Many young people I know live on much less than this.

This is more like “optimal wage to live alone in my own apartment with a car.” Which of course, people would like to have but certainly isn’t required to be comfortable.

For example, transportation costs are $9000/year and housing is $20000/year. These are both way more than is necessary.

They need better branding because calling this a living wage is a misnomer and harming their cause.

Through mid life, your financial health is not as determined by wages, but by your family/connections. Do you have access to a grandmother who can babysit? A decent second-hand car? A good roommate situation? Just look at the expense table - any one of these things could be worth up to 20% of your income!

And you see that literally right here - are any of us actually comfortable with the idea that the value of your labor should be determined by your marriage status and number of children?

It's kind of telling that countries with "successful" minimum wages either don't have one and just institutionalize collective bargaining, or they do some fancy calculations that start with prevailing median wages and welfare eligibility. The idea of trying to get this number from the bottom up by building expenses just doesn't seem very robust.

Here in Norway we have five weeks of holiday plus various public holidays and only 37.5 hours per week adding up to about 1700 hours per year.

It shows $13,641 for my metro (Chicago), but day care costs are easily twice that. Obviously once kids are school-age this is much lower (if going to public school), so maybe that's how you get at this figure.

On the other hand the transportation costs are way overestimated for non-car families (we spend less than $2k/year on local transit for 2 adults and 1 child, obviously this doesn't include airfare for vacations or whatnot). Maybe these are both an artifact of too broad a catchment area (childcare is probably cheaper in the 'burbs, but so likely are average transportation costs).

That artificially inflates the “wage level” needed for the estimated living standard. It also makes the tax figures absurd. No two-parent, two-kid household making $110K is paying 15% of that net in taxes, subtracting deductions, credits and subsidies.

IOW, our “safety net” for middle-income parents could get 5X more generous and this calculator would show the same results.

$11,896 with 2 children? My Kaiser $14K deductible bronze plan costs $2100 a month. That's more like $25K a year, and that's before I use it... the only reason I have it is in case something traumatic happens. This is the cheapest plan I can get on covered california.

The core of the problem is that you basically have to have someone define what is an acceptable standard of living. Sharing a flat? Nah, the MIT trained economist thinks that's for the poverty people so that is defined as below living wage. Walk to work? No. You need atleast $10k a year on travel otherwise you're a bus wanker.

A huge amount of this is value judgements on what is an acceptable standard of living from people who benefit from immense privilege but will never experience the thing they're studying.

When I looked at the methodology, some is based on consumer surveys so it may be more reflective of over-consumption. In other words, it prices in what people want or what they’re used to, not what they need. The counterpoint is that maybe some wealthy countries should be pricing in a higher quality of life, but the “living wage” then becomes a bit of a misnomer.

For example, you don’t want me to be the one to define “living wage.” I’ve been a prepper/bushcrafter for 20 years… the ACTUAL “living wage” is _zero_. There are innumerable resources all around you if you know how to find and use them.

[0]: https://livingwage.mit.edu/metros/38060

By my estimations, it's not a great calculator. $2.5k/month for all housing costs. I'm not saying it's not possible to find a studio + utilities but that's not a fun place to live. No AC, no insulation, built for a different climate which was 70 years ago, laundromat or (hopefully) coin-op laundry in building, likely near busy roads (101, el camino) or train tracks with no sound insulation, still extremely car dependent (which is included in this calculator - gas/electricity, taxes, and cars in CA are very expensive), etc. Again, doable but competitive market and not a fun one. You'd be guaranteed to NEVER own any property at that income. Until we have some public housing utopia, I'd say ownership should be accounted for in a living wage. Otherwise, you're gonna get evicted when retirement hits.

Its calculation on taxes seems off to me as well. https://smartasset.com/taxes/california-paycheck-calculator#... Says $72308 in San Mateo, CA gives you $55793 - not $59791. You'd have to make close to $80k/yr to get the amount they suggest to live.

This calculator does not include retirement savings, emergency saving, etc. It just assumes you'll comfortably live paycheck to paycheck until you die and never save a dime. In our country, you will not be getting $60k/yr post tax from social security. So, this is a stupid calculator unless you plan to never retire or never experience job loss (max payout is $450/week for unemployment in CA), etc.

The thing I want to see next would be the sister calculator: what it would take for a business of X size employees, Y revenue, Z other expenses, to increase wages to these standards.

This feels like it would help to close that gap. Give a business owner a concrete path to take. Just saying something is broken isn't going to get it fixed.

Just typing all this I think I have my weekend project lined up.

Thanks MIT!

If you live in a large city, then it works great.

How is 1 adult + 3 children at $107.95 and 2 adults + 3 children at $63.97

5 people could require more money than 4. You could say in the 2nd case it's $63.97x2 but that doesn't make any sense either because the table also has 1 adult 0 children $29.31 and 2 adults 0 children at $41.81. Clearly they are not doing 2x to that $41.81 as it would be more than the $29.31 at 2x

Was this AI generated?