The Blue Collar Money Manifesto

It doesn't get more blue collar than this welding job

Welder making boilers for a ship, Combustion Engineering Co., Chattanooga, Tenn. (Photo credit: Wikipedia)

I’ve been thinking a lot lately on the topic of class, after a recent commenter claimed that the “labor class” simply couldn’t compared to those more educated (never mind that I am both a blue collar worker and college educated). But it got me thinking; we are different. Not in some fundamental way like the biological differences between men and women, or even different health issues that are more or less prevalent based on ethnicity. But in many cases, the mindset of how blue collar and white collar workers treat money is different. Given that most personal finance articles and books are written by white collar folk, I thought it was time to take a deep look at the issues affecting how blue collar men and women work for their money and how their money works for them. For now, I have prepared this manifesto outlining some of the ways that blue collar money is different. Meanwhile, I am working on a book on the topic which will give personal finance advice specifically geared towards the issues faced by those of us with blue collars.

There have been attempts to explain the differences in the past. But just like most personal finance articles are written by those who have never worked in a position of manual labor, so are the people who have written about the differences. The attempts range from well meaning but laughable to down-right offensive, like this list by the author of Secrets of the Millionaire Mind. Let’s see Eker work for minimum wage for a few months with no insurance and have to decide which bills are getting paid this month and see if he doesn’t change his tune.

Just who is a blue collar worker? According to Wikipedia, a blue collar worker is:

a working class person who performs manual labor. Blue-collar work may involve skilled or unskilled, manufacturing, mining, construction, mechanical, maintenance, technical installation and many other types of physical work. Often something is physically being built or maintained.

The article then goes on to describe white-collar and “pink-collar” service professionals. My definition is a little more simple. I would combine pink-collar into blue and define it as anyone whose job generally requires them to stand. Well, plus drivers and equipment operators. They sit for their job, but are definitely blue collar.

Blue Collar Income

This is the big one. When talking about the differences in how blue collar and white collar workers handle money, a lot of it comes down to the fact that blue collar workers generally earn less. Sure there are exceptions, like experienced skilled positions and entry-level clerical workers. But in general, blue-collared folk earn less. Outside of a few select skilled positions, salaries tend to top out under $40,000. I have white collar friends who have gotten $40,000 per year promotions.

Because we make less, we have less to spend. For some, that leads to an embrace of frugality. For others, a lifetime of envy for higher-earning neighbors and a debt-fueled lifestyle.

Blue Collar Savings & Investments

I laugh at lists of how much money you should have saved by a certain age. The post is more nuanced, and has also written about how to save on a low income, but Financial Samaurai has recommended in one table that I have saved up, at this point, more than I have earned in my life.

Where’s why I’m against the flat tax: spending on basic necessities takes up a far larger percentage of low-income salaries than high-income salaries. If the cost of living in an area was $20,000 for a subsistence lifestyle, that is all of the income of somebody who makes $20,000, 2/3 of those making $30,000, half of $40,000. At $60,000 it is only a third, and for those earning $100,000 it is a mere 1/5 of income. A flat tax penalizes the poor by taking a larger percentage of what might be left over after paying for housing and food.

I don’t have hard numbers to back this up, but I suspect that while collar workers have access to better investments. Yes, everyone has access to the same stock market to invest in with an IRA or non-retirement accounts. But I’m directing this at 401(k)’s. The standard advice is to max out our 401(k), or at the very least, contribute whatever it takes to get the maximum match from your company.

Here’s my list of problems with that:

  1. This company is the first I’ve ever worked for that even offers a 401(k). I’ve spent most of my time working for small businesses who simply aren’t big enough to offer benefits of any kind.
  2. This company only started offering a match this year. Meanwhile, to get the match, I had to triple my retirement contributions.
  3. The IRS contribution limit is a physical impossibility for me. My plan allows a maximum of 50% of my income and the contribution limit is 85% of what I expect to earn this year.

Similar to my complaint about the flat tax, having leftover money to save for retirement is simply harder when you don’t have as much of it to start. I was able to increase my retirement savings to get the “free money,” but at the expense of slowing down my debt repayment. If I was already down to paying those minimums, could I cut a bill? If not, well, I guess I could always go back to living off of peanut butter and ramen, like I was a few years ago when there simply wasn’t enough money to both eat and pay rent.

Free Money

Oh and free money? TANSTAAFL. There Ain’t No Such Thing As A Free Lunch. This phrase was popularized by science-fiction author and Libertarian Robert Heinlein in the 60’s and is actually a reference to a popular promotion by saloons in the 19th century where a “free” lunch would be offered for those buying drinks. Call it inflation, now we only get peanuts. But the trick was that at lunch time, the drink prices were usually raised to offset the cost of the lunch. So you were still paying for lunch one way or another.

But employers will put additional money to your retirement account from their own funds, shouldn’t that qualify as free? Well, for one, if the company wasn’t matching retirement contributions, that money could, theoretically, be used to increase employee salaries. But even excluding the possibility that it could be used for something else, an employer match is not free.

The key word is match. You have to put up your own money first. And doing so comes at an opportunity cost to other things you could use that money towards, such as debt or putting together an emergency fund. And if you have to increase your contributions to receive the match, then the discussion becomes a lot less academic and a lot more real.

These are the kinds of issues that blue collar workers face every day. Do I try to save more for retirement so I can eat tomorrow, or do I lose out on that “free money” so I can eat today?

Health & Insurance

According to President Obama, between 10-15% of the US population is currently without health insurance. I’m willing to bet that the majority of those work in blue collar positions for employers that traditionally don’t offer health insurance. Even with the new health care law, blue collar positions are more likely to be classified as seasonal or part-time exempting their employers from offering insurance. I work up to 60 hours per week in the summer, but because I don’t work in the winter, I’m officially classified as a part-time employee.

Another thing that blue collar workers are less likely to get are sick days. If you don’t work, you don’t get paid. If you don’t get paid, you may not be able to pay the rent. I’ve seen co-workers come into work with the flu because they simply couldn’t afford to take the day off. She spent a lot of time running to the port-a-potty that day!

And even when insurance is offered, it usually isn’t that good. Through my wife’s employer, we have the option of two different high deductible plans. Those deductibles are 10% and 15% of her gross income. And she has reached the top of her pay scale. For the average employee of that store, the deductible can reach as much as a third of gross pay! At that point, you might as well not have insurance at all for your ability to pay for health care and not wind up in debt.


Now, I’m not going to try to say that debt is a bigger problem for blue collar workers than for white collar workers. People of all walks of life get into trouble with debt. But I believe that blue collar workers are more likely to get into debt for reasons that aren’t their fault.

A lack of proper insurance are the reason why we have two medical loans and are being sued over a third medical bill.

I have a former coworker who, when his hours were cut for the winter, started taking payday loans to pay his bills. Then he needed to take payday loans to pay his payday loans. He sold off most of his possessions. He lost his car and started walking 10 miles to work on the 1-2 days per week he was getting scheduled. When he found a new job, he was 2 months behind on the rent for spot in an RV park he and his disabled wife were living in. He now works as a farm hand at a local farm and gets free housing. He was able to sell the RV to the park for back rent plus $20.

That is what the debt picture that many blue collar workers face.

Do you consider yourself blue collar? Do you believe that blue collar workers face different financial challenges than white collar workers do?

If you are a blue collar worker and would like to collaborate on this book, or be interviewed by me for it, please use the contact form below:


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18 thoughts on “The Blue Collar Money Manifesto

  1. This is timely, for years I was a blue collar labor/carpenter and topped out at just over 40 grand….nuff said about that, we lived below our means and are living the good life, nuff said about that…long ago there was a show on tv called this old house, the show and the means to fix up the house was way beyond most blue collar means, I always said there needs to be a show called my old trailer, with tips and ways to fix up the low income home….as well on the radio a well known finical person tells how to live and save money only you have to have a lot to save a lot…his advice to those who don’t make enough, get a better job….no we need to help the lower income and blue collar people live better and live well…..i would love to talk to you about the book

  2. I think that’s a great idea for a book. I do agree that when you make $25K a year, it’s hard to relate to someone who is making 6 figures, and I think people blow off trying because they think advice doesn’t resonate with their situations. I haven’t worked in a blue collar job since college, so I guess I’m in the other camp, but I did grow up with a very blue collar background. I doubt my grandparents ever made more than $15K a year, but they had no debt and were very happy. I think lots of it depends on where you live. In rural Kentucky, or even where we live now, $40K would be a decent living. What I do notice is how the standard for what people think they need has risen over time. My grandparents drove their old truck for 20 years while I see people who don’t make alot buying new cars and even buying their kids a car while they complain about not being able to afford things, but you’re right, I haven’t really lived it, so maybe I’m not the best person to judge.
    Kim@Eyesonthedollar recently posted..Eyes on the Dollar 20/20 Roundup #41: San Diego Here We ComeMy Profile

    • Oh, no, I’m firmly of the opinion that if you are struggling to pay the bills, you have no business buying anything but a beater and then only if your current ride would cost more to fix than replace.

  3. I am not blue and honestly do not have direct experience with much of what you are talking about. But I think that’s exactly your point, that it’s really impossible to give financial advice to someone whose situation you really can’t relate to. It certainly sounds like there’s a big disconnect in terms of how standard financial advice relates to the real world realities of blue collar workers, and I there’s probably a real opportunity there for someone like you to help educate a large number of people. Best of luck! Though I’m not the blue collar worker you’re looking for, if there’s anything I can do to help please let me know.

    • It’s a bit like the saying, before you criticize someone, walk a mile in their shoes. I believe the same goes for advice, be it relationship, financial, career, or anything else.

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  5. Not having good insurance benefits as blue collar workers must be stressful due to the costs and risks of injuries on the job. I’m sure it’s also much harder to work until 65 due to the physical strains from doing constant labor. I suppose a lot of blue collar workers have to change their job duties and specialities as they age.

    • I sometimes wonder if blue collar workers tend to be in better physical condition in their old age from a lifetime of activity. It’s like that arthritis commerical: a body at rest tends to stay at rest, but a body of motion tends to stay in motion

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  7. My partner is “blue collar” and he makes ~$60K/year (skilled trade, so he is educated in the field). But he is sort of capped at that salary, unless he becomes a supervisor. He loves it, so it works for him.
    SuburbanFinance recently posted..What To Do With Your RefundMy Profile

    • That is exactly my point. $60k is a starting salary in many white collar professions and a top salary for most blue collar ones. That’s great that he enjoys his job so much. I tend to have a love-hate relationship with mine. Not really what I imagined doing, but I’m really good at it.

  8. Most of my family before me where blue collar and the love what they do and for some its all they know. My life is different but its hard for me to tell/teach things that are foreign to them. 401k many dont have the option go to school most will end up picking another trade. There is little education for them in particular but I think the principles are the same. Make money but live of less then you make. Well you have what the neighbor making 100k will chances are you wont but chances are they wont be living in your neighborhood either. I think what you are doing would be great. Its just getting the word out to many of the blue collars. Most of my friend that are blue collar dont look for that kind of info at least they dont say it to me. Could be they looked and didn’t find anything that related to them.
    Thomas | Your Daily Finance recently posted..The Basics on How to Build a Better BudgetMy Profile

    • Yes, it is a chicken-and-egg problem. But that is the way that a lot of personal finance advice goes, the ones that tend to need it the most are the ones who don’t even realize they need it.

    • All I know is that neither my wife’s or my 401(k)’s look anything like what I read about. I don’t have any numbers, and I wouldn’t even know where to go looking for them, but my guess is also that blue collar workers are more likely to be working for small businesses that don’t even offer a 401(k) in the first place.

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