This may come as no surprise to many of you, but it’s still an interesting discussion for me to write about.
I think the general consensus is that minimum wage average household income is around $30,000 a year in North America (higher, lower, it’s around that range). That also includes two income earners with 2 kids.
Update: Sorry, I didn’t mean minimum wage, I meant “average household income”
For some reason when I wrote the post I was thinking of something else at the time. You know, as I am scheduling posts up to 2012? Yeah.
I make mistakes you know.
However, when you take into account cost of living in each city such as New York City, NY versus Detroit, Michigan, $30,000 doesn’t work the same way; food is a lot more expensive, and so is living in general.
Aside from all that, I still think that within the same city, we could all have different opinions about how much it costs to live in that city.
I daresay I could live in the same city as someone and have different opinions about how much it costs to live there, just from the different levels of quality in things we purchase and our activities.
I buy groceries, cook at home, drive a fully-paid, old minivan and I don’t tend to go out on the weekends to bars, restaurants or any kind of high-octane activities unless it’s with friends.
Someone else like my brother, would think that he needs to own a $350,000 home, buy a brand new SUV to drive in, because he has had awful luck with used cars, eat take-out during the whole week and go to a restaurant every other night.
Our lifestyles differ, and that also changes our perspective of on how much it costs to live in the same city.
It’s the reason why the advice is always the same: spend less than you earn, save what you don’t spend & watch your expenses.
Just a girl trying to find a balance between being a Shopaholic and a Saver.
I cleared $60,000 in 18 months earning $65,000 gross/year.
Now I am self-employed, and you can read more about 
If you guys (girls) have ever been criticized/refuted by a whole group of people, you'll know it's far from fun, and tough *not* to get defensive. Good post though, although the household income I've seen was also around 60k, for 1.7 earners with a kid or so. Perhaps the 30k figure is for one person? Or it includes retirees or the unemployed? Averages can be so meaningless. Why don't they divide people in categories first (average for working people, retirees, …).
Thanks for defending. 🙂 I can see how people can see that I overreacted, but it was also that just recently, things have gotten uncomfortably tense at work with a colleague, and it must have spilled over into my blogging when I read those comments after these past few days.
It could be. I was going off numbers I remember from a newspaper article from 2004 🙂
It showed all the income from provinces across Canada, and the range was $30,000 – $33,000 in household income, which I think, might have included even teenagers working, as well as two income-earners and so on. At any rate, if we can just calculate that $7 – $8/hour is the approximate minimum wage in Canada, that\’s $14,000 – $16,000 a year in gross income.
So if we just double that, we can (probably) safely assume that it\’s either 2 minimum income wage earners or 1 person in a $15/hour job, which is either clerical work or a starting salary in an office.
Actually, the aveage household income figure cited here (30K) is incorrect for the United States. The mean(average) and median income in the US is actually considerably higher than that.
Table 674 of the US Census Bureau shows this: http://www.census.gov/compendia/statab/cats/incom…
In 2007, the mean, or average household income in the United States was over 60K. The median income (which is a much more commonly cited number for what the “normal” household makes, because a mean tips up dramatically when you have a few billionaires in the population, but the median is not affected by these people) was around 50K. Therefore, the “normal household” in the US makes around 50K.
In general, though, salaries for the same positions are slightly higher in New York or San Francisco than they are in Detroit–salaries generally somewhat (although not fully) reflect economic conditions, and therefore the cost of living. In fact, part of the reason why Detroit is so cheap to live in is because the economic downturn has hit is disproportionately hard. If you can find a job there (unlikely, with unemployment so high), the wage for that job will be lower than comparable jobs in other cities.
I’m not sure why, but you seem a tad defensive, I didn’t detect much hostility after reading these comments. Just my two cents, but they were responding to what you wrote and likely confused as to how you came to your conclusion, that’s all. But then again, money is a very touchy subject…
I totally apologize for it.
This is absolutely no excuse, but it was a tense couple of days at work, and I let it filter over/spill over into my blogging life without realizing it, until I was prompted by people on Twitter, and thinking about it more last night, after writing what I did.
I read more into the comments than I should\’ve, reading them as \”hostile\”, when really they were \”incredulous\”.
It\’s difficult when you are reading text to get the emotions, and something as simple as \”Oh yeah?\” can come off very calm and casual or aggressive, depending on how you feel that day.
You are totally right (although I\’d call myself more sensitive than defensive… but I do see that I feel guilty inside for not being a blogger who is present on Twitter and on the webs lately).
Thanks for calling me out! 🙂
No problem, glad I could help 🙂 And no worries – we all have our moments. I, for one, can be very sensitive (or more sensitive than others) at times so I completely understand how stressful situations can snowball and spill over into other areas. And how written communication can often leave things open to misinterpretation. I think most people could figure out that you made a mistake without all the disbelief (Minimum wage of 15K X 2 people=30K). Bottom line – good topic, interesting comments (I always like to see what others have to add to the conversation). I appreciate you owning up to your mistake and replying in such a humble way after more thought. Happy blogging!
No, thank you! 🙂
I just have to be more aware of how my work affects me. I need to sit down and really think through how I\’ll psychologically cope with what\’s happening so I can compartmentalize and help myself stop feeling so bad/guilty.
Then maybe I\’ll write a post on it. LOL! 🙂
Good! Maybe that can help those of us with similar issues.
I agree with your point in this article. If you live in the same city but different areas of it, the costs of living is going to be different. I live in the nice part of Henderson, a suburb of Las Vegas and it costs more to live there then the hood part. I also think it's where you shop around here, what you buy, do, etc. While I think my bills and rent is okay, people from my hometown cringe.
Holy cow, why is everyone so daggum uppity? I understand the gist of what you're saying. I think people are uncomfortable being challenged about how they choose to spend their money and it's much easier to place blame on an economy/politics than on your personal spending/budgeting habits. I live in LA and though we are extremely blessed in the income category, we choose to live a sub-normal lifestyle (compared to others folks in my income category in this city) in order to become wealthy later. There are a few things we can't help – rent is expensive here and there's no way of getting around that – of course you can elect to life in a more ghetto neighborhood, but it's still much more expensive than a small town. Still, we budget like crazy, don't borrow money, and choose to make sacrifices now so that we can be relieved of financial stress for the rest of our lives (God willing). Though I am thankful to have the cash flow we have now, I by no means want to get used to living off that salary because I don't hope to be working the rest of my life to keep up with a lifestyle that to be honest, pales in comparison to the things that I believe truly make us happy.
You are absolutely correct! Everyone in the DC area has a different opinion on the cost of living here! I live in Nothern VA and people say the area I live in is SO expensive, but I find it completely manageable. In the long run, it all comes down to your personal salary and living choices, like you said.
If a lowly 20-something mid-level career girl can live here…it must be pretty inexpensive ’cause I’m far from wealthy!!
I made a mistake, it\’s average household income, which includes 2 income earners and possibly kids.
What do I think? I think I want to know where you got the idea that minimum wage is "about $30,000 in North America?"
I mean, it's NO WHERE NEAR that high ANYWHERE in North America. The state with the highest minimum wage in the USA is Washington, at $8.55 an hour, which amounts to $17,774/yr for a full-time, 2080 hour year. Every other minimum wage earner in America earns less than that. The highest minimum wage in Canada is in Ontario, at $10.25/hr, which amounts to $21,320.
So $30,000? Not even close.
You don\’t need to be so hostile. Really. This is not the area for you to take out your anger upon a mistake in a post that I just realized.
I made a mistake, it\’s average household income, which includes 2 income earners and possibly kids.
I sincerely did not intend to come across as hostile, and apologize if I did. I was just so incredulous at your numbers, which I see you've corrected. I'm sorry.
That said, I think your figures are still off. A cursory search tells me that the Average Household Income in the US is about $53k, while the Median Household Income is about $46k. Averages in general are never a very good indicator because of their susceptibility to outliers. For example, if a neighborhood has a population of 100 people and 99 of them make $30k/yr, but one of them makes $1,000,000/yr, their average income would be about $40k, which is misleading, because the overwhelming majority of them don't make anywhere near $40k. (It's interesting to note that this also applies to the oft cited 'the cost of the average wedding in America is $30k!!' declarations. In truth, the median cost of a wedding in the US is about $15k).
Anyway, I didn't look at the figures for Canada, but I'd imagine they're similar (perhaps even higher), so I think maybe your $30k figure is off.
Your point, however, is a good one.
Again, sorry for seeming hostile.
And I truly apologize for reading your comment as hostile.
Meg on Twitter, told me she didn\’t read it as hostile, and I realized that perhaps I was reading more into your \”Do you want to know what I think\” comment as being more aggressive than you meant it to be.
I thought about it some more as I was in bed last night, and I think it was more incredulous as you mentioned than hostile. I got the 2 mixed up because it\’s hard to read emotions in text.
Sorry!!
I disagree that "minimum wage is around $30,000".
Federal minimum wage in the US is roughly $7.25 x 40 (full-time) x 52 (weeks per year) = $15,080 before taxes … after taxes, that number is much much lower.
Obviously there are some regional variations in what people are paid but there are a lot of people who live in (expensive) cities who make it work on very, very little.
I made a mistake, it\’s average household income, which includes 2 income earners and possibly kids.
If my partner's Dad in Iowa knew how much we bought our modest Seattle condo for he would shit a brick. More than he recently sold his five bedroom house in the suburbs of Des Moines!
I definitely agree. I've lived in 2 large cities (Chicago and San Diego) and despite everyone's assumption that SD is more expensive, Chicago cost me pretty much exactly the same in all respects, mostly due to my salary (need to spend less than I make) and my lifestyle (I choose to spend a rather large amount buying health food from specialty grocers, I don't drive much, etc). However, in each city, I could live a LOT cheaper or a LOT more expensive, even if we're just talking about rent prices. I fall right in the middle at about $700/mo for rent, which is what I paid while living in Chicago also, and I was just about at the same quality of living there as well. I think the difference comes in when you're talking about a big city vs. somewhere more rural, where a rent of $1500 for a one bedroom would be absolutely insane. A city like Chicago would have plenty at that price range, but a town in the middle of Indiana isn't going to have such a variety, so overall things are cheaper.
Wow, where did you get $30k as minimum wage? Is that what it is in Canada? If so, that's awesome! Even in New York, the minimum wage is $7.25, which comes out more to $15k (that's assuming 40 hours EVERY week) and I don't know about Mexico. All the minimum wage earning people I know would LOVE $30k a year. TEACHER salaries where I am start below $30k a year, last time I checked, though they at least have some benefits and summers off.
If you want to check the numbers, here's minimum wage numbers for the U.S. (some are REALLY scary): http://www.dol.gov/whd/minwage/america.htm
Of course, your advice is good, but for people truly making minimum wage it's a lot tougher and takes some real tricky balancing. I can totally understand why people making minimum wage have a hard time making it and get into debt. By the time you pay for housing, there's not much left over even if you live in a slum. There's no room for medical expenses or unplanned expenses in general and transportation is a huge issue. And while you can work more, long hours are hard to sustain and often lead to health problems over time as well as more spending on things like food. Plus it really sucks if you're trying to take care of kids.
As for cost of living in general, yeah, that DEFINITELY varies greatly by location when it comes to what you can get housing-wise. Taxes are an issue, too, and food to some extent. But besides that, a lot of things aren't that different or you can buy online — though it might be different if you are relying a lot on second hand goods like from thrift stores. Prices in thrift stores can vary quite a bit, as does quality. Some are definitely geared more to the poor whereas others you can tell are for more middle class shoppers.
Please tell me where you get that number for "minimum wage." It's twice what I make and I'm paid an hourly rate that's higher than the state declared minimum. If it wasn't for a wonderfully supportive family, I'd be out on the streets. Living within your means is all well and good, but sometimes every penny is needed just to survive.
I made a mistake, it\’s average household income, which includes 2 income earners and possibly kids.
I think it has everything to do with how you spend your money. If you are thrifty, you will have a lower cost of living. If you are living a "lifestyle" you will have a higher cost of living. I made $30,000 last year and had a very high cost of living because I was living a "lifestyle" I couldn't afford. This year I will make the same amount, I will be in a much better place financially because of HOW I spend my money.
Wow, can I relate to that!
I live in Boston. Well, I live in Brighton, which is a neighborhood on the outskirts of Boston. It's a fairly decent middle class neighborhood, lots of two family homes, some students. Lots of Irish pubs, pizza delivery places, and mom and pop convenience stores. To live in the parts of Boston you see on TV, the really nice brownstones near a park and that sweet cafe with the very good croissants, the rent is literally doubled, and sometimes tripled. I know that lots of people live in places like that, and they crowd the gyms that cost four times what I pay for the YMCA, and they are regulars at the restaurant I can only afford to splurge in every now and then. I am blown away at how people do it, and how I've been doing what I've been doing for ten years. How much money do you make that you can spend $2300 a month on rent for a one bedroom? Geez.
The funny thing is, as much as I feel the difference now, ten years ago I was bringing home less than half of what I am now, and I still always had a roof over my head and food in my stomach. It is all relative and dependent on lifestyle, definitely.
This is true, as well as 'Live within your means'. Some people want a massive house, when they can't afford one. Like one of my more lavish relatives lives by herself and dreams of a mansion, when I look at her and my thrifty self would ponder "What do you want a massive mansion for, by yourself? How would you clean it?!"
She'd say, "Why, I'd have a maid, of course."
And there our conversation would end.
But then again, a lot of my relatives think I live primitively because I don't have an iron. I guess it all depends on what you see as necessary, and what you deem as luxuries.
While it certainly depends on the type of lifestyle people lead, there are also other considerations, such as which part of a city you live in (or rather, do your shopping in) as well. Several studies have shown that there is a correlation between higher property value and higher grocery costs, particularly for fresh produce – although quality is also better in those areas.
That said, I wouldn't trust any estimate for the price of living beyond the accuracy of much cheaper/about the same/much more expensive.