11 Jun 2015

The Hourly Wage Needed to Rent a 2-Bedroom Apartment in Every U.S. State

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Yes, the American economy is improving, and yes, we’re creating more jobs. But the hourly wages for a lot of these jobs are stagnant at best. According to the Pew Research Center, 30 percent of America’s workforce earns a near-minimum-wage salary—that’s almost 21 million people. As a cruel paradox, rents across the country keep rising.

A new report by the National Low Income Housing Coalition examines how these opposite trends play out regionally. The work maps how much an American worker needs to earn per hour in each state to rent a two-bedroom apartment. It finds that in no state can a person earning minimum wage afford such an apartment at market rent. …
Rents keep rising because the demand for rentals keeps growing, and that’s partly because fewer people can afford to buy their homes today than they could before the recession. The low supply of rentals has created a situation where people who definitely can’t afford to buy are also priced out of renting.
Here’s how the report explains the impact of scarce affordable housing on low-income renters:
The tightening rental market has the most significant impact on low income renters. Many higher and middle income renters occupy units that are affordable to lower income groups, reducing the supply of affordable and available decent apartments for the lowest income renters. As a result, in 2013, for every 100 extremely low income (ELI) renter households, there were just 31 affordable and available units.

The report’s calculations back up its claim. Currently, an average American needs to earn $19.35 to afford rent on a two-bedroom unit. That’s a few dollars more than the $15.16 average hourly wage earned by the average American renters, and 2.5 times the federal minimum wage. It’s also more than the median hourly wage of the the average American worker, which is $17.09. …
What do you think of this? If accurate, is this report an argument for raising the minimum wage, as many on the left suggest, or, rather, is it an argument against the Obama economic model: high taxes, low yield, rising unemployment, and massive regulation?
From Citylab:

5 comments:

  1. The problem isn't wages (which I agree are too low) but that housing, along with real estate in general, is used as an investment medium. That means the price of housing is set by the amount of investment capital floating around looking for profitable safe havens; the renter is just along for the ride.

    Creating new regulations intended to curb the use of the housing stock for investment purposes by non-residents, or the flip side, to favor owner-occupants over landlords, probably wouldn't work. The real problem ultimately goes back to central banking and fiat money which require constant increases in the money supply to avoid a crash. Since the poorest people are always the last to get their hands on the new money, their wages will always be playing catch-up with the money that has already flowed into rental housing. End the Fed. Reset.

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  2. 17 dollars an hour you would not be able to rent a two bedroom apt. Try again!

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  3. No, the economy is not improving and no there are no new jobs being created. I don't know where you get the idea your statements are true.

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  4. I know people who are working 2-3 PT jobs just to barely scrape by. The economy is not improving for those other than the Wall St. money junkies. The loss of middle-class industrial jobs spelled the end of the "American dream." In this neck of the woods $15-$20 dollar an hour jobs are practically unheard of except for professional people. The few blue collar jobs are still at the level of 15-20 years ago.

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  5. Rafael Espericueta12 June 2015 at 09:24

    State averages can be very misleading. A 2 bedroom apartment in California is not affordable to someone making $28 per hour if you happen to live in places like San Francisco, where you could easily pay $5000/month.

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