Living on Minimum Wage – Is It Possible? (Live the Wage Challenge)

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In the summer of 2014, several prominent politicians made an unusual choice. For one week, they all voluntarily set aside their generous salaries and tried to live on just $7.25 an hour – the federal minimum wage.

No, they weren’t crazy. They were taking the Live the Wage Challenge.

This challenge was created as part of a campaign to raise the federal minimum wage, which hasn’t increased since 2009. The campaign encouraged politicians, bloggers, and others to try living for one week on minimum wage and write about it. The organizers set up a discussion on Twitter at #LiveTheWage for people to share their experiences. Their goal was to show people firsthand how difficult it is to live on $7.25 an hour and encourage them to support the wage hike.

All those who took the challenge say they learned from the experience. Mostly, they say, it helped them understand how difficult it is to get by on minimum wage. But also, they learned to distinguish between wants and needs – to recognize which of their expenses were truly necessary, and which were extras they could cut if they had to. Ultimately, they came away from the experience more grateful for the little luxuries they once took for granted.

Rules of the Challenge

The official website for the challenge, which has now been taken down, outlined both the purpose of the challenge and the rules for taking it. In a nutshell, you get $77 per week for each adult in your household to pay for everything except your housing expenses.

Here’s how the website explained that figure:

  • Weekly Income. The challenge gives you a weekly budget of $290 based on 40 hours of work at $7.25 per hour. The Live the Wage website didn’t explain what to do if you come from a two-income household, but most couples who took the challenge simply multiplied this number by two, pretending that they both earned minimum wage.
  • Taxes. From your $290 salary, take out $35.06 for taxes. The website said this was the average amount that minimum-wage workers pay in tax each week, including federal and state income taxes and the Social Security payroll tax.
  • Housing Expenses. The website gave $176.48 per week as the average amount a minimum-wage worker pays for housing. However, it didn’t explain where this figure comes from or what it includes. An article about the challenge in TIME suggests that rent and utilities (monthly bills for gas, electricity, and telephone service) should be treated as part of the $176.48 weekly housing costs, not part of the $77 weekly budget, which is money leftover after housing expenses are deducted.
  • Final Budget. Deducting the taxes and housing costs from a $290 weekly salary leaves $78.46 per week. It’s not clear why the organizers of the challenge chose to round that figure down to $77 a week – perhaps it was to make it divide evenly by seven, giving a budget of $11 per day. This amount has to cover all non-housing expenses, including food, healthcare, transportation, childcare, and entertainment.

Stories From the Challenge

The original sponsors of the minimum wage challenge were three Democratic politicians: Representative Tim Ryan of Ohio, Representative Jan Schakowsky of Illinois, and Ted Strickland, the former governor of Ohio. They took the challenge the week of July 24, 2014, the fifth anniversary of the last increase in the minimum wage. Several other politicians joined them, along with a few bloggers, including myself.

Some of the people who took the challenge were trying to support a family on their pretend minimum-wage salary, while others had only themselves. Some made it through the whole week, others went over budget, and nearly all of them ran into problems they hadn’t expected.

Mixed Results

Most politicians who took the Live the Wage Challenge couldn’t manage to stretch their minimum-wage budget through the whole week. Strickland’s $77 ran out on Thursday evening, the fifth day of the challenge. Schakowsky, in an account of her experience on a blog run by the U.S. Department of Labor, says she and her husband “didn’t quite make it” through the week, though she doesn’t say just how long they lasted. And Ryan ran short with two days left, spending his last $4 – plus a little bit more – on a bag of trail mix right after returning to his office in Washington.

Bloggers who tried the challenge had a little more success. Christine Owens, writing for Raise the Minimum Wage, went over her limit as a result of a friend’s birthday lunch. Joshua Mbanusi, at the anti-poverty organization MDC, extended the challenge across several weeks, succeeding on weeks one and three but going over-budget on week two. As for me, I made it through the entire week with money to spare, though that was largely because I was lucky enough not to run into any unexpected expenses.

Unfortunately, I couldn’t find any stories out there from people who took the Live the Wage Challenge as single parents. All the participants who had kids to support also had two incomes. Yet in reality, about 1 out of 10 minimum-wage workers is a single parent, according to data from the Economic Policy Institute. As the stories show, this challenge is a struggle even for families with two working parents; presumably, it would be even more difficult for single parents.

Biggest Challenges

Different people had different reasons for failing the challenge. In nearly every case, it was an unexpected expense that put them over their budget, but those expenses fell into several different categories.

The tricky areas included the following:

  • Transportation. Schakowsky says “a big chunk of her budget” went toward a 140-mile car trip for her granddaughter’s birthday party – even though she counted only the cost of gas and not maintenance or insurance. Mbanusi writes that he started buying just $10 worth of gas at a time, rather than filling his tank, and a $24 bill for routine maintenance nearly wrecked his budget for week one. And Strickland describes showing up late for a meeting because he had to walk from his apartment – in 90-degree heat – rather than taking a cab.
  • Food. Nearly everyone who took the challenge says eating healthy food was a problem. Only a few say they actually went hungry, but most say their diets were less varied and less healthful during their minimum-wage week. Strickland says he couldn’t afford most fresh fruits and vegetables and had to rely heavily on cheap staples like bread, bologna, bananas, and peanut butter. Schakowsky reports that she and her husband “stretched a package of romaine and a few tomatoes to last the week.”
  • Health Care. Mbanusi says his budget went off the rails in week two when he had to pay $40 for a doctor’s appointment he’d made weeks earlier. Ryan notes that the first big stumbling block in his week was a $25 charge for vitamin D drops and a few other items for his newborn baby. Strickland, in an interview on the left-wing website ThinkProgress, says he was lucky to have medicine at home when he caught a cold early in the week; otherwise, he says, “I don’t think I would have been able to buy that Afrin nasal spray.”
  • Kids and Pets. For Ryan, the expense that finally knocked his budget off track was his 10-year-old daughter’s summer camp. Schakowsky says she learned that “pets are luxury,” as one of her biggest expenses was caring for her dog Lucky, who is disabled.
  • Laundry. One surprising stumbling block in Schakowski’s account of her week was the cost of laundry. She says that she and her husband not only couldn’t afford to pick up their dry cleaning, they couldn’t even spare the quarters to do laundry in their building’s coin-operated machines.

Lessons Learned

Even though most people who tried the challenge couldn’t beat it, most of them still say it was a valuable experience. Here are some of the lessons people say they learned by spending a week on minimum wage:

  • Gratitude. Several participants say the challenge made them realize how lucky they are just to be able to pay their bills each week and not have to worry about how to pay for random expenses, such as a car repair or a doctor’s appointment. For instance, Strickland says in an account of his minimum-wage week for Politico Magazine that his experience with the cold medicine made him realize how for many workers, even small expenses can “prevent the budget from stretching as far as it needs to stretch.”
  • Empathy. Most participants in the challenge say they discovered how stressful it is to live on a bare-bones budget and what a toll it takes on your mind and body. Several of them say this was the first time in their lives they had actually gone hungry. Living this way for just one week made them realize how hard it must be to do all the time and made them care more about finding ways to help people who are struggling.
  • The Difference Between Wants and Needs. Most challenge participants write about the small treats they found themselves skipping during the week: a dinner with friends, a drive-in movie with the kids, a cold beer after work, a cup of coffee. Even at the grocery store, they found themselves classifying certain items, from steaks to sports drinks, as luxuries they couldn’t afford.
  • How to Depend on Others. Being able to turn to friends and family for assistance makes a big difference when you’re in a tight spot financially. Although the rules of the challenge say not to accept free meals at friends’ houses, several participants admit that they did just that, and it greatly eased the pressure on their budgets. One of my biggest discoveries about this challenge was how much easier it is to do as a couple, since there are so many costs you can reduce by sharing them, from food, to gas, to Internet service. I concluded that a single person making minimum wage would have a much easier time either living with adult family members or having a roommate to share living expenses.
  • The Value of a Dollar. On a budget of just $77 a week, every dollar is crucial. In her Department of Labor blog entry, Schakowsky says the challenge taught her quite literally what a dollar can do: “It can buy a can of tuna or baked beans or a box of pasta.” Other participants in the challenge talk about stretching their dollars as far as possible by using coupons, cutting back on driving, and relying on free entertainment.
  • The Importance of Good Planning. Many participants discovered that when money is this tight, planning is essential. They learned to budget down to the penny, plan their meals, keep track of everything they ate, and time their work hours to coincide with bus schedules. Schakowsky says a minimum-wage paycheck leaves “no room for error,” as even small mistakes, such as forgetting your lunch, can derail your budget.
  • The Benefits of Foot Power. During our week on minimum wage, my husband and I used our car only once, to stock up on groceries for the week. He rode his bike to work every day, and I did all my other errands on foot. Strickland also says that he walked as much as possible during his minimum-wage week to keep his transportation costs down.
  • The Cheapest Way to Eat. Of all the people who took the challenge, I was the only one who didn’t eat any differently during the week than I do normally. There are two reasons for this: First, my husband and I are near-vegetarians, and second, we have a home garden that supplies us with fresh veggies during the summer. This meant the only groceries we needed to buy were staples like flour, cheese, oatmeal, and milk, plus a bag of fresh apples from the farmers market. With these plus the produce from our garden, we were able to eat our usual healthy diet and even squeeze in a trip to Starbucks over the weekend.

Problems With the Challenge

Although the Live the Wage Challenge is useful as a learning exercise, it’s also unrealistic in several ways. The limitations of the challenge include:

  • Less Stress. Living for just one week on a minimum-wage budget can’t begin to mimic the stresses of living that way week in and week out. The people who take the challenge know that it’s only for a week, and they also know that there are no real consequences even if they don’t make it through the week. If an emergency crops up, they can always just pull out their credit cards and declare the challenge a failure.
  • Inability to Budget. Many of the expenses workers have aren’t paid on a weekly basis. The challenge takes out money for housing, which is usually a monthly expense, but it doesn’t account for occasional costs like clothing or insurance or maintenance for cars. In real life, workers know that these are expenses that will come up eventually, so they have to set aside money for them ahead of time. In the challenge, though, the only expenses that count are weekly ones.
  • No Way to Plan for Emergencies. In a long-term budget, you can plan for expenses that only come up occasionally, such as car repairs or doctor visits, by setting aside a few dollars each week. But on the Live the Wage Challenge, if one of these expenses comes up, you have to pay the entire cost immediately out of your $77 budget. Many participants say emergencies like this left them with too little cash to get through the rest of the week.
  • No Adjustments for Location. The minimum wage challenge requires you to work with a budget of $7.25 an hour, even if the actual minimum wage in your state is higher. So if you live in a state where the cost of living is high, you end up having to pay above-average prices for everything without an above-average minimum wage to make up for it.
  • No Way to Change Housing Costs. The challenge allots $176.48 of your $290 paycheck for housing, based on some theoretical “average” cost. It doesn’t give you the option of cutting your housing cost, which is one of the most important things you can do when you’re really living on a minimum-wage budget. Most of the people interviewed in this New York Times article about living on the minimum wage say they live with family members, share a home with a boyfriend or girlfriend, or rent a room in a friend’s house.

A more realistic way of figuring out whether you could really survive on the minimum wage long-term is to use this interactive tool via The New York Times. It starts by calculating your yearly income, based on the actual minimum wage for your state. Then you take out all your expenses for the year, including taxes, housing, healthcare, food, and transportation. This shows you how much you could save – or how much debt you would pile up – over the course of a whole year, and what cuts you would have to make to keep your budget under control.

Final Word

Despite its flaws, most participants seem to think the Live the Wage Challenge is a worthwhile experience. Ryan, discussing the challenge on his Facebook page, acknowledged that it couldn’t match the stress of living on minimum wage for real, but he said it still helped him to understand his constituents and their needs. Schakowsky says it convinced her that living on a minimum-wage salary is not just difficult but impossible. And I learned how well our frugal lifestyle stands up to the rigors of a true bare-bones budget, and which of our money-saving strategies are most helpful.

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