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Here’s a paycheck for a McDonald’s employee. And here's my jaw hitting the ground.

The federal minimum wage is still less than this.

via JustFrugalMe/YouTube

How can anyone get by on this?

I've written extensively about minimum wage, supported by fact-checkers, economists, and scholarly studies. All of them support raising the minimum wage as a solution to lifting people out of poverty and getting them off public assistance. It's slowly happening, and there's much more to be done.

But when it comes right down to it, where the rubber meets the road is what it means for everyday workers who have to live with those wages. I honestly don't know how they do it. Ask yourself: Could I live on this small of an hourly wage? I know what my answer is.

(And note that the minimum wage in many parts of the county is STILL $7.25, so it could be even less than this).

paychecks, McDonalds, corporate power, broken systemOne year of work at McDonalds grossed this worker $13,811.18.via JustFrugalMe/YouTube

The YouTube channel Just Frugal Me discussed the viral paycheck and noted there's absolutely nothing wrong with working at McDonald's. More than 2 million people in the U.S. alone work for the fast food giant. The worker's paycheck shows they put in 72 hours over the pay period, making $8.75 per hour. Before taxes, that's $631 for the week. Just Frugal Me's breakdown is even more eye-opening, breaking down this person's pay after taxes and weighing across average rent and utility costs. Spoiler Alert: the total costs for basic necessities far outweigh what this person is making even while working 12 hours per day. But they do make too much to qualify for Medicaid, meaning they will have to go out and buy their own health insurance.

mcdonald's, minimum wage, restaurants, fast food, burgers, big macA photo of a McDonald's in Hartford, CT. via Mike Mozart/Flickr

Even in states like California, where the state's $20 minimum wage ensures that people earn nearly three times as much as the federal minimum wage, which remains as low as when this paycheck first made the rounds nearly 10 years ago.

Still, even for a worker that maxed out at 40 hours per week and took zero vacation or sick time, that's only a little over $41,000 per year. That's barely half the median wage in the state of $78,000 and far below a sustainable living wage in cities like Los Angeles.

- YouTubewww.youtube.com

The U.S. federal minimum wage is just $7.25 and hasn't been raised since 2009. In April 2025, the Raise the Wage Act of 2025 was introduced in the House of Representatives and U.S. Senate. The bill would increase the federal minimum wage to $17 an hour by 2030 and eliminate the subminimum wage for tipped workers and those with disabilities. But supporters should be cautious that it's unlikely to pass the Republican-controlled Congress.

If the Wage Act of 2025 were to pass, over $22 million workers would get a raise, which is 15% of the U.S. workforce. It would raise $70 billion for low-wage Americans, an increase of $3,200 per worker.

“No person working full-time in America should be living in poverty," Virginia Congressman Bobby Scott said in a statement. "The Raise the Wage Act will increase the pay and standard of living for nearly 22 million workers across this country. Raising the minimum wage is good for workers, good for business, and good for the economy. When we put money in the pockets of American workers, they will spend that money in their communities,”

This story originally appeared ten years ago. It has been updated to reflect new information.

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Australians have some wonderfully Aussie thoughts about the American minimum wage

Photo by Melissa Walker Horn on Unsplash, @BrettKlein/Twitter

Australia's minimum wage is an example for us all.

How great is Australia? A relaxed cultural vibe that is progressive, inclusive and seems like a literal day at the beach. They even give us some of our favorite Marvel superhero film actors. Must be tough to make a buck there though, right? Actually, they've got a significant edge on us there as well. Take a look at Australian's minimum wage and how much further it goes for the average worker than for your typical hard-working American.

Australian unions are currently pushing for a 5% increase to the minimum wage to counter inflation. Australia's minimum wage is 20.33 Australian dollars per hour, which is the equivalent of $15.23 (as of the writing of this article).

Meanwhile, Americans are still sitting on the same federal minimum wage we've had since 2009—a whopping $7.25 an hour—while we are also dealing with inflation.

Minimum wage by U.S. state varies—a lot—from $7.25 to $15.90. And most states have different minimum wages for tipped jobs such as wait staff in a restaurant, on the assumption that you'll earn enough tips to make up the base wage. Though employers can choose to pay above the minimum, they aren't required to. And the minimum tipped wage in 17 states is $2.13 per hour.

Let me repeat that. In 17 states in the United States of America in 2022, the tipped minimum wage is $2.13 per hour.

That's bonkers. And the disparity between states is, frankly, shocking. If you live in Washington state, for example, you're guaranteed to make at least $14.49 per hour in any job, whether you get tips or not. If you live in Idaho—literally the state next door—you're guaranteed $7.25 per hour for standard labor and just $3.35 per hour for tipped employment. So the base pay for a waiter on one side of an imaginary line is four times more than on the other. So weird.

Anyway, back to Australia. They're a little worried about us, and it's not hard to see why.

from antiwork

A 16-year-old Australian on Reddit was shocked to learn that the federal minimum wage here is $7.25 per hour. "There is no way someone can live off that wage even if they're working full time." Yep, nope.

Another Aussie responded to a sign for Buc-ee's, a chain of country stores and travel centers in the southern United States, announcing wages for full-time work ranging from $15 to $17 per hour for associates to $22 to $32 per hour for department leads. To American eyes, in most states, this sign is a unicorn of awesome hourly starting wages for "unskilled" labor.

To Australian eyes, these are the lowest wages they ever see in their country.

Despite Australia having a minimum wage of AU$20.33 ($15.23), most workers actually make more than that. In addition to its minimum wage, Australia has a system under its Fair Work Act called Modern Awards, which establishes base pay and benefits for workers in a variety of industries, from fast food to health and beauty to caregiving.

One caveat: Workers under age 21 can make less than minimum wage in Australia, so teenagers may make significantly lower wages than AU$20.33 per hour (though still not as low as $7.25 per hour). However, the Modern Awards system dictates higher than minimum wage earnings for most workers—even for basic fast-food jobs—for people over 21. For example, the starting pay for a Level 1 fast-food worker over age 21 is AU$22.33 ($16.72) per hour during the week, AU$27.91 ($20.90) per hour on Saturdays and Sundays, and AU$50.24 ($37.63) per hour on holidays.

Not too shabby.

Another Australian pointed out that the amount some Americans pay for a college education is bonkers, in addition to our low minimum wage.

Australians graduate with less student loan debt than Americans, on average, and their student loan payments only start over a certain income threshold (and are linked to the amount you make).

Oh and let's not forget that Australians don't have to pay for healthcare out of their own pocket, either. And they have paid maternity leave of up to 18 weeks at the national minimum wage. And they have a minimum of four weeks of paid vacation time for all employees, on top of paid national hoildays.

But don't Australians pay a much higher tax rate than Americans for these benefits, you may ask? No, not really. According to the Tax Foundation, a single worker earning an average wage in the U.S. pays an average tax rate of 28.3% while in Australia they pay an average of 28.4%—so basically the same tax burden, at least for single people with no kids.

It's not that Australia is perfect, of course. But when it comes to paying people reasonable wages and guaranteeing paid time off and providing healthcare to all, they're light years ahead of the U.S.

Rather than seeing it as a woe-is-us comparison, however, let's look at it as "Hey, look at what's possible!" We, too, could have wages people can actually live on and not go into bankruptcy over medical bills and ensure that everyone gets paid time off so they can actually relax a little. It doesn't have to be some distant pipe dream; it's a matter of collective and political will. If Australia can do it, there's really no good reason we can't, too.

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Mom shares why she's 'really proud' of her 19-year-old daughter who wouldn't take $9 an hour

via Anna Shvets/Pexels

A teen watches as an employer looks at her resume.

The COVID-19 pandemic has caused a massive shake-up in the American labor market and for many, the change has been positive. Many Americans quit their job this year because they feel optimistic that after enduring some of the harshest working conditions during the pandemic, they can find better work that pays more elsewhere.

This sea change in the labor market comes on the heels of the nation’s collective dedication to the idea that people should be paid a living wage and it should be somewhere around $15 an hour.

The change in attitudes toward work has many younger people feeling empowered to ask for better compensation and treatment in their young careers. This was perfectly evidenced by a mother on Reddit who praised her 19-year-old daughter for refusing to accept $9 an hour.

In the post's title, the mother wrote: "I’m really proud of my 19 year old daughter. She was offered $9/hr at a second interview today and declined telling them she couldn’t feed herself with that.”

"She told me she was polite about it, which she always is, but I was still a bit taken back initially that she would say this directly to the shop owner. It was somewhere she really wanted to work and has been going to since she was a kid," the mom continued.

The employer admitted that they weren’t paying “a living wage” and apologized for not being able to offer more. The daughter also had some leverage because she was making $10.50 an hour at another job.

The 41-year-old mother was impressed because when she was in her teens, younger workers were forced to accept any deal they were offered and had little leverage or confidence to ask for anything more than substandard.

"I'm 41 and when I was her age I would've taken any s*** pay they offered me just for the experience and so I could work at my favorite shop. And I would've been grateful for the opportunity for them to take full advantage of me," she explained. "I would've never had the confidence to stand up to an older adult in a position of power like that,” she added. “I told her I was so proud of her for knowing her worth and not accepting anything less."

Reddit user jakeyeah111 had the best response to the post. "Yup. The amount of older people who are mad that the younger generation isn't letting themselves get stepped all over anymore is... off-putting,” they wrote.

The mother’s post mirrors trends that people are seeing across income levels in America. The average reservation wage, or the minimum annual wage consumers said they needed before they would even consider accepting a job offer, has risen more than $14,000 over the past six years to $68,954.

On ZipRecruiter, the number of jobs offering $15 an hour has more than doubled over the past two years.

The changes in the labor market and public opinion are a wonderful development for the U.S. economy. Instead of cultivating a market where people are forced to accept less than they believe they're worth, employers and employees are working to create mutually beneficial relationships that uplift everyone.

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Economist says that the U.S. minimum wage should be $26 and proves it with a simple chart

via New America / Flickr

Over the past decade, activists have been fighting for the U.S. to raise the federal minimum wage to $15 an hour. The $15 threshold, which is more than double the federal minimum wage of $7.25, is seen by many as a "living wage."

Some states have higher minimum wages than the $7.25 standard, with California being the top at $14. However, 21 still linger in the $7.25 zone.

Given such paltry wages, it's no wonder why the U.S. is currently having a "labor shortage." Maybe it'd be more appropriately labeled a wage shortage?

A dramatic new report from Dean Baker, the founder of the Center for Economic and Policy Research, shows that if the federal minimum wage had kept up with U.S. productivity, it'd be at a staggering $26 an hour.

Baker is an economist who received his B.A. from Swarthmore College and his Ph.D. in Economics from the University of Michigan. His work has appeared in the Atlantic Monthly, the Washington Post, London Financial Times.

via Center for Economic and Policy Research

The federal minimum wage was first established in 1938 and Congress repeatedly raised the amount to correspond with U.S. productivity. In 1968 it was the equivalent of $12 in today's dollars. However, since 1968, U.S. productivity has dramatically increased, but the minimum wage has remained relatively stagnant.

"Furthermore, a minimum wage that grew in step with the rapid rises in productivity in these decades did not lead to mass unemployment," Baker wrote. "The year-round average for the unemployment rate in 1968 was 3.6 percent, a lower average than for any year in the last half-century."

If Congress had kept the minimum wage to match productivity we'd live in a much different world.

"Think of what the country would look like if the lowest paying jobs, think of dishwashers or custodians, paid $26 an hour," Baker speculates. "That would mean someone who worked a 2000 hour year would have an annual income of $52,000. This income would put a single mother with two kids at well over twice the poverty level."

However, Baker argues that such a dramatic, overnight shift would result in an economic disaster because we've "restructured the economy in ways that ensure a disproportionate share of income goes to those at the top."

Baker cites several examples of how the economy has been restructured, including "government-granted patent and copyright monopolies" that have inflated the cost of drugs, medical equipment, and software which would "all be relatively cheap in a free market."

Baker says that CEOs are vastly overpaid because "the corporate boards that most immediately determine CEO pay are largely selected by the CEO and other top management." So a lot of the company's money is wasted in CEO compensation when it could be spread amongst the rest of the employees.

He also believes that the financial sector benefits people who make "little or no contribution to the productive economy." Specifically, he says that the banking industry charges people tens of billions in fees when we could just as easily have digital bank accounts with the Fed.

Baker thinks that we can get back to a country where wages match productivity and the changes we'd need to make to get there are worthwhile.

"It would be a great story if we could reestablish the link between the minimum wage and productivity and make up the ground lost over the last half-century," Baker concludes. "But we have to make many other changes in the economy to make this possible. These changes are well worth making."

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