How much money do immigrants actually make?
How soon can you "get rich" in America as an immigrant?
How much money do immigrants get paid in America? The short answer is, not as much as you think.
As of the publishing of this book, ( Jan 2022) the current federal minimum wage is $7.25 per hour and has not been raised in over 10 years.
My very first job 20 years ago, paid exactly that much. It was considered “good money” back then.
Bear in mind that this is the minimum wage for legally authorized workers. If you’re working “under the table” you could be earning even less.
According to the U.S. Bureau of Labor Statistics, the median hourly wage for a manicurist in 2019 was $9.43 and an agricultural sorter earned $9.57.
Sewing machine operators earned $10.54 an hour.
Construction helpers like painters and paperhangers earned $12.46 an hour, while plasterers and stucco masons earned a much higher wage of $18.05 an hour.
These wages have not changed much if at all since.
For the sake of clarity, let’s assume an average wage of $12/hr for all low-skilled jobs, the kind most immigrants are likely to occupy.
A full-time job will offer you between 35-40 hours a week depending on the company’s needs.
We’ll go with the high number and assume that you will be working 8 hours a day, 5 days a week at this job, a total of 40 hours.
Therefore your gross income before all deductions will be 40 x 12, adding up to $480 a week.
That is how much you will earn.
But before your employer hands you that check, they are legally required to deduct mandatory taxes and remit them to the government.
There is no doubt about it — taxes are by far the single largest expense that most Americans pay every year.
The typical deductions from your paycheck are
Federal Income Tax
State Income Tax
Social Security Withholdings
Medicare/Medicaid withholding.
Those will come out of every paycheck you receive assuming you don’t have other deductions such as healthcare or retirement contributions.
Your gross income of $480 a week would be around $360 after taxes. Therefore, your net monthly income would be $1440.
Now let’s look at your expenses.
Your biggest expense will by far be housing.
According to the latest data by GoBankingRates, this is how much it costs to rent a one-bedroom apartment in 50 major U.S cities in 2018. Depending on when you read this, prices may be even higher.
Cost of one-bedroom apartments in 50 median cities across the country.
Wichita, Kansas:$470
Cleveland, Ohio:$525
Detroit, Michigan:$550
Tucson, Arizona:$559.50
ElPaso,Texas:$599.50
Oklahoma City, Oklahoma:$650
St.Louis, Missouri:$700
Albuquerque, NewMexico:$715
Indianapolis, Indiana:$732
Colorado Springs, Colorado:$750
Columbus, Ohio:$750
Milwaukee, Wisconsin:$750
Louisville, Kentucky:$750
Omaha, Nebraska:$759
Kansas City, Missouri:$795
San Antonio, Texas:$830
Memphis, Tennessee:$835
Newark, NewJersey:$850
Las Vegas, Nevada:$875
Jacksonville, Florida:$895.50
Phoenix, Arizona:$909
Virginia Beach, Virginia:$975
Anchorage, Alaska:$995
Sacramento, California:$995
Portland, Oregon:$1,095
Austin, Texas:$1,100
Tampa, Florida:$1,100
Baltimore, Maryland:$1,175
Charlotte, North Carolina:$1,265
Dallas, Texas:$1,271
Philadelphia, Pennsylvania:$1,295
New Orleans, Louisiana:$1,297.50
Houston, Texas:$1,308
Atlanta, Georgia:$1,387
Nashville, Tennessee:$1,395
Minneapolis, Minnesota:$1,435
Denver, Colorado:$1,435.50
Chicago, Illinois:$1,595
Anaheim, California:$1,606
SanDiego, California:$1,760
Honolulu, Hawaii:$1,795
Seattle, Washington:$1,795
Pittsburgh, Pennsylvania:$1,850
Miami, Florida:$2,000
Los Angeles, California:$2,014
Boston, Massachusetts:$2,025
Washington, D.C.:$2,172
New York, NewYork:$2,200
San Jose, California:$2,536
San Francisco, California:$3,600
That is the average rent you pay for a one-bedroom apartment.
If you want 2 bedrooms, it’s gonna cost you 30% more.
So, if you’re working 8 hrs a day, five days a week earning $12 an hour, you’ll be earning $1440 a month, and if you live in a median city such as Columbus Ohio, 33% of your income will go into paying rent alone.
That does not include other expenses such as utilities.
According to Move.org, in the US, people who rent apartments should plan to spend at least $240 per month for utilities, and homeowners should budget closer to $400 a month.
Groceries and toiletries.
You need to eat right?
You also need to clean your apartment, wash your body and hair, shave, brush your teeth, wash your clothes…. you get the point. So, how much should you expect those expenses to cost you?
In the US, the monthly cost of feeding one person in a median city is about $342.50.
The average cost of food per day per person is $11.05.
These are the insights provided by “NUMBEO”, the world’s largest cost of living database, and their overview of food and other expenditures worldwide.
Their data suggests that the average cost of food per week for 1 person is $77.35.
The average cost per person per month grows depending on the consumers’ spending habits and location.
Even if you live in one of the cheapest cities for grocery costs, you will still spend at least $250 a month on food alone.
Transportation:
Let’s say you’ve decided that instead of driving, you will utilize public transportation until such a time that you have enough savings or a second job to allow you to purchase a car.
The statistic shows that the average cost of a monthly bus or train pass in U.S. public transportation is 57.32 U.S. dollars.
Other monthly expenses:
Out-of-pocket medical costs.
Telephone/ Cell Phone
Internet
Renters Insurance
Those are simply the needs that you can’t do without. But, life isn’t all about needs. If you’re gonna have a life, which you should, there are other expenses that you’re going to incur such as…
Clothing, jewelry, etc.
Dining out.
Special meals at home (steaks for the grill, etc.)
Entertaining guests
Beverages [Starbucks Coffee, Alcohol]
Movie, concert, and event tickets.
Gym or club memberships.
Travel expenses (airline tickets, hotels, rental cars, etc.).
Cable TV, satellite TV, or streaming packages.
Self-care and personal grooming. [Hair salon, barbershop, nail salon, etc]
Home decor.
Not included in the list above are other expenses that depend on your life status.
Do you have children? You will have to take your child to a care center or hire a nanny to stay with your child in your home while you go to work.
Here is where things get really scary.
According to VeryWellFamily.com, The average cost of center-based daycare in the United States is $11,896 per year ($991 a month) for infants and $10,158 per year ($847 a month) for toddlers.
According to ChildCare Aware of America, prices for infant daycare can range from $5,760 to $20,880 a year ($480 to $1,740 monthly), depending on the city live in.
Therefore, if you have pre-schoolers or plan on having children, you’re gonna have to find ways to pay for childcare while you go to work.
This usually means taking on a second or even a third job just to meet that one expense, or splitting the responsibility between both parents so when one is at home with the kids, the other one can go to work.
This limits the number of hours you can work, therefore greatly reducing the amount of money you can earn. In a no-win situation.
Maybe now you’re beginning to see just how overwhelming expenses can be in America.
When most people are dreaming of a life in the U.S, they don’t consider these things in depth.
Worst of all, they look at other immigrants living here who seem like they’re living the good life and fail to realize that what they are seeing is what the person wants them to see, not the reality.
If there’s one thing a lot of immigrants are guilty of, it’s “flexing”
“Flexing” is a term coined by diasporans to describe someone who pretends to have more than they do especially when they visit their home country wearing designer outfits and carrying wads of cash and gifts to hand out.
The only problem is, they had to take a loan to afford that outfit and borrowed cash from a credit card account.
So, in review, working 40 hours a week, earning an average of $12/hr adds up to $1440 a month paycheck after taxes.
Here’s what Statista Research Department published on Apr 15, 2021
In March 2021, the average hourly earnings of all employees in the United States was 11.31 U.S. dollars. The data have been seasonally adjusted.
The deflators used for constant-dollar earnings shown here come from the Consumer Price Indexes Programs.
The Consumer Price Index for All Urban Employees (CPI-U) is used to deflate the data for all employees. (Statista.com)
It seems that at $12/hour, I am being even more generous. If that’s the only job you have, your monthly expenses in a median city like Columbus Ohio will look like the following:
Net monthly income: $1440
Rent: $725.00
Transportation $57
Groceries/Toiletries: $250
Cell Phone Plan: $80
Electricity or Natual Gas: $110: The average monthly electricity bill is $110.76.
Cable TV: Mid-level plans average about $75 per month
Internet: The average internet bill is around $60 per month.
If we punch in the numbers, here’s where we end up.
725+57+250+80+110+75+60=1357.
Subtract that from your $1440 income and you have $83 left to spend on
Clothing, Jewelry, Etc.
Dining Out.
Special Meals At Home (steaks For The Grill, Etc.)
Entertaining Guests
Beverages [Starbucks Coffee, Alcohol]
Movie, Concert, And Event Tickets.
Gym Or Club Memberships.
Travel Expenses (airline Tickets, Hotels, Rental Cars, Etc.).
Self-care And Personal Grooming. [Hair Salon, Barbershop, Nail Salon, Etc]
Home Decor.
Childcare if you have kids
Miscellaneous expenses
As you can see, it’s impossible to have a single job and live any sort of a decent life in America.
Therefore, for the most part, most people cannot afford to rent an apartment by themselves and are forced to look for a roommate to share the space and rent with.
If you choose to have 2 jobs so you can have more money, your other expenses will also increase.
Depending on what city you live in, it may be impossible to use public transportation to commute to both of your jobs since they’ll most likely be far from one another.
In such a case, you are then forced to purchase a car so you can juggle two jobs and a life outside of work.
Given the amount of money you’re earning isn’t even enough to take care of your basic needs, it means that you won’t be able to save cash that you can use to purchase a vehicle down the road, which leaves you with only one option.
You’ll have to buy a car, on credit.
According to one of the largest auto loan companies, Lending Tree, the average monthly car payment in the U.S. is $563 for new vehicles, $397 for used vehicles, and $450 for leased vehicles.
Once you own a car, you’ll then have to purchase insurance.
It is illegal to drive without insurance and if you finance a car, the bank that’s lending you the money demands that you carry a comprehensive insurance policy in case of an accident since they own the car until the day you pay it off.
The national average cost of car insurance is $1,592 per year, according to NerdWallet’s 2021 rate analysis.
That works out to an average car insurance rate of about $133 per month.
So, if you purchase a used car at $397 a month and pay $133 a month for insurance, you will also have to put fuel in the car.
The average cost of gas/petrol per month is $250 for someone commuting between two jobs.
So, owning a used car now becomes a $750 monthly expense. These expenses do not include regular maintenance like oil change, brake fluid, tire rotations, or any other breakdowns that might occur.
In fact, in Sept 2020, Credit Karma, a large credit lending company wrote the following in an article about the true cost of owning a car in America.
“The cost of owning a car is more than just the sticker price on the window. You’ll also need to spend money to use that car. And costs like fuel, parking, maintenance, and insurance can quickly add up.
Monthly car loan payment, car insurance premium, fuel, maintenance-$900.50
Average monthly maintenance cost -$99
The total monthly cost of owning a car, $999.50”
Source (Credit Karma)
So, if you decide to get a second job and you require a vehicle so you can juggle both jobs, you’ll be working 80 hours a week only to supplement your income by about $500 or less, and you still haven’t taken care of all the non-essential expenses listed above.
One other option that you have is to work overtime…a.k.a “Doubles” in immigrant lingo.
Working overtime:
It’s true that if you don’t want the expenses of having a car, you can choose to have only one job and work more than 40 hours a week.
International students with authorization to work off-campus are only allowed to work 20 hrs a week during school days and only 40 hrs a week in the summer when school is out.
While it’s true that some jobs such as nursing and Certified Nursing Assistants are in high demand and companies don’t mind paying overtime, other jobs will only allow you to work overtime if they are desperately understaffed or there’s an occasional emergency where a coworker can’t come to work.
The federal overtime provisions are contained in the Fair Labor Standards Act (FLSA). Unless exempt, employees covered by the Act must receive overtime pay for hours worked over 40 in a workweek at a rate not less than time and one-half their regular rates of pay.
Simply put, if your hourly pay is $12 per hour, you will be paid that wage for the first 40 hours in a week.
If you work more than 40 hours, each extra hour you work will be compensated at $18 per hour minimum.
There are a few cases where you could even be paid double overtime pay depending on the nature of your job.
Given the sheer number of employers and job positions in the country, it’s surprising how few occupations and professions allow employees to work overtime hours.
Most jobs that come with overtime hours and benefits belong in 6 categories only.
Information Technology
Nursing
EMT - Emergency Medical Team/ Paramedics
Manufacturing
Controls and Instrumentation Technicians
Construction
If you’re not working in one of those fields, you’ll most likely not be able to work more than 40 hrs a week at any other job except due to unforeseen circumstances.
Therefore, if you need to work 80 hours a week to earn enough for your needs and wants, you’ll have to work more than one job unless you work in one of those fields.
Are you starting to get a picture of the real “American dream?”
Needless to say, you’re not going to have that disposable income you dream about having by living and working in America.
The only way you can do this is by making some very serious sacrifices and figuring out a way to live way below your means.
Truth be told, the people who truly make it here are those that learn to live way below their means; those that don’t care about impressing others or showing off to their relatives and friends back home.
Alternatively, you can go back to school and acquire skills that pay a lot more than $12 an hour while maintaining a simple lifestyle so you’re not spending according to your earnings.
While we’re on the subject of family and relatives back home, as soon as you get yourself a job, they will automatically assume that you are swimming in a pool of dollar bills and they will expect regular handouts.
If you’re gonna make it in America as an immigrant, you’re gonna have to make some tough decisions about how to deal with family and friends that you left behind. We’ll talk about this in chapter 16.
So, if making good money is that hard, what other options exist? We’ll look at those in upcoming chapters starting from the next.
Next Recommended Reading
Notes
American dream. (2003, November 21). Wikipedia, the free encyclopedia. Retrieved May 31, 2021, from https://en.wikipedia.org/wiki/American_Dream
Serkan Arslanalp and Chima Simpson-Bell. (2021, May 5). US Dollar Share of Global Foreign Exchange Reserves Drops to 25-Year Low. https://blogs.imf.org. https://blogs.imf.org/2021/05/05/us-dollar-share-of-global-foreign-exchange-reserves-drops-to-25-year-low/
Manicurists and pedicurists: Occupational outlook handbook: : U.S. Bureau of Labor Statistics. (2020, September 1). U.S. Bureau of Labor Statistics. https://www.bls.gov/ooh/personal-care-and-service/manicurists-and-pedicurists.htm
Anderson, J. (2018, November 16). Here’s what an average apartment costs in 50 US cities. GOBankingRates. https://www.gobankingrates.com/saving-money/home/average-apartment-cost-us-cities/
Utility bills 101: Average cost of utilities. (2020, August 26). Move.org. https://www.move.org/utility-bills-101/
Cost of living in the United States. (n.d.). Cost of Living. https://www.numbeo.com/cost-of-living/country_result.jsp?country=United+States
How much does childcare cost? (n.d.). Verywell Family. https://www.verywellfamily.com/affording-child-care-4157342
Monthly hourly earnings for all U.S. employees January 2021. (2021, February 10). Statista. https://www.statista.com/statistics/216259/monthly-real-average-hourly-earnings-for-all-employees-in-the-us/
Average car payment | Loan statistics 2021 | LendingTree. (n.d.). LendingTree. https://www.lendingtree.com/auto/debt-statistics/
Average car insurance costs in 2020. (2020, January 29). NerdWallet. https://www.nerdwallet.com/blog/insurance/car-insurance-basics/how-much-is-car-insurance/
The true cost of owning a car. (2020, September 25). Credit Karma. https://www.creditkarma.com/auto/i/what-it-costs-own-car
Employment. (2020, November 16). ICE | U.S. Immigration and Customs Enforcement. https://www.ice.gov/sevis/employment
Overtime pay. (n.d.). U.S. Department of Labor. https://www.dol.gov/agencies/whd/overtime