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All American Minimum Wage Workers Are Homeless

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This would appear to be the correct conclusion from the latest report on housing in the United States:

Full-time minimum wage workers can’t afford rent anywhere in the US, according to a new report

Well, you know, if you can’t afford a place then you’re homeless, right?

Except, of course, that’s not what they mean by can’t afford:

The report defines affordability as the hourly wage a full-time worker must earn to spend no more than 30% of their income on rent,

Well, yes, OK, that’s nice. But “affordability” and “afford” aren’t not the meanings being used here, even close cognates.

The things gets worse when we look at the full definition:

The report’s Housing Wage is an estimate of
the hourly wage full-time workers must earn
to afford a rental home at HUD’s fair market
rent without spending more than 30% of their
incomes. Fair market rents are estimates of what
a person moving today can expect to pay for
a modestly priced rental home in a given area.
The kind of home that can be rented for the fair
market rent is in decent condition, but it is not
luxury housing.

HUD’s Fair Market Rent is – from memory you understand – around 30% up the market. So, median is 50% – by definition – and HUD is at 30%.

Which does give us one little problem. Why should poor people be 30% up the market?

More, only about 2% of the American workforce is on minimum wage. So, why should 2% of the workforce be up at 30% of the market?

No, but more!

They look at one bedroom and two bedroom places. Then measure that against a single income. Uhn hunh.

Single poor people should have a two bed apartment to themselves, should they?

Umm, why? It’s still true that the modal household is two adults. So why isn’t that what we should be measuring when looking at what a household spends on being a household?

Well, yes, obviously, except when we want to tell all how appalling the US is. You know, richest large country ever, offering the highest on the hog experience that any group of hundreds of millions has ever had. If people think this works then that might reflect well upon capitalism and markets. Can;t have that now, can we?

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2 COMMENTS

  1. I’ll say this for the UK Government, at least they understand this point. Young Un’s should be staying with parents or shared accommodation (and there’s a rate for that shared accommodation), older one’s in bedsits / one-bed flats for single people and matched accommodation for couples and families.

    The only problem I’ve ever had with any of this was setting the Housing Costs limit at the bottom 25% of available accommodation and then letting fiscal drag take it’s toll such that until it was uplifted at the start of COVID, it actually covered only the bottom 18% of available accommodation.

  2. 30% of income on rent is pretty average in wealthy western cities with strangled housebuilding unfortunately. Easy examples where they’ve fixed the issue are tokyo and houston, whereas here in the UK we give veto power to landlords to prevent rent going down. Abolish the town and planning act.

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