Housing High, Wages Low
Report Finds Gap Between Wages, Rent
by Jennifer Loven of the Associated PressThe average U.S. worker must earn at least $13.87 an hour, nearly three times the federal minimum wage, to pay the rent on even a modest two-bedroom apartment, according to a private study released Tuesday.
As in the past, the annual "Out of Reach" report by the National Low Income Housing Coalition found there is no jurisdiction in the country where someone working full time at the $5.15-an-hour federal minimum wage can afford an apartment. This year, the analysis concluded the gap between a minimum-wage salary and the cost of housing grew faster than before and widened virtually everywhere.
The Washington-based advocacy group favors increased federal spending on affordable housing and raising the minimum wage. [Others, including the Progress Report, favor removing unjust distortions of the economy that make housing artificially scarce and wages artificially low. We need justice and a level playing field, not government handouts.]
"Housing is the beginning, the foundation, the stability that people must have to go to work each day, send their children to school, arrange transportation and child care, and generally succeed in life," the report said.
Sen. Jack Reed, D-R.I., chairman of the Senate housing subcommittee, said the report shows the shortcomings of federal policy including years of declining federal funding for affordable housing.
"It would seem self-evident that if one goes to work every day and collects a regular paycheck, that should be enough to secure a reasonable place to live and take care of one's family," Reed said.
The study is based on the Department of Housing and Urban Development's determinations of fair market rent" in 3,779 states, counties and metropolitan areas. Each jurisdiction's "housing wage" was then established by calculating how much a person would need to earn per hour to pay no more than 30 percent of income for those rents.
HUD considers housing affordable when it costs 30 percent or less of gross income.
The national housing wage of $13.87 is less than the $16.97 an hour the average fulltime U.S. worker earned in 2000, according to a Bureau of Labor Statistics report covering nearly all American employees or about 125 million workers.
But it is far more than the federal minimum wage of $5.15 an hour, earned by 2.7 million people in 2000.
Workers in California and the mid-Atlantic region of the East Coast needed the most income to afford a modest two-bedroom apartment, while those in Puerto Rico and much of the Deep South needed the least, the report showed.
In one third of all jurisdictions, the housing wage is more than twice the area's minimum wage meaning a family needs at least two full-time minimum wage earners to afford even the most modest rental housing. Ten states and District of Columbia have set minimum wages above the federal figure.
And while most minimum-wage standards did not rise, the housing wage increased everywhere but Madison County, Missouri, the report found.
The study examined data from all 50 states, the District of Columbia and Puerto Rico, as well as from all metropolitan areas and counties or, in New England, towns.
On the Net: The report can be found at http://www.nlihc.org/oor2001/
For more on affordable housing, see this speech by Al Hartheimer and this article by Edward Dodson.
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