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

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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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Minimum Wage: Is $15/Hour Enough?

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Minimum wage debates are never-ending and often polarizing. What I can say with certainty is that the stagnation of the minimum wage for the last 12 years is unfortunate when we see the quick uptick in inflation. In the latest report from June 2021, inflation jumped to 5.4% year-on-year, compared to last year’s rate of 0.6%. 

Minimum wages leave even the hardest of workers struggling to make ends meet. The simplest thing that we can do is to advocate for decent, livable wages for all to ensure the opportunity for economic security no matter who you are, where you work or where you live. 

That, however, begs the question: how do we set the new minimum wage? In reality, how can we settle on one number, such as $15/hour,  when each individual city has dramatically different costs of living and each state has a unique tax burden? 

Today’s Wages

Stuck at $7.25, the reality of the federal minimum wage is that in the largest U.S. cities, this kind of wage just won’t cut it. Even $15/hour isn’t enough in most areas.

Some might boast of a news release from the BLS declaring the increase in average hourly earnings rose 3.6% in June 2021, but this is likely not true for every worker and definitely does not keep up with inflation. 

It’s a complicated issue but there are many places in America where people aren’t making enough to buy necessities or even pay rent. They opt out of health insurance or simply going to the doctor for fear of what they may owe when all is said and done. 

Sure, many states and cities have mandated higher local minimum wages. Unfortunately, those increases often aren’t enough. 

For example, New York City’s minimum wage is set at $15-an-hour. According to this data study, factoring in local taxes, utilities, food, rental costs and transit as part of the core budget, a single New Yorker would be left with around $70 for hobbies, insurance, student loan payments, emergency expenses or simply to save. (Case in point: this homeless Amazon worker making $19.30 an hour.)

Inflation and City-Adjusted Wages

One minimum wage movement that has made the most waves across the nation is the Fight for $15. An estimated 26 million workers have been positively impacted by changes made in response to this demand for more livable wages. 

This movement was launched 12 years ago. If we used the current rates of inflation that would mean that this movement should now be pushing for $17.75 an hour.  

I’m no economist or financial expert, but it seems reasonable to me that taking inflation and each city’s cost-of-living into account, a minimum wage formula could be devised and additional wages could be adjusted according to some city-specific metrics such as the local price parity.

This blog is printed with permission.

About the Author: Kristen Klepac is a writer and content specialist who really misses music festivals. She currently resides in France where she often works on creating data-focused content that reveals unexpected trends on everything from crypto to city-based demographic reports. 


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With All Eyes on DACA, the Trump Administration Is Quietly Killing Overtime Protections

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On September 5, the administration of Donald Trump formally announced that they won’t try to save Obama’s overtime rule, effectively killing a potential raise for millions of Americans. This disturbing development has largely slipped under the radar during a busy news week, marked by Trump’s scrapping of the Deferred Action for Childhood Arrivals (DACA) program.

Twenty-one states and a number of business groups sued the Obama administration last September, after the Department of Labor (DOL) announced the new rule, accusing the former president of overreach.

That lawsuit led to Amos Mazzant, a federal Obama-appointed judge in Texas, putting the rule on hold last November, shortly before it was set to become law. On August 31, Mazzant struck the rule down, and—less than a week later—Trump’s Department of Justice (DOJ) declined to challenge the District Court’s decision. In a court filing, a DOJ lawyer said that the administration would not appeal.

The Obama administration’s rule would have raised the overtime salary threshold considerably. The threshold hadn’t been increased by any administration to adequately reflect wage growth or inflation, which means that many workers only see overtime pay if they make less than about $23,660 a year. Obama had scheduled that number to be bumped up to about $47,476 after reviewing 300,000 comments on the subject.

“The overtime rule is about making sure middle-class jobs pay middle-class wages,” former Labor Secretary Tom Perez told reporters on a call after the rule was announced in May 2016. “Some will see more money in their pockets … Some will get more time with their family … and everybody will receive clarity on where they stand, so that they can stand up for their rights.”

While the overtime rule faced predictable opposition from Republicans and business groups, it also received backlash from some liberal advocacy organizations. In May 2016, U.S. PIRG, the popular federation of non-profit organizations, released a statement criticizing Obama’s decision. “Organizations like ours rely on small donations from individuals to pay the bills. We can’t expect those individuals to double the amount they donate,” said the group.

Critics of the statement pointed out that U.S. PIRG’s opposition suggests they have employees not being paid for overtime despite their low wages. The group was slammed by progressives for supporting a regressive policy when it benefited their economic interests.

The DOL claimed that the rule would mean a pay increase for about 4.2 million Americans, but the Economic Policy Institute (EPI) contends that the DOL’s figure is far too low. According to EPI, the DOL’s analysis fails to take the impact of George W. Bush’s overtime policies into account and relies heavily on statistics that were generated before he took power. EPI estimates that, because of changes to employee classifications in 2004, roughly 6 million workers had their right to overtime destroyed.

The EPI’s study of the overtime rule determined that about 12.5 million workers would have been impacted if it had been implemented. A wide range of workers would have potentially seen a pay increase, including 6.4 million women, 1.5 million African Americans and 2.0 million Latinos, the EPI concludes.

“Once again, the Trump administration has sided with corporate interests over workers, in this case, siding with business groups who care more about corporate profits than about allowing working people earn overtime pay,” Heidi Shierholz, who leads the EPI’s Perkins Project on Worker Rights and Wages, told In These Times.

The Trump administration’s move might be disappointing for workers’ rights advocates, but it’s hardly surprising. As a presidential candidate in 2016, Trump vowed to kill the overtime rule if elected. “We have to address the issues of over-taxation and overregulation and the lack of access to credit markets to get our small business owners thriving again,” he said in an interview. “Rolling back the overtime regulation is just one example of the many regulations that need to be addressed to do that.”

While many pundits have focused on Trump’s unrelenting series of failures and scandals, his administration has quietly waged a fairly successful war on labor. In addition to nixing one of Obama’s most notable policy achievements, the Trump administration is also poised to stack the National Labor Relations Board with a pro-business majority, has proposed major cuts to the Labor Department and has rolled back safety protections for workers.

Last month, Bloomberg reported that Trump’s Labor Department had created an office specifically designed to reconsider government regulations. The office will be run by Nathan Mehrens, the anti-union lawyer who is also in charge of the department’s policy shop.

Trump geared much of his campaign rhetoric toward the U.S. worker, vowing to dismantle exploitative trade agreements and bring back jobs. However, his administration has simply emboldened the anti-labor forces that have dictated economic policy for decades.

This blog was originally published at In These Times on September 7, 2017. Reprinted with permission. 

About the Author: Michael Arria covers labor and social movements. Follow him on Twitter: @michaelarria


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