Report: Full-time Minimum Wage Workers Can’t Afford Rent Anywhere In U.S.

Report: Full-time Minimum Wage Workers Can’t Afford Rent Anywhere In U.S.


Close To half Of Americans Can’t Afford A 1-Bedroom Rental Apartment. Photo by: John Nacion/STAR MAX/IPx 2020 5/18/20 A view of a poster saying Cancel Rent Cancel Mortgage during the coronavirus pandemic on May 18, 2020 in Brooklyn Borough of New York City.

People earning minimum wage in full-time jobs cannot afford a two-bedroom apartment anywhere in the U.S. or even a modest one-bedroom in 93 percent of U.S. counties, according to the National Low Income Housing Coalition’s annual “Out of Reach” report.

A federal housing resorce, the nonprofit NLIHC says it is dedicated to achieving non-racist public policy so people with the lowest incomes have affordable and decent homes.

For housing to qualify as affordable, the report said no more than 30 percent of a household’s gross income should be spent on rent and utilities. Households paying more than 30 percent of gross income on housing are considered cost-burdened. Those that pay more than 50 percent on housing are considered severely cost-burdened.

Although President Joe Biden signed an executive order in April raising the minimum wage paid by federal contractors to $15 an hour, state minimum wage rates are lower. If Washington, D.C. was a state, it would have the highest minimum wage ($15.00). California has the highest minimum wage ($14.00) but that only applies to businesses with 26+ employees. Washington state has the highest minimum wage applying to all companies ($13.69).

Black workers earn less, on average, than white, even as U.S. companies say in their branding and business strategies that they are improving diversity and inclusion. Black U.S. workers earn on average 30 percent less than white, according to a new report from research and consulting firm McKinsey Global Institute. Almost half of Black workers work in healthcare, retail, accommodation and food services and the “vast majority” are in lower-paying service jobs rather than professional or managerial, Forbes reported.

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Black workers are more likely to spend more of their income on rent, the NLIHC report found. More than 40 percent of Black households spend more than 30 percent of their income on rent, compared to 25 percent of white households.

The average minimum wage worker must work close to 97 hours per week (more than 2 full-time jobs) to afford a two bedroom rental home or 79 hours per week (about 2 full-time jobs) to afford a one-bedroom at the fair market rent. People who work 97 hours per week and need eight hours of sleep have around two hours left for everything else— commuting, cooking, cleaning, self-care, and caring for children and family.

Low-wage workers bore the brunt of covid-19 job losses and, often being frontline essential workers, were also more susceptible to catching the virus.

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The U.S. urgently needs to expand affordable housing, wrote Marcia Fudge, Secretary of the U.S. Department of Housing and Urban Development, in a preface to the NLIHC report.

Seventy percent of households with the lowest income routinely spend more than half of their incomes on rent, Fudge wrote. “Even before the pandemic, our nation had a shortage of 7 million affordable and available homes for renters with the lowest incomes … They have little ability to save—and one emergency or unexpected expense could send them into homelessness.”

The NLIHC is urging the government to ensure that covid-era emergency rental assistance programs help those with the greatest need. It is also calling for policymakers to create permanent, universal rental assistance for eligible households, to invest in new affordable housing and to implement stronger renter protection laws, CNBC reported.