What does it cost to live a life?

What does it cost to live a life in America today?

I live in Raleigh, NC, so let's use it as an "example city." Raleigh is one of the top-50 cities in America in terms of size, but it still has a reasonable cost of living compared to NY, LA, Chicago, SF, etc. Here's what it costs to live a life in Raleigh for a family of four:

• A family of four needs a three-bedroom apartment. Sure they could all cram into a one-bedroom apartment, with the parents and kids bunking together in that single bedroom. But this is America, not the slums of a third-world nation, so three bedrooms for four people. You can spend anywhere from $800 to $1,200/month for a decent three-bedroom apartment in Raleigh right now. Let's call it $1,000 and assume renter's insurance is a part of that.
  
  
• A family of four needs health insurance. If the employer is not providing it, it costs something like $600 to $800/month for a family of four. Let's call it $800 and assume all the co-pays, prescriptions, etc. are a part of that.
  
  
• A family of four needs two cars. Again, this is America, not a third-world nation. Very few cities provide the public transit network to make car ownership optional, and the rents there will be a lot more than $1,000/month. According to the federal government, a car costs 37 cents per mile to operate right now. If it is a new car, you are paying for the car payments. On a used car you pay a lot more for repairs. There's gas, oil changes, insurance, inspections, etc., etc. That's $370/month + $370/month (two cars) if you assume 1,000 miles per month. $740/month total.
  
  
• Food, cleaning supplies, etc. for a family of four might run $300 per month if great care is taken on shopping. $500 to $600 would be normal.
  
  
• Electricity/gas might run $200 per month.
  
  
• Telephone, water/sewer, etc. - let's call it $50 per month.
  
  
• Clothing - $100 per month
  
  
• Furniture, linens, etc. - $100 per month (we are taking an average here -- obviously there is a lot of furniture to buy when you first move in)
  
  
• School supplies, field trip fees, bake sales, science fair supplies, year books, etc. - $30 per month
  
  
• Property taxes, income taxes, sales taxes, etc. - $150

Right there we are at $3,470 per month, or $41,640 per year.

Now, do we allow this family of four any luxuries? For example:

• A cell phone? ($30/month)
  
• TV with cable? ($40/month)
  
• An occasional movie or dinner out? ($100/month)
  
• A vacation once a year? ($100/month)
  
• A video game system? ($20/month)
  
• A computer? ($20/month)
  
• Internet access? ($15 to $50, depending on the speed)
  
• A camera and/or video recorder to record the kids growing up? ($20/month)
  
• Saving for college? ($500/month)
  
• Saving for retirement in a 401(k) ($400/month)
  
• Child care if both spouses need to work (likely) ($400 to $800/month per child depending on child's age)
  
• Diapers for small children ($100/month if both kids are in diapers)
  
• Chistmas presents?
  
• Dental expenses?
  
• Pets?
  
• Bicycles for the kids? Toys? Books?
  
• Magazine subscriptions?
  
• The morning paper?
  
• Hobbies?
  

If you factor in college, retirement and one week of vacation per year that adds $1,000 per month. If you allow such things as a cell phone and diapers it easily reaches $1,500/month without ever considering child care.

At this point annual income needs to be somewhere between $50K and $60K, which means we are well into the range of real income taxes every year, so tack on another $1,000 per month or more to cover income taxes.

At this point, you can see that a normal American family of four, living a normal and certainly-not-extravagant-by-American-standards lifestyle, in a normal, relatively inexpensive American city, needs something like $60,000 to get by. Yes, you can cut out things like cell phones, retirement savings and college savings and get down to $40,000 per year. You can cut out health insurance and get it down to $30,000 per year. But what, exactly, do you do when someone in the family gets sick? You have to pay for it, and it probably works back out to costing the same as health insurance anyway (assuming you are lucky enough to avoid a major medical expense like a heart attack, cancer, child birth, a car accident, etc. -- then it will cost far more than insurance, making the avoidance of health insurance penny-wise but pound-foolish).

In other words, it costs $40,000 per year minimum for a family of four to live a life in America. Far more if we allow the family to save for college and retirement, have an occasional vacation and buy Christmas presents. The article is completely accurate in its estimates of a "living wage" in America.

Right now, the minimum wage is $5.15 an hour, or roughly $800/month. America's largest employer pays $7.50 per hour on average, or roughly $1,200 per month. The average factory worker makes about $2,000 per month, and that is considered a good wage for Americans. None of these wage scales comes close to allowing a family of four to live a life.

This is where the concentration of wealth has gotten us. Executives are making millions of dollars per year. But more than half of the jobs in America do not pay enough to support a family. By de-concentrating the wealth, we would allow a majority of Americans to raise families, buy homes, send their kids to college, etc. In other words, we would allow Americans to live normal lives in America.