Busting the $15-an-hour Wage Myth

Fast-food workers recently protested in support of a federal $15-an-hour minimum wage. The main argument is that employees believe they are living below the poverty line, which suggests an inability to provide a family with food, clothing, and shelter.

First off, employment in the fast-food industry, unless upper management, should be an entry-position and not a permanent job. Secondly, over-taxation has a lot to do with how much money is left on the employees’ paycheck by the time he or she gets it.

In New York State, the sales tax rate is now 4-percent and as high as 8.875-percent in certain municipalities. Meanwhile, New York City’s income tax rate is 8.82-percent.

On the Left Coast, California adds a mandatory local rate of one-percent that increases the total state sales and use tax base to 7.5-percent and depending on local municipalities, the total tax rate maybe as high as 10-percent.

Unfortunately, the poverty line is jus’ an imaginary boundary established by government bureaucrats to rationalize their existence. The average poor person, as defined by the government, has a living standard far higher than you’d imagine.

The federal government claims that a family of four making less than $24,250 is below the poverty line. Breaking it down as one parent working, that’s $11.66 per hour, which actually is above the federal minimum wage of $7.25.

Using New York’s tax rate, that $24,250 per year suffers a 36-percent tax burden. So it isn’t the so-called low wage – it’s the taxation.

However, the typical household defined as poor by the government also has a car, air conditioning, three televisions with cable or satellite programming, a DVD player, two or more smart phones, a personal computer with Internet service and a printer.

The family also has a game system, like an Xbox or a PlayStation. In the kitchen, there’s a refrigerator, oven and stove, microwave, dishwasher and a coffee maker, with other household conveniences that include a washer and dryer and ceiling fans.

In the end, poor families certainly struggle to make ends meet, but in most cases, they are struggling to pay for comforts as well as to put food on the table. Their living standards are far different from the images of dire deprivation promoted by activists and the mainstream media.

There is a difference between real poverty and modern conveniences – it’s the gap between want and need — but you have to be willing to be truthful about where that line’s drawn. Plus you need to know that a healthy reduction in taxation also means more money come payday.

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Busting the $15-an-hour Wage Myth

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