Full-time minimum wage workers can't afford rent anywhere in the US
cnbc.com
cnbc.com
There's a lot of assumptions there. Assumes minimum wage workers should not have to get by with a single bedroom and a couch in their own place. Assumes minimum wage workers should not have to spend more than 30% of their income on housing.
Now maybe that should be our policy. I just don't think the headline should be "can't afford rent" until we've made a concrete policy decision as a people that supports the premise that they should be able to afford it.
... if it helps...
There's over 100 years of scholarship and research on this if you're interested. You can get college degrees, have careers in these related fields.
American culture in general does not value and it's dismissive of it and that's probably why America's livibility metrics are so out of line with everyone else. (See https://en.m.wikipedia.org/wiki/Most_livable_cities)
Or why the life expectancy is lower, suicide is about the same rate as sub-saharan Africa, and polls of satisfaction and happiness perform worse, etc.
Such problems can be addressed
There's also 100 years of research on how to pick up skills that aren't minimum skill and minimum wage.
Problems can be address... but so can skewed ideas of what you deserve and what reality shows you're going to get.
I grew up poor. I started with low-pay, low-skill jobs. I lived on couches and didn't have "2 bedroom apartments" because even before I got my college education I understood that not everyone can afford to live like that.
Know what I did? That college degree I mentioned... I got a skill in demand and became more than a burger flipper and dish washer.
The disconnect between our opinions is the expectation that you deserve a good life in a minimum wage job. People have been lied too that life is fair and that they deserve a minimum standard of life. I grew up with the expectation that I got what I earned and if I earned minimum wage? I got a lot less than a nice apartment.
You got lucky. Like really, statistically, you were incredibly lucky. Good genetics, lack of disabilities dire enough to stop you from working, no medical emergencies serious enough to put you in permanent debt, and obviously received some decently schooling on the government's dime as a child if you just "got a skill in demand" and a "college degree". Yes, the hard work helped to captalize on all of the good luck you had, but it didn't create the circumstances that allowed you to succeed. So if your argument is "why should these people who are less fortunate than me be allowed to live decently?", the response should be "you should be that person living in squalor, but you lucked out".
Yes... I was born in America.
Then I stopped relying on being lucky and took my poor ass (I grew up with a single parent and little to nothing) and worked my ass off to better myself (using the opportunities afforded in the wonderful country I was lucky enough to be born in).
> why should those less fortunate be allowed to live decently
The problem is definition of "decent". Poor people in America make 10x more than the AVERAGE global salary and have opportunities that people around the world envy. "I can't afford a good apartment" in other countries is "I can't eat and my kids are dying".
You say I'm lucky... I say you're entitled.
Funny thing is we're both correct and that still doesn't make "affordable housing" something that's realistically possible for 100% of people in 100% of the US much less the world.
Oh no, you still rely on being lucky. Especially if you went from being very poor to having a college degree, so many things completely outside of your control must have gone in your favor for that to happen. That is the definition of luck.
> You say I'm lucky... I say you're entitled.
Since you know nothing about me, I'm assuming you are lashing out here because I touched on a sensitive area for you. Maybe rocked your sense of being solely responsible for all of the good things that you've been fortunate to have?
> Funny thing is we're both correct
No. I really don't have any sense of entitlement. You, however, are incredibly lucky, you've really been in the top 1% for statistics on poverty. Remember to pay it forward.
"Lashing out" telling you the truth in an uncomfortable manner isn't lashing out... it's telling the truth. It's only lashing out if I... "touched on a sensitive areas for you". That sword cuts both ways.
I never said I controlled EVERYTHING... I already said I was lucky to be born American where even our poor people are so lucky they are in the top 1% of the world - past and present.
"I really don't have any sense of entitlement" Funny how many Americans says that while preaching from a platform of entitlement.
This isn't about personal gumption and rugged individualism or some self-help personal bootstrap story. It's an economic policy question
Here's an example. Let's say there's a formula for success rate, here we'll define it as generating more revenue than cost for the state over the lifetime of an individual.
A policy proposal, say your rugged individualism, has a given success rate, return on aggregate investment, confounding variables that can affect its outcome, etc. You can typify the classes of failures and bucket them into categories that can be characterized by cost, which is up for definition. It could include a loss of potential economic output for instance.
That's what we're talking about here. It's not story time, it's math, data collection and stats time.
The minimum wage question is "should it be legal to compensate a full time worker at a rate where their wages cannot cover some definition of sustination? And if so, how will the remaining slack be accounted for?" not whether someone can visualize their success and follow some 12 rules for life or whatever. It's not relevant
Quantitative economics used to be big in the US, kinda made it a world power. If you read newspapers from the 1930s it becomes obvious fast. How it got replaced with policy based on quite literally narrative fiction is for another conversation. It wasn't a good move, folklore is a terrible substitute for science.
Pick some advocacy, let's go the other end, generous social services + adequate UBI.
"people will just be lazy and not work"
Alright sure, how many? Some industries more than others? Do we care as a society if those industries fold?
And what about those people, are they idling or pursuing financially riskier dreams like say local journalism or being a religious cleric? How many? How confident are we about this? Are they in general doing a good job?
Would we be ok with say more local journalists and less say fast food restaurants? Is that a good trade-off? Would this change land-use? Food availability? If we do a policy that will intentionally make these things fold, what's the possible exit strategies for things like the supplies and buildings? Is that what we want?
Are there test cases, anywhere in the world that did similar things? What were their reports on it?
This is the kind of discipline that was used to rebuild Japan and Europe after world war 2.
It's not about a "planned" economy, but instead a "catastrophe avoiding one". If the answer was something like "apparently, historically, when some country does X, a large number of people join criminal gangs and murder people" then, if you don't want that outcome, you probably don't want to do X.
China has also been doing this kind of interlocutor discipline since, that's debatable, certainly by 1990. People say they're no longer "communist". What they actually mean is the merit of a policy is no longer held up against the ideology of communism and then decided upon based on a purity test.
That process is actually super popular in the US. An accusation of a policy not aligning with the dogmatism of a particular flavor of capitalism is enough to kill the policy. Everything is held up to an ideological purity test where it's marked based on adherence alone. It's actually exactly what the Soviets did with things like Lysenkoism that led to millions dying from essentially communism applied to seed planting, fertilization and harvesting.
I know it sounds insane and that's because it is. Ever notice how economic policy debates seem a little crazy and detached from reality? Ever notice how policy is kinda DOA unless someone can spin a story and make it jive with a specific ideology and how they give exactly 0.000 weight to any historical analysis of what the policy does? It's a problem.
It shouldn't matter but instead it's literally the only thing that does.
I have news for you: the world is run by min wage people, the entire system depends on having a large amount of people being paid as little as possible.
This is the "it's easy: just stop being poor" level of argumentation...
30%+ the US population should live in a single room flat and sleep on a sofa apparently:
https://upload.wikimedia.org/wikipedia/en/c/ce/Households_vs...
The average life GLOBALLY sets that the "minimum wage" life in the US is the top 10% globally.
https://www.cnbc.com/2018/11/07/how-much-money-you-need-to-b...
> And the global median income is just $1,225 a year
You can be worth $4/k total and still be worth more than 50% of the world. Your $15-25k/year income for minimum wages is still 10x the global median and your "I can't afford a nice apartment" life is still 100x better than most of those places.
"every wage should be able" Why? Because you feel it should? Guess what? your feelings don't make land cheap, labor to build housing cheap or get rid of burdensome government bs that makes things 10x more expensive than the should be.
Your entitled opinion doesn't make things affordable or change the fact that the people crying about how bad they have it in the US have it 100x better than previous generations and current generations around the world.
That's why it's called a "political economy" the two are ultimately inseparable.
It's a question of autonomy, control, agency and liberty, not one of dollars in a bank.
This goes back over 100 years. Look at the Hollywood star system. Big names having essentially contracts of grueling work and enslavement for years under the Lochner era, they could make $1 million a movie but all the cash could be seized if they broke the 10 year contract or whatever and leave the person destitute. Stars who broke contracts and had everything taken away famously had to pawn off academy awards to try to feed themselves.
The people didn't really have meaningful freedom. That's why United Artists, SAG, DGA, AFTRA and WGA started. If you work on a big show, it's the Guild that gives you dental and health care, not the studio. They give it to you in the dry times too.
The money wasn't the problem, it was the enslavement. The politics and relationships is the actual thing, the money is just a temporary consequence
It may serve you well to learn about the values you are prioritizing. www.wamv.life is a tool that helps with self-awareness by measuring values, moods, and value utilization.
side note: children are expensive and you probably shouldn't have them if you can't afford them
Not very strong ones when it comes to raising children.
> side note: children are expensive and you probably shouldn't have them if you can't afford them
Well it's definitely not a living wage if you can't have a child.
You really think having a child or two is scope creep for the basic things every person should be able to do in their life without financial ruin?
Until the US has universal, free contraception (and education about contraception), as well as easy access to their constitutional right to an abortion, this is not a fair argument.
Lots of people are actively misinformed about contraception in conservative public schools, and their access to abortion may be hindered by their state government.
The end result is that some people accidentally have children, and society shares the consequences of that one way or another.
Hahaha, yes the US is well known for its social safety nets. Like universal healthcare, paid maternity leave, or free contraceptives.
The idea that kids need their own bedroom is extremely modern. There’s no reputable science behind it.
Edit: the same is true for mortgages. https://www.experian.com/blogs/ask-experian/how-much-to-spen...
Second edit: Feel free to have an actual conversation. Your downvotes are meaningless.
Minimum wage is not intended to support a family in a 2 bed apartment. People need to factor in cost of living when making decisions like having a family. The unfortunate reality is we already have too many people for the Earth to sustain. The population can’t keep growing.
This is not common. But at the same time, we can’t optimize for tail risks. If your hypothetical occurs, and a family have to share a one bedroom, then so be it. People are subjected to far worse every day.
Ultimately minimum wage cannot and should not be comfortable. There simply aren’t enough resources in the world for everyone to have everything.
I suppose we could have a discussion there. One bedroom is probably okay for one person, but we need to look at what happens when two adults try to have a child on full time minimum wage employment.
> Assumes minimum wage workers should not have to spend more than 30% of their income on housing.
A minimum wage worker is going to be the most squeezed by the costs of healthcare and food and transportation. So yeah I think that 30% rule needs to apply.
You can make it happen. I was a happy kid. Luckily we figured something out by the time I was 12 because it would’ve been too weird.
Americans are used to luxury poverty. Where being poor still means having a car and a smartphone and consider two bedroom apartments a minimum.
If you’re too poor to afford more room then maybe don’t have a kid. We need to stop ignoring this and start educating people instead of just feeling bad for them when they have 3 kids and a minimum wage job.
Now, I’m not saying “don’t help them, this is fine”, I want everyone to live comfortably and have a fair wage. But I can’t agree with “it’s impossible”. Really it’s not that bad, but consumerism in the US makes everyone feel bad if they can’t buy unnecessary shit on amazon every month
> Americans are used to luxury poverty. Where being poor still means having a car and a smartphone and consider two bedroom apartments a minimum.
In most places you need a car to get a job, so you pay for a car out of your wages whether you can afford it or not. A phone is also necessary but phones are really cheap and there are subsidies. That's not much of a luxury. And while two bedrooms for one person is a luxury, two bedrooms for a family isn't.
> If you’re too poor to afford more room then maybe don’t have a kid. We need to stop ignoring this and start educating people instead of just feeling bad for them when they have 3 kids and a minimum wage job.
Okay, what about two or just one kid? Even with two parents willing to work it can be crushingly expensive, in part because childcare can eat up a huge portion of someone's wages. Education is not the best solution. Making it so everyone can afford to have a child is the best solution.
There is, however, one assumption I did make: there is no stated policy that min wage workers should be able to afford all that while spending 30% or less. If I'm wrong and there is a stated policy, I would like to be corrected.
Also, roommates are a thing. It's absurd to suggest that everyone, even minimum wage workers, should be entitled to their own private kitchen, bathroom, and living room, let alone an extra bedroom on top of it. Americans rank among the highest in living space per Capita, so we spend emit a lot of CO2 heating and cooling spaces that we're not even inside.
Well, I've known quite a few lower class, paycheck to paycheck families, and they would NEVER run an AC or heater without someone in the room. Poor people aren't the reason all that CO2 is being emitted, it's the people with multiple houses.
You're not alone in that view. → [1]
[1] https://ourworld.unu.edu/en/the-worlds-richest-people-also-e...
Until a country decides to stop making policy to support this notion that a basic need should be an appreciating asset and not a depreciating one like food, transportation, etc, this completely unsurprising trend will continue. It is a strange world we live in where we collectively believe that a basic need should appreciate in value over time.
It doesn't have to. Even if it just matches inflation you could call it an investment. If it keeps up with wage growth, that's a pretty good investment that doesn't force it to become less affordable. Or it could be somewhere in between, and then housing would be a reasonable investment and increasingly affordable over time.
The issue isn't that it's an investment at all, it's that it's much too good of an investment for multiple reasons.
From 180m in 1960 to 329m today. [1]
[1] https://data.worldbank.org/indicator/SP.POP.TOTL?locations=U...
When the government throws tons of money at it? Housing is funded by a lot of government money for "affordable housing" and the like.
As with ANYTHING the government throws money at? Supply goes down and prices go up. For other references on increased price, worse results? Look at school, daycare, health insurance... amazing how bad government help screws everything up.
"basic need" supply and demand... when there's only x amount and there are x+more wanting it? the price will go up... either you increase the supply or decrease the demand.
It's a strange world we live in where people think labeling things as anything removes the supply/demand dynamic and the ability of the government to screw things up "in the name of the good"
TVs, computers, even cars have decreased in price and improved in quality, but college education and housing...not so much.
You'd think there'd be $30,000 small, but affordable houses by now.
There's some fuckery afoot.
So yes, those loans are the reason prices keep (emphasis on keep) rising. Private loans would probably stop at some "reasonable" ceiling.
Yes, there are prefab houses and whatnot, but that only enables so much scaling.
I don't think I've ever in my life been paid minimum wage at any manual labor job I've ever had. Everything I've ever done in that field of work (ranging from literally digging ditches with pick-axe and shovel to commercial interior/exterior remodeling) starting pay was generally 1.5-2× minimum wage and often higher.
When I think of minimum wage, I think motel janitorial, burger flipping, supermarket bagger, etc, though I suppose who pays minimum wage for what job also depends on location and employer.
I find this really funny having been a hotel janitor. It paid 1.5x minimum wage, but that was offset by them wanting not only a hardworking janitor, but also a skilled handyman who could also do plumbing, fix beds and railing, etc. I've witnessed this at several other jobs as well, where they hire someone for a low paying job, then expect them to use all the skills they have at the same pay rate as what they were hired for.
Computers also aren't really all that much cheaper now either. I mean sure, OK, compared to the 80's sure but that was 40 years ago.
Cars have absolutely not gotten cheaper.
Education and housing though...yeah. The Federal Reserve has made sure that no one has been able to afford either for many years now. Housing has also been made even worse by flippers and foreign investors(invaders).
Rentals also consolidating into fewer and fewer hands which is just going to drive up rents for everyone.
Electronics are frankly only so important.
Housing(ownership especially) and education are actually things that underpin so many other societal problems that we as a country should have *never* allowed lax interest rate policy and Chinese investors / flippers to drive prices so far beyond any semblance of rationality.
Depends on how you define "cheaper computers". Over the years, $1000 home computer is consistently far more powerful with far more storage, memory, and features than that same $1000 would have bought you the year before. We also now have nifty toys like the single board computer market (Raspberry Pi, etc) weighing in at the $5-50 USD price range on average, and smart-phones in a wide range of prices (which are basically just a "pocket computer") far more powerful than entire desktop systems of decades past.
> Electronics are frankly only so important.
> Housing(ownership especially) and education are actually things that underpin so many other societal problems that we as a country should have never allowed lax interest rate policy and Chinese investors / flippers to drive prices so far beyond any semblance of rationality.
Must agree with these points pretty much entirely though…
Then increase the construction budget and put multiple units on the location.
Look at other places government butts in? Schooling? Health care? Day care? etc... all more expensive and worse than ever.
Something is certainly going on. Its as if demand is increasing everywhere.
Not really. Inflation is one culprit. And housing is already about the cheapest thing you can buy by weight. Housing isn't more expensive. Wages are less. If the money printer would stop for a few years, the price of housing would stop dead at that moment too.
This article is useless.
With that out of the way, let's start dispelling some myths.
First, building houses inflation-adjusted actually hasn't gotten more expensive [1]. It's basically the same in real terms as almost 50 years ago.
What has changed is two things:
1. Land has gotten more expensive;
2. Houses have gotten substantially bigger; and
3. Real wages have been largely frozen, particularly on the low end, for the last 40 eyars.
So I was curious where the stats for rents came from and in Appendix B of the Full Report you'll see it uses the HUD FMR (Fair Market Rent) stat [2].
I was curious about this for several reasons. A description like "average house rent" raises a lot of questions like:
- What sorts of properties does this include? Free standing houses? Townhomes? Condos?
- What sort of "average" is it? Mean or median? You wouldn't want houses in the Westside distorting "average" rent for LA county, for example.
> HOW IS FAIR MARKET RENT CALCULATED?
> Fair Market Rent is generally calculated as the 40th percentile of gross rents for regular, standard quality units in a local housing market. This excludes low-quality units, already subsidized units, and units that have been built in the last 2 years. FMR rent data is typically taken from recent move ins rather than long-term tenants, as long-term tenants generally receive a lower monthly rental rate. FMR includes core utilities, like water and power, but doesn’t include internet and other optional services.
Isn't this a bit misleading? Like, it's data from recent move ins so it's people who have decided to or have needed to move and what they've been willing and able to pay.
[1]: https://www.aei.org/carpe-diem/new-us-homes-today-are-1000-s...
[2]: https://www.hud.loans/hud-loans-blog/what-is-fair-market-ren...
Multiple demographics are essentially crashing. Plenty are below replacement right now.
Should be interesting to see what happens over the next 20 years after reliance on migration finally changes voting trends.
most of us started at or near minimum wage living with roommates etc. The question to me is what is preventing these people from achieving career growth?
After entry level, it's up to the individual to level up and improve their employability and work their way up. At least that's the way it used to work, and boy did it work. Nowadays everyone wants the payday without having to put in the effort.
It is hard to get a well paying job without education. It is hard to afford education without a well paying job. The places with the most jobs, especially low-paying entry level jobs are quite often the most expensive places to live (cities). The cost of living is highly variable depending on where you are in the country, but only in the last few years have states/municipalities worked to try and close the gap in minimum wages so that people who work there can afford to live there.
In fact, for many people it’s a way to guarantee you’ll never be able to climb any financial ladders because you’ll be saddled with unpayable debt and a worthless degree.
Have you noticed how many major politicians have ties to predatory for-profit schools?
Absolutely not true. This is a dangerous myth that has gotten people stuck with worthless liberal arts degrees and $xxx,xxx in student debt. You can make a very decent wage with a trade skill (plumber, electrician, HVAC technician, etc.) Starting out, for most of these jobs, all you need to do at first is merely "show up."
I say this as someone that deeply values education, and I myself have one of those "worthless" liberal arts degrees. But the difference is that I went to school as a way to become a more well-rounded person, I already had a skill prior to going to school, and I also had a full academic scholarship that I was able to maintain due to good grades.
I 100% agree that we do a huge disservice to high school kids by pushing this myth of higher education, but that is the direction they are pushed and trade school is hardly in the conversation most of the time.
Have you applied or know someone who applied for a minimum wage job recently?
The last time I did, the person interviewing me went on a rant/monologue about how she couldn't find anyone who would actually show up and not, like, play on their phone all day. Essentially all I had to do in the interview was agree on a start date.
Then a couple days later, she changes her mind, evidently because I was overqualified (aka wore a tie, probably too old). Which turned out to be ok, because someone else called me back about a ~$15/hr job.
This was a little before the pandemic in a non-economically booming area, not a major global city.
I can't remember when I've seen a full time minimum wage position offered. Stocking shelves at Target paid more than minimum. Answering the phone for an ISP, which was my first job, paid slightly more than minimum.
I may be forgetting something, but I think if any jobs I've had or applied to paid exactly minimum they were probably very short assignments through temp agencies. Where obviously their client is paying a lot more.
2. Price of everything increases since people have more money, without corresponding increase in wealth/value.
3. Government: pikachu face