Minimum-Wage Workers Cannot Afford Rent in Any State

Full-time minimum wage workers cannot afford rent in any U.S. state according to a recent report, Out of Reach, by the National Low Income Housing Coalition. The report compares average rent for "modest" one and two apartments and establishes the wages required to afford such apartments. The figures for affordability are based on not spending more than 30 per cent of household income for housing.

In the U.S., the "Housing Wage" needed is $25.82 per hour for a two-bedroom rental apartment. For a one-bedroom apartment, it is $21.25. This means the two-bedroom Housing Wage needed is more than 3.5 times greater than the federal minimum wage of $7.25 an hour.

As a result of persistent struggle by workers, thirty states, the District of Columbia, and more than 50 counties and municipalities now have minimum wages higher than the federal minimum wage. However, even in these areas with a higher minimum, such as $15 per hour, wages are not sufficient to afford a one-bedroom rental apartment on a 40-hour workweek. It is estimated that the average worker would need 96-hour workweeks for 52 weeks per year to afford a two-bedroom apartment or rental home -- equivalent to about two-and-a-half full-time jobs. Such a workweek, assuming eight hours for sleep, leaves about two hours for everything else. For the overwhelming majority, not even sharing a dual income with a federal minimum wage-earning partner would cover a two-bedroom rental in their state.

The federal minimum has not been raised since 2009, does not keep up with inflation, especially in the current situation, and keeps full-time workers impoverished. In 1968, for example, the federal minimum wage was equivalent to $13.16 in 2022 dollars -- nearly $6 higher than the minimum today. Today's minimum is worth about 38 per cent less than in 1968 and 21 per cent less than 2009.

There are at least 1 million workers getting paid the federal minimum wage or less. Workers under age 25, who represent just under one-fifth of hourly paid workers, make up 48 per cent of those paid the federal minimum wage or less.

Workers have long fought to raise the federal minimum wage, which is supposed to provide the minimum needed for workers to have a U.S. standard of living. While workers consider that the minimum should be equal to the average wage of industrial workers, evidently the government thinks poverty-level wages should be standard.

The refusal to raise the minimum directly aids the giant oligopolies that steal the wealth produced by the workers. As with all wages, the minimum wage has not kept up with productivity growth -- that is the growth in wealth produced by the workers, who generally everywhere work more for less. Had the minimum wage kept up with productivity, it would be $22 per hour.

The report brings out that eleven of the country's largest occupations, accounting for more than one-third of all workers, pay median wages that are less than the one-bedroom Housing Wage of $21.25 per hour. In most areas, a family of four with the poverty-level household income provided by the minimum wage can afford a monthly rent of no more than $694. That is assuming the household can manage to spend as much as 30 per cent of its income on housing. The average monthly rents for one-bedroom or two-bedroom apartments are $1,105 and $1,342, respectively.

Individuals with disabilities relying on federal Supplemental Security Income (SSI) can afford a monthly rent of only $252. A household receiving the average unemployment insurance benefit can afford a rent of no more than $529 per month. Since unemployment insurance is determined by an individual's past wages, workers who had been making the minimum wage before losing their jobs receive even less.

Many workers across the United States, such as at Amazon, Starbucks, Trader Joe's, and fast food restaurants are organizing and rightly demanding higher wages and safe working conditions. Workers are putting forward the need for a minimum wage of $25-$30 per hour and that government guarantee that no worker or family is forced to live in poverty.

This article was published in
Volume 52 Number 9 - September, 2022

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