FROM THE CARPE DIEM BLOG:
http://www.aei-ideas.org/2014/08/monday_afternoon_linkage818/
Item #10
More From Today’s BLS Report:
a) Texas added more than 1,000 jobs every day over the last 12 months, a total payroll increase of 396,200 from July 2013 to July 2014.
b) Texas payrolls increased in the last two months (+77,000) by more than the net increase in California payrolls since December 2007 (see chart above).
c) Texas added more than 15 workers to the state’s payrolls since December 2007 for every one worker added to payrolls in California (1,078,600 net new jobs in Texas vs. 69,400 net new jobs in California, see chart above).
Comments 15
According to the Bureau of Labor Statistics: (http://www.governing.com/news/headlines/gov-states-with-lowest-paid-workers.html)
1. California had 8.9 million workers who were paid hourly. Of those, 118,000 earned at or below the minimum wage.
2. Texas had 6.3 million workers who were paid hourly wages. Of those, 400,000 earned at or below the minimum wage.
Also according to the Bureau of Labor Statistics: (http://www.theatlantic.com/business/archive/2012/04/the-10-states-and-10-jobs-with-the-most-low-wage-workers/256553/)
1. 32% of all workers in Texas earn less than the federal poverty threshold and an ADDITIONAL 40% earn less than 200% of the threshold. This puts Texas 5th from the bottom. In fact, the entire bottom ten are from States that would be considered very safe Republican states.
The amazing thing about Texas is that you can really enjoy a middle-class lifestyle, even on minimum wage. There are over 500 listings in the greater Houston area alone, for a single-family home, under $75,000. Think about that.
San Diego used to be like that before Pete Wilson and the NIMBYs started passing restrictive land use regulations.
Nobody thinks minimum wage is a permanent condition but even a teenager can climb on the economic ladder in Texas with a job and home ownership. Think about that.
Brian,
The median cost of a home in Detroit rose 14.3% last quarter all the way to $40,000. I am not sure that bargain basement housing prices is the sign of a great economy.
I am also not sure that even at $75,000, a minimum wage worker is going to be buying a home any time soon. Even if that person had actually saved $15-20,000 for the down payment and closing costs, highly unlikely for a minimum wage worker, the monthly cost of a $60,000 mortgage plus property tax (average of 3% in Houston) and insurance would be approximately $635 per month. The take home pay of a minimum wage full-time worker is $1152 per month assuming no taxes other than payroll taxes.
Hypocrisy: It’s also about purchasing power. As the HuffPo article illustrates, the purchasing power of $100. gets you $88.57 in goods and services in California and $103.63 in Texas. A minimum wage income goes a LOT further in Texas. Since both a husband and wife usually work, the Texas couple is sitting pretty while the Democrats are killing jobs and the middle class in California. http://www.huffingtonpost.com/2014/08/19/value-100-dollars-each-state_n_5691571.html.
Well HQ, I actually AM an expert on this subject. A $75K house will need a down payment of about $2625 with an FHA loan. The PITI would be about $595 for that FHA loan.
It would be very tight for that teenager to get approved or even save up the down payment. but let’s assume she never got a raise, from ages 18-20, and actually had to pay rent.
She could split an apartment with a girl friend and pay about $300/month. Allocate another $300/month to savings and she’ll have her down payment money in less than a year but, I”m conservative, so let her wait two years to buy so she has some liquidity.
Let’s say she spent $700 on housing and savings from ages 18-20 and only had $100/week to live on. It would be tough but not impossible to do.
There are, quite literally, over 500 3BR homes for sale under $75K in the Houston Metro area. When she buys, guess which 20-year old gets to charge her two girlfriends $300/room.
Inconvenient? A sacrifice? Sure. Doable? Damned right it’s doable.
You’re helping me make my point by crunching numbers–the economic ladder, for poor people to enter the middle class, has MUCH lower rungs in Texas. Think about it
Since 1997, California has lost over $35 billion in adjusted gross income [income workers make before they apply standard deduction or itemized deductions] with the 3 largest recipients being Nevada, Arizona and Texas. That $35 billion represents skilled workers California will never get back. Meanwhile, socialist’s like Todd Gloria want to focus on raising the minimum wage. In Liberty.
Brian,
I have to admit that your numbers are correct. I put in a bad number for the cost of insurance which caused mine to be somewhat inflated.
See, it is not that hard to admit when you are wrong. Maybe someday you will be able to do the same.
I do wish you would admit that most minimum wage earners are not teenagers, but putting that aside, your point is well taken. The cost of living in Texas is much lower and it possible for AN INDIVIDUAL to survive on minimum wage.
For me, I would prefer to earn more in a higher cost of living state and own a home that will actually appreciate in value. Although my day to day living may be the same as someone living in a similar home in Texas, I will have much more flexibility to make out-of-the-ordinary expenditures.
I do also have to say this one more time: You still haven’t shared Mr. DeMaio’s plan to save Social Security and Medicare.
Author
HQ, just to beat your dead horse, you’re using the arbitrary one-size-fits-all federal poverty figure. But the census bureau now uses primarily the ADJUSTED poverty figure (the “Supplemental Poverty Measure”). It makes a BIG difference! Consider:
According to recent U.S. census figures, the 2009 median household income in California is significantly higher than Texas.
CA — $58,931
TX — $48,259 — 18.1% less than CA
But, ADJUSTED FOR THE COST OF LIVING, the Texas median household income is significantly higher than California.
TX — $53,009
CA — $44,456 — 16.1% less than TX
http://en.wikipedia.org/wiki/Household_income_in_the_United_States#Median_income
Author
HQ, here’s more:
Poverty is now based on a more sophisticated measure of poverty, now used by the U.S. Census Bureau. It’s called the “Supplemental Poverty Measure,” and better reflects the cost of living in a state or region. The old poverty figure used the same dollar threshold regardless of where one resided. This one adjusts for costs — first and foremost housing costs.
The result doesn’t work well for California. We’ve vaulted to the top spot — the WORST poverty rate in the nation.
And not by a small margin. We are at 23.5%, compared with the national average of 16.1%. The second worst state is Florida is at 19.5%.
Stated differently, California’s real poverty rate is 55.7% higher than the average for the other 49 states (not including CA). And CA is 20.5% worse than its nearest challenger Florida.
One assertion in this Huffington Post article by poverty pimps doesn’t stand scrutiny: ” . . . California is struggling more because it’s relatively harder there to qualify for food stamps and other benefits.”
FACT: California has 12% of the nation’s population, but 33% of the country’s TANF (“Temporary” Assistance for Needy Families) welfare recipients – more than the next 7 states combined. Unlike other states, this “temporary” assistance becomes much more permanent in CA.
http://www.utsandiego.com/news/2012/jul/28/welfare-capital-of-the-us/?print&page=all
UPDATE: November, 2013 — Here are the latest figures:
California’s real poverty rate (the new census bureau standard adjusted for COL) is by far the worst in the nation at 23.8%. We are 48.8% higher than the average for the other 49 states. Indeed, the CA poverty rate is 20.2% higher than 2nd place Nevada.
http://www.census.gov/prod/2013pubs/p60-247.pdf
Richard,
My guess (I can’t document it) is that there are Central American and African countries where the median income “adjusted for the cost of living” exceeds the median income in the United States. That doesn’t mean I would want to live there.
Author
Also note the difference in YOUR reference in the median hourly income.
http://www.governing.com/news/headlines/gov-states-with-lowest-paid-workers.html
CA $13.11 vs. TX $11.99 ($1.12 an hour — the average Texas hourly worker grosses 91.5% of what a CA worker makes). One doesn’t have to run the numbers to realize that — with the lower taxes and other costs in the Lone Star State — a person lives better on $11.99/hr in Texas than $13.01/hr in CA.
Author
HQ, when you point to the larger number of people on minimum wage in Texas, you assume that’s a bad thing. Not of you’re a kid!
In California it’s getting more and more difficult for young people to find employment — certainly compared to Texas. That differential makes up a good portion (not all) of the disparity you cited.
Consider:
Youth Unemployment Percentage 2012
State Age 16-24 Age 16-19 Age 20-24
California 20.2 34.6 15.9
Texas 13.5 21.1 10.8
http://www.governing.com/gov-data/economy-finance/youth-employment-unemployment-rate-data-by-state.html
NOTE: A full table of state youth unemployment percentages can be found at this link.
Richard,
The majority of minimum wage and near-minimum wage workers are not children, not teenagers, not even young (under 24) adults.
http://www.epi.org/publication/wage-workers-older-88-percent-workers-benefit/
Author
HQ, yes, many are older. But almost ALL kids seeking jobs must be paid the minimum wage — which as new workers frequently they are not worth — so many find it difficult to get that first job (and job experience).
In addition, many of those touted mature minimum wage workers are TIP workers who will NEVER make more than minimum wage — but who in reality make considerably MORE in earnings than minimum wage. I’ve yet to see good figures on how many fall into this “tip” category — waiters, busboys, valets, casino workers, bartenders employee barbers/beauticians, etc.
Here’s a good list of the “tip” occupations and estimates of tips (doubtless understated by those receiving the tips):
http://www.payscale.com/data-packages/tipping-chart-2013
Moreover, we must remember that, unlike 43 states, CA mandates a FULL minimum wage for tip workers. That’s why you’re more and more likely to find college grads waiting on your table in mid-priced restaurants — “crowding out” less educated people who COULD do the job, but are beat out by these grads.
Richard,
The fact is that the majority of employees making minimum wage or near minimum wage, even if you include tips, are adults, many have families. That said, I do agree with you on two points:
1. Reported tips should count toward the minimum wage requirement. Earning money from the customer is just as good as earning money from the boss. The goal of increasing the minimum wage should be to allow full-time adult workers to earn enough to live on and not to punish employers.
2. There should be a lower minimum wage for anyone under the age of 18 ( I could even probably be convinced that 21 is the right age). This would allow teenagers, who probably are not supporting themselves, to have easier access to work experience while still allowing a higher minimum adult wage.