You always hear about the 1%, the rich and the poor. A lot of our life experiences/knowledge/attitudes come from the group we fall in. As a child we cannot help which group we are brought up in. It’s either our family has “old” money, new money, some money or no money. You hear people saying it’s not their fault that’s how they were raised. Other people come back with you decide who you are and what your going to do. But do you really?
Growing up in the poor group I know it quite well. The Poor gets divided into three sub-groups. Dirt Poor, Working Poor, WannabeRich Poor. Dirt poor is just about any household making under $25,000. Working poor is a household making $50,000-$100,000. WannabeRich Poor(Middle Class) is a household making $125,000-$200,0000. Now as you can see there is middle areas in between each group. These are the grey areas. If your in this area you are one move/decision/meeting/conversation away from gaining a level or falling backwards.
The majority of households are in the working poor area. You are in a constant battle with trying to to keep up with the Joneses. You have nice stuff or are able to at least buy and not have it hit the checkbook to hard. Those in the dirt poor group are busting their asses and not seeing the money flowing in. Their ability to buy nice things is far and few between. A single purchase could set them back months/years. The WannabeRich are able to buy what they want within reason. They want what the rich have but have to be realistic in what they acquire. Itwould be nice to have a yacht…but if you don’t make that kind of money…it’s not feasible.
Growing up I have had the opportunity to be in two categories. No matter what group your in your always looking/striving to be in a higher bracket. That’s just life…you keep trying to get higher/faster/stronger.. The area between dirt poor and working poor really sucks. Your right there in the middle and you either accept the bottom or fight for the top. ($25,001 – $49,999) The reason it sucks so bad is because of the following…
So your single and your making $18.00 an hour. A lot of your buddies who started work after high school are making $10.00 – $15.00. It’s funny how people think. People making $10.00 think $15.00-$20.00 is this grand thing. Breaking it down let’s say you make $18.00 so your annual $37,440. You get bumped up to $19.00 an hour so your annual is now $39,520. Your making an additional $2,000+. Your excited…your buddy who makes $18.00 still is a little jelly. End of year taxes come and you now realize your in a new tax bracket. You just got bumped to 22%. Your buddy is paying $4493 for his $37,440. Your excitement with that extra $2000 ends real quick. Your new payment is $8694. At the end of the year your buddy who makes less than you will actually have made more than you. Whattt? Buddy ($37,440 – $4493 = $32,947) You ($39,520 – $8694 = $30,826) He is making less than you but bringing home $2000.00 more than you a year. Let’s say you get another dollar. Your annual moves to $41,600. Your new tax bill looks like $9152. After paying that your 40K+ turns into $32448. So now your buddy is only bringing home $500.00 more than you. To ice the cake you got someone making $17.00 ending with $31,117 after taxes. Uggggglllyyyy!!
Being in the grey area is where “the struggle is real”. You see a lot in the news where high power African Americans blame Democrats for giving the community freebies. They believe that it keeps them from succeeding further. I agree with their idea but the problem is much bigger. You can’t fault people for getting what the system offers. You have to do the best for you and your children. So…using same example in last paragraph…you make $41,600($20.00/hr) a year. After taxes you bring home less than someone making $17.00, $18.00 & $19.00 an hour. On top of that let’s say you have three kids or two kids and a partner who doesn’t work. In the state of CT you can get free healthcare for yourself and your kids if your household income for family of four is under $41,348. So not only do the people that bring home up to three dollars less than you bring more home after taxes….but they also don’t have to pay for their own insurance for themselves or their kids. Insurance is different for every company but for mine it would cost $500.00 a kid per month. Some healthcare jobs would cost $500.00 a month including kids and yourself. So on top of everything you end up dishing out at a minimum $250.00-$2500.00 a month on insurance.
How does that make sense at all? You could be spending $3000.00 to $30,000.00 a year solely on health insurance? How crazy is that? If you made a dollar less you would avoid that cost all together! Broken down there is no incentive when their is freebies by government to make more when your in this area. If your making $10.00 an hour I get it there is incentive galore until you hit that $18.00 mark. Breaking it down further you also have energy assistance. So during the winter months when the majority of people are getting baptized with oil/gas prices some are getting assistance. $38,625 is the lucky number that you have to be under. That means once you hit $19.00 an hour with family of four you don’t get that assistance. Winter months in Connecticut would be October – March. Six months you are paying $250.00 – $600.00 a month for heating. Another $1500.00 to $3600.00 you can deduct from the pot. That extra $1.00 or $2.00 really looking that good anymore?
Let’s do a final comparison. Let’s say you spend $2500.00 a winter in heating costs. You spend $10,000.00 in insurance for your whole family. At what point would you start bringing home more than someone who is making $18.00 an hour. $18.00 = $32,947.00 / $28.00 = $ 45,427.00 – $12,500(Insurance/Heating) = $32,927.00. To answer the question $28.00 would be almost the same….$29.00 an hour would be more. This is the problem…this is why people stay in the dirt poor or very close to it and don’t strive to be part of the working poor. I don’t want to even mention the food stamps…if your making under $18.00 you are eligible for them even if you only had a family of 3. That pushes our $29.00 an hour to probably $30.00. Something has to give. It could be free education or free healthcare. There has to be some kind of a “filler” that makes people in this grey area want to make more and not less. There are people I know that have turned down raises so that they wouldn’t lose their free insurance. Now I know every state is different and each has it’s own income guidelines but something needs to be done. All I know…is when something is finally done…one of these sub-groups is going to be very angry. Until then…