
Minimum Wage Still Can’t Pay For A Two-Bedroom Apartment Anywhere - tshannon
https://www.citylab.com/equity/2019/06/affordable-housing-minimum-wage-rent-apartment-house-rental/592024/
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throwaway98434
This article like so many others makes a critical mistake in using a median
price for minimum earners.

A minimum wage earner is not and should not be in the market for a median
priced home.

A median wage earner would pursue a median priced home.

A bottom quartile earner would pursue homes priced in the bottom quartile. Not
the median.

The title of this article is false. Minimum wage earners can often afford two
bedroom homes priced at the lower end.

~~~
SomeOldThrow
> Minimum wage earners can often afford two bedroom homes priced at the lower
> end.

[citation needed]

Looking around the bay they appear to simply become homeless, especially if
there's any interruption in work, and if they're lucky they're able to move
away before this happens.

~~~
leereeves
Obviously not in the Bay Area. People making six figures can't afford homes in
the Bay Area.

But homes are cheaper almost everywhere else in the US.

~~~
SomeOldThrow
...and that's the economy _working_ , where you can be run out of the city
because a rich person wants your house?

~~~
leereeves
No, that's NIMBYist government regulation preventing the economy from working
by building high density housing in a city that needs it.

~~~
SomeOldThrow
YIMBY pro-developer stances like Weiner's SB-50 aren’t going to help working
class families and individuals either. I am very pro-development but we need
high allocations of affordable and social housing to make the development work
for the existing community.

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zuminator
I'm all for people earning a fair wage but I find reports like this a bit
disingenuous. A minimum wage person can't afford a median apartment? Ok but
you would expect that minimum wage workers would seek out bargain low-end
units, and leave the median apartments to median income families.

So while acknowledging that in many cities including my own there is an
overall affordability issue, I have a problem with being presented with
misleading statistics, even if for noble reasons. About 5 percent of workers
make minimum wage or less. A straightforward and honest question would be to
ask if they can they afford available apartments in the bottom 5-10% range of
rents? Maybe they can't, and that would indeed be a problem. But in terms of
this report, we have no way of knowing.

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OceanKing
It seems that minimum wage is not, in fact, supposed to support a person 100%,
not especially a family.

~~~
ocdtrekkie
I am not sure why people think minimum wage must be enough to afford a two-
bedroom home. Ideally minimum wage should comfortably allow one person to
support... Themselves, minimally. Which means a studio or one bedroom.

People should not aim to remain at minimum wage long, but use it as an entry
point for somewhere better.

~~~
djschnei
Eh I'm not positive it should even be able to support a single person... Why
do we insist on raising the bar for employment so high? If a 16 year old wants
to get their first job, they shouldn't be required right of the bat have a
productive output sufficient to support themselves. That's not the point of
minimum wage jobs - or at least it never was until we started arbitrarily
setting a minimum value.

~~~
tcfunk
That's all well and good if 16 year olds are the only ones making minimum
wage.

And if their parents haven't kicked them out of the house already because they
got pregnant too early.

Or have a sexual orientation that their parents don't agree with.

Or..

~~~
imgabe
Do we need to handle those edge cases by mandating what employers have to pay
ALL employees? Maybe there is a better way to help people in needy situations
without distorting the labor market for everyone.

~~~
suby
16 year olds working min wage is the edge case. The average retail worker for
instance is 37.

[https://www.google.com/url?sa=t&source=web&rct=j&url=https:/...](https://www.google.com/url?sa=t&source=web&rct=j&url=https://familiesandwork.org/downloads/TurnoverAndRetail.pdf&ved=2ahUKEwidpaCDl_biAhXGqlkKHUFuBjQQFjABegQIDxAG&usg=AOvVaw2QfCizk_emgU0YIDzaDwgO)

~~~
imgabe
Not all retail workers make minimum wage.

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mgraczyk
On the other hand, if this weren't the case I think it would be even more
strange.

"Law requires companies to automate or illegally hire any job worth less than
a 2-bedroom home"

~~~
Damorian
Is there anything wrong with this? If a job can't provide for a person at some
(philosophically debatable) level, it's not a job worth doing, free market be
damned. We could take this to a logical extreme and think of all the jobs that
could exist in the absence of a minimum wage and basic human necessity, but
the reality is both of these exist. Either it's "worth" more for an employer
to pay them more, or automating it becomes more competitive. Both of these
drive innovation and advance society. This is why I've supported a higher
minimum wage.

~~~
mgraczyk
Yes, there is plenty wrong with this. It is a strange economic intervention
that distorts incentives and rarely helps low-wage populations or innovation.
Unfortunately there are other options besides "automate" or "pay more".

For example, you can pay people under the table, outsource, close down your
business (as many restaurants do), change your business model to require less
labor (many restaurants in the US are switching from full service to counter-
serve). None of these are good for workers.

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anbop
Minimum wage should provide a minimal lifestyle. Not penury, but perhaps a
room in a shared accommodation. Why would the legally minimal wage support
housing an entire family?

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gok
The actual report:
[https://reports.nlihc.org/sites/default/files/oor/OOR_2019.p...](https://reports.nlihc.org/sites/default/files/oor/OOR_2019.pdf)

Some notes:

\- Those earning minimum wage are unlikely to be in the median rental market

\- The report doesn't include the impact of any tax credits like child
credits, EITC, LIHTC

\- They don't adjust minimum wage by local jurisdictions. For example, minimum
wage in Chicago is $13/hour but they only list the Illinois minimum wage
($8.25/hour). This is particular distorting given that cities (with higher
minimum wages) are home to most renters

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DINKDINK
Several co-related factors affecting this:

Worker productivity increases cannot be legislated. Such productivity
increases can only come from workers improving their skills or technology that
increases their productive output (as simple as an electric drill to as
advanced as an exoskelleton with a HUD). Minimum wage laws are effectively
bans on low-productivity workers. By making labor artificially expensive
through legislation, demand for it drops, total economic output decreases,
production costs increase. There's no reason to believe that the home-
production industry would be able to reduce costs / increase output with
minimum wage increases; in fact that opposite is the case.

Legislation can only reduce the permitting costs of housing production IFF it
becomes more permissive. In the regions of the US that I'm familiar with, all
the areas that have high housing costs pass legislation that increases
permitting costs or transactional costs to bring housing to market. This can
only result in a price increase globally with some politically-connected group
receiving a benefit.

Legislation and corporate-bank policies artificially increase the money supply
to the greatest degree with housing loans. Typically these workers are not
minimum wage and in addition to the above effects, the Cantillon effect gives
an undue subsidy to these higher wage workers
[https://www.aier.org/article/sound-money-
project/cantillon-e...](https://www.aier.org/article/sound-money-
project/cantillon-effects-and-money-neutrality)

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hello_tyler
Minimum wage workers can't afford a 1 bedroom apartment or studio where I
live.

~~~
sdinsn
So perhaps they should split a 2/3 bedroom with roommates?

If someone makes the absolute legal minimum, why does every expect them to
live alone?

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atonse
Or maybe we can actually pay people a wage allowing them to lead some
semblance of a decent life? Why does it fall on them, instead of the actual
businesses paying them?

~~~
leetcrew
I share a house with three other people and I don't have any kids. I quite
enjoy my life right now and if I had thinner skin I might take offense from
your implication.

~~~
atonse
I'm saying that if people are not able to have a certain standard of living
due to their income, why should it be framed as their fault? Obviously I'm not
saying someone should be able to live in a 3000 sq. ft. house when I say
"certain standard of living."

In your case, you probably made the choice of your living arrangement, not a
choice your employer made for you. That's different.

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chrisseaton
> And only in 28 of the country’s counties can a 40-hour-a-week minimum wage
> worker afford a one-bedroom [home]

So where _do_ they live?

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temp-dude-87844
One or more of the following:

\- Living in units where the rent is far below the median rent.

\- Working multiple jobs.

\- Living in a multiple-income family.

\- Living with roommates and pooling rent money.

\- Payday loans.

\- Behind on rent.

\- Living in a house and not directly responsible for mortgage payments.

\- Living with others in an informal arrangement and not legally responsible
for payments.

\- Homeless

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lucaspm98
The obvious response to this is that the minimum wage is simply not supposed
to be a sole source of income for a person living on their own.

The bigger problem with this particular article is qualifying affordable as
less than 30 percent of income. That is a great rule in most situations.
However, if you are on a limited income the percentage housing will be
expected to be higher. It is one of the least elastic expenses, while things
like a car or entertainment can be cut back or substituted for alternatives
like public transportation. I don't know what the percentage should be, but
30% is unrealistic.

If you think about it, the opposite will also be true in many situations. If
my income doubled from 100k to 200k overnight, I would consider upgrading
apartments but from 1k a month to 1.3k a month. My food and entertainment
costs would scale much quicker as a percentage of income.

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dragonwriter
> Minimum Wage Still Can’t Pay For A Two-Bedroom Apartment Anywhere

Was it supposed to?

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merpnderp
I get roughly $1,500 for a couple per month, at 30 hours a week, post tax, but
before government assistance programs. There's no place in Oklahoma where you
can't find a 2 bedroom for $700/month. I'd bet that most of the surrounding
states are similarly priced. In my city you can find single bedrooms, with all
utilities plus washer and dryer included, for $350/month.

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segmondy
Why should it pay for 2 bedroom? It should pay for the minimum shelter. Which
I would say is a studio.

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AdmiralAsshat
Mm, yup. Solid navy within the DC Beltway area. That feels about right.

~~~
dsfyu404ed
New Hampshire is even worse since it doesn't even have many good paying jobs
to drive that cost up. Any area that's within a reasonable one day drive with
a family of the Boston area (i.e the max distance many people will consider
for their "vacation cabin") is just solid navy. The people of NH and ME always
complain about MA money driving up the cost of land. It looks like they're not
wrong.

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sdinsn
Why would a minimum wage worker be trying to buy a 2-bedroom home?

Edit: Meant to say rent instead of buy

~~~
alistairSH
They aren't. The article is about renting a 2-bedroom home. And nowhere do
they limit the definition of "home" to "free standing, detached dwelling" \- I
believe their figures include 2-bedroom apartments as well.

~~~
sdinsn
Apologies- I meant to write rent. Even if their numbers include 2 BR apts, my
point still stands: a single person affording rent for a 2 BR apt is _not_ a
reasonable baseline for a _living wage_.

~~~
uwuhn
It's not, but what's your argument for why it shouldn't be?

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kortilla
Why should minimum wage be enough to support anything? It’s not like we have
requirements that employers provide 40 hours of work.

~~~
sp332
A worker could get multiple jobs if one doesn't "provide" enough hours.

~~~
anbop
Not always, since a lot of jobs demand that you’re “available” way more than
they actually schedule you, and ready to come in at a moments notice. They are
trying to legislate this though.

