Making the Rent on Minimum Wage

So much reporting about the economy is focused on unemployment numbers, but as writer Nona Willis Aronowitz pointed out on Good yesterday, a much less reported story is the number of people who have jobs but are “barely clinging to a decent lifestyle.” Two recent reports show that while employment numbers may be on the upswing, having a job doesn’t necessarily mean you’re on easy street.

In fact, if you’re working at a low wage job, you’re most assuredly not — and that’s the reality for a significant number of Americans. Consider this statistic from Aronowitz’s post:

“In 2010, one in five American adults worked for poverty-level wages, 4.4 million of whom earned wages at or below the federal minimum.”

The federal minimum wage is $7.25 per hour, but that figure varies depending on where you live. A few weeks ago, the National Low Income Housing Coalition (NLIHC) released their annual housing report documenting the disparity between what minimum wage workers can afford to pay for rent and how much rent costs. While it’s not surprising that these workers have trouble paying their rent, it is shocking to see just how big the gap is in many states. For example, in Hawaii, the most expensive state, a person needs to make $31.68 an hour to afford a two-bedroom apartment. (An apartment is considered affordable if rent and utilities cost under 30 percent of a person’s income.) For someone making minimum wage, that would mean working 175 hours — which isn’t even possible (since there are only 168 hours in a week). The disparity exists for every state and commonwealth with the shortest work week in Puerto Rico, where you would still need to work 55 hours to make the rent.

Since 2008, the affordability of housing has steadily eroded for working households in 24 states. Nearly one in four working households spends more than half its income on housing costs, according to a new report from the Center for Housing Policy.

Click on the map above to see how many hours minimum wage earners would have to work to afford rent on a two-bedroom apartment in all 50 states. Learn more about the report on the NLIHC blog.