By CPA SAM
A Government Minimum Wage
When an employee is hired in the United States, in most cases, the employer is required to pay a minimum amount per hour for the services of that employee. As of 7/24/09, that amount is $7.25 per hour. If that employee works 40 hours per week and 52 weeks per year, the total gross wages of a full-time minimum wage worker will be $15,080.
The IRS actually collected about $2.74 trillion in 2008 (the latest year for which data exists). For 2008 the governments minimum wage equates to$1,317,307,692.31 per hour. With a US workforce of 150 million, we pay on average $8.78 per worker, per hour to the government, the government minimum wage.
On October 16, 2009, the US Treasury Department released official figures of the national budget deficit. Keep in mind that the deficit is the amount the US Government spends beyond what it takes in. That number was an astounding $1.42 trillion. Written out that is $1,420,000,000,000. Actual spending is somewhere in the range of $4.16 trillion dollars. If we divide that by the 2080 hours that the average worker actually spends at his/her job, we see that our government spends about $2 billion per hour. If we divide that by 365 days in a typical year, we see spending of almost $12.4 billion per day.
I read a book about a year ago called “Secrets of the Temple: How the Federal Reserve Runs the Country.” This book contains a very good discussion of the economic conditions surrounding the Carter and Reagan administrations. According to the author, the Federal Reserve and Congress worked against each other as they both attempted to fix the economic crisis of the day. Because the situation was so dire with runaway inflation and economic recession, the two really needed to work together to fix the problem.
Back to the present, news reports say the Fed is looking at drafting the policy going forward of slowly removing the money used to prop up the financial system. Other news reports talk of increased Congressional spending. It sounds like these two groups are getting ready to repeat the same errors. Job growth has always lagged economic recovery. Let’s hope the policies put in place do not discourage job growth in the next recovery.
How does this apply to you? By keeping your financial house in order and spending less than you take in, you are able to better withstand the storms of economic change the those who spend everything they make plus accumulate extra debt. You never know when a health, repair or job crisis will hit. It’s best to be prepared for those events when you can.
One of my recent posts mentioned using software for managing your checkbook and tracking your spending. Several readers have asked for further suggestions on programs that they can use.