Minimum wage and affordable housing do not coexist. There’s not a single place in the country where minimum-wage workers can afford to rent one- or two-bedroom homes without working impossible hours. Not even in places like Washington, D.C., Massachusetts, or California—where minimum wage is nearly double the federal minimum wage of $7.25 per hour—can workers find decent housing at an affordable rent. Michela Zonta, PhD, a senior policy analyst for housing and consumer finance policy at the Center for American Progress, says it’s always been this way.
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Michela Zonta, PhD, is a senior policy analyst for Housing and Consumer Finance Policy at American Progress. She has extensive research, teaching, and consulting experience in housing and community development. She has published work on the mortgage-lending practices of ethnic-owned banks in immigrant communities, jobs-housing imbalance in minority communities, residential segregation, and poverty and housing affordability.
“I do not think there was ever a time in which people working minimum wage comfortably afford rent unless workers and their families received some form of subsidy, like housing vouchers, or had more than one worker per household who could contribute to rent,” says Dr. Zonta. “Being a renter is more common among low-income households; inflation-adjusted wages, especially at the bottom of the income spectrum, have barely risen since the 1970s, while housing costs have outpaced incomes.”
The federal minimum wage has not changed since 2009. And findings from the National Low-Income Housing Coalition show that it’s not nearly enough to live on. For 2020, workers need to make a minimum of $19.56 per hour to afford a two-bedroom apartment or $23.96 per hour to afford a one-bedroom apartment. Keeping in mind that a full-time job is 40 hours per week, the average minimum wage worker needs to work 97 hours a week to afford a two-bedroom rental or 79 hours a week to afford a one-bedroom rental.
“People who work 97 hours per week and need 8 hours per day of sleep have fewer than 2.5 hours per day left over for everything else—commuting, cooking, cleaning, self-care, caring for children and family, and serving their community,” reads the report.
“On average the housing wage is much higher than the minimum wage across the nation both for a modest one-bedroom and a two-bedroom apartment,” says Dr. Zonta. “This problem needs to be addressed both from a housing and a labor perspective by increasing access to affordable housing by boosting the affordable housing supply and expanding subsidies for low- and middle-income renters and by increasing wages.”
It has gotten worse during the COVID-19 pandemic, and communities of color are the ones who’ve been hit the hardest. Comparing July 2020 data to June 2019 data, white people have had an increase in unemployment of just under 7 percent; it’s increased more than 9 percent for Black people and more than 11 percent for Asian Americans. Though the pandemic has widened racial gaps, they persisted prior to the pandemic.
“People of color disproportionately face greater challenges in finding decent and affordable housing in the U.S., and income inequality contributes to those challenges,” reads the report. “Income inequality along racial lines is the product of historical and ongoing discrimination, economic exploitation, and unequal opportunities.”
There are systems in place to help people who can’t afford housing, but they’re not all accessible or publicized.
“There are some programs that address housing affordability for low-income households, both from a supply and demand perspective,” explains Dr. Zonta. “From a demand perspective, the Housing Choice Voucher program (Section 8) is probably the largest form of subsidy, along with public housing. Only very low-income households are eligible for housing vouchers (usually their income is less than 50 percent of the area median income, although eligibility is based also on family size). However, only 1 in 4 eligible households actually receive this benefit.”
Currently, Dr. Zonta says that there is also a severe shortage of affordable housing that needs to be addressed in order to provide working families with housing stability. And while states like New York have enacted COVID-19 rental assistance programs, much of the country has failed to act to help its citizens.
“Evictions have increased, and because of the current pandemic, as the moratorium on evictions is set to expire soon across the nation, more families are at risk of losing their homes, especially among low-income families who were already struggling with rent before the pandemic,” she says. “There needs to be an aggressive response by governments at all levels to ensure that people stay in their homes.”
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