Why should the minimum support a two bed apartment? Credit - public domain

A report out telling us that the minimum wage for a single worker, unsupported by any other income, isn’t enough to rent a two bedroomed apartment in any part of the United States. OK – that rather leaves open the question of why the minimum wage for a single worker, unsupported by any other income, should be enough to rent a two bedroomed apartment in any part of the United States. Anyone got any ideas? Why that basic, minimal, wage below which it is illegal to offer your labour should be enough to afford that?

Even a $15/hour minimum wage would not allow a single parent to afford an apartment with a separate bedroom for their child or children in most of America (Arkansas has the lowest rents in the country, and even there you need to earn $13.88 to afford a two-bedroom apartment).

OK. But again, the important question here is, well, why should the minimum wage afford that?

Now, this is not the same as the question of whether everyone should have somewhere to live. Yes, in a rich nation that’s well along the way to being a right and even I would say that it’s something that should happen. But a two bedroom apartment for a single parent flipping burgers? Why should that be the determinant of whether the minimum wage is high enough or not?

The answer, in my book at least, is that if we do insist that everyone should have a home then we should be putting our hands into our pockets in order to enable everyone to afford a home. Not dumping those costs upon those who own businesses which is the first iteration of where the costs arrive with a high minimum wage. Or the second iteration, which is many more unemployed people.

And the thing is we do put our hands in our pockets via the tax and benefits systems. We increase wages through the EITC (some $80 billion a year or so) and we also cough up to pay rents (Section 8).

We’ve thus two questions, the first being why is that 2 bed apartment being used as the minimal definition of what all should get? And why is it the minimum wage which should be affording that level, rather than the welfare benefits system?

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Nautical Nick
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Nautical Nick

I can’t speak for the US, but if it were applied to the UK, the very first thing that would happen, would be an increase in the price of 2 bedroom apartments to remove them from the grasp of anyone on minimum wage

BlokeInTejas
Member
BlokeInTejas

You mean when the demand went up, the price would rise?

Bizarre πŸ™‚

Quentin Vole
Member
Quentin Vole

Roger Miller nails it:
two hours of pushin’ broom
Buys an eight by twelve four-bit room

Richard M
Member
Richard M

“And why is it the minimum wage which should be affording that level, rather than the welfare benefits system?”

The second question is actually pretty easy to answer. They want to give out apartments but they do not want to have to pay for it themselves via higher taxes. Plus demonizing businesses is an easier sell politically than raising taxes.

Spike
Member

Now, this is not the same as the question of whether everyone should have somewhere to live.” β€” Actually, it really is. Tim says that, if we are a “rich” nation (how rich?) “well along the way to being a right and even” (says who?), its Swells may dictate that everyone have a place to live. Of their own? I do not know whether the coolies at my local Chinese take-out make minimum wage; they are extended family and might be exempt. But I know they double and triple up in apartments and maybe even bedrooms. It is not the… Read more »

Chester Draws
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Chester Draws

Surely a minimum wage person *with children* isn’t effectively a minimum wage person in most of the Western world.

It’s naughty to argue that they should be able to afford a two-bed on the minimum wage and then give them an extra bonus for housing their child.

TD
Member
TD

Does anyone bother to ask what portion of minimum wage workers are actually supporting themselves on the minimum wage or don’t have a comfy place to live? At least half of them are teenagers living at home.

Richard M
Member
Richard M

I forget the exact number but pretty sure the number of minimum wage employees living in households below the poverty line is ~25-30%. The rest are students, adults working in a 2nd PT job, or secondary wage earners in the household such as mom (or dad) working when the kids are at school or at night when the primary wage earner is home.

Spike
Member

And second part-time jobs are a recent national paradigm, as businesses still have to arrange jobs at 29.5 hour/week to stay under the threshold of being required to offer Obama-care health insurance.

TD
Member
TD

One of those unintended consequences that Obama wasn’t bright enough to think about as most payers of the minimum wage are smaller businesses.

Spike
Member

It will make parlor conversation for decades whether Obama simply lacked in foresight what he made up for in persuasion or melanin, or whether he thought bad outcomes would simply be something to be spun later, or whether he was actively trying to muck up everything, as in “never let a crisis go to waste.”