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  THE LOW INCOME & URBAN HOUSING BLOG  

Wednesday, May 28, 2014

Low Income Housing is Anything But Low For Many Minimum Wage Earners


According to the Bureau of Labor Statistics, a little under 3.6 million American workers are paid either at or below the federal minimum wage. This comes out to about 2.6 percent of all American workers. The current $7.25 an hour wage rate is making it increasingly more difficult for many workers to find affordable housing.

Affordability is out of reach for many

For many who live in larger cities where the rent is high, affordability is out of reach. But it's not a problem that is confined to big cities. The term affordability is the U.S. Department of Housing and Urban Development (HUD) definition that spending 30 percent of your income for housing is considered affordable. But for many, it's simply out of reach unless they want to work 100 hours or more a week.

Every year, the National Low Income Housing Coalition issues a report based on federal data that shows, state by state, how many hours a minimum-wage worker would need to work each week in order to afford an apartment for rent at fair market value. The latest reports shows some shocking results. In California, for example, a minimum wage earner would need to work 130 hours a week in order to be able to afford a two-bedroom apartment.

Two major obstacles

One might think that raising the minimum wage would solve the problem. Not so. There are two major issues that need to be resolved. One is that rents are going up faster that wages, making the gap too large for minimum-wage earners to make up the difference, no matter how many hours they work. The other problem is that there is a serious lack of affordable housing available. The shortage is estimated to be about 7 million units.

As many experts have discussed, raising the minimum wage could help some but could also cost others jobs. Building more affordable housing costs money and funding is tight. For sure, the solution to this problem will not be easy to find.
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