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This is based on this question on Politics.SE.

There's currently a "Live the Wage Challenge" which a former governor and several congresspeople are publicly doing (abcnews, politico). The challenge claims on their official site that out of the $290/week a full-time minimum wage worker in the United States makes, they have to pay an average of $176.48 for housing and $35.06 for taxes, leaving $77 for food, transportation, and other expenses.

Quoted from the Live the Wage information sheet:

July 24, 2014 marks 5 years since the last time the federal minimum wage increased. For five years, the federal minimum wage has remained stagnant at $7.25 an hour, meaning a family supported by a worker earning the minimum wage still lives below the poverty line — which is the case for far too many Americans today. Our nation can’t wait any longer.

After average taxes and housing expenses, the approximate weekly budget for someone earning the federal minimum wage is $77. This is the budget you have to cover a week’s worth of your meals, groceries, transportation, and recreational spending.

Aside from the fact their math is slightly off (290 - 176.48 - 35.06 = 78.46), they also don't provide any sources for their "averages". So: Are there any sources to back up the claimed average housing/tax expenses?

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Bobson
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  • @rjzii - If there are no sources for their number, implying they made it up whole-cloth, that's a valid answer. But since they claim it, one would *assume* there's a source. – Bobson Jul 30 '14 at 15:10
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    Should this question never see an answer that isn't deemed "original research", I suggest looking at the Social Security Administration and IRS to verify the tax number, and looking at the American Community Survey (the University of Minnesota has a nice way to access it) to determine the rent paid by a person earning around the minimum wage. – drew Aug 12 '14 at 21:17
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    **Answers should merely verify or disprove the figures with objective verifiable facts.** Let's avoid speculation, indirect evidence and applied economics :-) – Sklivvz Aug 13 '14 at 00:45
  • @Sklivvz Would you be able to edit one of the deleted answers instead of deleting it? Or was there nothing of value in any of the answers? – ChrisW Aug 13 '14 at 00:52
  • I'm curious as to what would constitute "objective verifiable facts". – drew Aug 13 '14 at 01:00
  • @ChrisW the OPs can do so already. – Sklivvz Aug 13 '14 at 01:01
  • @drew "Objective": not influenced by personal feelings or opinions. A number is objective. "Verifiable": capable of being proven correct. "Fact": a thing that is known or proved to be true. In other words: avoid opinions, provide references, only mention what you can prove. – Sklivvz Aug 13 '14 at 01:10
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    @ChrisW I've removed your comment, you are confusing mods and community. Mods did not discuss the merit of the question. Hard evidence and facts are required on *any* question. Speculation and theoretical answers are discouraged on *any*. Answering the question specifically is required in all cases. The question is "Are there any sources to back up the claimed average housing/tax expenses?" hence my comment. Mods do not determine what is a good or a bad answer, the community does so. We only monitor that answers have the evidence that the community needs to judge. – Sklivvz Aug 13 '14 at 08:22
  • @Sklivvz Mods discussed the answers which were deleted: you know exactly what you thought was wrong with those answers and why you deleted them. I was asking whether any answer might have been salvageable: whether you could have edited instead of deleting. – ChrisW Aug 13 '14 at 08:26
  • @ChrisW they were theoretical answers: they discussed how to calculate the 77$ figure instead of focusing on the numbers. Unsurprisingly they all disagreed on each other. – Sklivvz Aug 13 '14 at 08:29
  • @ChrisW - None of the answers I saw were salvageable as-written. They all took a good stab at trying to back-calculate the numbers, but none of them actually found a source for the provided numbers, or were even able to derive a close match. – Bobson Aug 13 '14 at 12:40
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    @Sklivviz, I'm still curious. What was not objective, verificable, or factual about an answer that cited tax law and census data? Is math now subjective? – drew Aug 13 '14 at 16:05
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    The official site is run by Organizing For Action https://www.facebook.com/OFA, it should be possible to *ask* them where their average figures come from and assess whether their method is reasonable. – John Lyon Sep 30 '14 at 01:52
  • @jozzas Turns out the PDF specified how they got their numbers in the Q&A section at the end. – Nat Jun 16 '17 at 04:20

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tl;dr- No, $77/week isn't a realistic figure for full-time minimum wage workers. There's not really much to debunk here since the figure's source doesn't claim that it's factual or even realistic.

Note that the original website isn't hosted anymore; going to the same URL seems to lead to some sort of blog/advertising site. The below analysis is primarily based on the "challenge toolkit" PDF.

The $77/week figure

As noted in the question, the figure's calculated as the weekly income, less taxes, less living expenses, coming to $78.46/week. As explained by "LIVE THE WAGE CHALLENGE TOOLKIT":

Q: Why $77 a week?

A: The weekly budget for the minimum wage challenge is based on the earnings of a full-time worker earning the federal minimum wage of $7.25 an hour, minus average taxes and housing costs. Tax costs are based on a national average that includes federal and state taxes. Housing costs are based on the national average rent for a 1 bedroom apartment.

So, they're assuming that someone earning minimum wage is renting a 1-bedroom apartment at the average national rate. This isn't at all realistic; most minimum wage workers live with others, and there's simply no reason that someone struggling to buy food wouldn't tend to prefer cheaper apartments.

However, the people issuing the challenge didn't claim that this was realistic in the first place:

Q: Is this a realistic exercise?

A: We have made a number of simplifications to make the Challenge more accessible. For example, we have not factored in geographic variations in taxes and housing costs, and we are not asking participants to consider things like a health care emergency or a broken down car. But the choices you will face in taking the Live the Wage Challenge are real – these are the sorts of choices that minimum wage workers are confronted with every day.

Further, while the challenge focuses on how hard it is to buy food on that budget, the people pushing the challenge acknowledge that this population's supplemented by food stamps:

Q: Don’t many minimum wage workers receive SNAP benefits to help with their food budget?

A: Yes, minimum wage workers make so little that many receive SNAP (food stamp benefits). In fact, raising the federal minimum wage would lift approximately 3.1 million to 3.6 million people out of SNAP.

This statement itself is misleading, most (76%) people who make minimum wage aren't poor, and most (91%) poor people don't consistency work at all. (reference)

It's a political message, not a factual claim

The document starts with a quick description of the challenge, but most of it's about how to spread the political message. Its table of contents:

  • Instructions for the Challenge
  • Message Guidance
  • Social Media Resources
  • Key Facts
  • State by State Impact of Raising the Minimum Wage
  • Questions and Answers

Ultimately, the $77/week isn't realistic, nor does the source claim that it is. Its primary problems are:

  1. Most people who earn minimum wage don't live on their income alone. (reference)

  2. Most people who earn minimum wage don't pay for their own single-bedroom apartment (reference), much less at average cost since low-income households spend a fraction of the average (Figure 5).

  3. For the minority of minimum wage earners who are poor, there are food stamps and other assistance programs. (acknowledged by the challenge source)

Comments

Poverty's a horrible thing, and this answer isn't meant to suggest otherwise. Merely, the $77/week challenge is political bunk, not factual reality.

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Nat
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  • Wow, I'd forgotten all about this. Where did you find that toolkit? That's much more detailed than the one I linked. – Bobson Jun 16 '17 at 11:54
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    Your statement that "renting a 1 bedroom apartment is not realistic" is missing part of the point. While many minimum wage earners do share accommodation, some are not in a position to do that. Some have dependents. The point is that the problems this exercise highlights are real, If it was real for you, would you be able to live on this wage? – DJClayworth Jun 16 '17 at 12:46
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    @DJClayworth This answer's about the $77/week figure in specific, which is generally false for the above reasons, e.g. even for those who get an apartment, why an average-priced one? The data shows that this isn't realistic. – Nat Jun 16 '17 at 16:45
  • @Bobson Lots of searching I guess. =P This topic was notably difficult to find good sources for, since the good bulk of information out there was political advocacy, and there's apparently relatively little public research into how low-income earners spend their money. What I could find suggests that minimum-wage earners are a hugely diverse group, making it difficult to make too many general statements about them. But, it does appear that the political campaigners misrepresented the issue. – Nat Jun 16 '17 at 17:01
  • Seems to me one major problem (intentional distortion?) is with the claim of "a family supported by a worker earning the minimum wage". That seems to purposely overlook the many (perhaps most) minimum wage workers who are just starting out &c, and so don't have families to support. – jamesqf Jun 17 '17 at 17:42
  • If "political bunk" is your bugaboo, don't use Heritage as a source, link directly to the BLS. Note that the fact that most poor people don't work is a red herring, and that many of them are children, elderly or disabled. Note also that the narrow fixation on workers at or below the Federal minimum wage (many states have a higher minimum) is a simplification and distortion of the real, complex issue of working poverty, which is not merely an affliction of middle-class teens. However, it is out of scope for this question. – rob Jun 18 '17 at 04:39
  • @rob Yeah, Heritage wasn't my first choice of a source, though the policies on SE.Skeptics severely constrain our ability to do stuff like make our own plots, with the intention being a focus on third-party sources. The mods' rulings on that matter tend to be highly subjective; sometimes they'll just delete it, while other times it's left alone. Since the comments on the question seem to refer to several prior answers having been deleted here, I tried to err on the side of caution and avoid doing too much data analysis. – Nat Jun 18 '17 at 15:51
  • @rob Separately, I think that your description of the situation's well-stated. It'd be great to find more surveys on the working poor to add references to this answer, though most of what was out there seemed to be political advocacy or small-scale anecdotal case studies. I wasn't even able to find reliable numbers for, say, the average housing expenses of minimum-wage earners; from the BLS data, I checked the housing expenses for 10-15 kUSD/yr earners (which should include full-time federal minimum wage), though their expenses broadly ranged from 0-to-30+ kUSD/yr. [...] – Nat Jun 18 '17 at 16:09
  • @rob Oddly enough, a significant portion of households with zero income had the top-level of housing expenses, i.e. 30+ kUSD/yr, presumably due to living off savings, retired, etc.. There didn't seem to be a way to isolate those groups. I did find a median-ish peak around the expected 300 USD/month in housing expenses for the minimum-wage income bracket, but that had a thick tail to zero, and there was another, larger peak around 600 USD/month, which would be closer to what this $77-challenge assumed. Though, I wasn't sure how to interpret that, either, as it's pretty hard to explain [...] – Nat Jun 18 '17 at 16:12
  • @rob [...] why people in that income bracket would burn so much cash on housing. This peak didn't disappear, either, when looking at people who had zero income. So, presumably, people in that bracket aren't paying for their housing out of their household's income. If that were due to people with a lot of savings, then that'd be one thing, but it seemed to be a substantially large group. Which... well, might've just been retired people, but I stopped analyzing when it became apparent that the numbers couldn't be interpreted in a simple enough way to be reported here. – Nat Jun 18 '17 at 16:16
  • @rob I think that, ultimately, what would need to be done is a large model-based regression, like PewResearch does in their "Red vs. Blue" report, to identify the various demographics and extract the relevant data for them. Unfortunately, I couldn't find anything like that in the literature. – Nat Jun 18 '17 at 16:18