In an article for USA Today, Jolie Lee reported last Tuesday that the minimum wage across most of the United States has not kept up with living costs for nearly four decades. Through interviews with experts in the field and thorough consultation of federal data released by the National Low Income Housing Coalition on March 24th, Lee reports, “minimum-wage employees must work on average 2.6 full-time jobs to afford a decent two-bedroom apartment in the USA without paying more than 30% of their income:
“Twenty-one states and D.C. have a minimum wage higher than the federal minimum wage of $7.25, according to the Labor Department. But a higher minimum wage doesn’t translate into housing affordability. In D.C., the minimum wage is $8.25, but a full-time worker would have to make $12.60 an hour to afford a one-bedroom rental and $15.42 an hour for a two-bedroom apartment, according to the NLIHC report.”
She goes on to suggest that little is happening at the federal level to remedy the situation.
The Obama administration has backed efforts to increase the federal minimum wage to $10.10 an hour, but Congress has not passed any wage hike and is unlikely to do so. Last month’s Congressional Budget Office report found raising the minimum wage to $10.10 would lift 900,000 workers above the poverty line but cost 500,000 jobs.
According to the NLICH, reducing a shortage of roughly 7 million affordable renting units for extremely low-income households (defined as 30% of an area’s mean income) would be another essential step to resolving this complex situation. Their report estimates the cost of that measure at roughly $30 billion a year for the next ten years. Both solutions appear costly, but the key here is to take everything in smaller steps. There is substantial evidence to suggest that wage increases at the very least reap significant rewards for local economies over time. Private companies also have the power to help, whether by focusing their hiring practices on local job markets or instituting new payment practices with greater payout for employees who are overachieving.
It’s time to examine these numbers critically, at a local level, and consider what both private and public institutions can do to help their communities.
Infographic courtesy of Jolie Lee and USA Today