Keep in mind that in NYC there are very high priced apartments, but there are also a LOT of low income housing/slums/projects where rent is dirt cheap, it's just that people live in terrible conditions compared to what that same rent could get you elsewhere.
That's actually another good question - does NYCHA and other low-income housing push the average down as well? I'm not sure what it takes to qualify to get rent assistance; seems like it's unreasonable to compare a luxury apartment on the Upper East Side to my apartment in Hamilton Heights to a low-income housing project.
The article doesn't address why the hourly wage for 2-bedroom is relevant in relation to say, a 1-bedroom, studio, or mansion. Looking briefly at the BLS data, it seems that there are about equal numbers of single- and double-earner households. It's not clear to me that a single-earner household should expect to be able to rent a two bedroom apartment.
Logic fail is claiming there is a logical reason why all single wage earners SHOULD be paid enough to afford a two-bedroom rental in their current location. Emotions might tell you that but logic does not.
For much of the 20th century and perhaps as far back as the 19th a single earner was capable of not only providing a multi bedroom apartment but also a house. You should look into why this has changed and ask yourself why you are OK with that change.
Both of my grandfathers built their own homes in 1951 or 1952. Both original houses were around 800 sqft, and eventually expanded to around 1600 sqft over the course of decades. According to the US census bureau [0] the median new home constructed in the US is around 2100 sqft. If you dig deeper into the data [1] you'll find that the characteristics of housing in the US have changed drastically since the days of mostly single-income households -- homes are much larger, with more amenities. The average dwelling for someone below the poverty line right now is bigger and has better amenities than the average dwelling for Americans as a whole in 1970.
One pair of my grandparents is still living, in the same house. Houses that have sold on their block in the last few months were all around 800 sqft and went for an average of $95,000 -- which is an affordable 3.2 times the median income in the neighborhood (it's a poor neighborhood.) A single earner can provide a house, provided it's a house similar to what single earners could provide decades ago -- but there aren't many of those on the market. We keep building bigger houses and then wonder why the poor can't afford to keep up.
No, that is not what I meant to imply. My point is that increasing living space will obviously require more income, and it seems arbitrary to assume that 2-bedroom is the point of comparison when you're only looking at one-person incomes. I know a lot of single people without families who are perfectly content to live in a one bedroom or studio (myself included). If you simply assume that everyone must live in a 2 bedroom, then of course you can tell dire stories about how unaffordable housing is.
I don't want to diminish the very real struggle some families have with finding adequate housing. But I do think that the linked article has no real clear thesis other than that they wish housing was cheaper. I'd venture that everyone wants that to be true, always, and forever.
This chart wouldn't take into account the various subsidies you would get if you were actually making $13/hr as a single parent -- housing assistance, food stamps, medicaid, welfare itself, etc. The effective income -- after all assistance is accounted for -- is going be far higher than the quoted hourly wage.
At $13 an hour, TANF (the best match on "Welfare") would not be available. $25,000 per year is in the taper for the EIC, but would qualify for ~$2000 each of the first two children and a bit more for a third.
In some states, $25,000 per year would also disqualify a family of 4 from Medicaid (but ACA subsidies would still apply).
They should expect to live somewhere decent. They should also expect to be responsible for making sure they have marketable skills and enough money to afford it.
And so what's the answer? Just stick or fingers in our ears and go "La la la" and ignore the problem simply because you got lucky enough to not knock someone up at an inopportune time in your life?
Being from Arkansas, I always thought our housing prices were crazy low. When I was in university there, I paid something like $450/mo for a two bedroom, 1000 square foot (92 square meters) apartment.
Then I moved to Seattle and pay 6x as much per square foot. That's to be expected, I guess. Seattle is much more desirable than Arkansas.
I am also from Arkansas! I am planning on moving back in the next few years as my remote work jobs solidify. Information like this really hammers that point home. If you have family/friends in Arkansas, it's a cheap way to live with a fairly reasonable quality of life - at least the NW corner where I grew up.
The NW corner is where my apartment was (Fayetteville, University of Arkansas).
Central Arkansas is more expensive, but still extremely affordable compared to the rest of the country. My sister just bought a 3 bedroom house in a good neighborhood in Little Rock for < $150K. It would easily cost $600K+ here in Seattle.
The idea that you could calculate a meaningful number like this for the entire state is absurd. Perhaps if you could drill down into county or zipcode this would be more useful.
I live about 20 minutes outside of Pittsburgh. When I graduated college 6 years ago, I held down a restaurant job while doing an internship that would eventually lead to my first full-time job in my field. I had a roommate who worked at a hotel. We found a two-bedroom apartment (a house split into 3 units) that was going for $425/month plus utilities. Because we split, I had to pay about $300/month to keep a roof over my head. I think I was making $8/hr, so the first week of the month mostly covered my living expenses (not including taxes and the like of course). Very different than the 78 hours that shows for PA.
Anecdotal, I know, but the point being that if you're willing to make tradeoffs, you can find a way to live. My friend in Manhattan takes on two roommates to make his rent affordable. After my spouse and I got a house, we rented out our spare bedroom for a time to help pay down school loans and provide an affordable space for friends. I always remind myself that my grandmother was one of 13 children in a 3-bedroom home, and that many immigrant families of her generation had a boarder to help cover costs.
There are always edge cases that need to be dealt with compassionately - the single, unskilled mom with a few kids, etc. But the underlying assumption of articles like this seems to be that minimum wage should get you a 2BR apartment, and that's a premise that I don't agree with.
In additional most of these lower wage job should be for younger high school age or college students. A grown adult(lets say 25) shouldn't be working the entry level position at MickeyD's. That should be an outlying case and policy shouldn't be decided on corner cases.
Youth unemployment is significantly higher than the national average and if wages are mandated even higher then no one will take the chance on a 15 year old.
> A grown adult(lets say 25) shouldn't be working the entry level position at MickeyD's. That should be an outlying case and policy shouldn't be decided on corner cases.
Maybe you think they shouldn't be, but statistics show they are. Good jobs are hard to come by and the median age of fast-food workers is 28[0] (meaning half are older than that). It's absolutely not a weird corner case. It's a very common thing, and if we don't want adults with kids working those jobs, we're going to have to reverse decades of economic trends and start creating lots of better-paying jobs for marginally skilled workers.
Uniquely, it seems the act of grilling meat, and putting that between slices of bread, is harder to automate than driving a car. Or at least it's hard to automate for less than $15 an hour. Err $8 an hour.
I dunno, I don't think it is an unreasonable aim of society that if you are supplying your labour to someone (why shouldn't this include McD's?), that you are able to at least live a reasonable life.
By that I mean secure accomodation (not large, but comfortable), food and transport.
The issue what is a reasonable life? We make our enlisted soldiers live in a barracks and eat cafeteria food. Minimum wage could afford that sort of lifestye. And I think it's fair to expect a job to provide for that. It could provide a dorm experience.
But I don't think it's fair to expect it to support a family or a solo apartment.
Because a lot of minimum wage workers do live with mom and dad or live in a bunch of buddies. Artificially increasing their salaries hurts families who have to pay more for products and services.
Who is actually building these barracks-style accommodations for minimum wage workers?
That is something that occurred in the early days of industrialization, and still occurs in factory towns in newly industrializing economies, but not in the contemporary US. Where everyone is expected to finance a car and a single-family detached house.
This is a deep problem -- but not one to solve by messing with the minimum wage. It's largely a zoning issue. High-density housing lowers nearby property values (for many reasons), which means people tend to vote against policies that would allow it.
There are real external costs that impact the neighborhood, but what's needed is a more rational way of managing local real estate externalities. A bad solution is a solution of a kind, even if it's not a very good one.
Yes, the original other way to read the image in the OP is as "localities with an insufficient supply of housing".
Barracks-style housing is just so much further than higher-density housing though. About the only time true barracks accommodations are built is for factories or similar institutions in specific circumstances.
And a lot of minimum wage workers are trying to support families. And they got minimum wage work because that's all that was available. And they can't go back to school to get a better job because they have mouths to feed and rent to pay.
> "the underlying assumption ... seems to be that minimum wage should get you a 2BR apartment"
or, phrased another way, the underlying assumption is that if your labor isn't worth a full 2BR apartment to your employer, you shouldn't be allowed to work for part of it, you should be forced to rely on government entirely.
I think it's a good thing that low-wage employees are partially government-subsidized, not because I like government subsidies, but because I dislike hard thresholds and cutoffs that make people have to jump over a significant gap in order to make small net gains.
And, as you say, there's nothing inherently wrong with not being able to afford a 2BR apartment on your own. My sister can't afford a 2BR apartment, so she lives in a spare room in my house. My friends (teen parents) likewise can't afford a 2BR apartment, so they live in the other spare room in my house. There's certainly an argument to be made for doing more to subsidize corner cases (single unskilled mom with a few kids, no source of child support, etc.) but messing with the minimum wage isn't a particularly effective method.
Am I the only one that doesn't see the value of assessing this at the state level? Given the drastic variability of rents within states, this seems like a useless (not to mention misleading) unit of analysis.
Even worse, this kind of sensationalism around rising rents seems to be bringing the rent control zombie back to life in a number of cities. What a disaster that would be.
The argument here is comparing the AVERAGE rental price with the MINIMUM wage, and then concluding that the minimum wage is less than the average rental?
Well no shit!
States that have rich people will have a higher average. But there are also plenty of cheap 2-bedroom apartments too!
Why don't you compare the MINIMUM available 2-bedroom price with the MINIMUM wage? Then you can see if our poor can afford to live.
I swear I have been seeing this average/minimum bait-and-switch everyday for the last 3 weeks now. I don't know how something so false is having such momentum.
Because poor people have to compete inn the greater rental market like the rest of us. And there aren't as many of the minimum rental units as are needed.
Someone else already has already done the work for me, and written a bunch of reasons why the conclusions people tend to draw from this less-meaningful-than-you-think set of datapoints are faulty:
"Ask people what level of income would make them poor and they tend to come up with a number that's relative to their income. In the U.S., people are surveyed as to the amount of income necessary for a family of four to "get along." In 1950, the answer was $48 a week (PDF), or around 75 percent of household mean income that year. More than half a century later in 2007, the average answer was $1,000 a week—or around 77 percent of mean income."
Shouldn't they be using the median income since it's more resistant to outliers? Or did they just disregard the outliers?
I'm missing some definitions here. Not sure if I didn't see something, but what are they assuming in terms of number of hours/week and what does "two-bedroom housing wage" mean: is this just the wage at x hours/week that allows you to rent the average 2BR or does it include some other kind of spending like food? Because what does it help if minimum wage pays for the apartment but I can't eat?
On a different note, in relation to everyone asking why 2BR is important: please just imagine being a single parent with, say, 1-2 kids and a minimum wage job.
They're looking at how many hours worked at minimum wage that it would take to afford an average priced 2 bedroom apartment, if you only spend 30% of your income of housing.
Like Pavel says above/below, state level data like this is ok, but county level or even finer-grained data would be a lot better. There's a big difference in cost of living between Portland, Oregon and Burns, Oregon.
1. You can't raise the minimum wage without also having rent control or more public (section 8) housing. People on minimum wage usually have little negotiating power. Landlords servo the rents to what the market will bear. The market isn't sympathetic to low wage earners.
2. The California prices mentioned seem to be weighted to population (Rent in large cities). I have a 2br. rental unit in the eastern sierra, and the market there only allows me to charge $900.00/Month.
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[ 3.3 ms ] story [ 129 ms ] threadLogic fail is claiming there is a logical reason why all single wage earners SHOULD be paid enough to afford a two-bedroom rental in their current location. Emotions might tell you that but logic does not.
One pair of my grandparents is still living, in the same house. Houses that have sold on their block in the last few months were all around 800 sqft and went for an average of $95,000 -- which is an affordable 3.2 times the median income in the neighborhood (it's a poor neighborhood.) A single earner can provide a house, provided it's a house similar to what single earners could provide decades ago -- but there aren't many of those on the market. We keep building bigger houses and then wonder why the poor can't afford to keep up.
[0] https://www.census.gov/const/C25Ann/sftotalmedavgsqft.pdf
[1] http://www.census.gov/programs-surveys/ahs.html
I don't want to diminish the very real struggle some families have with finding adequate housing. But I do think that the linked article has no real clear thesis other than that they wish housing was cheaper. I'd venture that everyone wants that to be true, always, and forever.
In some states, $25,000 per year would also disqualify a family of 4 from Medicaid (but ACA subsidies would still apply).
Should a 19 year old community college student get 20 bucks an hour scooping ice cream because that's what you'd need to support a family of 5?
Then I moved to Seattle and pay 6x as much per square foot. That's to be expected, I guess. Seattle is much more desirable than Arkansas.
Central Arkansas is more expensive, but still extremely affordable compared to the rest of the country. My sister just bought a 3 bedroom house in a good neighborhood in Little Rock for < $150K. It would easily cost $600K+ here in Seattle.
I live about 20 minutes outside of Pittsburgh. When I graduated college 6 years ago, I held down a restaurant job while doing an internship that would eventually lead to my first full-time job in my field. I had a roommate who worked at a hotel. We found a two-bedroom apartment (a house split into 3 units) that was going for $425/month plus utilities. Because we split, I had to pay about $300/month to keep a roof over my head. I think I was making $8/hr, so the first week of the month mostly covered my living expenses (not including taxes and the like of course). Very different than the 78 hours that shows for PA.
Anecdotal, I know, but the point being that if you're willing to make tradeoffs, you can find a way to live. My friend in Manhattan takes on two roommates to make his rent affordable. After my spouse and I got a house, we rented out our spare bedroom for a time to help pay down school loans and provide an affordable space for friends. I always remind myself that my grandmother was one of 13 children in a 3-bedroom home, and that many immigrant families of her generation had a boarder to help cover costs.
There are always edge cases that need to be dealt with compassionately - the single, unskilled mom with a few kids, etc. But the underlying assumption of articles like this seems to be that minimum wage should get you a 2BR apartment, and that's a premise that I don't agree with.
Youth unemployment is significantly higher than the national average and if wages are mandated even higher then no one will take the chance on a 15 year old.
Maybe you think they shouldn't be, but statistics show they are. Good jobs are hard to come by and the median age of fast-food workers is 28[0] (meaning half are older than that). It's absolutely not a weird corner case. It's a very common thing, and if we don't want adults with kids working those jobs, we're going to have to reverse decades of economic trends and start creating lots of better-paying jobs for marginally skilled workers.
[0] http://www.theatlantic.com/business/archive/2012/11/mcjobs-s...
By that I mean secure accomodation (not large, but comfortable), food and transport.
But I don't think it's fair to expect it to support a family or a solo apartment.
Because a lot of minimum wage workers do live with mom and dad or live in a bunch of buddies. Artificially increasing their salaries hurts families who have to pay more for products and services.
That is something that occurred in the early days of industrialization, and still occurs in factory towns in newly industrializing economies, but not in the contemporary US. Where everyone is expected to finance a car and a single-family detached house.
See also the recent HN discussion about trailer parks: https://news.ycombinator.com/item?id=9592812
Barracks-style housing is just so much further than higher-density housing though. About the only time true barracks accommodations are built is for factories or similar institutions in specific circumstances.
or, phrased another way, the underlying assumption is that if your labor isn't worth a full 2BR apartment to your employer, you shouldn't be allowed to work for part of it, you should be forced to rely on government entirely.
I think it's a good thing that low-wage employees are partially government-subsidized, not because I like government subsidies, but because I dislike hard thresholds and cutoffs that make people have to jump over a significant gap in order to make small net gains.
And, as you say, there's nothing inherently wrong with not being able to afford a 2BR apartment on your own. My sister can't afford a 2BR apartment, so she lives in a spare room in my house. My friends (teen parents) likewise can't afford a 2BR apartment, so they live in the other spare room in my house. There's certainly an argument to be made for doing more to subsidize corner cases (single unskilled mom with a few kids, no source of child support, etc.) but messing with the minimum wage isn't a particularly effective method.
Even worse, this kind of sensationalism around rising rents seems to be bringing the rent control zombie back to life in a number of cities. What a disaster that would be.
Well no shit!
States that have rich people will have a higher average. But there are also plenty of cheap 2-bedroom apartments too!
Why don't you compare the MINIMUM available 2-bedroom price with the MINIMUM wage? Then you can see if our poor can afford to live.
http://slatestarcodex.com/2013/04/04/lies-damned-lies-and-fa...
Shouldn't they be using the median income since it's more resistant to outliers? Or did they just disregard the outliers?
2. The California prices mentioned seem to be weighted to population (Rent in large cities). I have a 2br. rental unit in the eastern sierra, and the market there only allows me to charge $900.00/Month.