# \$4 an Hour is How Much a Year? Before and After Taxes

In today’s economy, an extremely low hourly wage of only \$4 an hour is completely unlivable for most workers. But what does \$4 an hour actually equate to over the course of a year? In this article, we’ll break down the before and after tax annual, monthly, biweekly, and weekly salaries for someone earning \$4 per hour.

You’ll learn how to calculate the total yearly pay for \$4 an hour, including any potential overtime. We’ll discuss why \$4 an hour is far below a livable wage given today’s high inflation. You’ll see how unpaid time off further reduces already meager annual earnings when making just \$4 an hour. We’ll also overview the limited jobs that pay only \$4 an hour. And we’ll look at sample budgets to demonstrate why it’s essentially impossible to afford necessities on \$4 an hour. Understanding the inadequacies of this extremely low hourly rate can better inform career and salary decisions. Keep reading for a full analysis!

## Convert \$4 Per Hour to Weekly, Monthly, and Yearly Salary

Input your wage and hours per week to see how much you’ll make monthly, yearly and more.

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### \$4 an Hour is How Much a Year?

If you make \$4 an hour, your yearly salary would be \$8,320. We calculate your annual income based on 8 hours per day, 5 days per week and 52 weeks in the year.

Hours worked per week (40) x Hourly wage(\$4) x Weeks worked per year(52) = \$8,320

### \$4 an Hour is How Much a Month?

If you make \$4 an hour, your monthly salary would be \$693.33. We calculated this number by dividing your annual income by 12 months.

Hours worked per week (40) x Hourly wage(\$4) x Weeks worked per year(52) / Months per Year(12) = \$693.33

### \$4 an Hour is How Much Biweekly?

If you make \$4 an hour, your biweekly salary would be \$320.

Hours worked per week (40) x Hourly wage(\$4) x 2 = \$320

### \$4 an Hour is How Much a Week?

If you make \$4 an hour, your weekly salary would be \$160. Calculating based on 5 days per week and 8 hours each day.

Hours worked per week (40) x Hourly wage(\$4) = \$160

### \$4 an Hour is How Much a Day?

If you make \$4 an hour, your daily salary would be \$32. We calculated your daily income based on 8 hours per day.

Hours worked per day (8) x Hourly wage(\$4) = \$32

## \$4 an Hour is How Much a Year?

The basic formula to calculate your annual salary from an hourly wage is:

Hourly Rate x Hours Worked per Week x Number of Weeks Worked per Year = Annual Salary

So for a \$20 per hour job:

\$4 per hour x 40 hours per week x 52 weeks per year = \$8,320

However, this simple calculation makes some assumptions:

• You will work 40 hours every week of the year
• You will not get any paid time off

Therefore, it represents your earnings if you worked every week of the year, without any vacation, holidays, or sick days.

Accounting for Paid Time Off

The \$8,320 base salary does not yet factor in paid time off (PTO). Let’s assume the job provides:

• 2 weeks (10 days) paid vacation
• 6 paid holidays
• 3 paid sick days

This totals 19 paid days off, or nearly 4 weeks of PTO.

Importantly, this paid time off should not be deducted from the annual salary, since you still get paid for those days.

So with 4 weeks PTO, the annual salary would remain \$8,320 .

## Part time \$4 an hour is How Much a Year?

Your annual income changes significantly if you work part-time and not full-time.

For example, let’s say you work 20 hours per week instead of 40. Here’s how you calculate your new yearly total:

\$4 per hour x 20 hours per week x 52 weeks per year = \$4,160

By working 20 fewer hours per week (20 instead of 40), your annual earnings at \$4 an hour drop from \$8,320 to \$4,160.

That’s a \$4,160 per year difference just by working part-time!

Here’s a table summarizing how your annual earnings change depending on how many hours you work per week at \$4 an hour:

Hours Per Week Earnings Per Week Annual Earnings
40 \$160 \$8,320
35 \$140 \$7,280
30 \$120 \$6,240
25 \$100 \$5,200
20 \$80 \$4,160
15 \$60 \$3,120

The more hours per week, the higher your total yearly earnings. But part-time work allows for more life balance if you don’t need the full salary.

## \$4 an Hour With Overtime is How Much a Year?

Now let’s look at how overtime can increase your annual earnings.

Overtime kicks in once you work more than 40 hours in a week. Typically, you earn 1.5x your regular hourly wage for overtime hours.

So if you make \$4 per hour normally, you would make \$6 per hour for any hours over 40 in a week.

Here’s an example:

• You work 45 hours in a Week
• 40 regular hours paid at \$4 per hour = \$160
• 5 overtime hours paid at \$6 per hour = \$30
• Your total one Week earnings =\$160 + \$30 = \$190

If you worked 45 hours each week for 52 weeks, here’s how your annual earnings increase thanks to overtime pay:

\$190 per week x 52 weeks per year = \$9,880

That’s \$1,560 more than you’d earn working just 40 hours per week at \$4 an hour.

Overtime can add up! But also consider taxes and work-life balance when deciding on extra hours.

Here’s a table summarizing how your annual earnings change depending on how many hours you work per week at \$4 an hour:

 Overtime hours per work day Hours Per Week Earnings Per Week Annual Earnings 0 40 \$160 \$8,320 1 45 \$190 \$9,880 2 50 \$220 \$11,440 3 55 \$250 \$13,000 4 60 \$280 \$14,560 5 65 \$310 \$16,120 6 70 \$340 \$17,680 7 75 \$370 \$19,240

## How Unpaid Time Off Impacts \$4/Hour Yearly Earnings

So far we’ve assumed you work 52 paid weeks per year. Any unpaid time off will reduce your total income.

For example, let’s say you take 2 weeks of unpaid leave. That brings your paid weeks down to 50:

Hours worked per week (40) x Hourly wage(\$4) x Weeks worked per year(50) = \$8,000 annual salary

With 2 weeks unpaid time off, your annual earnings at \$4/hour would drop by \$320.

The table below summarizes how your annual income changes depending on the number of weeks of unpaid leave.

 Weeks of unpaid leave Paid weeks per year Earnings Per Week Annual Earnings 0 52 \$160 \$8,320 1 51 \$160 \$8,160 2 50 \$160 \$8,000 3 49 \$160 \$7,840 4 48 \$160 \$7,680 5 47 \$160 \$7,520 6 46 \$160 \$7,360 7 45 \$160 \$7,200

## Key Takeaways for \$4 Hourly Wage

In summary, here are some key points on annual earnings when making \$4 per hour:

• At 40 hours per week, you’ll earn \$8,320 per year.
• Part-time of 30 hours/week results in \$6,240 annual salary.
• Overtime pay can boost yearly earnings, e.g. \$1,560 extra at 45 hours/week.
• Unpaid time off reduces your total income, around \$320 less per 2 weeks off.
• Your specific situation and location impacts taxes and PTO.

Knowing your approximate annual salary and factors impacting it makes it easier to budget and plan your finances. The next step is calculating take-home pay after deductions like taxes.

## \$4 An Hour Is How Much A Year After Taxes

Figuring out your actual annual earnings based on an hourly wage can be complicated once taxes are taken into account. In addition to federal, state, and local income taxes, 7.65% of your gross pay also goes to Social Security and Medicare through FICA payroll taxes. So how much does \$4 an hour equal per year after FICA and income taxes are deducted from your gross pay?

Below we’ll walk through the steps to calculate your annual net take home pay if you make \$4 per hour. This will factor in estimated federal, FICA, state, and local taxes so you know exactly what to expect.

### Factoring in Federal Income Tax

Your federal income tax will be a big chunk out of your gross pay. Federal tax rates range from 10% to 37%, depending on your tax bracket.

To estimate your federal income tax rate and liability:

Look up your federal income tax bracket based on your gross pay.

2023 tax brackets: single filers

Tax rate Taxable income bracket Tax owed
10% \$0 to \$11,000. 10% of taxable income.
12% \$11,001 to \$44,725. \$1,100 plus 12% of the amount over \$11,000.
22% \$44,726 to \$95,375. \$5,147 plus 22% of the amount over \$44,725.
24% \$95,376 to \$182,100. \$16,290 plus 24% of the amount over \$95,375.
32% \$182,101 to \$231,250. \$37,104 plus 32% of the amount over \$182,100.
35% \$231,251 to \$578,125. \$52,832 plus 35% of the amount over \$231,250.
37% \$578,126 or more. \$174,238.25 plus 37% of the amount over \$578,125.

For example, if you are single with \$8,320 gross annual pay, your federal tax bracket is 10%.

Your estimated federal tax would be:

\$8,32010% = \$832

So at \$4/hour with \$8,320 gross pay, you would owe about \$832 in federal income taxes.

### Considering State Income Tax

In addition to federal tax, most states also charge a state income tax. State income tax rates range from about 1% to 13%, with most falling between 4% and 6%.

Key Takeaways

• California, Hawaii, New York, New Jersey, and Oregon have some of the highest state income tax rates.
• Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming don’t impose an income tax at all.
• Another 10 U.S states have a flat tax rate—everyone pays the same percentage regardless of how much they earn.

A State-by-State Comparison of Income Tax Rates

STATE TAX RATES LOWEST AND HIGHEST INCOME BRACKETS
Florida 0% None
South Dakota 0% None
Tennessee 0% None
Texas 0% None
Washington 0% None
Wyoming 0% None
Colorado 4.55% Flat rate applies to all incomes
Illinois 4.95% Flat rate applies to all incomes
Indiana 3.23% Flat rate applies to all incomes
Kentucky 5% Flat rate applies to all incomes
Massachusetts 5% Flat rate applies to all incomes
New Hampshire 5% Flat rate on interest and dividend income only
North Carolina 4.99% Flat rate applies to all incomes
Pennsylvania 3.07% Flat rate applies to all incomes
Utah 4.95% Flat rate applies to all incomes
Michigan 4.25% Flat rate applies to all incomes
Arizona 2.59% to 4.5% \$27,806 and \$166,843
Arkansas 2% to 5.5% \$4,300 and \$8,501
California 1% to 13.3% \$9,325 and \$1 million
Connecticut 3% to 6.99% \$10,000 and \$500,000
Delaware 0% to 6.6% \$2,000 and \$60,001
Alabama 2% to 5% \$500 and \$3,001
Georgia 1% to 5.75% \$750 and \$7,001
Hawaii 1.4% to 11% \$2,400 and \$200,000
Idaho 1.125% to 6.5% \$1,568 and \$7,939
Iowa 0.33% to 8.53% \$1,743 and \$78,435
Kansas 3.1% to 5.7% \$15,000 and \$30,000
Louisiana 1.85% to 4.25% \$12,500 and \$50,001
Maine 5.8% to 7.15% \$23,000 and \$54,450
Maryland 2% to 5.75%  \$1,000 and \$250,000
Minnesota 5.35% to 9.85% \$28,080 and \$171,221
Mississippi 0% to 5% \$5,000 and \$10,001
Missouri 1.5% to 5.3% \$1,121 and \$8,968
Montana 1% to 6.75% \$2,900and \$17,400
Nebraska 2.46% to 6.84% \$3,340 and \$32,210
New Jersey 1.4% to 10.75% \$20,000 and \$1 million
New Mexico 1.7% to 5.9% \$5,500 and \$210,000
New York 4% to 10.9% \$8,500 and \$25 million
North Dakota 1.1% to 2.9% \$41,775 and \$458,350
Ohio 0% to 3.99% \$25,000 and \$110,650
Oklahoma 0.25% to 4.75% \$1,000 and \$7,200
Oregon 4.75% to 9.9% \$3,750 and \$125,000
Rhode Island 3.75% to 5.99% \$68,200 and \$155,050
South Carolina 0% to 7% \$3,110 and \$15,560
Vermont 3.35% to 8.75% \$42,150 and \$213,150
Virginia 2% to 5.75% \$3,000 and \$17,001
Washington, D.C. 4% to 9.75% \$10,000 and \$1 million
West Virginia 3% to 6.5% \$10,000 and \$60,000
Wisconsin 3.54% to 7.65% \$12,760 and \$280,950

To estimate your state income tax:

Look up your state income tax rate based on your gross pay and filing status.

Multiply your gross annual pay by the state tax rate.

For example, if you live in Pennsylvania which has a flat 3.07% tax rate, your estimated state tax would be:

\$8,320 gross pay x 3.07% PA tax rate = \$255.42 estimated state income tax

So with \$8,320 gross annual income, you would owe around \$255.42 in Pennsylvania state income tax. Make sure to check your specific state’s rates.

### Factoring in Local Taxes

Some cities and counties levy local income taxes ranging from 1-3% of taxable income.

To estimate potential local taxes you may owe:

• Check if your city or county charges a local income tax.
• If yes, look up the local income tax rate.
• Multiply your gross annual pay by the local tax rate.

For example, say you live in Columbus, OH which has a 2.5% local income tax. Your estimated local tax would be:

\$8,320 gross pay x 2.5% local tax rate = \$208 estimated local tax

So with \$8,320 in gross earnings, you may owe around \$208 in Columbus local income taxes. Verify rates for your own city/county.

### Accounting for FICA Taxes (Social Security & Medicare)

FICA taxes are a combination of Social Security and Medicare taxes that equal 15.3% of your earnings. You are responsible for half of the total bill (7.65%), which includes a 6.2% Social Security tax and 1.45% Medicare tax on your earnings.

In 2023, only the first \$160,200 of your earnings are subject to the Social Security tax

There is an additional 0.9% surtax on top of the standard 1.45% Medicare tax for those who earn over \$200,000 (single filers) or \$250,000 (joint filers).

To estimate your FICA tax payment:

\$8,320 x 6.2% + \$8,320 x 1.45% = \$636.48

So you can expect to pay about \$636.48 in Social Security and Medicare taxes out of your gross \$8,320 in earnings.

### Total Estimated Tax Payments

Based on the examples above, your total estimated tax payments would be:

Federal tax: \$832

State tax: \$255.42

Local tax: \$208

FICA tax: \$636.48

Total Estimated Tax: \$1,931.90

### Calculating Your Take Home Pay

To calculate your annual take home pay at \$4 /hour:

2. Subtract your estimated total tax payments

\$8,320 gross pay – \$1,931.90 Total Estimated Tax = \$6,388.10 Your Take Home Pay

n summary, if you make \$4 per hour and work full-time, you would take home around \$6,388.10 per year after federal, state, local , FICA taxes.

Your actual net income may vary depending on your specific tax situation. But this gives you a general idea of what to expect.

## Convert \$4 Per Hour to Yearly, Monthly, Biweekly, and Weekly Salary After Taxes

If you make \$4 an hour and work full-time (40 hours per week), your estimated yearly salary would be \$8,320 .

The \$8,320 per year salary does not account for taxes. Federal, state, and local taxes will reduce your take-home pay. The amount withheld depends on your location, filing status, dependents, and other factors.

Just now during our calculation of \$4 An Hour Is How Much A Year After Taxes, we assumed the following conditions:

• You are single with \$8,320 gross annual pay, your federal tax bracket is 10 %.
• You live in Pennsylvania which has a flat 3.07% tax rate
• You live in Columbus, OH which has a 2.5% local income tax.

In the end, we calculated your Total Estimated Tax is \$1,931.90 , Your Take Home Pay is \$6,388.10 , Total tax rate is 23.22%.

So next we’ll use 23.22% as the estimated tax rate to calculate your weekly, biweekly, and monthly after-tax income.

### \$4 Per Hour to Yearly, Monthly, Biweekly, Weekly,and Week Salary After Taxes Table

 Income before taxes Estimated Tax Rate Income Taxes After Tax Income Yearly Salary \$8,320 23.22% \$1,931.90 \$6,388.10 Monthly Salary \$693.33 23.22% \$160.99 \$532.34 BiWeekly Salary \$320 23.22% \$74.30 \$245.70 Weekly Salary \$160 23.22% \$37.15 \$122.85

### \$4  an hour is how much a year after taxes

Here is the adjusted yearly salary after a 23.22% tax reduction:

• Yearly salary before taxes: \$8,320
• Estimated tax rate: 23.22%
• Taxes owed (23.22% * \$8,320 )= \$1,931.90
• Yearly salary after taxes: \$6,388.10
Hourly Wage Hours Worked Per Week Weeks Worked Per Year Total Yearly Salary Estimated Tax Rate Taxes Owed After-Tax Yearly Salary
\$4 40 52 \$8,320 23.22% \$1,931.90 \$6,388.10

### \$4 an hour is how much a month after taxes

To calculate the monthly salary based on an hourly wage, you first need the yearly salary amount. Then divide by 12 months.

• Yearly salary before taxes at \$4 per hour: \$8,320
• Divided by 12 months per year: \$8,320 / 12 = \$693.33 per month

The monthly salary based on a 40 hour work week at \$4 per hour is \$693.33 before taxes.

After applying the estimated 23.22% tax rate, the monthly after-tax salary would be:

• Monthly before-tax salary: \$693.33
• Estimated tax rate: 23.22%
• Taxes owed (23.22% * \$693.33 )= \$160.99
• Monthly after-tax salary: \$532.34

Monthly Salary Based on \$4 Per Hour

Hourly Wage Yearly Salary Months Per Year Before-Tax Monthly Salary Estimated Tax Rate Taxes Owed After-Tax Monthly Salary
\$4 \$8,320 12 \$693.33 23.22% \$160.99 \$532.34

### \$4 an hour is how much biweekly after taxes

Many people are paid biweekly, meaning every other week. To calculate the biweekly pay at \$4 per hour:

• Hourly wage: \$4
• Hours worked per week: 40
• Weeks per biweekly pay period: 2
• \$4 * 40 hours * 2 weeks = \$320 biweekly

Applying the 23.22%estimated tax rate:

• Biweekly before-tax salary: \$320
• Estimated tax rate: 23.22%
• Taxes owed (23.22% * \$320 )= \$74.30
• Biweekly after-tax salary: \$245.70

Biweekly Salary at \$4 Per Hour

Hourly Wage Hours Worked Per Week Weeks Per Pay Period Before-Tax Biweekly Salary Estimated Tax Rate Taxes Owed After-Tax Biweekly Salary
\$4 40 2 \$320 23.22% \$74.30 \$245.70

### \$4 an hour is how much weekly after taxes

To find the weekly salary based on an hourly wage, you need to know the number of hours worked per week. At 40 hours per week, the calculation is:

• Hourly wage: \$4
• Hours worked per week: 40
• \$4 * 40 hours = \$160 per week

Accounting for the estimated 23.22% tax rate:

• Weekly before-tax salary: \$160
• Estimated tax rate: 23.22%
• Taxes owed (23.22% * \$160 )= \$37.15
• Weekly after-tax salary: \$122.85

Weekly Salary at \$4 Per Hour

Hourly Wage Hours Worked Per Week Before-Tax Weekly Salary Estimated Tax Rate Taxes Owed After-Tax Weekly Salary
\$4 40 \$160 23.22% \$37.15 \$122.85

### Key Takeaways

• An hourly wage of \$4 per hour equals a yearly salary of \$8,320 before taxes, assuming a 40 hour work week.
• After accounting for an estimated 23.22% tax rate, the yearly after-tax salary is approximately \$6,388.10 .
• On a monthly basis before taxes, \$4 per hour equals \$693.33 per month. After estimated taxes, the monthly take-home pay is about \$532.34 .
• The before-tax weekly salary at \$4 per hour is \$160 . After taxes, the weekly take-home pay is approximately \$122.85 .
• For biweekly pay, the pre-tax salary at \$4 per hour is \$320 . After estimated taxes, the biweekly take-home pay is around \$245.70 .

Understanding annual, monthly, weekly, and biweekly salary equivalents based on an hourly wage is useful when budgeting and financial planning. Taxes make a significant difference in take-home pay, so be sure to account for them when making income conversions. Use this guide as a reference when making salary calculations.

## What Is the Average Hourly Wage in the US?

Last Updated: Sep 1 2023

US Average Hourly Earnings is at a current level of \$33.82, up from 33.74 last month and up from 32.43 one year ago. This is a change of 0.24% from last month and 4.29% from one year ago.

Average Hourly Earnings is the average dollars that a private employee makes per hour in the US. This metric is a part of one of the most important releases every month which includes unemployment numbers as well. This is normally released on the first Friday of every month. This metric is released by the Bureau of Labor Statistics (BLS).

## What is the average salary in the U.S.?

Last Updated: July 18, 2023

The U.S. Bureau of Labor Statistics uses median salary data rather than averages to avoid skewed numbers from outlying high and low numbers. Median weekly earnings of the nation's 121.5 million full-time wage and salary workers were \$1,100 in the second quarter of 2023, the U.S.

If a person works 52 weeks in the year, then this represents a national annual salary of \$57,200.

## Is \$4 an Hour a Good Salary?

For full-time workers, \$4 an hour equates to an annual salary of only \$8,320. This falls drastically short of the federal poverty line for individuals, which was \$13,590 in 2022. It is barely livable even for the most frugal of individuals.

To put \$4/hour into perspective:

• The current federal minimum wage is \$7.25 per hour. \$4 is over 40% below this.
• The median hourly wage in the US is around \$20 per hour – five times higher than \$4 an hour.
• Studies show a “living wage” in the U.S. for basic necessities is \$15-18 per hour depending on location.

So by any reasonable standard, \$4 an hour is an extremely low wage that makes surviving and supporting a family tremendously difficult. It signifies extreme poverty-level income.

## Jobs that Pay \$4 an Hour

Very few legal jobs pay just \$4 an hour. Here are some possibilities:

• Tipped jobs – Jobs like restaurant servers where tips provide the majority of income. Base wages can be as low as \$2-4 per hour.
• Under the table jobs – Some small businesses pay cash under the table at below minimum wage, although this violates labor laws.
• Disabled workers – Special minimum wage certificates under the Fair Labor Standards Act allow wages below federal minimum for some disabled workers.
• Youth training programs – Some youth training programs provide stipends below minimum wage since they are teaching basic job skills.

The most common scenario where a worker may earn just \$4 an hour is in a tipped job relying mostly on tips. However, base pay this low is increasingly rare even for tipped workers given rising minimum wages across many states.

## Can You Live Off \$4 An Hour?

Attempting to live on \$4 an hour is extremely challenging bordering on nearly impossible. Even with very careful budgeting, there is little chance to afford basic necessities.

Some major financial challenges include:

• Housing – Average rent for a 1-bedroom apartment is \$1,100, requiring nearly 60 hours of pre-tax work per week at \$4/hour just to pay rent.
• Food – Feeding one adult basic meals costs \$220-\$320 monthly. This would consume 13-19 hours of pre-tax wages at \$4/hour.
• Healthcare – Affordable healthcare is out of reach. Basic insurance costs around \$300 monthly, or 75 hours of pre-tax work.
• Transportation – Owning a car would require 20+ hours of wages just for monthly loan, gas and insurance. Public transit is the only viable option.
• Other necessities – Basic utilities, clothing and essentials would be completely unaffordable on \$4 an hour without substantial assistance.

For all but the wealthiest of individuals, \$4 an hour makes surviveing virtually impossible. Taking on substantial extra work, living rent-free with family, or relying on government assistance are often the only options at this wage.

## The Impact of Inflation on \$4 An Hour

With inflation currently over 8% annually, \$4 an hour wages lose purchasing power rapidly. What little things \$4 can buy today will steadily decline as overall prices continue rising faster than this wage.

If we consider a theoretical 3% annual inflation rate going forward, here is the projected loss of purchasing power on \$4 an hour:

• In 2023 – Declines to \$3.88 per hour
• In 2026 – Declines to \$3.64 per hour
• In 2032 – Declines to \$3.05 per hour

Based on this, \$4 an hour ten years from now would have around 25% less purchasing power. And any meager necessities eked out today would become completely unaffordable over time at this eroded wage.

Just to maintain its already extremely low purchasing ability of \$4 today, this hourly wage would have to rise steadily to offset inflation. This underscores why minimum wage increases are so crucial for low-income workers just to avoid losing ground.

## 5 Ways to Increase Your Hourly Wage

For those trapped earning \$4 an hour or less, boosting wages should be the utmost priority. Some potential options include:

• Acquiring in-demand skills via affordable training programs
• Seeking entry-level roles with higher paying employers
• Exploring side jobs, gig work, or starting a small business
• Leveraging social assistance programs like SNAP and TANF while increasing earnings
• Lobbying state/local government to raise minimum wages for low-income workers

However, opportunities to substantially boost earnings are still very limited for many low wage workers due to constraints like family duties, medical issues, and limited social capital. Far larger institutional and policy changes are needed to create more viable paths out of poverty.

## Buying a Car on \$4 an Hour

For a full-time worker earning \$4 an hour, an automobile purchase is realistically impossible without major assistance or arranging low-cost used vehicles from family/friends.

Some quick math on buying an average new car at \$40,000:

• Cost is 10,000+ hours of pre-tax wages.
• A 5-year \$8,000 auto loan would require committing over 50% of monthly take-home pay.
• Insurance alone could exceed \$200 monthly – half of take-home earnings.

For used cars, a \$5,000 used car purchase would still require huge sacrifices like 1,250 hours of wages and forgoing rent. Cars requiring any monthly payments are utterly unaffordable on \$4 wages. Saving up in advance for a beater car is the only viable option.

## Can You Buy a House on \$4 an Hour?

Home ownership on \$4 an hour is practically impossible. Saving for a down payment itself would take decades on this wage. Even a small condo would be far out of reach.

Consider a median US home price around \$300,000. On \$4 wages, it would take:

• 15,000+ hours of work to save a 20% down payment.
• Monthly mortgage payments of \$1,500+ – requiring committing 100%+ of take-home pay.

And lenders would not provide financing given the inability to cover monthly costs. Home ownership, even a small condo, would sadly remain a distant dream on this wage. Renting or living with family are the only realistic options.

## Example Budget on \$4 an Hour

To illustrate just how hard surviving is on \$4 an hour, here is an example monthly budget:

• Gross Monthly Pay – \$640 (based on 40 hrs/wk)
• Taxes – \$96 (15% effective)
• Rent – \$0 (requires living rent-free w/ family or subsidies)
• Food – \$100 (extremely bare bones, often relying on food banks)
• Utilities – \$40 (likely need subsidies for basic electricity/water)
• Healthcare – \$0 (no health insurance since ACA plans out of reach)
• Transportation – \$0 (no car possible, requires public transit or getting rides)
• Phone – \$0 (prepaid flip phone is only option)
• Clothing/Household – \$20 (bare minimum personal & household items)
• Savings – \$0 (none possible at this income level)

Total Expenses – \$160

This leaves just \$384 left for ALL other expenses. Any emergency like an illness or job loss creates a crisis. And this assumes zero costs for childcare and does not account for numerous expenses faced by families with children.

## In Summary

Attempting to survive on extremely low wages of \$4 an hour is nearly impossible without relying on charity, family support, or social assistance. Housing, food, healthcare and other basic necessities quickly become out of reach financially.

While government subsidies and non-profits can provide some temporary relief, far more systemic solutions are needed to address the deeper problem of millions of workers trapped in severe poverty. From local minimum wage hikes to expanded federal social supports, increasing the income floor for our nation’s lowest-paid workers is critical and urgent. By implementing the right policies, ensuring wages like \$4 an hour are a relic of the past must remain part of our moral and economic imperative.