Many Must Work Three, Four Minimum Wage Jobs to Afford an Apartment
Minimum-wage workers have little chance of affording housing.
There hasn’t been this great a percentage of 18- to 29-year-olds living at home with their parents since the Great Depression. And no wonder: So many today simply cannot afford housing. In fact, it’s about 58 percent.
A recent report from Zillow finds that it takes nearly four full-time minimum-wage workers to reasonably afford a two-bedroom rental. This considers the renters are spending a maximum of 30% of household wages on their rent payments.
It doesn’t stop there. In cities with a $7.25 an-hour minimum wage, an average of over 3.5 full-time workers are needed to make the typical two-bedroom rental affordable, according to Zillow.
Even where minimum wages are set higher than that, an average of 2.5 full-time minimum wage workers are needed to make the typical two-bedroom rental affordable.
About one-third of the U.S. workforce earns less than $15 an hour, according to a report last year from Oxfam.
Creating these financial challenges is the lack of housing overall, Zillow said. More than three-quarters (77%) of homeowners and renters surveyed last year expressed support for either new accessory dwelling units, duplexes, or triplexes in residential neighborhoods. Providing more opportunities for housing access will help affordability improve across the market.
Your (Rental) Mileage May Vary
The number of workers necessary to afford typical 2BR homes depends on where the minimum wage is set in that locale and the locale itself.
For example, rent affordability is tightest in Austin, where more than five full-time minimum-wage workers to afford a two-bedroom rental.
Of the 50 cities Zillow studied, 10 would require two or fewer full-time minimum-wage workers to afford a typical two-bedroom rental. All 10 have minimum wages greater than $10 an hour, ranging from $10.10 in relatively inexpensive Cleveland to $15.50 in the far more expensive Sacramento and Fresno.
And even in the cities with the highest minimum wages (Seattle and Denver), roughly 2.5 full-time minimum wage workers are needed for a two-bedroom rental.