Can You Live on $7.25 in Tuscaloosa? | YES or NO

Cashier CareerThere has been a lot of buzz about how no one can make it on minimum wage.  Well, I’m here to tell you that that’s a load of hot garbage.  Yes, it is tough, but it is nowhere near impossible.  And here are the facts to back that claim up.  Below are the financials (CHART) for an 18 year old Ben Baxter to survive in Tuscaloosa, Alabama in the year 2014.  For the example, let’s assume his parents or guardians are no longer involved.

Ben is a hard working young man.  He worked while in high school to help put food on the table, and while do so, he gained the opportunity to work 40 hours per week as a cashier at a local pharmacy when he graduated.  He’s still making the minimum wage of $7.25 per hour, but working a full 40 hours per week really helps.  He has some other odd jobs that he does to earn money, but for now let’s focus on his base pay.

If we assume Ben works 40 hours per week (or 2080 hours per year), he will earn $15,080 before taxes.  That equates to $11,254.13 take-home pay after federal taxes, state taxes, Social Security, and Medicare are taken out.  He also lives with two roommates, Ruiz Chalmers and Harris Carr, in a median rental home for $720 per month.  Rent is split three ways with each person paying $240 per month.  Utilities are also split three ways.  He pays for his own food at $150 per month and his own health insurance at $25 per month.

Ben does not have a car, and nor does he need one.  Almost every route within the quadrant of McFarland Blvd, Lurleen Wallace Blvd, Interstate 20/59, and the Black Warrior River can be measured at around 3 miles or less.  At Ben’s current stride, he can easily commute by foot in approximately 45 minutes to almost anywhere.  This is great for his health as well since he will burn over 600 kilocalories during that routine 45 minute commute.

Ben assumes he will need to travel longer distances sometimes so he rents a BAMA Bike from a local university for $10 per month.  This university provides all maintenance on this bicycle.  Ben also budgets for education because he would like to make more than minimum wage by the time he is 25 years old.  He is attending Shelton State Community College.  And he is majoring in Air Conditioning and Refrigeration for his Associate in Applied Science Degree.

His yearly budget is listed below.  After one year, he stills has $500 leftover to go into savings for a rainy day.  You never know when that may come in handy.

Could you live on what Ben is living on? (SEE BELOW)

Ben's Budget

  1. So I just found out about this blog and am quite intrigued. Great article on, minimum wage. I would add a couple of questions/comments:

    1. How does he get to Shelton State? That’s outside the 3 mile area right.

    2. Cost of living varies by location. My brother is in Orlando FL and struggling to live on minimum wage. Rent is higher ( especially closer to the city) and he doesn’t have roommates.

    3. This plan will never work if Ben doesn’t BUDGET. But Ben seems like a responsible young man who was probably used to budgeting growing up on a tight income. :)

  2. This is a great article. I think sometimes we forget how capable we are of living simply and budgeting appropriately.

    That said, the arguments I most commonly hear associated with minimum wage are that it’s not a living wage for people with families, or if there is a medical crisis. Even with insurance, a deductible would still be required for the more serious health issues – the ones that may prevent Ben from doing his job. This deductible is usually more than $500.

    Also, as Anthony said above, cost of living changes with location. A one-bedroom apartment in the Bronx, for example,easily runs over $1000/mo. Consider this budget for a single mother or father with 2 kids and the discussion changes drastically.

    As a follow-up article, I would very much like to see a budget break-down for a single parent living in an area with much higher rent costs who doesn’t split the bills with two other roommates.

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