How far will $10 an hour stretch in 2016?

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Earlier this week, just as media reports pointed out that America’s wealthiest 1 percent did better in 2012 than almost any other year in history, Gov. Jerry Brown came out in favor of a bill that would raise the state minimum wage to $10 an hour by 2016.

Last night, the Assembly approved the bill on a 51-25 vote, sending it onto the governor’s office. The development is almost certain to provoke howls from pro-business interests claiming it will wreak havoc on the economy. But what will it mean for minimum wage earners, whose take-home pay currently totals less than $300 a week for a full-time job?

Here are some statistics to put into perspective what it means to be a minimum wage earner in a world of rising costs and a widening gulf between top income earners and the rest.

  • The National Low Income Housing Coalition notes that a household must earn $25.78 per hour to afford fair market rent for a two-bedroom apartment without spending 30 percent of their income. Couples earning California’s current $8 minimum wage can muster only a combined $16 an hour before taxes.
  • Based on this map illustrating San Francisco’s gaping rent affordability gap, a minimum-wage earner (making the 2012 minimum wage of $10.24 an hour) would have to hold down at least 3.4 full-time jobs to rent a two-bedroom apartment at fair market rate – even in the city’s less expensive areas like the Bayview or the Excelsior.
  • Fast food workers around the country are aiming higher than the $10 per hour Californians may have to look forward to by 2016 – organized food service employees have been rallying to be paid $15 an hour, a rate they see as an actual livable wage. According to this nifty calculator created by the Daily Beast, using data from University of Massachusetts economists Jeanette Wicks-Lim and Robert Pollin, the cost of paying McDonald’s workers this much could be recovered by charging 22 cents more for a Big Mac.
  • Finally, it’s worth considering the growing wealth gap between the wealthiest one percent and the rest. From 2007 to 2009, average real income for the bottom 99 percent fell by 11.6 percent, the largest two-year decline since the Great Depression, according to to an analysis by UC Berkeley economist Emmanuel Saez. Meanwhile, the top 1 percent lost an even higher percentage in that time. But then, during the economic recovery from 2009 to 2011, the one percent saw their incomes increase by 11.2 percent, while incomes of the bottom 99 percent shrunk slightly. Then, in 2012, the top one percent scored a 19 percent increase, their collective earnings accounting for 22.5 percent of total U.S. income. As Matthew O’Brien writes in The Atlantic, “it's the one percent's economy, and we're just living in it.”