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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13 COMMENTS

  1. 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

  2. “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.

  3. 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 life you want, but it is how you start toward that life. The thing about crawling before you walk?

    Now, if Tim can assert that we are duty-bound to ensure that each of those coolies has a separate home, then we have enabled the San Francisco gadfly to specify that it have two bedrooms (one for sewing or model railroading), and certainly a hot tub in the backyard.

    In short, you undercut your thesis on the morality of free commerce by suggesting that your position is merely a matter of degree.

    By the way, if an employer should ask the prospect what he wants out of the job, and the prospect should reply that he wants a two-bedroom apartment, the prospect does not get the job. The employer wants to know how well you will do the work at hand, not what the employer has to do for you (though he may do so anyway, once he sees that you are worth retaining).

    “And why is it the minimum wage which should be affording that level, rather than the welfare benefits system?” β€” One advantage is that a wage mandate means you have to do actual work, to someone’s satisfaction, to be lifted up at someone else’s expense. A welfare mandate means you simply have to fill out a form to get a card that will lift you up at someone else’s expense. The wage mandate is preferable β€” but it is still government setting prices wrong.

    • Think pragmatically for a moment. In general US society does say that somewhere to live is getting close to a right. We’ve thus got to deal with societal wishes as they are – and influence them, argue about them, as they are. “The poor can sleep in the street!” isn’t going to get us far. Why must they have a 2 bed? might.

      • Paul Ryan stated this principle, that surrender “clears the decks for victory later,” though he surrendered again the next time. Surrender is not pragmatic. “US society” does not “say” anything we have to heed. Government does.

        Your two-wrongs-make-a-right argument begins with the assertion that the welfare state is a given, but we must draw the line β€” somewhere. To a principled argument against the entire welfare state, the claim that β€œThe poor can sleep in the street!” (and it will be our fault) is not our slogan or our desire but a scare tactic of caseworkers in the Don’t Kill The Job coalition. People are sleeping in the street now, through a combination of mental problems and not wanting the commitments required to rent or buy or even sign up for a Free Place. All pity-based payments increase the value of being in the pitiable situation (notably, our blight of fatherless families) and none of them will ever solve a social problem.

        The correct level of transfer payments, which have done nothing for a half century but erode personal responsibility, is not the right place to hold the debate.

  4. 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.

  5. 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.

    • 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.

      • 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.

        • 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.”