Minimum Wage Jobs Suck

Grinding away at some thankless job in fast food asking if someone wants fries with their order.  Or working in the nearest grocery store or big box retailer restocking items or running the cash register.  We've all done it at some point and I think it's safe to say that none of us want to ever go back to working for minimum wage.

Let's face it:  Minimum Wage Jobs Suck

Obviously the money isn't that great when you're working a minimum wage job.  Assuming a 40 hour work week every week of the year you're looking at grossing just $16,847.17 at the average minimum wage rate of $8.10 across the United States.  That's in exchange for 2,080 hours of your life every year.  There's a reason it's called "working for peanuts" because that's about all you can afford to buy.

I don't think anyone's surprised by the fact that there isn't much to be found in the way of financial rewards through minimum wage jobs.  However, the income is just one reason why minimum wage jobs suck.
There's plenty of other downsides to minimum wage jobs.

For starters the responsibility of the position unfortunately matches the income.  There's no real opportunity for growth when you're stuck working these jobs.  That doesn't mean that you can't learn things; however, the possibilities are not nearly as plentiful.

Low paying jobs also typically require less skills/education which means more competition.  If you mess something up on accident, where's the incentive for loyalty from your employer?  To them you're just a cog in a wheel with no real differentiation.  The fact is in a minimum wage job you're always expendable thanks to the countless number of teenagers looking for these same jobs that can teach them how to work.

Let's also not forget that there isn't much in form of creativity with minimum wage jobs.  I mean how much creativity can be allowed when the business model for your employer requires consistency across each storefront?

I don't want to only bash on minimum wage jobs.  Minimum wage jobs do have a place and that's to help teach people new to the working class how to work.  They can teach responsibility, honesty, integrity, work ethic and much more.

I've only worked one minimum wage job, but it was luckily a great experience.  I worked at a children's day camp and birthday party place that was a couple miles from my house growing up.  It was great because I pretty much got paid to play with kids every day and I had a core group of co-workers that I worked with most days and since we were off-site we were fairly autonomous in our daily activities.

At the time I thought I was ballin' whenever my paychecks came in each month, but in hindsight it was pretty poor pay.  It was still a great time and taught me plenty, but it also reinforced the need for me to go to college, get an education and continually learn so I didn't have to work for minimum wage forever.

Most importantly though they can teach you what you don't want.

Almost all of us have worked at least one minimum wage job at some point in our life and chances are it was pretty mindless and possibly even soul sucking work.  While we learned valuable lessons from them, I don't think any of us are dying to go back to working those jobs mainly because they just aren't fulfilling.

It's all of the reasons that we dislike those jobs that should continue to push you towards saving, investing and eventually financial independence.

Whether your strategy for reaching financial independence is rental properties, index funds, growth investing or my personal favorite dividend growth investing, the key is to build up assets that can be turned into income.  Income you no longer have to work to earn because you have money working for you.  And I can guarantee that your money can work harder and longer than you can.

The oil field is our income source and it's anything but stable right now.  That got me thinking what would I do in a pinch if I was laid off and couldn't find work anywhere else and had to resort to going back to my high school/college days and take on a minimum wage job.  The wonderful thing about our saving and investing over the last 5 years is that we've built up a great portfolio that provides $5,643 in annual dividends across our taxable accounts.

So what I've been thinking of was just how valuable our dividends are in terms of minimum wage.  The following chart shows the equivalent weeks worked that our dividends provide based on each states' minimum wage.

That's anywhere from 14.1 weeks in Massachusetts and 19.6 weeks in Idaho worth of minimum wage income that I don't have to slave away for.  Or 19.5 weeks of minimum wage income in my home state of Texas.

That $5,600 in dividends is far from being a living wage, but what's great about it is that over the long term those dividends will grow on their own much faster than minimum wage grows.

Even if we invested no more capital and just let our portfolio sit there and grow we'll be much better off in 10 years.  At a 5% dividend growth rate our annual dividends would be almost $9,200 in a decade.  At a 7.5% dividend growth rate we'd be looking at $11,600 in annual dividends and at a 10% dividend growth rate we'd be at $14,600.

That's why generating a passive income source is so vital.  Without investing even $1 more over the next decade the worst case scenario would see us add another part-time "worker" to our family that works about half the year at a minimum wage job.  In the optimistic case of 10% dividend growth that "worker" would almost be working full time.

Except this "worker" is even better because it has no expenses associated with it.  No extra rent.  No higher utility bills.  No cell phone.  No gas for a car.  No food.

If that doesn't show you the power of passive income or dividend growth investing then I don't really know what will.

What's the worst minimum wage job that you ever had?  What are you doing to build a passive income stream?

Image provided by Mister GC via


  1. It is incredible how little a minimum wage job pays, isn't it?! I've never had one at the true "minimum", but in high school and college I had two jobs that paid a dollar over the minimum. My chief issue was that the work was boring! Incredibly, in a recent government job (by the way NEVER work for government) I had this awesome secretary. She was paid $10/hour, but she was worth twice that to my department. I tried to get her promoted for a while, but was unsuccessful. I quit my day job a couple months back, but she was still there plugging along. She felt she had too much debt to venture out for something else. Well, my former office manager texted me yesterday and said that this young lady got promoted to $12/hour and moved to another department. I'm glad, but I have to say many people's pay does not actually reflect their value to their employer.


    1. Bryan,

      Minimum wage is horrible for many more reasons than just the pay. There's no creativity, responsibility, constant replacement and very little upward mobility in minimum wage jobs. What's the incentive for the employee to work harder or do any critical thinking to improve a product/service when they aren't likely to be rewarded with much.

      I hate to hear about that lady essentially being stuck in her job but it's awesome that she was given a solid 20% raise. Hopefully her hours aren't cut any so she gets the full raise. Her situation just reinforces the importance of having your financial house in order so you have one of the best things anyone can have: options.

      Thanks for stopping by!

  2. JC,

    I think I've seen similar comparisons before, and I have calculated that my dividends equals 1 pay period at my current job (almost). I totally agree it is a great way to compare your dividends, so you can see how your passive income is your 3rd job and a buoy to your bottom line.

    Keep up the good work,

    1. Gremlin,

      That's awesome that your dividends are an additional pay period for you. I think that's what makes DGI so strong. It's easy to draw comparisons as far as expenses covered or income replaced and the best part is that your capital keeps working for you even if you take your dividends in cash.

      Thanks for stopping by!

  3. Nice! I've often made the same type of comparison. Now I'm debt free, I have enough passive rental income to nearly double the annual minimum wage. I'm just starting to develop my Dividend Growth Portfolio. It's like starting from zero. It'll be fun to watch the income grow and increase over time. I'm going to continue making this type of comparison going forward.

    Keep up the great work.

    1. POMR,

      You're in a great position being debt free and having that much rental income already coming in. The best part about passive/semi-passive income is that it requires very little upkeep 95% of the time. And you continue to build up your stream even faster as it grows and gets reinvested. I love dividend growth investing but would also like to move into rentals at some point in the future. It's a bit riskier from a diversification standpoint and since we'll have to take on additional debt to do it, but if you're conservative in your approach it can be very profitable.

      Thanks for stopping by!

  4. Hi JC,
    I remember working at a pharmacy store before university - the money seemed a lot at the time but I had some good coworkers so I enjoyed the work even though it was very routine.

    I was also thinking about minimum wage, but was considering to calculate my "FI Wage" instead which would be the hourly rate my investment income pays me for sitting around doing nothing :) It's below minimum wage levels at the moment though!

    Best wishes,


Post a Comment