Teaching Resources: Budgeting

The following assignments uses a scene from Breaking Bad as the starting point for a project that has students create a budget for a worker on minimum wage. The project is well-suited for a principles-level course or as an opening assignment in a labor economics course. The scene below involves Walter considering how much money he needs to earn in order to take care of his family after he passes away. In the development of the minimum wage budget, students will quickly realize that many of the items Walter is considering are not available on their budget.

Episode Title: Paying for College
Season: 2
Episode: 1
Episode Title: “Seven Thirty-Seven”
Timeframe: (04:24 — 06:03)
Concepts: cost benefit analysisdiscountingGary Beckerinflationmarginal analysisnet present valueRational model of crimereservation income

Clip Summary

After watching a gruesome beating, Jesse and Walter are officially scared of their new distributor, Tuco. Walter starts to calculate just how much money he needs to earn selling meth in order to take care of his family. Becker’s theory on the rational criminal suggests that criminals take the time to calculate the costs and benefits before committing their crimes. Walter is even careful to consider future inflation changes as he determines the appropriate amount to “invest.”

Project Summary

Students will assume the role of the primary wage-earner for a minimum-wage family, and must develop a budget on how they will spend their family income. They must identify a current job posting for a job that pays close to a city’s minimum wage. Ideally they select a job that is closely related to the industry they actually want to work in after they graduate. For example, if students hoping to earn a position as a Human Resource Specialist after graduation, may want to find a posting for an HR Generalist.

Assignment Purpose

  • See the impact of increasing the minimum wage for workers who currently earn the minimum wage.
  • Give you some experience using data and spreadsheet software (e.g. Excel), as these skills are highly valued in today’s workplace.

Supporting Documents

For each number in the budget and the job that generates the family’s income, supporting documents should be included. These can be screen shots of webpages or printed copies of quotes. For example, a student wants to spend $500 per month for an apartment, they must go online and find an apartment in the area that costs $500 per month. The supporting documents prove that the apartment actually exists. If the apartment is significantly far from the job posting, be considerate of how to get to work!

Excel Sheet

Budgets should be complete, meaning that all categories for living should be included, and submitted as an Excel spreadsheet. The total amount of expenditures should not exceed the family’s income. If the budget has a car, they must also account for car insurance. There must provide supporting documentation for the sole earner in the family. This means finding a job description or a job category that fits within the family constraints. The income and hours worked for workers in the family must be described.

The Excel sheet will include two tabs: the first showing the budget for someone earning close to the minimum wage and the second sheet showing how the budget changes if the primary earning maintains their job (and hours worked) following an increase in the minimum wage to $15.00 per hour.

Project Description

Students must describe how they came to the budget and work decisions, issues that arose, and overall thoughts on the assignment. Examples of questions that should be addressed include:

  • What did you prioritize in your budget?
  • What did you want to include, but could not?
  • What was the hardest and easiest part of this assignment?
  • How did your decisions change after the increase in the minimum wage?

As a conclusion to your project, please visit the MIT Living Wage Calculator and search for the living wage in the assigned area. How does the budget differ from the one provided by MIT?