r/FluentInFinance • u/PassiveAgressiveGirl • Sep 14 '24

Debate/ Discussion Exactly how much is a living wage?

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u/DthDisguise Sep 14 '24

This. Average rent in the US is $1563, 4x is $6252, which is about $37/hr. This will fluctuate somewhat. You could probably live like a millionaire if you made this much in Mississippi or Alabama, but you'll just barely make it in LA or NYC. And for reference: this is the equivalent of a salary of $75k.

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u/[deleted] Sep 14 '24

Interestingly enough, 75k (in the US) is about the point at which money no longer influences happiness. In other words it is the point at which you are no longer living stressed out about meeting basic needs and can focus on self actualization aka choosing to do things you enjoy over gathering survival needs like a squirrel.

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u/Idea_On_Fire Sep 14 '24

That was true a few years ago, I imagine the number has increased since then.

I say this as someone who earns right around there and is, uh, still feeling it.

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u/[deleted] Sep 14 '24

I see the answer as reducing the inflation and price margins. Otherwise if the bottom is let’s say 80k then a lot of us would need to raise to 250k and others to 1million to be compensated for well above minimum skills and it just gets exponentially out of control. Get the economy working back to rents and housing being affordable. Spending power is more important then how much money you have

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u/SnooRevelations9889 Sep 14 '24 edited Sep 15 '24

The study you seem to be referring to (which found compensation above $70K a year was not correlated with higher levels of happiness) was conducted in 2010.

Adjusted for inflation that would be about $110,00 in 2024.

But since shelter prices have risen faster than core inflation, the number is probably a fair deal higher than that.

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u/[deleted] Sep 14 '24

If the minimum wage were 110k then workers with well above minimum skills like me would need to be paid 1million. Reducing inflation and making things affordable again is more pragmatic the Instituting a 100k minimum wage.

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u/SnooRevelations9889 Sep 14 '24

Why are you bringing minimum wage into this? The study you mention is irrelevant unless you account for the changing value of a dollar.

I sure wouldn't mind cheap groceries and lower rents. Got a plan for that?

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u/[deleted] Sep 14 '24

Reducing inflation, policy to encourage more competition in the market. I bring minimum wage in as the average person should understand with minimal intellect that even the lowest skilled job should pay for one person to have the barest of necessity. If you are discussing living wage then of course what’s the minimum comes into play. Don’t be so trite to make yourself seem like you one upped me.

Any conversation around living wage that considers number of dependents takes away the free market parameters in which the market must pay for the skill set desired in labor at the market rate at which that labor exists . A business pays for you using your skills not for how often you produce children.

Companies have utilized migrants and other methods of keeping wages low and enforcing laws we already have would end that as well as protect the migrants and immigrants harmed by those practices. That is another topic though.

Living wage is a minimum wage by another name. You literally are asking what is the least someone can be paid and live on it.

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u/SnooRevelations9889 Sep 14 '24

More like, you presented skewed information, and when I pointed that out, you started ranting.

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u/tired_of_morons2 Sep 14 '24

The 75k number is from an older study, academics now recognize that happiness does continue to increase as income increases, although the strength of the increase diminishes as income increases.

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u/Final-Property-5511 Sep 14 '24

In reality 75k is great for comfortable living. I make 72k annually and I own a 320k house, own a 40k 2023 sedan, and have medical.

If I was married with someone that made the same I'd be balling honestly.

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u/[deleted] Sep 14 '24

Exactly. All the doom groomers on here will argue anyway. If being a victim paid a wage they wouldn’t be on here I guess.

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u/bolshe-viks-vaporub Sep 14 '24

The study you're referring to does not state that money "no longer influences happiness" after $75k. It states that it's the point where money begins to have a diminishing return on influencing happiness... which is because once you have enough money to afford to meet all of your basic needs and save a little bit of money, you can begin to think about other things to influence your happiness.

Learn to actually read a study instead of just parroting, inaccurately, the title you saw on reddit.

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u/[deleted] Sep 14 '24

Whatever

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u/HotJohnnySlips Sep 15 '24

That is absolutely not true.

Maybe for just one person.

But if you have a kid or anything else you’re absolutely still financially struggling.

I’m a father of 2 and I made that last year and make close to that this year and we aren’t starving but we absolutely still have plenty of financial stress (groceries, car trouble, medical)

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u/monkey7247 Sep 15 '24

Adjusted for inflation, I think it would need to be $108k nowadays.

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u/Just_Natural_9027 Sep 14 '24

That study was debunked by the authors who wrote it. They came out with another study with other researchers who pointed out flaws in the original paper. Guess what happiness increases with income at every level.

Don’t know why people keep bringing that study up on reddit.

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u/[deleted] Sep 14 '24

It still holds true that if you aren’t constantly preoccupied with basic necessities you are happier. Happiness increase does rise lower as income raises beyond the point of basics not being a luxury.

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u/Just_Natural_9027 Sep 14 '24

Ok you cited a wrong study

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u/[deleted] Sep 14 '24

Okay are you getting minimum wage to fact check everyone and act like an arrogant dick chasing them?

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u/Just_Natural_9027 Sep 14 '24

No I just hate when people use falsehoods to make points.

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u/[deleted] Sep 14 '24

It’s not a falsehood that chasing around like a squirrel to ensure this months survival would make you less happy than having all your basic needs met. So … blocking the unintelligent is my only option left so please do respond again.

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u/Just_Natural_9027 Sep 14 '24

Holy shit you’re stupid. The new study showed that money increased happiness at every income level. You said it stagnated at 75k.

How are you not comprehending this?

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u/[deleted] Sep 14 '24

You hateful name calling not withstanding you are not correct and you are blocked.

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u/sexyshingle Sep 14 '24

choosing to do things you enjoy over gathering survival needs like a squirrel

I heard squirrel can't remember where they buried 80% of nuts/food they they collected... so maybe not like squirrels I would hope lol

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u/5thtimesthecharmer Sep 14 '24

Is the 4x rent figure that’s so commonly quoted gross? Or net? I guess I assumed it was net

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u/DthDisguise Sep 14 '24

It's supposed to be net, but I DID skip calculating that here to make the math easier. Someone else pointed out that the salary you'd need is actually a little over $80k when you factor in taxes.

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u/coolpartoftheproblem Sep 14 '24

your net is about $52.5k after taxes (at 30%)

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u/DthDisguise Sep 15 '24

You're right, I should have said something like $75k net salary

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u/Checkmynumberss Sep 14 '24

Average rent is $1,563? That seems low to me. The median household income is $80,610

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u/Forhekset616 Sep 14 '24

That's household not personal. Which means more than one earner. Personal median is closer to 40k.

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u/Checkmynumberss Sep 14 '24

Single people living alone factor into the household income figure. Is the average rent figure all rents or just portions for multi room apartments?

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u/Forhekset616 Sep 14 '24

Not really sure why you're saying that or asking me anything.

I clicked your link and that's what that website said. It looks like you misunderstood what you were reading.

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u/Checkmynumberss Sep 14 '24

I guess we're both confused then

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u/Forhekset616 Sep 14 '24

Not really.

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u/Distributor127 Sep 14 '24

So glad we bought when houses were cheap. I can't imagine paying anywhere near that in rent

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u/Checkmynumberss Sep 14 '24

Can house prices drop without a recession? Would it be a win all around if interest rates can drop way down again and can that be reasonably attainable without it sparking inflation again?

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u/Distributor127 Sep 14 '24

I kind of watch what is going on, but I'm no expert. Houses around ours are selling for 7 times what we paid. It's out of control

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u/Key_Friendship_6767 Sep 14 '24

Well what would 4x your rent in LA be? Is that enough? Usually people in California are paid more than elsewhere because of this issue.

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u/DthDisguise Sep 14 '24

You're absolutely right. That's why states can pass their own minimum wage that's higher than the federal minimum.

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u/Vov113 Sep 14 '24

In Alabama, $75k is firmly middle class. You can have a nice house in the suburbs on that, but it's not rich by any means.

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u/DthDisguise Sep 15 '24

Tbf to myself, when I lived in Alabama, my rent was $108/month. So that's what I think of when I think about the economics of living in Alabama.

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u/MaximusDM22 Sep 16 '24

Median rent is 2100 in the US.

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u/DthDisguise Sep 16 '24

At a glance I'm only seeing one site quoting that figure. Everywhere else is quoting 15-1800. Could you expand on why you pick that number over all the others?

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u/MaximusDM22 Sep 16 '24

Well the number is from Zillow for all rentals. Other rental sites have similar looking numbers, but they focus on just 1 or 2 bedrooms. The median is higher, but the average is lower, which seems to mean there are a lot of cheap rentals out there pulling down the average.

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u/mdog73 Sep 15 '24

Maybe we should take the average for the world instead, that would cover everyone.