According to a report from the National Low Income Housing Coalition (NLIHC), full-time workers who earn minimum wage cannot afford a one-bedroom rental home in any state in the U.S. without spending more than 30% of their income. This highlights a significant issue in the affordability of housing for low-income individuals.
The NLIHC’s annual “Out of Reach” report compares minimum wages and housing costs in different areas across the country. The results for 2022 reveal that the hourly wage rate needed to afford a modest two-bedroom rental is more than double the federal minimum wage of $7.25 per hour in every state. Nationally, an individual would need to earn $25.82 per hour to afford a two-bedroom rental without exceeding the recommended 30% of their income.
Even in areas with higher-than-federal minimum wages, the local rates are still insufficient to afford a one-bedroom rental home at the fair market rent with a standard 40-hour workweek.
The report also highlights specific state disparities in income requirements for rentals. Arkansas has the lowest hourly income needed for a two-bedroom rental at $14.89, while Hawaii demands the highest income at $40.63.
Furthermore, the report calculates that the average American would need to work 96-hour weeks for 52 weeks per year to afford a two-bedroom apartment. This is equivalent to having two-and-a-half full-time jobs. Even sharing a dual income with a partner earning the federal minimum wage wouldn’t cover the cost of a two-bedroom rental in most states.
These findings reflect the persistent disparity between income and rent, as previously noted in the NLIHC’s reports. The authors attribute this issue to poor political decisions and the exacerbating effects of the COVID-19 pandemic.
Diane Yentel, the President and CEO of the NLIHC, emphasizes the urgent need for affordable housing and calls for Congress to take action.
It is worth noting that the federal minimum wage has not kept up with inflation or productivity growth. In 1968, the minimum wage was equivalent to $13.16 in 2022 dollars, nearly $6 higher than the current federal minimum wage.
For more details, you can refer to the full report published by the NLIHC.
Note: This article has been updated with the latest data for 2022.
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