From [HERE] Even a modest two-bedroom home is completely out of reach for someone earning the federal minimum wage anywhere in the United States.
According to the National Low-Income Housing Coalition’s (NLIHC) 2018 “Out of Reach” report, someone working a 40-hour week position earning the federal minimum wage of $7.25/hour would be unable to afford a two-bedroom apartment anywhere in the United States at fair market rent (usually the 40th percentile of gross rent in a given area, set annually by the Department of Housing and Urban Development). Even in Arkansas, a minimum wage worker would need to work 65 hours/week to earn enough to afford fair market rent for a two-bedroom home.
When using the national average for fair market rent, someone earning $7.25/hour would have to work an astonishing 122 hours per week for all 52 weeks of the year (approximately three full-time jobs simultaneously) in order to afford a two-bedroom apartment, and 99 hours a week to afford a one-bedroom home. To put that in perspective, there are only 168 hours in a seven-day week, meaning that these workers would have to spend more time working than sleeping simply to pay for shelter.
The NLIHC’s methodology comes from comparing fair market rent to the number of hours one would need to work in order to afford rent at an apartment without being cost-burdened, or having to spend more than 30 percent of their monthly take-home pay on rent (referred to as Housing Wage in the NLIHC report). The minimum wage necessary to afford a two-bedroom home in the U.S. without being cost-burdened is $13.84/hour in Arkansas, with that amount going up to as much as $36.13/hour in Hawaii.
While many cities and states have responded to the call from workers and labor unions to raise the minimum wage to $15/hour, many of those increases won’t go into full effect for another several years. And even someone already making $15/hour and working full-time hours would be unable to afford a two-bedroom apartment anywhere in the country outside of six states (Alabama, Arkansas, Kentucky, Mississippi, South Dakota, and West Virginia).
Even when using just a one-bedroom apartment as the standard — which is likely untenable for families with children — there are only 22 counties out of more than 3,000 nationwide where someone working 40 hours a week earning the federal minimum wage can afford a one-bedroom home at fair market rent without being cost-burdened.
“Thirty-eight local jurisdictions have their own minimum wages higher than the state or federal minimum-wage, but all fall short of the local one-bedroom Housing Wage,” the report states.
Nationally, the NLIHC estimates the average hourly wage for renters is $16.88/hour, which still falls $5.22/hour short of the hourly wage needed to afford a two-bedroom home, and $1.02/hour short of the national average fair market rent for one-bedroom homes.
How does your state fare in the national affordable housing crisis? Read the NLIHC’s full report here.