Then There was Light

The other night, a good friend of mine called me in tears. She was one of the people who panicked when I told her I was quitting my cushy job around the corner from the house I rent to paint, invent and try to make do with a part time wage. This friend, let’s call her Tara, is not yet thirty, bright, unusually diligent, and a social worker. She was crying because she was stretched so thin. In addition to her full time day job, she babysits in the evenings for affluent families who allow her to bring her daughter with her on those nights and also works weekends supervising court ordered visits between children and their estranged parents. Tara makes roughly $40,000 a year as a social worker. All together, she grosses about $55,000 a year. Her husband, a chef who also earns around $55,000 annually, had fallen violently ill the day before and had to be rushed to the emergency room. This is a man who has not once called in sick in the eleven years that he and his wife have known each other. He also works six or seven days a week. Their combined income is about $110,000 only because both work well over 60 hours a week.

Tara no longer buys herself coffee in the morning. She hasn’t purchased any new clothes in several years. She and her husband have been trying to save up for a house and despite their long hours were finding it hard to get by on less than their full incomes. In the midst of all this, because she cannot afford to put her daughter in consistent daycare, she also uses time allotted for her lunch hour and breaks to shuttle her daughter around town without a car to various facilities because doing this costs less and is more enriching than daycare.

As supportive as I was of my friend I did not agree with her supposition that her situation was abnormal. Most parents I know are suffering through similar complaints and those of us who are resigned to the fact that we may never own a home in our lifetime are still struggling to put away some money for retirement and college tuition for our children.
Although Tara’s situation may seem extreme to some, many people live just as harried lives with comparably long hours. Any single parent who has tried to find a full time job that, including commute time, fits nicely into the hours that day care operates can attest to it being a miraculous achievement. Some employers are sympathetic, but only because they know that these parents will shorten their lunch hours to accommodate the full 8 hour work day, accept less money than others and will most likely stick around for several years because there isn’t enough leeway in their lives to shop for a better job. How do I know this? More than one employer has told me so, not so much in confidence exactly, but rather as a way of letting me know that they anticipate the same from me.

Even dual income parents have to worry about the time hustle. Spouses have to find jobs with staggered schedules so that one can drop off the kids and the other can pick up the kids. If a couple is lucky enough to have an extended family member who is willing to assist in the parenting of their children, they are most likely supporting that person as well.

Given all these complications it makes sense to me that people un-complicate their lives by doing a cost analysis comparing the pros and cons of working fewer hours. As an example, let me illustrate how earning an annual income of $48,000 is equivalent to earning $28,00o for a single parent with one child, a scenario I am personally well acquainted with.

The prospect is sort of amazing isn’t it? There is such a vast difference in those figures and yet for some of us, they amount to roughly the same lifestyle. Both of these are very specific numbers and they may also be specific to California. The reason for this is the simple fact that in California, $28,000 is the maximum income a two member family can earn and still qualify for any kind of subsidies; earning over $48,000 brings you close enough to a living wage that it is no longer comparable. Your subsidies will increase as you make less but the sliding scale in most subsidy programs is sadly less sliding than it is a gentle slope between two precipices. So if you are making between $24,000 and $28,000 a year, you can apply for and will most likely be awarded substantial subsidy or scholarship for your child on such things as childcare, summer day camps, school lunch (you need to make less than $26,000 for the school lunch subsidy), and health insurance through Healthy Families. If you make less than $23,000 most likely you will be awarded maximum subsidy for every program to which you apply, which for some things means it is free. The CARE program for Pacific Gas and Electric will reduce your monthly bill by 20% if you make under $28,800 for a household with two members.

Once you make over $29,000 for a two member household, most likely you will be given no help. How does a single parent making $29,000 a year with no child-support survive in the Bay Area? If she has to work full time to make this living and doesn’t have extended family to offer free childcare the truth is she can’t. Day care costs $500-$1,100 a month. If her child is in school, she is most likely paying $500 for daycare and rent will cost $850 minimum for a one bedroom. After taxes, she makes less than $1800 a month. This means after rent and daycare, she has less than $450 a month for food, transportation, clothes for her growing child, utilities, health insurance and all the other expenses that I care not to itemize. Yet according to any discussion of the middle class, $29,000 is well above the lowest point that can be considered middle class.

On the flip side, in an article dated October 17, 2007, the San Francisco Chronicle reported that a single parent with two children in the Bay Area needs to earn $65,864 to earn a living wage. They did not mention the cost for a single parent with one child but it is reasonable to assume that it would be well over $48,000 since the adjustment for one child was about $10,000 in the other cost of living figures mentioned.

The reason I am so familiar with the $48,000 annual salary is because that is the amount to which my employer decided to reduce my wage when her company was in the red for three months. The numbers I am about to run made me realize how unreasonable it would be for me to stay in her employ. As a head of household with one dependent at $48,000, I would owe roughly $9,000 more in State and Federal Taxes (based on 2007 tax figures), reducing the difference between $48,000 and $28000 to $11,000. In addition, Earned income credit at the $28,000 mark is $834 for one child and $0 for the higher wage, reducing the difference to $10,166. Also, childcare at $28,000 is about $1000 a year as opposed to $6000, reducing the difference to 5,166. Health insurance for one child, instead of being $9 a month through Healthy Families is $250 a month for an equivalent plan without subsidy. Thus calculating for the difference in healthcare at around $2,800 a year, the difference in wages is further reduced to $2,366. The 20% reduction in utility I mentioned earlier is roughly $240 a year in my case as my yearly utility runs about $1,200; that brings the difference down to $2,126. The cheapest summer day camp offered in the East Bay is the Berkeley Day Camp which costs $195 for a two week session. This fee is reduced to $45 with a scholarship, limited to one session, which saves $150, bringing the income difference down to $1,976. Two or three additional day camp sessions at different facilities would add a savings of around $500, which brings that difference down even further to $1,476. Social Security and Medicaid contributions, greater by $1,532 for the higher income, pretty much takes care of the rest.

In truth, I could find other subsidies that would actually place me in a better financial position at the annual income of $28,000. The biggest is Section 8 housing, a subsidy that greatly reduces housing expenses for those who qualify. This should satisfy those who are critical of the use of day camp scholarships in this comparison. Though it may seem frivolous for someone complaining about not making a living wage to consider day camp expenses, take note that my inability to afford day camp for my daughter two summers in a row was one of the key determining factors for why it was imperative that I quit my former job. Now that I work a half time schedule, my daughter will not be stuck in an institutionalized setting all summer. She will be spending 4 days a week outdoors with me, most likely at a lake or pool, both less than twenty minutes from our home, and at a fraction of the cost of sending her to a day camp. If we take lightly the prospect of our children wasting their entire childhoods in a facility so that the nation can have an abundant supply of productive adults, we are missing the point of being productive in the first place.

I am sure that if a two income family that didn’t have a costly mortgage made similar cost comparisons based on an income reduction in exchange for more time, they would find that it makes much more sense to have one parent stay home or find a half time position in order to eliminate the cost of daycare and other expenses. The reduction in stress alone is worth it.

Ultimately the whole purpose of this exercise is to convince people that working less and making less money will be more profitable in the long run. If you work less, you have more time to invest in your health, which leads to less stress and reduced risk of hospitalization. Many of us have inventive ideas that we may be able to capitalize on if we had the time to follow them through to fruition. If we allow ourselves time and energy to do things that are more fulfilling, we inevitably cultivate skills that may allow us the possibility of earning an income doing what we love. In the meantime, investing time and energy into our own creative ventures fulfills us and gives us perspective, enriching our lives in ways that makes it less important to own the latest gadgets, up to date fashions or be able to afford expensive restaurant meals and other forms of high cost entertainment.

Another way of looking at the exercise above is this: we all participate in a free market economy. Our employers operate with the intention of maximizing profit for themselves. If we took the same logic and applied it to our own circumstance, many of us will find that the business of living our lives is not profitable. We need to reorganize how we use our resources to increase our profits. If we follow that principle through to the end we will find ourselves allocating less time and energy to being employed at current wages because we will find that it is not cost effective to do so.