In No State Can A Minimum Wage Worker Afford A One Bedroom Apartment

Tyler Durden's picture

Earlier this month we learned that in 21 out of the 26 OECD member countries that have a minimum wage, working 40 hours per week at the pay floor would not be sufficient to keep one's family out of poverty. That rather stunning revelation comes as Democrats in the US push for a $12 minimum wage by 2020 and as pressure grows on companies like McDonald’s to raise wages for its lowest-paid employees. 

Of course rising minimum wages can also have the rather counterintuitive side effect of harming those they’re meant to help because after all, when the cost of labor goes up, employers may simply fire people or, as we saw yesterday when McDonald’s pledged to reduce the number of company-owned restaurants by 10% over the next several years, resort to other measures aimed at getting around pay floor hikes.

So while one can debate pros and cons of addressing abysmal wage growth by legislating a non-market-driven solution, what is not up for debate is this: it’s getting harder and harder to subsist above the poverty line for low-income workers.

In fact, as the following map shows, in no state can a minimum wage worker afford a one bedroom apartment.

 

Here’s some color from a study by the National Low Income Housing Coalition:

Rents for apartments have risen nationally for 23 straight quarters. As of the third quarter of 2014, rents were 15.2% higher than at the tail end of the Recession in 2009. Rising rents are an outcome of increased demand for rental housing. One recent study of 11 major cities found double-digit growth in the number of renters in nine of the 11 cities between 2006 and 2013. In the fourth quarter of 2014, the homeownership rate dropped to its lowest rate in twenty years and the rental vacancy rate fell to 7% as more households sought rental units. The downward pressure on vacancy rates directly impacts the rental housing market, making landlords less willing to offer rent concessions and more likely to increase rents. The tightening rental market has the most significant impact on low income renters. 

So thank you Wall Street (and a hat tip to Alan Greenspan as well) for creating an entirely unsustainable housing bubble which finally collapsed on itself, turning a nation of homeowners into a nation of renters many of whom will now have to pony up everything they make each month to someone who may have gotten a landlord loan from Wall Street to buy up rental properties from home flippers who also got loans from Wall Street where some very clever investment bankers are busy securitizing these landlord and home flipper loans in order to sell billions in new ABS on the way to recreating the very same bubble only to have it burst all over again. 

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Save_America1st's picture

oh this is simple to resolve...just raise the minimum wage to 25 bucks an hour.

Done...and...done!

That deserves a drink...hava nice weekend.  ;-)

Beam Me Up Scotty's picture

"working 40 hours per week at the pay floor would not be sufficient to keep one's family out of poverty"

Why do you have a family if you are only making the minimum wage?  Minimum wage jobs are for kids.  If you are 40 working at McDonalds for minimum wage, you have made some mistakes in your life.  Just sayin....

Pure Evil's picture

Cause you can always count on Uncle Sugar to pick up the tab.

TheRedScourge's picture

Protip: Minimum wage is not for preventing poverty. It's for people with absolutely no skills getting their first job, old guys who can hardly work but really need some extra cash because they didn't plan well in their youth, and housewives to earn some cash on the side for maybe 15 hours a week because Little Timmy is not providing them with enough gossip.

max2205's picture

Who needs work when you can get 57k in EBT and other benifits from Barry

Anusocracy's picture

"that in 21 out of the 26 OECD member countries that have a minimum wage, working 40 hours per week at the pay floor would not be sufficient to keep one's family out of poverty."

And that most likely in all of the OECD countries the cost of government more than doubles the cost of living.

Paveway IV's picture

I think we're going about this whole minimum wage thing completely wrong. Mandating businesses that rely on cheap labor to pay a higher wage has little net effect on revenue for the state - it's sort of a wash bewteen increased payroll revenue for minimum wage workers but loss of the overall number of them, and increased numbers unemployed and/or on some kind of state aid vs. the remaining ones that need a little less state aid.

It's horribly wrong to have any government policy like this revenue-neutral. Like they do to their citizens, the state itself needs to be motivated by punishing disincentives to avoid certain actions. The only way to do that is to punish the state for minimum-wage workers. The only way to do that that I can think of is to - nationwide - remove any minimum wage requirement on employers, but exempt any wage below whatever the minimum wag is today from ANY form of state or federal payroll tax INCLUDING SS. There simply is not SS contribution (or ultimately, credit) for minimum-wage jobs. 

First of all, you create a small number of additional minimum-wage jobs and the people earning minimum wage have more disposable income. More of that income is counted against state and federal aid programs, so you have some small effect on reduction of those numbers.

The greatest effect of doing this thought is to disincent the state (and federal) governments from having an economy based on minimum-wage workers. Wal*mart and COSTCO would NOT be attractive employers payroll-revenue wise, so you wouldn't waste millions on tax breaks to lure them in. What government WOULD be forced to do is concern themselves with keeping or attracting better-paying employers.

BoredRoom's picture

SO THE FUCK WHAT?

 

Minimum wage is for entry level jobs for TEENAGERS......

 

 

The real minimum wage should be ZERO,,,,,zeros.....

PT's picture

Pro Tip #2:  Ten jobs, eleven people => wage = ten people hungry plus eleventh person starving.  But apparently the starving guy can use his hunger as collateral, borrow some money, acquire some capital and become an ENTREPRENEURRRRRRRRRRR!!!!  Apparently starvation makes you smarter too!

I used to worry about all them starving kiddies in Africa but I don't care now because I know that the hunger made them hungry and industrious and innovative and they all grew up and became successful ENTREPRENEURRRRRRRRRRS!!!

Pro Tip #3:  You only have to worry about creating the right product at the right price.  Someone else ALWAYS provides the rich customers.

Pro Tip #4:  Keep your back to the wall so you can avoid the Pro's "Tip".

boogerbently's picture

So, two min wagers move in together.

What.....a mother and 3 kids are trying to survive on their own on min wage?????

WTF are THEY thinking ?

PT's picture

Good news!  Now all those minimum wage workers will quit their minimum wage jobs to become tradesmen and builders and then they will build more homes and the resulting over-supply will crush the price of housing and then they will be able to afford to buy the homes they built!

No?

NO????????????????????????

PT's picture

I don't understand why no Capitalists ever pick up on this angle. I thought it was what they were all about.

Earl Slaughter-- Truck Driver.'s picture

A lot of good jobs went away in the "recession" with millions being forced to make adjustments they never thought they'd have to make. Hell, "good" jobs have been going away for decades now. Depending on circumstance, one might need to consider a fast-food job to maintain a cash-flow.

 

Joining the FSA is easier in some places/states/counties than others. "Means Testing" raises the bar too high for many to collect benefits. In some areas, applications for housing-assistance are oinly accepted for a few days at a time every few years after the backlog is worked through. If you want benefits, it's best to be disabled, or be a single woman with a couple of kids. Single, healthy males do not apply-- there's space for you in the big house.

 

Many families have fallen on hard times and will take whatever they can get: a job at McDonalds? Better a little bit of something than a whole lot of nothing...

NumNutt's picture

40 working at McDonalds = Some mistakes!?!?  I would say you have totally fucked up if that is your situation....

Earl Slaughter-- Truck Driver.'s picture

Tend to agree, but it's a big country with a lot of things being different between here and there, and some have been just barely hanging on for a long time.

 

Most of us reading this blog have an interest and awareness that many others do not have, and might come out better for our circumstance.

 

There are many who follow rules and law, but not all of us do, at least to a greater or lesser degree-- and perhaps this comes down to one's adversion to risk.

 

As an annecdote, I myself had a chance to broker a deal on the black-market that would have more than doubled my investment, but I chose not to due to a "bad-feeling." Perhaps I am just paranoid or a gutless pussy. But later I dove into the grey-market where I was earning 2-3X minimum wage, cash-weekly.

 

Point is, and probably as much as the one you are making, is that if I didn't find opportunity outside the law I would have not been able to eat, keep a roof over my head, or maintain a relationship with one who that matters most to me in this world. If I was working fast-food for minimum wage, I'd be dead by now (or wish I were)

 

You seem quick to blame an individual for their plight rather than those who created the plight. At least a 40 YO whose working at McDonalds has access to food to bring home and some money in the form of a paycheck. Some don't abandon their responsibilities just to "look out for number one."

Billy the Poet's picture

At least a 40 YO whose working at McDonalds has access to food to bring home and some money in the form of a paycheck.

Yes, and it's worth "some money." as determined by the productivity of the job and worker in question not some idealized amount of money that is considered to be fair, whatever the hell that means. If I'm wrong then hire some neighborhood folks at $2400 per month each to do odd jobs around your home.

 

Some don't abandon their responsibilities just to "look out for number one."

Not looking out for number one is an abandoment of responsibilty. It means that you expect others to take care of you.

 

Earl Slaughter-- Truck Driver.'s picture

The Sicilians have a saying: "When a child is born, interest passes from one generation to the next."

 

"Looking out for number-one" and "Fuck 'em, I got mine" = responsibility?

 

It's a beautiful, sunny morning after a long, crappy and cold winter, and I just got through having a couple of beers with my neighbor, a recently-retired tradesman who had a lung removed last year (big-C). His brother invited him to go walleye fishing this weekend, but he declined, instead choosing to spend the time to work on fixing-up things around his property so that his wife (who has medical issues of her own) won't have to deal with them in the likelihood that he gets sick again.

 

Tell me again about responsibility...?

Consuelo's picture

It's morning and you're already pounding 'em down...?

 

 

Earl Slaughter-- Truck Driver.'s picture

Sort of-- we had three Miller Lites. a couple of cigarettes each I put them aside and did 8-hours work on my own stuff, but he's still working on his, and probably til sunset.

 

I'm not sure if that counts as "pounding them down"-- by my writing, when I break-out and into the whiskey, believe me, bro, you will know it!!!

 

PT's picture

Re "Why do you have a family if you are only making minimum wage?": 

I didn't marry my gf because I couldn't afford it so she left me.
We didn't have any kids.
The next man in her life might have given her kids.  (I don't know.  I haven't kept in touch).
And he might be on a minimum wage.

These days I make more than most people but my hours are very unreliable and I still have no confidence in supporting a family.

Evolution, bitchez.

Survival of the most optimistic / irresponsible.

RichardParker's picture

If your working at Mcdonald's or similiar, you have no business makin' babies.

PT's picture

For some strange reason, the majority of people who agree with you tend to go extinct.  And the majority of people who DISAGREE with you tend to have children, with whom they can share their life-views.

raywolf's picture

Just start a tech company, float the stock (no need to be profitable) and soon you will be a billionaire too.....

Joenobody12's picture

Better still, start a solar power company , get a billion dollar loan from your Dear Leader, declare bankrupcy and retire to the Bahamas.

A Lunatic's picture

Did we run out of cardboard boxes or something......?

813kml's picture

Just need more government housing, aka prisons.

Pure Evil's picture

Can't these people just get Federal Renters Loans just like students in College?

max2205's picture

Yeah I thought the forget me loans were bonus cover for the FSA.

WE GOT TO MAKE A FUCKING BROUCHER OR SOME THIng to get the word out

zhandax's picture

At least you got the right letters there, although they are frantically looking for home.  And no, I wasn't the downvote.

Condition 1SQ's picture

The government created this problem - can't wait to see their "solution".

PT's picture

LEND Moar!

In other cuntries (sic), the guvmint "helps" the poor to buy houses by becoming "partners" with them - i.e. poor person buys half a house, guvt buys the other half, poor person makes half the repayments, guvfucks make other half of the repayments, poor person never fully owns house, guvfucks take their cut when poor person sells thus guaranteeing house prices stay high and unaffordable.

In case you haven't noticed, YOUR LAND IS BEING STOLEN FROM YOU AND MOST PEOPLE ARE TOO DUMB TO NOTICE.

The story goes that some Indians swapped their land for some beads (True or not?  I don't know.)
That's nothing compared to now where people swap 25-40 years of hard labour (because they THINK they are involved in a Capitalist transaction - if you think you are involved in a Capitalist transaction and you don't know who the patsy is, then YOU are the PATSY) for the HOPE of one day owning a small piece of land - better hope you can hang on to that income or else that land is going to someone else ...

seek's picture

Absolutely true, though with roommates a minimum wage worker can swing a private bedroom in a 2-BR apartment in my state, at least.

This would be a more interesting chart as a time series to see when/where minimum wage earners could afford a 1BR.

max2205's picture

As a new officer in the USAF I had to share a house with 3 other officers just to be able to eat. That was 30 years ago. No sympathy from me sorry

Bob's picture

i'm sorry too.  had to -1 that.  not only did you volunteer to enforce the perversion of "freedom and democracy" that brought this neoliberal disease upon us, but you apparently don't understand WTF it was about or the world that common people have since been sentenced to . . . inch by inch by fucking inch.

sorry a whole bunch.

stormsailor's picture

i was an officer a bit more than 30 years ago also. your comments offend me and the poster as well as 10's of thousands of other officers.  monday is memorial day, i have fellow officers that have been killed and it offends me that offal like you have the pussy yellow stained behind a computer gall to post your foul little puss filled opinion, but i would still uphold my oath to defend your rite to say it with my life.

 

happy memorial day, fucking asshole

83_vf_1100_c's picture

  I was just an NCO but I retired. Thanks for paying my monthly retirement check and whole family healthcare Bob.

ShortBusDoorGunner's picture

When your only reply involves insults, flag-waving and dick-waving, it might be time to rethink your position.

 

Billy the Poet's picture

Yeah, I was with him up to that point.

Bob's picture

That's nice.  Happy Memorial Day, soldier.

Without people like you fighting for my right to say it to you behind your computer, I might not have the freedom to say your fellow officers were assholes too. 

Fuck you. 

And God Bless America. 

Of course, I could say similar things to anybody on the internet in a hundred other countries in this world, but whatever. 

Fuck your twisted vision of America.  People like you helped kill the actual nation.

Long live the Empire Squid.  And, of course, all our heroes, both fallen and still killin'. 

Christophe2's picture

Hey stormsailor, name a single righteous war that the US has been involved in, in the last 100 years...

Yeah.  That's right, there are none, so you and your "fellow officers" were nothing more than henchmen for evil empire makers, with tons of false flag BS + etc. to distract the masses.  You are a bunch of hired, paid murderers.  Baby killers for profit, right?

You sadly didn't uphold any other oath than just to follow criminal orders, you only killed relatively innocent people to steal their oil and fuck with their sovereignty (for empire, 'cos memorial day!).

The military never did anything about the enemies domestic, that's for sure!

Thank you?

(P.S.: dear-me, I hope I don't OFFEND you, jee-wiz, that would be so hurtful, compared to war and killing brown people!)

roddy6667's picture

You get a cannon fodder medal.

Consuelo's picture

While it is unfortunate - and I sincerely hope this doesn't 'offend' you sir, but...    No one in this nation has died, been maimed or otherwise Skrewed up as a result of U.S. foriegn policy/military actions to 'protect our freedoms and way of life', since the 1940's - and even that time frime is suspect, as to the origins of the conflict and the necessity of our involvement.    But let's not allow trivial things like truth get in they way, shall we?

While it is probably the most difficult thing to accept, the fact that thousands upon thousands of American military (and associated civilian support personnel) lives have been lost in vain, nonetheless remains the Truth.    You can either choose to accept that fact as a few truly (Brave) souls have done, or wave the flag, jump up & down and call into the Sean Hannity show for security in numbers...

 

 

NoPension's picture

Mexicans don't have a problem. Rent a 2 bedroom. 6-10 head should fit easy and cover the rent.
It's a new day in America. Stay up with the trends.

PhoQ's picture

Some people have more street smarts than others. You call them Mexicans, but I call them Survivors.

PT's picture

Ten to a house?  Works great if you're an early adopter.  And if you invest the savings wisely.  And don't fuck up and lose it all.  People will say you're tough and a genius.

But once everyone does it, rent prices re-adjust and you lose your competitive advantage.  Then people will have to live one hundred to a house to get any savings...

PT's picture

seek:  In my city (in Australia), 25 years ago you could buy a decent 3/1 HOUSE for a mortgage of half the minimum wage.
In the mid-noughties, the CHEAPEST house in the CHEAPEST suburb cost 100% of the minimum wage - and don't forget, I said CHEAPEST here, ie. we're talking a fixer-upper.
Median house prices briefly hit 100% of Average Weekly Earnings.  (Actually, it might still be 100%.  Perhaps I should look it up again.)

Using the 30% rule, I once calculated that only Doctors and Lawyers could afford to buy the median house (Or was it the cheapest house in the cheapest suburb?  I'd have to dig up the numbers again to say.)

Even though our technology can make everything else cheaper, for some reason housing/land NEVER goes down ...

Miffed Microbiologist's picture

Bedford Falls is morphing into Pottersville.

Miffed