A recent study by the National Low Income Housing Coalition determined how many hours you would have to work a minimum wage job to afford rent. The results make a very good case for raising minimum wage. There is no state in the country where a minimum wage worker can afford market-rate rent working 40 hours a week.
To perform their calculations, the researchers used the Fair Market Rent for each state.
The Department of Housing and Urban Development (HUD) determines Fair Market Rent. It is typically the 40th percentile of gross rents for standard units in an area. The researchers also assumed the hypothetical workers in their study would spend 30 percent of their income on rent.
HUD considers a person to be rent-burdened if rent is more than 30 percent of their income. The chart below shows the results.
As you can see, every number is greater than the standard 40-hour week, and many are more than double that.
Here are the main takeaways from this study:
- Currently, minimum wage workers are rent-burdened in every single state in the country.
- Congress would have to more than double the federal minimum wage to $16.35 in order for workers to afford the national average price of a one-bedroom apartment with a standard work week. The current federal minimum wage is $7.25.
- Even in states with higher minimum wages, a 40-hour week will still leave a person rent-burdened.
- Affording a two-bedroom apartment is even more difficult. A person earning $7.25 an hour would have to work 112 hours a week in order to afford the national average price of a two-bedroom and not be rent-burdened.
The 2016 Democratic Party platform includes raising minimum wage to $15 an hour. This is still $1.35 less than the hourly wage needed to afford an average one-bedroom apartment.
Check out this video on how to use the HUD Tool to calculate Fair Market Rent:
Featured Image: Screenshot Via NLIHC
