What it takes to pay rent at minimum wage

news7g02/09/2023

2 2 minutes read

What it takes to pay rent at minimum wage

In spite of prices have dropped in some placesrents are still up 8.3% nationally in December 2022, compared with a year earlier, according to the Bureau of Labor Statistics.

With the federal minimum wage at $7.25 and not increasing since 2009, it is increasingly difficult for those on the minimum wage to pay rent. In fact, it takes four people working full-time on minimum wage to afford a two-bedroom apartment, According to new research by Zillow.

The real estate company collected minimum wage and rent data in the 50 largest US cities to see what it takes to earn rent on some of the lowest legal wages. Zillow estimates “typical” rents in each city using data from the Census Bureau’s 2021 Five-Year American Community Survey with monthly changes calculated using the Critical Rent Index. Zillow’s observations.

It concluded that a minimum-wage renter had two options: find three roommates (and assign two to a room) or work four full-time jobs on her own to keep housing costs down. normal. recommend 30% of their income.

But the situation in some cities is tighter than in others. Even in places like San Francisco, where the $16.99 minimum wage is more than double the federal wage, sky-high rents leave workers with little comfort — you still need the money. salary from three full-time jobs to buy a two-bedroom apartment. there.

Renters in just 10 of the 50 cities Zillow analyzed could comfortably buy a two-bedroom apartment with just one job per person and one person per bedroom.

According to Zillow’s analysis, an ideal situation would be an area with high local wages and low rents, but such a city is hard to find in the US.

total 26 states raise minimum wage by 2023but none come close to the estimate $24.16 an hour living wage Researchers at the Massachusetts Institute of Technology say it takes a family of four with two working adults to make ends meet.

Those with higher minimum wages have better prices despite higher rents

While most states have set their own minimum wage rules, 16 states default to a federal rate of $7.25 an hour, according to the Ministry of Labor. In addition to state guidelines, cities can set their own minimum wages. In Denver, the minimum wage is $17.29—nearly $4 more than the Colorado state minimum.

Rent is often cheaper in cities with a minimum wage of $7.25, Zillow found. But residents of those cities still need an average of 3.5 full-time minimum wages to buy a two-bedroom apartment. In cities with wages higher than $7.25, it takes on average 2.5 wages to pay rent.

Here are the five cities that require the most minimum-wage jobs to afford a two-bedroom apartment: