Poverty and the community Part 2

Someone once defined “poverty” as a state of mind. Though not really a definition, it does explain why many people are poor and remain so throughout their lives regardless of opportunities afforded them. A more precise definition according to the Information Please Almanac, the U.S. poverty level in 1994 for an individual under the age of 65 was $7,71 0 per year. This translates to about $4.40 per hour if we assume 1,750 hours worked per year. (According to the U.S. Census Bureau of the Census, the standard definition of full-time work is 35 hours per week for 50 weeks.)

For a family of four with the head of a household 65 years or over, it was $15,141 per year. This comes out to $4.33 per hour for 3,500 hours if both husband and wife work full time, or if only the father works and receives $8.66 per hour. Thus the family of four will have an income of $15,139.20.

The current minimum wage in the U.S. is $5.15 which comes out to $10, 258.80 or $2,548 over the poverty level for a single person. For a family of four $20,517.60, or $5,376 over the poverty level. Yet even with that income many families remain poor and can barely afford daily necessities. Something must be wrong. Can it be that income cannot keep up with purchasing ability?

For the individual receiving an annual income of $10,2458.80 ($2,548 over the poverty level), his net after Social Security and tax deductions may be only $8,207.04 more or less, or $683.92 per month. Perhaps a single bedroom can be obtained for $500 per month, and if food averages about $200, and with other normal living expenses, he will show a negative of several hundred dollars per month. How can this individual survive though he works full-time? The same will be true for a family with children.

Currently the janitors’ union in San Francisco is striking. because They cannot survive on their current $7.70 per hour ($2.55 over the minimum wage). They are demanding at least $12 per hour. Mac Donald’s is paying $9.00 per hour and jobs are going unfilled. There are legions of stories like this. The reality is that the cost of living is way beyond the wages received!

Thus work alone does not always guarantee a route out of poverty. The wages received determine poverty or comfortable living. An income must be sufficient to allow the worker to purchase his daily necessities.

If the government insists that a minimum wage be paid then it must also insist that prices be capped to meet that wage level. How can it interfere with one phase of the market but not with the other. I recall as a boy during the Second World War, the government froze all prices but not wages. As a result everybody had money to spend and enjoy a decent living. Today we work hoping to earn just enough to pay for our daily bread. Then we worry how we will ever be able to retire.

The two greatest fears any employee has is that he will become ill and be unable to earn a wage, and the other is that he will be fired. These two fears are deeply instilled in the hearts and minds of many of us.

Ever wonder why so many people seek local government employment? How many people are laid off -annually? They know that if they hold onto a job for twenty years, though distasteful, they are assured a good salary and retirement income. Consequently our local government has become a giant social welfare state for the majority of its citizens. (To be continued)