What does the minimum wage really buy a full-time worker? Not a two-bedroom apartment, anywhere in the United States, according the National Low Income Housing Coalition. This study uses the minimum wage for each state, and the Fair Market Price of apartments in each state (which is below the average rent). It bases affordability on the renter paying no more than 30% of their wages on rent, allowing for food and other living costs to be taken into consideration. Any more than 30% spent on rent for a low-income household, Megan Bolton of NLIHC explains, leaves workers verging on homelessness.
In Maryland, a minimum wage earner would have to work 135 hours per week to afford a two-bedroom apartment, the equivalent of more than three full-time jobs. While there are places to live in all states that fall below the Fair Market Price, sacrifices of cheaper housing include areas with higher crime, poor schools, and a lack of public transportation, and could be difficult to attain if there is a high demand for cheap apartments in the area. These sacrifices are the only choice for many minimum wage earners who have been waitlisted for subsided housing programs.
In 2013, 3.3 million workers were earning $7.25 or less an hour. Full-time workers were making around $15,000 per year, or $1,250 per month, before taxes and without missing any days. If they abide by the 30% budgeted for rent, they need to find housing for $375 per month or less, leaving under $900 for a month’s worth of food, transportation, bills, healthcare, taxes from wages, and possibly childcare, which becomes more crucial as workers take on more hours. Childcare costs for a full-time worker with one infant range from $405 per month in Mississippi to $1,369 per month in Massachusetts.
These minimum wage earners are disproportionately Black or Latino and sixty percent are women. Many of these low wage positions, such as in retail, offer little room for upward mobility, and the higher paid positions that are available still leave full-time workers, especially women, below or near the poverty line. The resulting cyclical poverty in these communities is evident in the racial wealth gap, which will require substantial policy changes to improve.
Workers struggling to live on minimum wage are not just missing out on decent neighborhoods. They are also more likely to rely on credit cards for basic living expenses, resulting in debt and adding to the difficulty in wealth accumulation. They are less likely to vote, widening the income gap in voter turnout and skewing the democratic process to reflect fewer viewpoints. There are fewer students from low-income families attending four year colleges, and when they do, they are likely to be taking on thousands of dollars of debt.
A 135 hour work week is not the fulfillment of the American Dream, and is proof that there is a gap between the minimum wage and the cost of living that keeps a huge portion of American workers from the middle class. Without defining what it means to pay workers fairly, many businesses will continue to pay the bare minimum required by the state or federal government, exasperating the current trends.