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View Diary: Rick Perry's Texas 'miracle' is built on minimum wage jobs (75 comments)

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  •  Cost of living matters. (0+ / 0-)

    Well being a fact based individual with a soft spot for Texas I was alarmed to see some of the wage comparison information you provided.  But wages are only part of the equation.  One also has to consider the cost of living.

    So to explore that a bit I Googled around and came upon the following cost of living comparison calculator:

    http://www.bankrate.com/...

    So by way of making a comparison I decided to compare one of the most expensive urban areas in Texas (Dallas/Fort Worth) to New York City.  I then found the combination of Dallas/Fort Worth and New York Queens/Brooklyn/Manhattan that (a) most favored New York, and also (b) least favored New York to get an idea of what those income ranges equate to between the locations.

    For the comparison I assumed the individual was living in Texas and moving to New York.  So from your wage information the yearly income would be

    $790 * 52 = $41,080.

    Here's what I found.

    (a) Most favorable to New York.

    Location: Fort Worth - Arlington TX Metro Div. Arlington TX
    Salary: $41,080

    is equivalent to

    Location: New York (Queens), NY
    Salary: $65,680
    Increase: 59.88%

    Weekly income required: $1,263

    So even if the New York weekly income rose to the $900 per week that you state, that's still about $363 per week short of what is required just to maintain the standard of living.

    (b) Least favorable to New York

    Location: Dallas-Plano-Irving TX Metro Div.  Denton TX
    Salary: $41,080

    is equivalent to

    Location: New York (Manahattan), NY
    Salary: $99,157
    Increase: 141.38%

    Weekly income required: $1,906

    Again, even if the New York weekly income rose to the $900 per week that you state, that's about $1,116 per week short of what is required just to maintain the standard of living.

    So the bottom line is that the poor in Texas are much better off than the poor in New York because of the differences in cost of living.  That $790 per week in Texas is still worth way more than the $900 in New York.  So while they're wages may be stagnant in Texas they are still way ahead of their New York counterparts even with their increases.

    (c) Now, what about the effect of Taxes?

    Let's assume that low income wage earners tend to live from pay check to pay check.  Basically spending everything they make just to get by.  In this scenario the total state tax rate becomes effectively

    StateIncomeTaxRate + StateSalesTaxRate + StatePropertyTaxRate = StateTotalTaxRate

    So, I looked up the average income and sales tax rates from here:

    New York Avg Income Tax Rate: 5.83%
    New York Sales Tax Rate: 4%
    New York Median Property Tax Rate: 1.23%
    New York Total Tax Rate: 11.06%

    Texas Avg Income Tax Rate: 0%
    Texas Sales Tax Rate: 6.25%
    Texas Median Property Tax Rate: 1.81%
    Texas Total Tax Rate: 8.06%

    So here again I am finding it hard to consider the New Yorker better off than the Texan.

    Bottom line is that I believe that your conclusions in these respects are unjustified.  Sorry.

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