I’m going to go way off the normal track here and do a bit of social commentary. I heard a radio piece on my drive home yesterday about the challenge of paying court and legal fees for low income wage earners. This can trap those guilty of minor offenses (like a traffic infraction) in a cycle of jail and debt that is difficult to break out of. It never made sense to me that financial penalties – which by their nature are punitive – don’t scale with income, as is common in some European countries. I decided to try and visualize how the weight of a penalty for say, a speeding ticket, scales with income. It was tempting to try and scale up, i.e. what is the equivalent of $300 for someone earning $X? I decided however, that it would be more informative to try and scale down.
In this scenario the penalty is $300. Someone earning the federal minimum wage and working 40 hours a week makes $15,080/year, so the $300 penalty is roughly 2 % of annual income. So be it, perhaps that’s a fair penalty. But what would be the equivalent if the same offender earned more? A private/seaman/airman who has just joined the military earns roughly $18,561/year. Paying the same ticket (and I know from experience that the military pays a lot of them) would equate to the minimum wage earner paying $243.72. A graduate student fortunate enough to get a stipend (and own a car) might earn $25,000/year. Paying the same ticket would be equivalent to the lowest wage earner paying $180.96, and down it goes along the income scale. If LeBron James, who earned $77.2 million last year in salary and endorsements (according to Forbes), got the ticket, the penalty would be equivalent to the lowest income wage earner paying $0.06. Salary data came from a variety of sources, including here and here. Salaries marked with an asterisk in the plot above are medians from these sources.