Minimum wage workers can't afford rent anywhere in America | Hacker News Reader

Minimum wage workers can't afford rent anywhere in America

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40 pointsLinuxBender51 comments

I know there are a lot of opinions on what the Federal minimum wage should be, but can we all agree that $ constants in our laws are always a bad idea?

I think any law, without a sunset provision, that mentions a $ amount, should peg that $ value to a periodically updated relevant economic metric - inflation, etc.

For example, if the outrage over minimum wage has something to do with median rent, then tie the two values together, so we can stop having these pointless debates everytime rent goes up.

tldr - minimum wage should be computed at run-time, not compile time.

Here in Switzerland this is mostly calculated on exactly these factors. If you somehow earn below that, for whatever reason, you can get the difference from the state.

Minumum wage is not and never was meant to allow the worker to afford a two-bedroom rental on his own.

Where are the kids going to sleep? I suppose we can have coffin homes like Hong Kong. Maybe four beds on one wall with the communal toilet and tub down the hall.

The part OP didn't say was they don't believe "poor" people should have homes, children, and especially not more than one bedroom. Utterly disgusted at the thread as a whole, and I'm taking a dimmer and dimmer view of HN generally. Seems so full of nastiness these days.

While I agree with you in spirit, I also think this is an uncharitable view of OP’s statement. While it is true that some subset of the population relies on the minimum wage to survive, it’s perfectly reasonable to question whether that’s the best tool for the job without meaning that the poor don’t deserve homes/children.

For example: federal housing subsidies could be expanded, as well as SNAP, to augment the minimum wage. In fact, that is already what happens. So a fuller portrait of this situation might include the total hourly wage when factoring in government subsidies. I will contend that even with those add-ins the minimum wage still isn’t high enough, especially in relation to the massive productivity gains realized through automation and efficiency over the past half-century.

What was “meant” to be the case for an economic policy is quite besides the point. If wages don’t keep pace with the rise in housing prices, upward mobility for low wage workers decreases. They rely more on public services. The have poorer health outcomes. This has real consequences for the economy overall.

Dismissing this concern with “it wasn’t meant to do that” is a little like seeing a man with a bandaid over a gaping axe wound and saying, “well, sucks for him — but that bandaid wasn’t meant to stop that much blood.”

> If wages don’t keep pace with the rise in housing prices, upward mobility for low wage workers decreases.

The article we are addressing is not about minimum wage failing to keep pace with housing inflation, or general inflation, both of which are reasonable things to complain about. So, while the above observation is correct, it is not germane to the article under discussion, which makes no historical comparisons of the adequacy of the minimum wage to the standard it complains it does not currently reach anywhere in the US.

After minimum wage was increased in 2009 there has been a decrease in the amount of people that make minimum wage every year. I'm assuming this is due to COL increases. A lot of the people making it at this point are probably being supported by their family.

https://www.bls.gov/opub/reports/minimum-wage/2017/home.htm#....

I could afford a two-bedroom apartment on my own either and had a roommate for years.

I think the headline is inaccurate because minimum wage workers can obviously afford some rents.

I think if we want everyone to have a basic housing level we should just invest in lots of council homes or projects and start handing them out. I don’t think it’s the best or even a good idea, but better than trying to set the wage floor at the price of two bedroom apartments.

That just seems silly, that everyone should have a two bedroom apartment? That’s a waste for people who don’t need it.

Also assumes that I will only work one minimum wage job and that I’ll be able to work 40 hours. This study isn’t very useful.

Federal minimum wage is $7.25?! Wow, I guess I'm just too used to CA minimum wage which is roughly double that ($14).

Even with a higher federal minimum wage, the problem of "The rent is too damn high!" would persist.

$14 for employers with more than 25 employees, $13 for 25 or less.

Why is there a minimum wage at all? What's the point?

We've tried the no-minimum-wage experiment before.[0] A lack of minimum wage tends to lead to extremely exploitative wages for workers without skills in high demand.

If you agree with the statement "anyone who works full time should be able to afford necessities like safe housing and adequate food," a minimum wage is required.

If you disagree with that statement, I guess you could argue for no minimum wage, but your moral system will be different enough from most people to make you the minority position.

[0] https://www.dol.gov/general/aboutdol/history/flsa1938

> your moral system will be different enough from most people to make you the minority position.

I hope you’re right about this, but in my experience many folks in the US harbor a puritanical sense of justice in which people have what they have because they deserve it (i.e. poor people are poor because they deserve to be, and wealthy people are wealthy because they deserve to be). To be clear, I vehemently disagree with this sentiment but I have encountered it enough to wonder whether it’s the majority opinion.

For the sake of my own sanity, if nothing else, I am going to choose to believe that this isn't the majority opinion. I don't think Objectivism is quite that popular.

"anyone who works full time should be able to afford necessities like safe housing and adequate food" sounds great.

A minimum wage is a lot like having your health care tied to your employer. With employer-sponsored health care, employers pay the lion's share of the cost, and workers are left out to dry if they leave their jobs.

Minimum wage is the same concept except for at a grander scale. Your employer provides the lion's share of the resources for your food, housing, transportation, etc.

With health care the liberal agenda is focusing on shifting it away from the employer, so you're not stuck in the rat trap of needing a job to go to the doctor.

Maybe we need a similar thing for other basics.

As in UBI? That's the only experiment I know of (or at least, politically feasible experiment) trying to decouple physical necessities and employment.

I guess you bring up an interesting point here, that UBI would make minimum wage obsolete.

It seems like you're arguing for changing "anyone who works full time should be able to afford necessities like safe housing and adequate food" to just "anyone should be able to afford necessities like safe housing and adequate food." I'm not opposed on principle, but I think this is a harder goal to hit in practice.

Right now, we demand companies that use minimum wage labor to over-pay their workers, as a form of corporate-sponsored welfare. Wouldn't it make more sense for Walmart to pay employees market rate, and the tax base as a whole ensure that nobody goes hungry?

I think this is such a massive and fundamental restructuring of the US's historical way of doing things (and the popular conception of "how it should be done") that pushing for incremental change like livable minimum wage is probably more effective in the short-run.

In the long run, if UBI continues proving its success in real-life trials and we're able to get a larger share of the population on board, I'd vote in favor of trying it.

I want Biden to use brute force to make homes a commodity like they were 50 years ago or prior.

Create a bunch of jobs to just compete directly with the private sector and plummet home building costs into the ground. Work with some great designers across the nation and create a renaissance of home design. Dirt cheap 1500 sq. ft homes. None of this 300k nonsense. Cut it directly in half or more.

Take undeveloped land by eminent domain unless the owners can document that they’re going to do something with it, and just build a shit ton of homes WWII style, and allocate unfathomable amounts of taxpayer funds from existing appropriation categories into that instead.

I want a home for under $150,000. I want REITs outlawed from buying them. And I want investors national and foreign prohibited from purchasing them. I want a new golden age of home ownership to combat the slow march to neo-feudalism.

Won’t ever happen, but I’ll dream.

Where do you put them though? Good land is hard to come by & most of what you're describing here is already done by commodity housing developers in the outskirts of (e.g.) many big cities in Texas.

New housing creates new infrastructure problems, and our government is insanely bad at dealing with these kinds of things.

Here's my equally unlikely but also naively aspirational plan: inflate the US dollar until housing is affordable again.

You joke about that being equally unlikely. But looking at the current inflation rate it is much more likely to be held true compared to any other economic plans or lack there-of.

> But looking at the current inflation rate it is much more likely to be held true compared to any other economic plans or lack there-of.

No, its not; even if you naively project the current inflation rate into the future instead of expecting a reversion to the mean, since the current inflation rate is largely driven by housing prices (that is, housing prices are inflating much faster than overall price levels and, more importantly, wages), it would never make housing affordable; in fact it is doing the opposite.

Chicago has loads of vacant land[1] and unused buildings[2] not far from the city center. Also, the land for "the 78" is still mostly undeveloped[3].

[1] https://cdn.vox-cdn.com/uploads/chorus_asset/file/7917749/Sc...

[2] https://chicago.curbed.com/2016/3/9/11185730/chicago-eminent...

[3] https://www.78chicago.com/

Apologies if you’re joking, but inflation increases housing prices and reduces the effective minimum wage.

housing prices (and asset prices in general) are already in a bubble - you can either deflate that bubble (unlikely to happen given the state of things), or you inflate the rest of the economy to match.

As a renter looking to buy I want that too, but most people are already property owners. Which means if all property prices drop their equity will fall below 0 causing way more problems than before.

If the government starts taking homes from one person and giving them to another, there will be war. This is not Germany 1933, i’m not saying that’s what you’re talking about, but it sounds like it. Taking from one and giving to the other is not a solution.

Maybe, maybe, although if a neighbor was going around gathering a posse because the government took his extra homes?...well I don't think I'd pick up arms for that cause.

That already happens and it's about to happen to millions of people in the US: it's called eviction.

No, I think you’re confusing literal taking by the government, with a private action of eviction backed by government enforcement. The government generally isn’t the one to initiate an eviction action, it’s the owner, bank, etc.

I guess you don’t realize that eminent domain already happens today and very frequently.

Intended (in the US at least) to be exercised only in the public interest, like to build a dam for flood control or a railroad right-of-way to facilitate commerce.

I fully recognize that "public interest" can be twisted in all sorts of ways, but I agree with the GP comment that taking land from some people to give it directly to other people does not conform to my understanding of the spirit of the eminent domain law.

I’ve read Little Pink House, and know very well the bastardization of eminent domain for private gain, corruption, and outright theft by government. I abhor it but eminent domain, and eviction, are not the same thing. They may lead to the same outcome, but they are two entirely different processes of government. Perhaps you might find the same read educational.

(1): https://www.amazon.com/Little-Pink-House-Defiance-Courage/dp...

Take undeveloped land by eminent domain

Swap that part out with Government owned land and I think you would get more support. The U.S. Federal Government owns a tremendous amount of land in each state [1] with varying degrees of usability for urban development.

[1] - https://ballotpedia.org/Federal_land_ownership_by_state

Unemployed workers also cannot afford rent anywhere in America. Creating an artificial price floor on labor will reduce the consumption of labor, leading to more unemployment.

But does it? As far as I know the US has way worse unemployment numbers than Europe, yet Europe mostly enforces a proper minimal wage.

Europe has way worse unemployment numbers than the US.

There are certainly countries in Europe that can match, and maybe even beat, US unemployment numbers on historical data while having much higher labour costs.

And there are US states that can match and beat almost all European states on unemployment numbers.

But my point is that the parent comment is wrong: the US has a lower unemployment rate than the EU as a whole, and a much lower unemployment rate if you only count the regions of Europe with high social welfare spending.

A surprising amount of people seem content with a minimum wage earning underclass. "Minimum wage was never meant to support..."

Why not? Can we not define what it is meant to do?

How will it detract from your life that someone else existence is worth living? And when you earn that little, as much as $20 dollars a weak extra goes a long way. Better yet, they spend that $20 a week extra. It's good for everyone.

> Why not?

Because minimum wage sets the minimum value job that can be done.

> How will it detract from your life that someone else existence is worth living?

Minimum wage isn't minimum standard of living. There's a certain level where minumum wage mostly mitigates lack of bargaining power in low wage labor, but as you get further and further beyond that point, you are raising wages less and causing unemployment more.

If you want to set a minimum standard of living, you want a UBI, not a minimum wage.

Only 2.3% of Americans earn minimum wage. https://www.bls.gov/opub/reports/minimum-wage/2017/home.htm

The relationship between unemployment and minimum wage is not as concrete as you might think. Economics 101 predicts it would, but empirical studies don't actually tend to support or refute that notion.

Unsure how UBI doesn't results in massive inflation. Not against the concept, but not sure why we couldn't just have a functioning welfare system.

It's actually the opposite of what you wrote. Minimum wage is precisely "minimum standard of living", not a "minimum value job". There's no such thing as a standardised minimum wage for various types of job, every job has a different requirements that set the minimum wage. The reason why we (at least in Europe) set the minimum wage is to cover basic costs such as housing, health insurance and food or in other words basic costs of living.

> Minimum wage is precisely "minimum standard of living"

No, its not.

Because while it compels someone who employs you in a covered job to pay you a certain hourly wage, it doesn’t require anyone to employ you at all, nor does it require them to employ you for a minimum number of hours per (say) month if they do.

It sets a floor on value of work for which it is economical to hire workers, but it does not set a floor on standard of living for the jurisdiction, or even for those employed in the jurisdiction.

sarcasm warning.

it's demand supply. if there is supply then rent will fall so that these min wage worker can afford it? also, maybe it's a demand issue. these works just don't demand housing.

so yeah.

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