Working people are so screwed: Rents spike and minimum wage hits its lowest value since 1956

Laura Clawson

The average wage needed for someone to afford a market-rate one-bedroom apartment rental in this country is $21.25 per hour. The federal minimum wage is $7.25 per hour. It’s not hard to see the problem here.

Both sides of the equation are responsible: The rent is too damn high and the pay is too damn low.

According to the National Low Income Housing Coalition’s annual report on housing costs, the market rate for a modest two-bedroom home requires an hourly wage of $25.82 for affordability, defined as 30% of income on housing costs. Across the entire country, “In approximately 9% of counties or county equivalents (including Puerto Rico), the renter wage is below the federal, state, or local minimum wage.” In the continental U.S., Arkansas is the winner, requiring just 1.4 full-time minimum wage jobs to afford a two-bedroom apartment.

On the rent-is-too-damn-high front, “Across the country, rents rose 18% between the first quarter of 2021 and the first quarter of 2022. These rent increases have been widespread: out of 345 metropolitan counties, all but two have seen a rise in rental prices since 2021.” Those increases have hammered people who were barely making it month to month, already paying well over the 30% of income considered affordable for housing. Some interviewed in the NLIHC report are now paying 80% of their household income to remain housed.

Nationally, more than 40% of people are not paid enough to afford a one-bedroom apartment, and nearly 60% are not paid enough to afford a two-bedroom apartment.

The burden of high housing costs falls disproportionately on Black and Latino renters, the report notes: “White workers at the bottom of the white income distribution earn over one dollar more per hour than Black and Latino workers at the bottom of their respective income distributions. Among Black workers, a Black person at the 20th percentile of wages earns $2.30 less per hour than a white worker at the same percentile. A Latino worker at the 20th percentile of wages earns $2.05 less than a white worker at the same percentile.” 

On the pay-is-too-damn-low front, the minimum wage, which has not increased since 2009, is now worth less than at any time since 1956. The Economic Policy Institute’s Dave Kamper put that in context:

The United States must invest in affordable housing and rental assistance. It must increase the minimum wage—even in the states where it’s currently the highest. And that means Republicans cannot be allowed to keep standing in the way. 

This blog is printed with permission.

About the Author: Author’s name is Laura Clawson. Laura is assistant managing editor for Daily Kos.

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Madeline Messa

Madeline Messa is a 3L at Syracuse University College of Law. She graduated from Penn State with a degree in journalism. With her legal research and writing for Workplace Fairness, she strives to equip people with the information they need to be their own best advocate.