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Minimum Wage Doesn’t Cover Minimum Needs

With most Americans living paycheck-to-paycheck and half of them working more than one job to get by, minimum wage workers are struggling hard.

A new survey from CareerBuilder says two-thirds of Americans can’t make ends meet within their minimum-wage jobs. And it doesn’t stop with the lowest income bracket: almost 1-in-5 workers at all salary levels admit they struggled to get by at some point in the last year.

Right now, the vast majority of Americans believe the federal minimum wage, currently at $7.25 an hour, should be increased. Only 5 percent of employers think it’s fair at the rate it is right now. Two-thirds think it should be more than $10 an hour and even 15 percent say $15 an hour or more is a fair minimum wage.

“Fair wages and benefits such as paid sick days are a hot political topic right now, and they’re also on employers’ minds as the public and private sector continue to work to provide good jobs, which will lead to a stronger, more stable workforce, leading ultimately to a healthier economy,” says Rosemary Haefner, chief human resources officer for CareerBuilder.

Even though 30 percent of employers admit that they plan to hire minimum wage workers this year, more than two-thirds of them think the hourly rate should go up. And this isn’t anything new. Employers were hoping for an increase in minimum wage two years ago. Since then, even more employers have come around to the idea of a higher hourly rate.

Until then, though, Americans are struggling financially and half of them are working more than one job to make ends meet. Even upper-middle-class earners are having a hard time due to financial insecurity. The CareerBuilder survey says 66 percent of respondents feel “more fiscally responsible since the recession,” but most Americans — 68 percent — are struggling hard with debt. Employees say credit cards (64 percent), auto loans (47 percent), and mortgages (45 percent) were among their top struggles.

Low income means less savings

With all their financial resources going to paying bills and debt, Americans are finding it harder than ever to save money. CareerBuilder says more than a third of respondents don’t even participate in a retirement plan like a 401(k) or an IRA and 25 percent haven’t set aside any savings within the last year.

And that’s a big problem right now, because if there’s one thing Americans fear more than dying, it’s watching their money run out before they die. Furthermore, most don’t feel financially ready to live to 100 years old or even longer, and that’s because they didn’t prepare for it when they were younger.

Don’t believe that you’ll work longer into your golden years to make up for lost time. Most say they do, but don’t end up actually doing it. There’s a likelihood you’ll live longer than you think you will and no, you won’t spend less once you retire.

Less income also means putting off major purchases until later in life or possibly, not at all. Along with not putting money toward retirement, it also means delaying buying a home and possibly getting married and having children because of the extra expenses.

Posted in: Budgeting & Saving, Career and Business, Credit & Debt, News
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