January 02, 2014
Where Would A Minimum Wage Of $15 An Hour Put You?

If you are single, then by world standards, probably in the top 5 percent, almost certainly in the top 10 percent.

Here's how I come to that tentative conclusion:  A $15 an hour wage gives you a yearly gross income of $30,000, assuming you work 40 hours a week, 50 weeks a year.

In 2005, a net yearly income of $34,000 put you in the top 1 percent, world wide.

The United States holds a disproportionate amount of the world's rich people.

It only takes $34,000 a year, after taxes, to be among the richest 1% in the world.   That's for each person living under the same roof, including children.  (So a family of four, for example, needs to make $136,000.)

So where do these lucky rich people live?  As of 2005 -- the most recent data available -- about half of them, or 29 million lived in the United States, according to calculations by World Bank economist Branko Milanovic in his book The Haves and the Have-Nots.

If we allow for economic growth and inflation, that $34,000 might be, say, $40,000 now.

And that would be after taxes, so even in 2005 a gross income of $30,000 would not put a single person as close to the 1 percent as you might think, at first glance.  So that is why I suggested that singles earning a wage of $15 an hour would now be in the top 5 or 10 percent, rather than, say, the top 2 percent.

Different people, depending mostly on their ideologies, will draw different conclusions from my back-of-the-envelope analysis.  But I think most of you will agree that those who live in the United States are fortunate.

Cross posted at Jim Miller on Politics.

(Here's Milanovic's book.)

Posted by Jim Miller at January 02, 2014 09:38 AM | Email This