The Road Most Recently Traveled

An interesting question:

Does a one-parent family of three, making the minimum wage of $14,500 a year, have more disposable income than a family earning $60,000 a year?

That’s the provocative claim made by pseudonymous blogger Tyler Durden at the popular finance blog Zero Hedge. Durden produces a chart that compares inputs like income, payroll and federal income taxes, child care costs, and welfare benefits from programs like Medicaid and the Children’s Health Insurance Program for theoretical families of various income levels in Mississippi.

The calculation yields an “economic benefit” of $37,777 a year for the family making minimum wage but only $34,366 for the family making $60,000 a year. The analysis also indicates that a family provider working only one week per month at minimum wage will make 92 percent as much as the provider earning $60,000 a year as a result of savings on child care and Medicaid’s low deductibles and copays.

Some questions are raised about the origins of the analysis on which this is premised, but this does seem to be the general direction in which the country has been heading.

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