unwieldy (so that no one but a tax attorney or CPA can understand it) and could use reform, suggestions such as that from Ted Cruz to abolish the IRS, simplify taxes so they can be "filled out on a postcard" and just take everyone's word for accuracy (yeah, I can really see success with an "income tax honor system!") or Ron Paul's plan to abolish income tax altogether aren't workable, but have many supporters nevertheless. The current proposal sent to the House by Rep. Camp of the Ways and Means Committee would collapse tax brackets to only two, but it's doubtful that's going anywhere.

My suggestion for fair tax reform (not that anyone's asked me, haha) is to eliminate the loopholes used by ultra wealthy individuals and corporations to avoid paying taxes altogether or to pay much less than their fair share. That will never happen because politicians aren't going to do anything that would so anger their biggest campaign contributors. I don't think there will ever be fair tax reform in this country, though I can envision tax code changes that will hurt the middle and lower classes.

Jaye


My Esoteric profile image

My Esoteric 2 years ago from Keystone Heights, FL Author

So true Jaye. Reagan actually had modified form of two brackets for a short while at the end of his term; it didn't last very long though. Personally, I am for abolishing income tax altogether and establishing a national sales tax with the appropriate things exempted like basic food stuffs but not potato chips, the first $25,000 of a car, the first $1,000 of rent, etc. Obviously there is still a need for some sort of low income support programs and I am not sure how that would integrate, but it could.


Jenna 2 years ago

Why does this assume only one worker?

Using the corrected number from @my esoteric, $39,100, dividing by the average hours worked by a 40hr a week worker (1928, a common US Gov estimate), I get $20.28/hr.

However, why is only one parent working for a family so poor? Assume that one parent works half time, since this is an elementary student who may need extra childcare after school, and this number goes way down (to $13.52 an hour). This is half of the minimum wage (now @ 7.25 in the worst states), and that is potentially a problem. The real numbers are already bad enough; when you ARTIFICIALLY TRY to make them look worse, it weakens not strengthens your argument.

However, despite these numbers (the real ones that is), I am not sure they are sufficient to argue raising minimum wage. One of the issues is that studies [1] have shown only 35% of minimum wage earners are at less than 2X the poverty line. That means 65% were in families with annual incomes of $39,612 or greater (and that was in 2006 when this study was published, I'm sure it's higher now but I don't have the numbers). Also, there are some reporting issues with minimum wage: we don't know how many of those workers earn tips or unreported income. It is possible that very few struggling people would benefit from minimum wage hikes.

Also, why not discuss the potential pitfalls of raising the minimum wage, such as decreased work hours, lack of jobs for teenagers (to get an edge on career bldg, help families, etc), potential cost shifting from employers to the fed gov and ultimately the tax payers, and potentials for increased costs of common goods? This discussion is superficial, which may make it sound clever to some, but really fails to get at the real issues of minimum wage.

[1] http://www.heritage.org/research/reports/2006/08/w...


My Esoteric profile image

My Esoteric 2 years ago from Keystone Heights, FL Author

Thank you for your analysis @Jenna, but I am afraid you missed the point of this hub. While the contents of the hub bear on minimum wage, that is not what it is about; I only provide an hourly wage figure so people can relate what an annual figure translates to for a family needs in terms of an hourly wage, regardless of how many people earn it.

The point of this hub is do people really understand where the poverty line really begins, which is not a superficial issue, especially for those who live below it; I maintain it is much higher than people think and that is the point of this hub.

Personally I oppose the minimum wage myself, for some of the same reasons you do, and instead would opt for a beefed up earned income tax credit to replace it. But the downsides of unregulated capitalism, marginal tax rate bands that are too narrow, and too low a top tax rate make it necessary to have one or the other or both. Add to human nature to that mix and you get unsustainable income inequality.

    Sign in or sign up and post using a HubPages Network account.

    0 of 8192 characters used
    Post Comment

    No HTML is allowed in comments, but URLs will be hyperlinked. Comments are not for promoting your articles or other sites.


    Click to Rate This Article
    working