To afford a two-bedroom apartment, a minimum-wage worker would need to work about 122 hours a week. Jeff Greenberg/Getty Images
On January 30, 2019, Hillary Hoffower and Andy Kiersz write on Business Insider:
- Many minimum-wage workers can’t afford a modest two-bedroom apartment, according to the National Low Income Housing Coalition’s annual report.
- The national housing wage for a modest two-bedroom rental apartment is $22.10, while the federal minimum wage is $7.25.
- A low-income worker earning the federal minimum wage would need three jobs to afford a two-bedroom apartment — or 1.5 jobs and a roommate.
A minimum-wage worker needs 2.5 full-time jobs to afford a one-bedroom apartment in most of the US, according to the National Low Income Housing Coalition’s (NLIHC) annual report.
But that’s nothing compared to how many jobs they’d have to work to afford a two-bedroom rental apartment in most of the US — three.
However, that’s only if they’re living in a two-bedroom alone or are the only working spouse bringing home a check. It’s likely they have a partner or roommate living there as well, in which case they would split the rent. If both residents are minimum-wage workers, they would need to work 1.5 jobs each to afford rent.
The report looked at the “housing wage,” an estimate of the hourly wage a full-time worker — working 40 hours a week, 52 weeks a year — needs to earn to afford a rental home at the US Department of Housing and Urban Development’s fair-market rent. That’s defined as spending no more than 30% of their income on housing costs — experts’ rule of thumb when budgeting for housing.
NLIHC found that the national housing wage for a two-bedroom rental apartment is $22.10. That’s slightly more than three times the federal minimum wage of $7.25.
The map below shows the hourly wage needed to afford a fair-market rent, two-bedroom apartment by state, assuming a 40-hour work week, 52 weeks a year, as calculated by the NLIHC.
If a worker held three full-time minimum-wage jobs, they’d be earning $21.75, just under the $22.10 needed to afford rent and have 70% of income left over for other expenses. They would have to work about 122 hours a week, 52 weeks a year, just to cover rent, according to the report. To put that in perspective, there are 168 hours in the week — that leaves them with only 46 hours, less than two days, of nonwork time.
Read more: A minimum-wage worker needs 2.5 full-time jobs to afford a one-bedroom apartment in most of the US
There is no state in which a minimum-wage worker can afford a two-bedroom rental home by working a standard 40-hour work week, according to the report.
This is true even in Arkansas, which has the lowest housing wage of $13.84. The state has a minimum wage of $8.50, which means workers would need to work a full-time job and a part-time job, or 65 hours a week, to afford a two-bedroom apartment.
Fourteen states have a housing wage exceeding the national housing wage of $22 — Washington, Alaska, California, Colorado, Hawaii, Virginia, Maryland, New Jersey, New York, Connecticut, Massachusetts, Vermont, and New Hampshire, plus Washington, DC.
Of all these states, Hawaii is the most expensive with a $36.13 housing wage. Here, workers earn a minimum wage of $10.10. With three jobs, that’s $30.30 — more than the national housing wage, but still not enough to afford a two-bedroom apartment in the state. A worker in Hawaii would need to work nearly four full-time jobs, or 143 hours a week, to afford a two-bedroom rental.
Gary Reber Comments:
While affording an apartment rental on a single minimum wage is impossible, likewise is enabling minimum-wage workers to purchase a home or to be good “customers with money” to sustain our economy.
Labor cost increases leave business owners mulling their strategy. How much, for example, do they need to pay to attract the best workers and not loose workers to competitors? Can they increase wages without having to let go workers? Can they increase prices, or will customers turn to their competitor? Should they hire fewer workers, cut hours, add automation? Will they be able to maintain their current profit margins, especially critical to small businesses operating on low margins? What will be the impact on labor intensive businesses, such as restaurants and tourism? What will be the impact of job-destroying robotic and AI replacements? What is the impact of American companies outsourcing supply chain goods and finished products manufacturing and off-shoring manufacturing? What is the impact of gutting our manufacturing capabilities?
The problem: insufficient earning and thus purchasing power.
To solve the problem we need a paradigm shift to empower EVERY citizen child, woman and man to earn through owning productive capital assets, as do the wealthy capital asset ownership class. Otherwise, dependency on government will grow. People will be enslaved to subsistence, and demand and ability to purchase needed and wanted goods, products and services will continue to significantly deteriorate. People need to have ownership stakes in the businesses growing the economy. People need to own the “things” replacing their jobs.
We need to begin now to create broad, universal individual ownership of the future formation of productive capital assets and make this the focus of our leadership instead of constantly viewing our economy through the one factor lens of jobs, only jobs.
The new agenda should be the JUST Third WAY Movement (also known as “Economic Personalism”) at http://foreconomicjustice.org/?p=5797, http://www.cesj.org/resources/articles-index/the-just-third-way-basic-principles-of-economic-and-social-justice-by-norman-g-kurland/ and http://www.cesj.org/resources/articles-index/the-just-third-way-a-new-vision-for-providing-hope-justice-and-economic-empowerment/.
Support the enactment of the proposed Capital Homestead Act (aka Economic Democracy Act and Economic Empowerment Act) at http://www.cesj.org/learn/capital-homesteading/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/. And The Capital Homestead Act brochure, pdf print version at http://www.cesj.org/wp-content/uploads/2014/11/C-CHAflyer_1018101.pdf and Capital Homestead Accounts (CHAs) at http://www.cesj.org/learn/capital-homesteading/ch-vehicles/capital-homestead-accounts-chas/
