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KEY TAKEAWAYS
- Though the federal minimal wage of $7.25 has not modified in additional than a decade, renting prices have elevated.
- There are not any main American cities that maintain a mean month-to-month rental price which is 30% of a minimal wage earner’s gross revenue.
- The month-to-month revenue of a minimal wage employee on the federal wage is $1,257, which implies that a one-bedroom condo for a single renter would must be $377 a month to be thought of reasonably priced.
There are not any American cities the place a minimum-wage earner can comfortably afford the lease worth of a one-bedroom condo.
The federal minimal wage is $7.25. A minimal wage employee’s month-to-month revenue on the federal wage can be $1,257 earlier than taxes. In October, the nationwide common lease was $1,558 a month, based on Flats.com.
That’s greater than 30% of a employee’s revenue, which conventional monetary recommendation considers unaffordable. For instance, a one-bedroom condo for a single renter incomes the federal minimal wage would must be $377 a month to be thought of reasonably priced.
Nevertheless, based on analysis from Intelligent Actual Property, housing prices way over that in all main cities throughout the nation.
Cities and states can each have larger minimal wages than the federally mandated minimal wage, contributing to variations in affordability.
Town the place minimal wage employees can best afford housing is Buffalo, NY, the place the common one-bedroom condo takes up 39% of a minimal wage earner’s gross revenue. The minimal wage, which is $15 an hour in New York, is just not sufficient to comfortably afford the common month-to-month lease of $1,001 for a one-bedroom condo in Buffalo.
In 15 cities, it will take three or extra minimum-wage incomes to afford a one-bedroom condo. Atlanta is the most costly location, with a one-bedroom rental costing a minimum-wage earner 132% of their month-to-month revenue.
Minimal Wage Is Not Maintaining Up With Hire and Inflation
American employees who earn minimal wage noticed the final hike to the federal minimal wage in 2009. Throughout that point, the common lease rose 64%, and inflation on all gadgets jumped 48%, based on the Client Value Index.
In line with Intelligent, to keep up the identical buying energy after 15 years of inflation, the federal minimal wage would must be hiked to $10.59 per hour. Nevertheless, minimum-wage employees would nonetheless be unable to comfortably afford the common lease at these ranges.