This Is Why You Can't Survive on the Minimum Wage

 

A flyer calling for a raise to the minimum wage.

Paul Sableman/Flickr

From MarketWatch:

by Jillian Berman 

In every state in the country, it’s impossible to get by on the minimum wage and that’s particularly true if you have student debt.

A single adult needs to earn $17.28 an hour on average, or nearly $36,000 a year, to make ends meet, according to a report released Tuesday by People’s Action Institute, a network of state, local and national groups looking to address inequality. When factoring in student loan payments that figure rises to $18.67 an hour.

This so-called living wage is what it takes for workers to afford basic necessities like food, housing, transportation and health care, without using public assistance and while still having some room to save for emergencies. In 42 states and Washington, D.C., it’s higher than $15 an hour — the rallying cry for recent movements to raise the minimum wage.

“We know that workers who are making the minimum wage or even a little bit over the minimum wage are not making enough to make ends meet,” said Allyson Fredericksen, the deputy director of research at the People’s Action Institute, and the author of the report. “Those workers who are also repaying student debt need to be paid even higher wages to make ends meet.”

And that’s likely a lot of workers. Nearly 70% of bachelor’s degree recipients leave college with student debt, averaging roughly $30,100, according to The Institute for College Access and Success. In fact, Fredericksen said her organization decided to include student debt calculations in their annual living wage report for the first time this year in part because it’s become such a ubiquitous expense for workers. “We know that student debt has grown and is just so consuming,” she said.

The report also highlights the varying ways student loans may affect different types of borrowers. Borrowers of color and women often don’t reap the same benefit from their student debt as their white, male counterparts in part because they’re more likely to land in low paying jobs or low paying fields, other research shows. 

Borrowers who don’t finish college also face particular challenges paying back their student loans. That’s because they typically struggle more to land jobs with wages high enough to support their student loan payments.

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