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Living Wage Calculation

Recently I saw a Facebook (NASDAQ:FB) post that children of parents working at Wal-Mart (NYSE:WMT) have to be on government programs for medical insurance. The agreement was that anyone working 40/hr week should not need government assistance and that Wal-mart should pay a "living wage". Well, I have no idea what a living wage is, so I figure I would try to calculate it for someone living in Southern New Hampshire.

Below is my estimate, $37,200 annual income, or, $18.60/hour working 2,000 hours per year.

I am sure someone will argue that my estimate is way too high and probably think it is too low. I think it is close. There is not much "extra" in this budget. Maybe the 2.5% 401k contribution or the $100/month "buffer".

What does this mean? This means a single mom working at Wal-Mart as a cashier for 40/hr per week (on average) would have to be paid $18.60/hr.

According to, a retail store manager average pay is $56,000/year. Is $56,000/year still a valid pay if a cashier (let's face it, a 15 year-old is qualified for this position) is $37,200?

For an entry level mechanical engineer, the average pay is $66,000/year. Using this logic, one could got to 4 years of (grueling) college and make $66,000/year (with student loan debt) compared to no college (and maybe no high school) and make $37,200/year.

I will say, if high school students made $18.60/hour, maybe college would be easier to afford (assuming they saved the money).

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.