Are you thinking of moving to California? You’ll want to know the cost of living here and how much you should earn to live here comfortably. So, can you live off minimum wage in California?
The minimum wage in California is $15 per hour, which equates to $28,800. This is far below the living wage of $34,337 for a single person. However, location and number of dependents will determine whether it’ll be enough. For a single person, it might be, but a family can’t survive on minimum wage.
Although a single person might be able to survive on minimum wage, it’ll still require cutting down on all expenses to the bare minimum. Here, we discuss whether it’s possible to live off minimum wage.
Minimum Wage in California
California has one of the highest minimum wages in the country. Its minimum wage of $15 for large employers, i.e., those with more than 25 employees, makes it one of the highest in the country, and small employers who have less than 26 employees will also have to start paying a $15 minimum wage by 2023. Not only that, but the state also plans to increase the minimum wage based on inflation.
Living Wage in California
While the minimum wage in California is high, the living wage is much higher, showing that the what’s minimum may not be enough. A living wage is an amount that an individual has to earn per hour to support themselves and their family. The living wage in California for a single adult is $19.41, while a family will require $66.31 if only one person is working. After-tax, a single person’s required annual livable wage is $34,337, while a family of 4 would need $114,715.
Factors That Determine Whether Minimum Wage Would Be Enough
Here are factors that could determine whether minimum wage would be enough:
Where you live in California greatly determines how much you need to live. The number one thing you’ll have to spend on in a major city is rent. Of course, that varies depending on the city you’re living in. For example, those living in Los Angeles and San Francisco, where the average rent is over $2,000, will find it almost impossible to live on the minimum wage. But if you’re staying in places such as Redding, where the cost of living is low, and homes are cheap, it might be possible to survive on the minimum wage. Even then, it won’t exactly be a very comfortable living, especially as the rent, mortgage, and even the cost of essential goods continue to rise. However, it’s much more difficult to find jobs in the smaller cities.
2. Number of Working Adults in the Family
Another serious factor that’ll come to play, especially for couples and families, is the number of working adults. The minimum wage applies to everyone and doesn’t consider the dependents that each family may have. This means that the higher the number of dependents, the less likely the minimum wage would be enough. For example, the living wage for a family of 4 with three dependents is $47.49, while a family of 4 with only two dependents, which means both adults are working, will only require $33.64. This represents the necessary hourly rate, so it’s significant when considered in terms of annual income.
If you’re living in California, here are the expenses you’ll need to spend. Knowing these expenses might help you cut down the cost to cut down the cost.
Food is one of the significant expenses for anyone living in California, and the cost is high, especially if you’re eating out. A single person spends $4,091 on food annually, while a family of 4 will spend $14,652. One of the ways to cut down on how much you spend on food is by eating at home more often. Regardless of your location in the state, you’ll need to cut back on buying food outside, maybe even restrict yourself to basic food such as ramen, beans, and rice to live on that income.
The shelter takes the cake when it comes to what you spend most of your money on. Regardless of where you choose to live in the state, housing will strain your income if you earn minimum wage. The average amount spent on housing for a single person is $16,314, while a family of 4 would spend $32,161. Thus, minimum wage might not be enough to cater to this expense. Of course, there are places where you can spend less on homes, and you should try as much as possible to opt for those places. Another option for some people is to live inside a mobile home or RV. This generally costs less and saves some money that would otherwise go to rent. Of course, it has its challenges, including finding where to park the vehicle and the general hostility of certain people.
Transportation can be quite costly in California, depending on several factors. A single person needs $4,264 for transportation annually, while a family of 4 could spend $11,620. It’s possible to cut down this cost by opting for public transport all the time, and this is likely what anyone earning minimum wage would have to do in the state. This way, they can save on gas or even the cost of getting a car. However, depending on where you live in the state, you may not have access to public transportation.
4. Child Care and Healthcare
One of the advantages of being single is not having to spend on childcare which is high in California. The average cost of childcare annually in the state is $11,129 per child. This makes it almost impossible to live on minimum wage while having a child. On the other hand, medical costs about $2,388 for a single person, while a family of 4 would spend over $7,000. Of course, that’s still below the amount you might have to spend on a single child.
The cost of living in California is provocative, making even its high minimum wage insufficient to meet the basic expenses. As a single person, you might be able to survive on minimum wage but only in specific locations, and it’s not sustainable.