Minimum wage workers cannot afford rent in any U.S. state • Hacker News Board

Re: Minimum wage workers cannot afford rent in any U.S. state

#81

Post by thephyber » Thu, Jul 16, 2020, 11:03 PM UTC

rayiner wrote: post #8

Is minimum wage workers affording an average 1-2 bedroom apartment with no other householders a goal we have set? The French minimum wage is 1,521 euro per month. 30% of that is 456 euros, or about $513. According to the underlying study, the average 1BR in Alabama is $665. Is housing in France, on average, really that much cheaper than Alabama? I don’t think these abstract targets are very helpful. According to the…

I'm not opposed to your general points, but there are a few flaws in your data.

Those earning minimum wage aren't going to be able to afford "an average" apartment. They will likely only be able to afford a starter apartment which is more likely to cost much less than average and are more likely to live with family members or commute from a more affordable geographic locale.

Income in US is not directly comparable to most other OECD countries for multiple reasons. Labor laws (paid vs. unpaid sick days, vacation days, ma/paternity time off, union dues), taxation policies (local, state, federal, employer), health care costs (no nationwide price negotiation), health insurance costs (lots of problems here), school tuition costs (because the demographic highly overlaps with school-aged young adults), lack of public transportation in most geographic regions, etc all add up to costs which are obscured by using the simple "gross income after housing and maintenance" figure.

Re: Minimum wage workers cannot afford rent in any U.S. state

#82

Post by NovemberWhiskey » Thu, Jul 16, 2020, 11:04 PM UTC

deathanatos wrote: post #51

NovemberWhiskey wrote: post #3

Am I misreading this: the conclusion is that the lowest earners cannot afford 40th percentile rents?

Yes, and no. Directly yes. But no, because the numbers are so insanely over I question whether they can afford 30th or 20th percentile too. It smells like the 40th-%tile is the number that the data exists for. I would welcome graphs showing this data at other %-tiles, and whether that changes the outlook significantly. But the report puts ~50% of the workforce below the national housing wage for a 1-bed. 50% of the w…

N.B. that the "fair market rent" also excludes public housing rents. Would it be reasonable to suggest that we could expect people earning only minimum wage to be consumers of public housing?

Re: Minimum wage workers cannot afford rent in any U.S. state

#83

Post by dumbfoundded » Thu, Jul 16, 2020, 11:05 PM UTC

worik wrote: post #73

eikenberry wrote: post #57

Earlier quoted context omitted.

Minimum wage is not designed to provide enough income to support a family. It it intended to prevent labor abuse.

It really should be. Single people on the minimum wage would do very well. Maybe save? What is wrong with that?

The problem is the globalized economy. Ireland tax laws provide an example. Governments have little power over corporations as you can simply pick and choose which laws you want to operate under. Corporations have pushed governments to compete on favorable terms. Until governments unify basic tax and labor laws, these problems will continue.

Re: Minimum wage workers cannot afford rent in any U.S. state

#84

Post by kingrazor » Thu, Jul 16, 2020, 11:05 PM UTC

Just doing some napkin calculations, the cheapest apartment I can find right now online in my city is $900 per month. This is including studios. The minimum wage in my state is $11.25 per hour. So working full time at minimum wage, that apartment would be over 46% of your gross income.

Re: Minimum wage workers cannot afford rent in any U.S. state

#85

Post by autokad » Thu, Jul 16, 2020, 11:10 PM UTC

mjevans wrote: post #15

Due to how much it cost and also a glut of Federally insured mortgages, housing became a defacto investment for baby boomers. Housing should be a liability, owning land should be a liability. Neither of these should be investments. That's the true solution to spiraling prices.

No. Housing should be an asset. If all housing and land were liabilities, then they would all be owned by the government (we tried that, most people didn't like it). The fact that homes are assets are not stopping people from owning homes (and why the f would someone want to own one if they were a liability in the first place?!?!).

the median income in the US is about 60k and median home price is about 200k. you only need 3.5% to qualify for a FHA loan. I managed to save that when I was making less than half of the median income.

We dont have a problem of people investing in homes, we have a problem of people not having good financial health (do to their own bad financial decisions).

in 2013, home prices were falling and interest rates were at a then all time low of 3.25%. I told people 'go buy a home, any home!' people were like 'but home prices are going down' 'interest rates may drop further'. or people were proud and smug that they didnt own a home, as if they achieved something because of the 'losers' that bought homes had their home values go down. but they didnt buy, now those same people are complaining that prices are too high, yet they dont have 7k saved for a down payment.

Re: Minimum wage workers cannot afford rent in any U.S. state

#86

Post by thephyber » Thu, Jul 16, 2020, 11:11 PM UTC

bonestormii_ wrote: post #52

rayiner wrote: post #49

Earlier quoted context omitted.

Countries and places with the most extensive housing regulation have some of the most unaffordable housing. Stockholm’s housing market, for example, is a basket case.

How can that be, exactly? If it's "extensively regulated", then why is it so expensive? Can you point to a relationship between capping the price and inflating it? They seem to be inversely related.

Regulation isn't always about rent price caps.

In the US, cities frequently have "zoning requirements" so it's very difficult to get a new high-density structure built in a neighborhood of 1-floor single family homes. Also, NIMBY groups usually have a veto vote of sorts, which makes it more expensive for a real estate developer to come into a pre-existing neighborhood and make more units (because it's a gamble and usually they have to spend more to acquiesce to the NIMBY if they are able to build at all).

Even when there is a rental price cap, that tends to only work in the short term and exacerbates supply/demand problems long term. San Francisco, for example, implemented a rent control system in ~1980. Since then, only 40% of rental units are eligible for rent control and lots of potential rentals stay off the rental market. There are loopholes which allow conversion of a rent-controlled unit to a market-priced rental and no new built units are rent controlled, so there is a bifurcation of the market. Rent controlled units are very affordable, but increasingly scarce. Market priced units are growing (slowly) in numbers, but cost 2x - 5x what a comparable rent-controlled unit does.

Re: Minimum wage workers cannot afford rent in any U.S. state

#87

Post by anm89 » Thu, Jul 16, 2020, 11:11 PM UTC

centimeter wrote: post #41

More accurate: “Minimum wage workers can’t rent a two bedroom and have 70% of their income left over.” Ok; rent a one-bedroom, have a roommate, whatever. Having your own apartment with a guest room isn’t a reasonable thing to expect on the lowest tier of work available. The lowest-value labor in the market being able to support a middle-class lifestyle isn’t a sane thing to expect, by definition. It’s tautologically…

This is not true. There is no law of physics guaranteeing some standard income distribution over a society. There at least hypothetically exists societies with very minimal or no income inequality although in practice this is extremely unlikely.

The idea however that the bottom n% of some society have to skew with x deviation from the mean or median is not exactly correct. And the idea that some segment of society will always not be able to afford some amount nominally denominated in that society's currency is explicitly wrong.

Re: Minimum wage workers cannot afford rent in any U.S. state

#88

Post by [deleted] » Thu, Jul 16, 2020, 11:14 PM UTC

rayiner wrote: post #16

standardUser wrote: post #10

Earlier quoted context omitted.

Look at it from the other direction. Is working 40 hours per week but not being able to afford a 1 or 2 bedroom apartment a goal we want to set? If so, we have achieved it! I think most of us like the idea that if you put in 40 hours of work every week, regardless of the specific job, you are able to afford a basic standard of living.

You’re begging the question. Is having your own 1BR apartment a “basic standard of living”? When did we decide that? Is that a goal other developed countries have set and achieved? Those are the pertinent questions, not what ideas “we like.” According to the study, that standard would require a $30-40 minimum wage in places like New York. Is that something any country has done?

[deleted]

Re: Minimum wage workers cannot afford rent in any U.S. state

#89

Post by gremlinsinc » Thu, Jul 16, 2020, 11:17 PM UTC

bonestormii_ wrote: post #36

rayiner wrote: post #8

Is minimum wage workers affording an average 1-2 bedroom apartment with no other householders a goal we have set? The French minimum wage is 1,521 euro per month. 30% of that is 456 euros, or about $513. According to the underlying study, the average 1BR in Alabama is $665. Is housing in France, on average, really that much cheaper than Alabama? I don’t think these abstract targets are very helpful. According to the…

Having worked a lot in a rental market with a very active housing subsidy program, I agree that the administration of such programs is an actual nightmare, but you really are missing the point I think. Start with the assumption that people need to be able to afford a place to live, and that a full time job should be able to achieve that. Do you agree? Now, if we both agree that a housing subsidy program is an adminis…

or just institute a UBI program specifically covering housing that is the average rent cost for a 2 bedroom apartment in the locale in which you live.

So you always have rent covered, regardless of your paycheck. They could maybe double that, and have it cover food stamps too, to cut out some of the administrative costs to manage both programs.

This works for married couples too, because you'd get double that, which is closer to what a mortgage would be, and would esp, help lower income families.

I think we could look into a VAT if needed for supplmental tax to cover it, but there's plenty of governmental spending we could also cut like maybe 1/3rd of the defense budget for one.

Re: Minimum wage workers cannot afford rent in any U.S. state

#90

Post by rayiner » Thu, Jul 16, 2020, 11:18 PM UTC

black_puppydog wrote: post #63

rayiner wrote: post #8

Is minimum wage workers affording an average 1-2 bedroom apartment with no other householders a goal we have set? The French minimum wage is 1,521 euro per month. 30% of that is 456 euros, or about $513. According to the underlying study, the average 1BR in Alabama is $665. Is housing in France, on average, really that much cheaper than Alabama? I don’t think these abstract targets are very helpful. According to the…

Paris is expensive, but I've rented studio apartments here in Grenoble, France, for about 450eur, yes. Given, Grenoble is nothing of not a small town compared to Paris. But those apartments were also in the very heart of the city, one was directly at the river with a panorama view of the alps. edit since these details matter here: two apartments in question. One was a 1R without, the other a Studio with amazing view.…

But what is the average price for a 1BR in Grenoble? Because that’s what the study is looking at, not a cheap price for a studio. In Huntsville you can find a nice studio downtown for $500 or so.