What financial professionals have to say about inflation fears | Personal finance
The federal minimum wage is $ 7.25 an hour, a rate that has not increased since 2009. While the current wage stagnates, its purchasing power is eroded in the face of inflation. the average living wage today, defined as an income threshold that provides basic shelter and food and keeps a person above the poverty line, is $ 16.54, according to a study by the Massachusetts Institute of Technology.
Of course, what constitutes a living wage depends on the cost of living, which in many cases is dictated by geography. the most expensive areas to live in in 2020 were the Northeast, Hawaii, Alaska and the West Coast, reports the Missouri Economic Research and Information Center. The cheapest regions were the southern and midwestern states.
To compare the cost of living in each state and Washington DC to minimum wage, Stacker consulted the Massachusetts Institute of Technology Living wage calculator. The tool groups the costs of child care, food, shelter and other living expenses into a living wage depending on the composition of the family. For the selected statistics, the calculator assumes that all adults work full time (2,080 hours per year). The data are recent in 2020.
the Institute for Economic Policy argues that low wages are particularly harmful for workers of color. A minimum wage of $ 15 would represent a wage increase for 31% of African Americans and 26% of Latinos. The Congressional Budget Office estimated in 2019 that a salary of $ 15 an hour would increase the rate of pay for 17 million workers, but it could cost 1.3 million jobs. Large business groups opposed the move, as did Republicans who thwarted efforts by Congressional Democrats to raise the national minimum wage to $ 15.
While the federal government remains at a standstill, individual states are moving forward. California was the first state increase the minimum to $ 15 an hour (by 2023). In states with their own minimum wage laws, workers are entitled to the higher of the two established wages.
Read on to see how the minimum wage in your home country compares to the cost of living.
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