Straight Talk TNT

Is boss out to lunch regarding wages?

Feb 19, 2013

Dear Straight Talk: My boss keeps telling me young people have it easy today. But I’ve worked 40 hours a week at $12 an hour for eight months and have been unsuccessful at saving money for college. I ride a bicycle six miles to work, do not own a car, and share a house with four roommates. I cook and am careful with spending, yet I still cannot save. Am I doing something wrong, or is my boss out to lunch? — Almost 20, on my own in Santa Cruz, Calif.

Justin 26, Redding, Calif. Ask me a question

I live rent-free with my parents and work 30-40 hours a week making $20 an hour. But with full-time college costs, I barely break even. I haven't bought an article of clothing in over a year, haven’t eaten out in months, and am too broke to ask a girl out for fear of having to pay her half. Gas is expensive, food is expensive, entertainment (of any kind) is expensive. I've given up trying to pay off my maxed-out credit card until I graduate.

Gregg 21, Los Angeles Ask me a question

I'm on my own, too. I commute on a bicycle, make $12 an hour, and have three roommates. I attended college last semester, but the money didn't stretch and I had to stop. Next fall, I plan to go again, using loans. Cost-to-income is outrageous. I even sold plasma twice a week to help cover food. But after six weeks, I was seriously run down. Some people trim bud seasonally. A friend made $3000 in two weeks — but illegally and under armed guard. Not a great solution either. Short answer: Yes, your boss is out to lunch.

Brandon 21, Mapleton, Maine Ask me a question

California is wicked expensive. I helped a friend find a safe, secure apartment in Norco — at $2000 a month! I'd commute from Mexico before paying that! Here, in rural Maine, my girlfriend and I pay $550 a month (total) for our two-bedroom apartment (including utilities). The community college costs only $1100 per 12-credit semester. I work and go to school quite comfortably, affording “necessities” like fast internet. I don't have a car, but my girlfriend does, and I'm saving for one. I can't agree that young people have it harder.

Lennon 26, Los Angeles Ask me a question

It's pretty rough. I'm a college graduate who landed what’s considered a “good” job. My girlfriend has a better job, yet we are far from being able to support a child or family. With the things needed to be competitive (smart phone, internet, computer, car), every month, after expenses, I'm left with about $300. Emergency fund? That’s it. I do save 10 percent for the future, and, luckily, have no debt. Many graduates owe $25,000+ in student loans. Most young people getting traction have help from their families.

Dear “Almost 20” in Santa Cruz: Your boss is misinformed. For the ratio between wages and cost of living to be equivalent to, say, 1968 — minimum wage would need to be $10.50 an hour, not $7.25. You are trying to launch on 30 percent less “wallet fuel” than your parent’s generation — and they had a car, not a bicycle. And that’s just the average. Raise that number for living in California where the cost of living is higher. Then raise it again for college, which has shot up 15 percent in the last two years. Your Australian bros have a minimum wage more than double ours — about $16 an hour. That’s closer to what you need.

To Our Older Readers: The myth that young people “have it easier” abounds. Many are trying to launch without family help. If you know such young people, consider ways to help them gain traction. Your generosity is good for them, you, and the economy.

Dear Readers: The proposal to raise the federal minimum wage from $7.25 to $9 is a step in the right direction. However, I hope the states with higher costs of living go farther. Some cities aren’t waiting to take care of their residents. In Long Beach, California, for instance, 63 percent of the voters passed a minimum wage pay increase for non-unionized hotel workers to $13 an hour.

Some people worry that a higher minimum wage will cause jobs to evaporate. But that’s not what we’re seeing. Of the ten countries with higher minimum wages than ours, Australia, Belgium, Canada, France, Ireland, Luxembourg, the Netherlands, New Zealand, San Marino, and the United Kingdom, only France and Ireland have a higher unemployment rate than the United States as of January 2013.

Student loans are the “answer” for most students. How else can they attend college on their wages? You’ve seen the despair in today’s column. I was shocked to learn from the unbiased Face the Facts USA website, that student debt has grown 280 percent since 2003. To put that in perspective, total student loan debt is a whopping $914 billion — more than our total consumer credit card debt of $602 billion. Only home mortgage debt is higher.

The average 2012 college graduate owes $28,720 in student loans. Some owe six figures. This is a problem, Houston, especially when 53 percent of recent graduates are unemployed or only able to find part time work. 

Not to mention that the work they find pays so little. Over 26 percent of all minimum wage earners are between the ages of 20 and 24. Another 23 percent are teenagers.

Brandon, congrats on getting a heck of a deal on your apartment! According to the National Low Income Housing Coalition, no minimum wage earner can afford a two-bedroom unit at fair market rent — anywhere in the United States, not even Maine.

Again, I urge our older readers who are financially solvent to think of how they can help a young person launch. Many do not have parents helping them and it behooves us all to assist them. If you don’t have money, think about assets such as cars, rental properties, computers, printers, garden produce, groceries, etc., that can be given, loaned, or heavily discounted.

One last thing regarding being “out to lunch.” Another fact I was shocked by: the federal minimum wage for tipped employees, such as wait staff, salon workers, and parking attendants is only $2.13 an hour. Please tip generously. —Lauren

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  1. By Margie from Sonoma, CA on 02/19/2013

    My best friend and I found out how difficult it is to live on your own these days the hard way.  We were both living with our parents while attending Community College and had part-jobs.  We were both tired of parents who still treated us like children and thought they could tell us what to do even though we are legally adults.  We were both also tired of sharing a room with our younger sisters with whom we did not get along. 

    We figured we could afford an apartment if we shared the costs.  We got a one bedroom apartment to keep down the rent and figured that sharing a room would be no problem since we’re such good friends and comfortable undressing in front of each other, and figured it would be much more pleasant than sharing a room with our sisters.

    The expenses turned out to be much higher than we expected.  We had to practically starve in order to be able to pay the rent and utilities even in a one bedroom on the “poor side of town.”  We also found that sharing a room together wasn’t as easy as we thought.  We had almost as many conflicts as we had with our sisters.  To stay in school we had no choice but to swallow our pride and move back home.  My sister who thought she finally had her own room was not happy to have me move back in with her, to say the least and has been very difficult. 

    I agree that young people do not have it so easy today.

    Margie

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  2. By Lauren Forcella from Sebastopol, CA, USA on 02/20/2013

    Margie—Thanks for writing in with another example. You reminded me of another point I wanted to make—that many young people really beat themselves up about not being able to “make it” on their own—when it’s hardly their fault. The wage-to-costs ratio is practically feudal and keeps everyone down. Smart move to stay in school, even if it meant going back home.—Lauren

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  3. By Tammie from Rancho Cordova, CA on 02/20/2013

    It’s not just young people trying to make it on their own who face these hardships.  Our mom is a single parent with a low paying job and we just barely get by.  Our dad skipped out on us and we don’t even know where he is and I don’t even care anymore.  We just live in a 1 bedroom apartment cause that’s all our mom can afford.  Me and my sister and our mom all have to share the bedroom and me and my sister have to share a bed.  Our brother has no room at all and has to sleep on the lumpy couch. 

    However, I try to tell myself that we should be grateful for what we have.  At least our mom has a job.  Many people are unemployed and would be glad to have our mom’s low paying job.  At least we have a roof over our head and food on the table when many people are homeless and don’t have food to eat and would be glad to trade places with us.  I know girls who live in very nice homes who actually complain because they have to share a room with their sister if you can believe that and it makes me made when my sister and I would be very happy to be sharing a room in a nice home like they have.

    I think that people who think they have it tough should be grateful for what they have and realize that it could be alot worse!

    Tammy

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  4. By Lauren Forcella from Sebastopol, CA, USA on 02/22/2013

    Tammie—I’m glad you brought this up. Many parents are struggling on low income today, too. It’s a shame and I’m sorry you’re in this situation. I I hope you won’t judge too harshly those friends and peers who complain while they have so much and can’t begin to relate to your situation. It’s not their fault either, they just have no way to understand. I grew up very poor also, with a single mother. You are correct that gratitude is key. They say poverty can make a person take a low road in life (crime, drugs, etc), or a high road, where it actually lifts the spirit, making a person gracious, deep, caring of others, wanting to make something of their lives and better the world. Even more reason for you and your siblings to do well in school, be thoughtful in how you party, and head to college however you can. You kids may be your mom’s only hope in old age.—Thank you for writing in. Love, Lauren

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  5. By Lauren Forcella from Sebastopol, CA, USA on 05/13/2013

    Dear Readers—Our college student loan interest rates are set to double on July 1 of this year. They will then be 7 times the interest rate that the federal government makes loans to banks. This link sends you to a bill proposed by Senator Elizabeth Warren to make sure our college students are treated fairly and are able to become contributors to a strong middle class.

    It’s a must-watch 5 minute tape of her proposal to congress.—Lauren http://www.upworthy.com/senator-uses-logic-to-suggest-that-maybe-we-shouldnt-let-banks-rob-your-kids-awesome-bill-ensues-3?g=2&c=upw10

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  6. By Lauren Forcella from Sebastopol, CA, USA on 10/01/2013

    Just saw this video that says it all regarding how tough it is for Millennials today to get launched. It’s by and about Millennials. Must see and share!

    Please hang in there and don’t give up hope. I believe in your generation SO MUCH!!—Lauren

    https://www.upworthy.com/the-best-response-for-when-anyone-calls-young-people-lazy-today?c=upw1

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