California's minimum wage trick by Democrats--virtue signaling

Who are they kidding? $20/hour in California for an unskilled teen-ager, or recently released prisoner?

Minimum wage was never intended to be a living wage. An increase has always hurt the poorest by raising prices and closing them out to the possibility of moving up. It began in the Great Depression and FDR hurt blacks and women the most who at that time could compete for jobs by using their negotiating for wages. This is more smoke and mirrors by Democrats. What employer would take a chance on an 18 year old with no skills but potential? Some kids don't even know how to show up on time--it's part of learning/teaching your minimum wage staff. Very few employed people earn minimum--it was already too high. Employers forced to pay $10-$15 will look for people worth it. California has hurt the poor and particularly American born minorities (immigrants often have a better work ethic if they walked 1,000 miles to get here).

Only about 1.4% of wage earners make federal minimum, compared to 13.4% in 1979. And that's not good. Those are earning/learning jobs--part time, good for teens and the mentally challenged that require good mentoring to move to the next level. Those jobs are now done by machines who won't take smoke breaks, call in sick, or want off for a relative's funeral. The good paying, living wage jobs are the kids who went to trade school, or high school grads who can be carpenter or plumber helpers.

Some are saying then an increase is needed for Social Securty. For that we have COLA. Like Minimum wage, Social Security was never meant to be a living wage. Rate of return in 2022 was about 6%--and considering a dicey economy struggling with socialist Bidenomics, that's not bad. It was about 1.2% in the late 90s. Possibly private investing could do better, but SS has a number of other programs to help workers that pensions and 401-k's don't. Unfortunately, we are now down to about 2.9 workers for every retiree. In 1940, that was 42. Someone in FDR's cabinet couldn't do the math. But that's Democrats. Promises, promises.

How to save $56,000 a year--don't move!

 Recently we've been discussing costs of retirement communities with various friends who have made the move, or are anticipating one.  The costs have ranged from $12,225/month to $6,500/month. All those figures are for less space than we have now, with no garage and little storage.  Huge difference--we have a lot of stuff and freedom to come and go.  And there's no guarantee those prices won't go up. All the facilities are nice, but some are downright luxurious! 

Most offer the traditional amenities within these ranges. (The Cost of Living in a Retirement Community (investopedia.com)

"Retirement communities, also called “senior living communities” or “independent living communities,” are designed for people in their mid-50s and beyond who are desirous and capable of living independently and don’t require specialized medical care. These communities can offer different types of housing, including single-family homes, duplexes, condos, and apartments.

In terms of amenities, retirement communities can provide things such as:
On-site gyms and fitness centers
Cleaning and laundry services
Transportation services
swimming pool in house or access
Community recreational events
On-site dining [one meal a day is included in some of the prices]

Assisted living facilities and nursing homes, on the other hand, are for seniors who need some level of help managing daily life. That can range from assistance with basic chores, such as laundry or cleaning, to round-the-clock medical care.

A third type of community, called continuing care, offers a full range of services from independent living through assisted living, memory care and nursing home care. This allows residents to age in place regardless of their health needs going forward and can also accommodate couples in which one partner needs a higher level of care than the other."

So, I did some number crunching to determine how much it costs to live in our 2,600 sq. ft. condo

Condo fee and insurance, lawn care, snow removal  $422/mo

AEP electricity $300

Water $40

Spectrum--wifi, cable, phone--$250

Real estate taxes $675

Cleaning $140

Estimated monthly cost $1,829

Opportunity cost--What the market value of our condo would earn if invested--unknown--perhaps $2,000/month--I'm not factoring this in, although my father would.

So even taking the bottom figure of $6,500/month or $78,000/year, we save about $56,000 a year by staying here as long as we can.  That means, staying healthy.                                           

It costs less to thrive today

I've often been suspicious of the memes that claim no one can afford the middleclass lifestyle enjoyed in the 50s-60s when many families had only one earner--the dad. I'd scratch my head and thought about the average home size in the 1950s--1,000 sq. ft. and the average cost of a 2-3 bedroom, 1 bathroom house, about $10-11,000 ($140,000 today). And the gardens that produced for Mom's canning after all the work she put in to get it to that stage; and the clothes lines that dried the clothes from our labor intensive wringer washer; and our party line telephone we used for taking Dad's orders from his customers; and all the painting, wallpapering, plumbing and carpentry my Mom did. I thought about the higher tax rates, both federal and local, as people were rebuilding their lives after WWII and the Korean War. Did anyone have health insurance? We didn't (except polio insurance, fortunately since my sister Carol got it and the family, not the nation was quarantined). We all had 2 vaccinations--small pox and later polio by 1955. And we only went to the dentist when the tooth hurt, and only to the doctor if bleeding or vomiting. Vacations? Never knew anyone who took one. Credit cards hadn't been invented yet. One car for our family of six. But we never went without--we all went to church camp; we all had music lessons; we visited our grandparents every weekend. Our parents stayed married despite all these "hardships" of only one phone and no TV and they didn't take out college loans for us.

 
What's unique about this article is it shows that the middle class really is thriving, but it's all how you look at the statistics about square footage, consumer goods, taxes, and abundance. This author compares the cost to 1985 instead of 1955, but the message works for 70 years as well as 40. Nice that you don't have to be a victim, which seems to be the big message these days.

The Cost of Thriving Has Fallen: Correcting and Rejecting the American Compass Cost-of-Thriving Index | American Enterprise Institute - AEI

Pittsburgh has the best deal for home owners

http://www.hsh.com/finance/mortgage/salary-home-buying-25-cities.html#cleveland

In Pittsburgh home buyers would need an annual income of $32, 617 and the median home price is $135,000.

http://www.trulia.com/property/3191271042-116-Woodgate-Rd-Pittsburgh-PA-15235

But in San Francisco, at the other end, buyers would need an annual income of $142,338 to buy a home in the median range of $742,900!

http://www.trulia.com/homes/California/San_Francisco/sold/7146643-138-Shakespeare-St-San-Francisco-CA-94112

1962 cost of Living

Comparatively speaking, food was more expensive in 1962 than today, according to this chart. In 1962 we bought our first home, $14,000, but our income was more like $4,000, and a wife's income did not count in mortgage applications unless s...he was a nurse or school teacher (considered safe jobs). Banks were strict; no more than 1/3 of income could be home related. My father financed our 2nd mortgage. We rented the upstairs apartment for $65/mo which was the mortgage amount. Rental real estate is the only home that isn't a hole in the ground where you bury money. Tuition, fees and housing at the University of Illinois was probably about $1200/year ($30,300 today). I don't recall specific prices for food, but a good size candy bar was 10 cents. Yes, gas really was that cheap, but automobiles were very inefficient and less safe 40-50 years ago--I had a huge 4  door '69 Olds that got about 10 mpg. My husband had zero benefits in 1962--no insurance, no vacation, no pension. We purchased a hospitalization policy and a small life insurance policy--I think they were about $30/quarter. We paid cash for doctors and dentist. All that said, I think higher education has gone up faster than health care (1,120% since 1978; medical 601%), food or housing--probably because of all the government assistance and loans, and it will only get worse now that the government has taken that over completely.

We were not church members then, and if our "giving" was $10/year, I'd be surprised. We were definitely in Joe Biden territory. We always had month left over after the money ran out until we started to tithe.

If I had $542 to spend at the grocery store

with or without food stamps ($542 a month for a family of 4 earning $26,856 per year), here's what I could get in Columbus, Ohio, shopping at a store within 2 miles of my home that doesn't require a loyalty card. Then I would have about $282 left over for the rest of the month. Everyone has something in the frig or cupboards, and I'm assuming catsup, mustard, margarine, and pickles are residing in mine. Indeed, I probably need to look at the expiration dates! I also seem to have an awful lot of rice and canned beans and miscellaneous canned fruits. And I've got frozen peas and corn in the freezer because I use them when I don't have fresh. But if I had to buy smart and buy cheap, I'd go for real food. And I wouldn't confuse shampoo and toilet paper with food--which is what many journalists do when they write about soaring food prices.

The quantity listed here is a bit unrealistic for my small condo kitchen, but it could be done in 2-3 trips to the store over 2 weeks, and without purchasing too many perishable items in quantity. Apples, cabbage, potatoes, carrots and onions last a long time--asparagus and bananas don't. And you'd need a decent size freezer compartment to hold the meat.

I often buy marked down meat on Monday, but didn't see any today, so these prices are from the flyer. This list also contains things I rarely buy like spare ribs and bacon--but they were on special this week, and bacon can go a long way in flavoring other items or as a garnish for salads. Also, I rarely bake anymore. I just put the flour and sugar down just in case Mom's watching from heaven.

Dairy
2 gallons milk (6.00)
3 (24 oz) real cheese (9.60)
3 doz eggs (6.00)

Fruits and Vegetables
16 lbs potatoes (5.00)
3 lbs cabbage (1.50)
3 lbs tomatoes (4.50)
10 lbs apples (Braeburn)(13.90)
10 lbs peaches (14.90)
4 cartons orange juice (10.00)
3 lb carrots (1.00)
2 cantaloupe (4.00)
8 corn on cob (2.00)
3 lbs asparagus (5.00)
bag of onions(3.00)
2 cukes, seedless (2.50)
5 lbs bananas (2.50)
seedless grapes (3.00)
asparagus 3 lb (5.40)
green salad mix (3.00)
broccoli (1.00)
cauliflower (1.00)

Meat
Brats (2 lbs) (6.00)
5 lb chicken breast boneless 2.29/lb (11.45)
bacon (2 lbs) (4.00)
ground chuck 5 lb (7.50)
3 lbs hot dogs (5.00)
10 lb boneless ham (11.90)
10 lb spare ribs (9.90)
8 lb hamburger (frozen patties)(11.90)
canned tuna 24 oz (3.00)
fresh fish 3 lb. (21.00)

baking, condiments, semi-processed
raisins 24 oz (2.50)
peanut butter 16 oz (2.00)
Miracle Whip 32 oz (2.50)
jam or jelly 32 oz (2.70)
broth for soup 2 cans (1.60)
pasta 5 lb (4.00)
salad dressing(1.50)
olive oil l lb (5.00)
shortening 3 lb. (2.50)
10 lb Flour (5.00)
10 lb sugar (4.00)
walnuts l lb. (6.00)
green olives, large jar, salad (3.00)
coffee 39 oz (6.90)
oatmeal, old fashioned, lg. (3.00)

Treats
Ice Cream (3.00)
Cool Whip (1.25)
popcorn (jar or bag, not mw) (2.00)
peanuts dry roasted, jar (3.00)

TIP: A potato combined with milk (or cheese) is nutritionally a near perfect food. And very cheap. 8 lbs of potatoes will cost you about the same as 10 oz. of potato chips which have no nutritional value at all.

My blog on the thrifty plan.

The Thrifty Plan and me in 1982.