Live data from Hacker News

Minimum Wage Still Can’t Pay For A Two-Bedroom Apartment Anywhere

citylab.com

71–80 of 168 posts

Re: Minimum Wage Still Can’t Pay For A Two-Bedroom Apartment Anywhere

#71
Several co-related factors affecting this:

Worker productivity increases cannot be legislated. Such productivity increases can only come from workers improving their skills or technology that increases their productive output (as simple as an electric drill to as advanced as an exoskelleton with a HUD). Minimum wage laws are effectively bans on low-productivity workers. By making labor artificially expensive through legislation, demand for it drops, total economic output decreases, production costs increase. There's no reason to believe that the home-production industry would be able to reduce costs / increase output with minimum wage increases; in fact that opposite is the case.

Legislation can only reduce the permitting costs of housing production IFF it becomes more permissive. In the regions of the US that I'm familiar with, all the areas that have high housing costs pass legislation that increases permitting costs or transactional costs to bring housing to market. This can only result in a price increase globally with some politically-connected group receiving a benefit.

Legislation and corporate-bank policies artificially increase the money supply to the greatest degree with housing loans. Typically these workers are not minimum wage and in addition to the above effects, the Cantillon effect gives an undue subsidy to these higher wage workers https://www.aier.org/article/sound-money-project/cantillon-e...

Re: Minimum Wage Still Can’t Pay For A Two-Bedroom Apartment Anywhere

#72
post #24

Why would a minimum wage worker be trying to buy a 2-bedroom home? Edit: Meant to say rent instead of buy

They aren't. The article is about renting a 2-bedroom home. And nowhere do they limit the definition of "home" to "free standing, detached dwelling" - I believe their figures include 2-bedroom apartments as well.

[deleted]

Re: Minimum Wage Still Can’t Pay For A Two-Bedroom Apartment Anywhere

#73

Mm, yup. Solid navy within the DC Beltway area. That feels about right.

New Hampshire is even worse since it doesn't even have many good paying jobs to drive that cost up. Any area that's within a reasonable one day drive with a family of the Boston area (i.e the max distance many people will consider for their "vacation cabin") is just solid navy. The people of NH and ME always complain about MA money driving up the cost of land. It looks like they're not wrong.

Re: Minimum Wage Still Can’t Pay For A Two-Bedroom Apartment Anywhere

#74

This article like so many others makes a critical mistake in using a median price for minimum earners. A minimum wage earner is not and should not be in the market for a median priced home. A median wage earner would pursue a median priced home. A bottom quartile earner would pursue homes priced in the bottom quartile. Not the median. The title of this article is false. Minimum wage earners can often afford two bedro…

You know this for certain, that the minimum wage earner can, and that there is a large enough supply of housing available for them?

Whether or not they can afford a bottom quartile home is a different question than whether it's reasonable to expect them to afford a median home (and I don't think we have any evidence regarding that question here). They certainly aren't expected to be able to afford a top quartile home, for example, so I agree that the headline is a bit fishy.

The whole situation is being drastically oversimplified, though. Whether or not we expect minimum wage to support a family depends on whether there are other alternatives, like higher (and adequate) wage jobs that individuals can reasonably obtain when they do have to support a family. Is that happening? My sense is no -- we have a big step function where you're either mostly screwed (working several jobs, driving Uber, etc. barely making it if at all), or you're making 6 figures after getting a 4 year degree in some technical or professional field.

Re: Minimum Wage Still Can’t Pay For A Two-Bedroom Apartment Anywhere

#75

This article like so many others makes a critical mistake in using a median price for minimum earners. A minimum wage earner is not and should not be in the market for a median priced home. A median wage earner would pursue a median priced home. A bottom quartile earner would pursue homes priced in the bottom quartile. Not the median. The title of this article is false. Minimum wage earners can often afford two bedro…

Is that what the article is saying? Their reference to 'median' is saying that's what other people are reporting and they want to look at something else. They don't seem to qualify it - they simply say 'there is not one U.S. state, metropolitan area, or county in which a minimum wage worker who clocks 40 hours a week can afford a two-bedroom apartment'. They don't use the term 'median' anywhere apart from talking abo…

Not "median," but they do use "average":

> In 2019, the affordability crisis has plunged to new depths. Last year, the average worker making the federal wage minimum of $7.25 per hour had to work 122 hours a week, every single week, to afford an average two-bedroom apartment.

The point being made earlier in the thread is the comparison is between the middle and the tail, not the tail earners and the tail quality 2-bed room apartment.

Re: Minimum Wage Still Can’t Pay For A Two-Bedroom Apartment Anywhere

#76
post #13

Earlier quoted context omitted.

I am not sure why people think minimum wage must be enough to afford a two-bedroom home. Ideally minimum wage should comfortably allow one person to support... Themselves, minimally. Which means a studio or one bedroom. People should not aim to remain at minimum wage long, but use it as an entry point for somewhere better.

People are using a 1950s-era nuclear family model, with the idea that a minimum wage should support a family of at least two adults and one child. Preferably with a yard, lawn, dog, and white picket fence.

[deleted]

Re: Minimum Wage Still Can’t Pay For A Two-Bedroom Apartment Anywhere

#77

This article like so many others makes a critical mistake in using a median price for minimum earners. A minimum wage earner is not and should not be in the market for a median priced home. A median wage earner would pursue a median priced home. A bottom quartile earner would pursue homes priced in the bottom quartile. Not the median. The title of this article is false. Minimum wage earners can often afford two bedro…

Neither the title nor the article use the word "median" - they appear to be using the concept of "Fair Market Rents" (FMR), which is a 40th percentile[1] of non-sub-standard units.

The article calls out that even the _average_ wage earner can't afford an FMR unit in many states:

> For a two-bedroom rental, the Housing Wage is $22.96—a figure that’s higher than average renters’ wages everywhere, and at least $5.00 higher than the average wage for renters in 16 states. For a one-bedroom rental, the Housing Wage is $18.65.

[1] https://www.huduser.gov/Periodicals/ushmc/winter98/summary-2...

Re: Minimum Wage Still Can’t Pay For A Two-Bedroom Apartment Anywhere

#78

This article like so many others makes a critical mistake in using a median price for minimum earners. A minimum wage earner is not and should not be in the market for a median priced home. A median wage earner would pursue a median priced home. A bottom quartile earner would pursue homes priced in the bottom quartile. Not the median. The title of this article is false. Minimum wage earners can often afford two bedro…

The article starts out talking about median rents, but the data they use is based on something called Fair Market Rent. There’s a link in there explain it.

FMR is a close to median value. From the linked definition:

"The FMR is the 40th percentile of gross rents for typical, non-substandard rental units occupied by recent movers in a local housing market"

Minimum wage is not a 40th percentile income.

Re: Minimum Wage Still Can’t Pay For A Two-Bedroom Apartment Anywhere

#79

Earlier quoted context omitted.

I am not sure why people think minimum wage must be enough to afford a two-bedroom home. Ideally minimum wage should comfortably allow one person to support... Themselves, minimally. Which means a studio or one bedroom. People should not aim to remain at minimum wage long, but use it as an entry point for somewhere better.

Eh I'm not positive it should even be able to support a single person... Why do we insist on raising the bar for employment so high? If a 16 year old wants to get their first job, they shouldn't be required right of the bat have a productive output sufficient to support themselves. That's not the point of minimum wage jobs - or at least it never was until we started arbitrarily setting a minimum value.

The average retail worker is 37 years old[0]. If it is possible to structure our society in a way that those who work a minimum wage job are able to support themselves, then we should do so. I'm kind of flabbergasted at the resistence to this. If the purpose of a minimum wage is not to guarantee a person a minimum standard of living, then what is the point?

Keep in mind that minimum wage jobs often make it hard to actually get 40 hours. You'll be lucky to get even 20 a week. And they rotate the schedules so that your hours are different every week, which makes it incredibly hard to get a second job.

[0] https://www.google.com/url?sa=t&source=web&rct=j&url=https:/...

Re: Minimum Wage Still Can’t Pay For A Two-Bedroom Apartment Anywhere

#80

Earlier quoted context omitted.

Isn't there a huge conceit that that's who earns minimum wage? Looking around my local wal-mart, it would appear many people first entered the job market at weird times in their lives.

Walmart actually pays considerably more than minimum wage, so I'm not sure what point you are making here.

I see now that changed recently, though I didn't see any demographics shifts in who are being employed.

And you know exactly the point I was trying to make.

Post reply on HN