Living on Minimum Wage

While lurking on Twitter I saw the following post about the minimum wage:

This is completely unrealistic for most heavily-populated places. I wanted to see what a more realistic breakdown of expenses would look like, so I decided to write this post to see what living in Seattle on minimum wage would be like.

In Seattle, there's a minimum wage of $15 per hour. An average month has ~30.42 days. Let's just round down to a 30-day month. A given 30 day month is going to have between 20-22 work days. Let's sit right in the middle and say a person on minimum wage is going to work 21 days, taking no holidays, sick days, or vacation.

$15 / hour x 8 hours / workday x 21 workdays = ~$2,520 gross income per month.

There's no state income tax for Washington state or for the city of Seattle. That means we just have to worry about federal income tax. Using the 2017 tax brackets found at a single person grossing $2,520 per month (i.e. $30,240 per year) would pay out about $340 per month ($4,080 per year) in federal taxes. That means that a single person would net $2,180 per month to use toward their common expenses.

What would some of those common expenses be?

Common cost of living expenses: rent, food, electricity, water/sewer/garbage

Quality of life expenses: cell phone, wireless internet, health insurance

Travel expenses: Bus card or car loan + car insurance (Geico) + gas money

If you're paying rent in Seattle, chances are that on minimum wage you're not going to be able to afford a place on your own. According to rentjungle, the average monthly rent for a 1-bedroom apartment is $2,063. That would already be a whopping 94.6% of our hypothetical person's salary. That won't do; no money for any of the other expenses!

What makes more sense is to share a place with at least one other person. Average monthly rent for a 2-bedroom apartment is $2,788 so let's put our hypothetical person into a 2-bedroom with someone else, splitting half the cost. They will now spend $1,394 for rent.

Food is the low-key demon that kills most people's budgets without realizing it. If you're working two part-time jobs, you probably don't have the energy to cook much over the week. Let's say that on average you spent $5 per meal. Of course dinner can be far more than that, a decent breakfast can be less, and $5 per meal won't get you much good nutrition, but let's just roll with this number for now. $5 per meal x 3 meals per day x 30 days per month rounds out to $450 per month spent on food. This also means no outings (bars, restaurants, extra coffees).

No one wants to get home to a dark apartment, so one must have power to get things moving. In most apartments in Seattle, electricity also controls the heat, so at least that level of comfort is covered. Let's say that the cost of electricity is $100 per month for the apartment in total, and both roommates are paying equal shares of that. So $50 per month for electricity/heating.

Along these same lines, in many places you must pay for your own water, sewer, and garbage costs. According to, in 2016 the typical residential water/sewer/garbage rate is $169.79 per month. Split between two people, that's ~$85 per month on water/sewer/garbage.

At this point, we have our basics covered. A place to sleep, food to eat, won't die from the cold, and can get your garbage collected. All together, that's $1,979 just for the basics of living. And thus far we've only included the absolute basics.

Nowadays, you just can't get by without a phone. Your job needs a way to reach you, friends and family need to be able to keep in contact with you, and it's nice to have for emergencies too. Can you get by without one? Sure, you can manage. Life would be notably different but you can do without. Let's say our hypothetical person isn't one of those people though and needs a phone. With Verizon, you can get a new basic phone with the basic phone plan (500MB data, unlimited talk & text) for about $40 per month including taxes and fees.

Let's face it, most people want wireless internet at home. With Comcast you can get the barest minimum wireless plan at home, supporting 1-2 devices at a time for about $60 per month including taxes and fees. If our person is paying half of that, that's $30 per month on wifi.

Our hypothetical person is also probably not getting health insurance from their employer, so they must supply their own. Using the Washington Health Plan Finder, an adult getting paid our test person's salary would at minimum pay $132.72 per month on health insurance. This doesn't at all include the $6,650 deductible that comes with the plan. So, having insurance is nice. However, don't get seriously ill or you're pretty much screwed.

On their own, our quality of life expenses total $202.72. On top of our basics of living, our expenses have now crept up to $2,181.72 per month. Recall that the monthly salary we were working with was $2,180 per month, and we haven't even covered how our person gets to/from work!

Our hypothetical person has to get to work. In Seattle, you'll pay between $2.50 and $2.75 per trip. Problem is, since our person is working two jobs, they have to go from home to job 1, then to job 2, then back home. So, every time they do their round trip, they spend between $7.50 and $8.25 per day on transport. If they never leave home on the weekends to go anywhere that requires a bus, then for their 21-workday month they're adding $157.50 - $173.25 to their bus pass.

It could of course be worse. Some jobs, especially hourly jobs, simply can't be reached with buses and require a car to reach. Cars do not exist in vacuums. Most folks (especially those on minimum wage) aren't paying for a car entirely out of pocket. So, our person will have a car note that costs $150 per month. You can buy the car, but you can't drive it without car insurance. You can expect to pay somewhere around $100 per month on car insurance (loosely based on my own Geico insurance).

So now you've got your car and your car insurance, but it's not going to go anywhere without any gas in the tank. According Seattle Gas Prices, regular gas costs $2.39 per gallon. For a small car like a 2010 Honda Civic, the gas tank can hold between 8 and 13.2 gallons. For the sake of argument, our person has a Civic that holds 10 gallons and gets 26 miles to the gallon. They're driving a total of, say, 20 miles per workday. As with the bus pass, we can assume that they never go anywhere on the weekends. So, each month they drive 420 miles. At 26 miles to the gallon, that's 16 gallons per month. That ends up being around $40 per month on gas.

Finally, cars require maintenance. That's just a fact. Cars are machines and machines are destined to break down over time. Our person literally cannot afford to not have a broken-down car, so they need to pay for maintenance. According to Money Under 30, annual maintenance costs around $1,000. The cost is higher for older cars. This breaks down to about $84 per month on maintenance.

In total for our travel, our person is spending between $160 and $375 per month on necessary travel. Now, recall from our previous totals we're already at our limit without travel. With travel, they can't afford to even get to work.

What this means is that with Seattle's current minimum wage, our mystery person is guaranteed to be in debt. They can't afford to build up credit and pay for credit cards, nor can they afford to pay for student loans that most college grads inevitably have. If they don't already have any higher education, they can't afford to pay for certificate programs or even the transportation it'd take to get to a university. They can't afford to have any savings of any real kind.

There is no life on minimum wage, nor is there a future. Not as it currently stands.