Laura Cone, a professional writer for more than 20 years, recently published a blog entry on Yahoo entitled "First Person: My $50,000 Salary Felt Like Minimum Wage." In her article, Cone calculates that after she abandoned her work-at-home job and took on working at the office, costs associated with employment has been so high that her $25/hr wage really boils down to about $7.50/hr. After arriving at that number, Cone concludes that "[her] high paying job equaled minimum wage."
Thousands of viewer comments were left on the blog entry. Most either ridiculed or lambasted Cone's conclusion. Viewers making less than $50K remarked how they were more careful in their spendings and that Cone should appreciate her income. In particular, those who left comments pointed out that the costs associated with employment are not necessary job expenses, but rather implicit costs associated with abandoning a work-at-home job. In Cone's case of transition from working at home to at office, the decision to take the office job has enormous additional costs. From costs of childcare to extra spending to combat work stress (all of the subtracted costs Cone listed in her analysis), all of these costs represent the hidden, implicit costs of working at office. In essence, these also represent the opportunity costs of working at office, as opposed to working at home. In her blog entry, Cone "discovered [she] was not making as much as [she] thought due to hidden career costs." It is plausible that these hidden career costs may not have been fully compensated by the increase in gross income at the office job, leading to Cone's conclusion. Nevertheless, they represent opportunity costs, which is necessary for all firms and individuals to take into account for any decisions such as moving employment locations.
But more troubling for public viewers of the blog entry is Cone's comparison to earning minimum wage. As comments pointed out, those earning minimum wages need to pay for the essential living expenses - food, transportation, etc - from their minimum wage. Cone's "minimal wage" is after all of those costs have been deducted. Furthermore, Cone was even "reimbursed mileage during the workday, but had to eat my commuting costs." Most employers for private companies don't even get reimbursed for mileage and the gas costs also come from their gross income. Lastly, some of the "career costs" Cone listed are luxuries that those earning true minimum wages would not be able to enjoy. For example, Cone wrote that she needs $40 per week on clothes; while this number may not seem outright lavish, she takes into account spending that amount for clothes, every week. What does indeed sound outright lavish, are what Cone says she needs to "combat work stress." She "needed to take expensive vacations just to unwind" and began "getting weekly massages." Citing that she now has "less time and more to juggle" (while working only the typical 40 hours/week), Cone "paid for someone to mow [her] lawn and clean [her] house." None of these luxuries are opportunities that those actually earning minimum wage typically enjoy.
It's understandable that people like Cone spend more for certain goods as her style of employment became more demanding. There's where the adage comes that "money buys happiness." However, it's not acceptable that implicit costs of career are counted under work expense; they are rather opportunity costs of making the transition from working at home to office. But more importantly, particularly in this economy of high unemployment and decreased real wages, associating these luxuries as work expenses, and drawing parallelism with earning minimum wage, after she indulges in the luxuries, is highly insensitive to those who indeed earn a gross income of minimum wage.
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