How Much Is That in Minimum Wage Hours?
Do you ever feel like you don’t have a good handle on how much money is worth? I mean really worth, in terms of sweat and blood, rather than how much stuff it can buy? With credit cards and electronic bank statements, the true cost of money is often difficult to truly comprehend because there are so many abstractions. Money is an abstraction of labor and effort.
You earn money through labor. Some labor is hard, like in a factory or a mine, while others are easier, shuffling papers in an air conditioned office; but both types require time and energy and both result in money. The point is, spending money, rather than bartering labor for goods and services, abstracts away the value of that money and it sometimes helps to put things back into focus.
So, why don’t we?
Let’s put things back into perspective by listing popular and common products in terms of minimum wage labor hours. Using the federal minimum wage in the United States, at $6.55, we calculated how much stuff cost in minimum wage hours.
Some of the more surprising figures? That $443k party AIG threw for their salespersons cost 67,634 minimum wage hours. Lehman CEO Fuld’s cash compensation from 2000 to 2008 was $500 million - or 76,335,878 minimum wage hours (26,142 minimum wage years, if 8 hours are in a day). Finally, that $700 billion bailout package will cost 36,599,394 minimum wage years. Yikes.
| Item | Price | Hours | Days |
| Private 4-Year College Tuition | $94,848 | 14,480.61 | 1,810.08 |
| Public 4-Year College Tuition | $24,740 | 3,777.1 | 472.14 |
| Public 2-Year College Tuition | $9,444 | 1,441.83 | 180.23 |
| Average Wedding | $30,000 | 4,580.15 | 572.52 |
| 2008 Toyota Prius | $21,500 | 3,282.44 | 410.3 |
| 2009 Lamborghini Gallardo | $198,000 | 30,229.01 | 3,778.63 |
| An Ounce of Gold | ~$900 | 137.4 | 17.2 |
| 6.2 carat Diamond (G, VS2) | $384,500 | 58,702.29 | 7,337.79 |
| Xbox 360 Console | $259.99 | 39.7 | 4.96 |
| Garmin nüvi 670 GPS | $327 | 49.92 | 6.24 |
| Gallon of Gas | $3.15 | 0.48 | -.– |
| Gallon of Heating Oil | $3.38 | 0.52 | -.– |
| One Million Dollars | $1,000,000 | 152,671.76 | 19,083.97 |
| $500/mo. Rent | $500 | 76.33 | 9.5 |
| $1,000/mo. Rent | $1,000 | 152.66 | 19.1 |
| Two Movie Tickets | $20 | 3.05 | -.– |
We made some assumptions in compiling this list. One is that a day consists of eight hours. Another is that while the cost is in post-tax dollars, minimum wage is in pre-tax dollars (i.e. the employee still has to pay tax on the $6.55/hr wage), so things really cost more in terms of hours than what is listed.
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Great post! Sometimes you don’t think about how much WORK is needed to pay for things. I think this works, too, for the rest of us. If I stopped to think about how much something cost in terms of my hourly earnings, I might change the way I spend money.
The number of days for a Private 4-Year Tuition is incorrect. You’ve divided by 24 hours for that number, not 8 as for the rest of the figures. The correct number of 8-hour days is 1810.08
Good catch Jack, thanks!
I have used a similar argument to call for the abolition of the penny and nickel — they take more time to handle than the time they’re worth.
Amazon has this program that allows people to work for even less than minimum wage.
Last week I worked for $1.42 per hour!
How about a calculator that does the same, except use your own salary instead of minimum wage? Also, some states have higher minimum wages than the federal mandate.
Don’t forget Tax Freedom Day.
Americans worked from January 1, 2008 to April 23rd in 2008 to pay their taxes - three days earlier than 2007 due, primarily, to the stimulus checks.
Does anyone else think it is interesting that the average wedding costs more than a 4 college education and a brand new car?
The education lasts a lifetime, the car can probably last 10+ years if you want it to and the wedding is 1 day. Don’t get me wrong, the memories from it will last a lifetime, but you will have great memories whether you spend $5000 or $30,000…
Saw a link to this over on PF Buzz… great comparison table.
I wonder how many hours you’d have to work to pay off your mortgage?!
Jim,
That’s a very nice summary. It definitely goes to show that once you invest your minimum wage earnings in education in order to establish some marketable job skills only the sky is the limit for you!