Widget time! In an article noting South Dakota’s unique effort to lower the minimum wage (yay, us), Will Drabold includes this cool clicky box showing the estimated basic family budget for single South Dakotans (if two can live as cheaply as one, then who needs a separate chart for couples?):
Note that the Economic Policy Institute numbers that Drabold plugs into his widget indicate that South Dakota’s cost of living ranges from 7% below the national average for childless singles to 13% below the national average for a single parent with one child. Interestingly, while the EPI data generally show higher costs of living in Rapid City and Sioux Falls/Sioux City (the EPI widget doesn’t distinguish, although anyone who’s visited can tell you there is a world of difference between Sioux Falls and Sioux City), single life is 1.5% cheaper in Rapid and 4.2% cheaper in the Sioux Falls/City metroplex (and somehow the widget doesn’t factor in the immense savings of riding one’s bicycle everywhere!).
But even in that cheap eastern metro, minimum wage still falls short of paying the bills. EPI says a single person in Sioux Falls/City can get by on a basic budget of $25,429. Full-time work at $8.55 an hour, 40 hours a week, 52 weeks a year, just barely misses 70% of that cost. That single person would have to work over 57 hours a week all year to clear all expenses in Sioux Falls/City and nearly 60 hours a week in rural South Dakota.
Bump the household up to two adults and two children, and the minimum wage budget gets much tighter. The South Dakota urban cost of living for that family is $58,658. If Mom and Dad each work 40 hours a week at minimum wage, they’ll make 60.6% of that budget. Clearing that basic budget requires almost 132 hours of minimum-wage work each week. Split that burden between the two parents, and Mom and Dad each have to put in 66 hours a week. So much for family time.
p.s.: A minimum wage of $12.23 an hour would cover the single Sioux Falls/City denizen’s bills if she worked 40 hours a week every week of the year. To cover the two-parent, two-child family’s bills, Mom and Dad would each need full-time jobs paying $14.10 an hour.
Cory,
First, congratulations on finally finding a COL that includes Rural South Dakota. That site is a pretty nifty repository of information. For instance, it looks as though more people are moving from our neighboring states into South Dakota than leave to those states, save Wyoming. That means there are more Minnesotans and Iowans moving to South Dakota than South Dakotans moving to Iowa and Minnesota.
Isn’t that something?
However, back to your argument that those earning the absolute minimum should be able to afford the average expenses just doesn’t jive.
I think it’s a better question to ask how does the minimum wage earning family do when looking at the lowest recorded cost of living within a community / region, and compare that to other regions. Even in Sioux Falls, there are homes for sale for $35,000. They’re not grand, but they’re a roof over the head. We shouldn’t expect the bottom of the income scale to afford the average any more than we should expect the average wage earner to be able to afford the most expensive lifestyle.
The fact that the minimum wage for a family gets them 60% towards the average is actually remarkably good.
So Mom, Dad & 2 kids making minimum wage in SD Metro is 60.6% of the average cost of living.
Same family making same money in metro Minneapolis/St. Paul ($5,803 avg COL) means they’re making 51% of average expenses, so they’re further behind.
And that’s assuming $8.55 an hour, when Minnesota’s minimum wage is $7.75.
The majority of Americans live paycheck to paycheck. I ask the Novstrups or anybody else living on minimum wage or a few dollars over to see if they can get ahead after a few months.
I get just over 11 grand a year on SS. Yippee, I am too poor to move to South Deplorable.
Average annual costs for rural Iowa for one adult and no children is $26,478, Mike… looks like you can’t afford to live in Iowa either on $11,000.
I would question this site, they have Sioux City as a town in SD. I know for a fact that Sioux Falls is very comparable to Rochester yet they have Rochester MN as a far more expensive place to live.
Wayne B: I am going to ask a realtor if in fact there are homes in SF for $35K. You may talk me into thinking there is a two room house, maybe. I don’t know how you could raise a family in that. I’d agree that it wouldn’t be much of a house at that price, but I am thinking they are so far and few between that to say there are “houses” in SF for $35K seems like a stretch. Say, one was to find one–I truly wonder if a bank would approve a loan for such a thing.
I have lived in iowa for 63 years and several months. I have lived on less money,too. I will live here until I die because I am a born and bred iowan (and mostly proud of that fact)
I have an asparagus patch to die for and refuse to leave my Grandgirlies apple trees behind.
Jenny-there is a North Soo City, South Dakota in Union County.
Mary, I did a quick search on Zillow for 1+ bedroom homes with a price ceiling of $65,000. There are 24 of those on the market right now in Sioux Falls (and 52 total within a reasonable driving distance of Sioux Falls).
The cheapest are trailer homes.
They’re not extravagant, but they’re shelter. I’ve lived in one. Nothing wrong with it. And banks do approve folks for those loans; I have a friend in Lennox making pretty much minimum wage and he managed to secure a loan for a $50,000 house. Now that his wife is working, they’re actually doing pretty well; they’re able to save and have bought a second new-to-them car.
I don’t know how old you are, Mary, but not that long ago it wasn’t any big deal for a family of 6+ to live in a one or two bedroom house. You’d roll out bedding on the dining room floor next to the wood / corn stove and stay warm that way.
Mike, good for you. I really mean that. But please stop disrespecting an entire state, and the people within it who are eking out an existence.