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, according to a report released Monday from the National Low Income Housing Coalition based on federal data.
Perhaps more surprising is that the inability to afford rent is not limited to big cities with high housing costs.
A full-time minimum-wage earner can't afford even a one-bedroom unit — except in a handful of counties in Washington and Oregon. A worker would have to make $18.92 an hour to be able to afford renting a two-bedroom apartment.
The low-income housing advocacy group's report shows a state-by-state breakdown of the number of hours a week a minimum-wage employee would have to work to afford rent in their state's fair market value as defined by the U.S. Department of Housing and Development.
In California, for example, a minimum-wage employee must work 130 hours a week to afford a two-bedroom rental.
The coalition has released this report annually for the past 25 years.
"Every year the story is worse," said Sheila Crowley, the advocacy group's CEO, on a phone call with journalists.
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 $11.50, 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.
"The minimum wage has just not kept up with the cost of living for about 40 years," said Bob Pollin, an economics professor and co-director of the Political Economy Research Institute at the University of Massachusetts Amherst.
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.
NLIHN says raising the federal minimum wage alone does not solve the complex issue. The nation must also address a shortage of about 7 million affordable rental units for extremely low income households, defined as 30% of an area's mean income. Eliminating that shortage would cost roughly $30 billion a year for 10 years, according to NLIHC.
The National Housing Trust Fund, a federal program, was designed to address the shortage, but the initiative is unfunded. The fund would provide grants to states to build or reconstruct affordable housing, according to HUD.
Last week, leaders in the Senate Banking Committee released text for legislation that would provide $3.5 billion a year for the fund.
The low-income housing tax credit also spurs the development of affordable rental housing, said George Hezel, director of the Affordable Housing Clinic at SUNY Buffalo Law School.
"It's not always oriented to the extremely low-income families, but it has produced a lot of much-needed housing all across the United States," Hezel said.