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Nearly 1/2 of American Workers Aren’t Earning Enough to Rent a 1-Bedroom Apartment

The federal government has long used 30% of income as a threshold for affordable rent. For affluent households, this still leaves plenty of money for essential purchases, but research has found that low-income families begin to cut back on necessities when housing costs exceed the 30% threshold. Rents in the United States continued to increase through the pandemic, and a worker now needs to earn about $20.40 an hour to afford a modest one-bedroom rental. The median wage in the US is about $21 an hour. On average, this new statistic means nearly one-half of the American workforce is unable to meet the requirements for basic housing.

The federal minimum wage is $7.25 an hour, but some states, counties, and cities have established higher minimum wages – the highest being $16.32 an hour in San Francisco. Still, there isn’t a single US county where a full-time minimum-wage worker can afford a modest two-bedroom rental. About 14% of Americans fell behind on rent payments during the pandemic – roughly double the figure before the pandemic. A federal moratorium on evictions has kept renters from being kicked out of their homes, but the moratorium lapsed last month, only to be extended into early October for those in regions hardest hit by the pandemic.

The data, from the National Low Income Housing Coalition, shows that millions of Americans – from Amazon warehouse workers to cab drivers to public school teachers – are struggling to pay rent. For the poorest Americans, market-rate housing is out of reach in virtually all of the country. And it’s not just big cities skewing the data. A two-bedroom rental – a reasonable size for a family – would stretch the budgets of renters in most US counties.

 

Housing affordability is an even bigger problem for Black and Latinx workers, who earn significantly less than white workers. The majority of white Americans can afford a one-bedroom rental, earning on average $23.31 an hour. But the average Black worker earns about $17.81 an hour – well short of what it would take to comfortably afford a one-bedroom apartment. Latinx workers are even further behind, earning on average $17.24 an hour.

A recent door-to-door survey in South and Central Los Angeles found that low-income families were forced to cut spending on things like food, healthcare, and education in order to cover their rent. Given current housing costs, the lowest-earning 10% of Americans would need to spend about 55% of their income to pay for a one-bedroom rental.

It’s worth noting that relatively few Americans – about 250,000 – earn the federal minimum wage. Another 865,000 workers earn less than that amount, largely because this group includes tipped workers who can legally be paid less than the minimum wage (their tips are supposed to make up the difference). But this data shows that even considering places with a higher minimum wage, the legal wage floor in every US county is still not enough to afford a modest two-bedroom.

 



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