Minimum Wage and Rent in the US

Slate had an article today:  The Rent Is Too Damn High for Minimum-Wage Workers which featured this nifty graphic:






The one that is least likely to get me labeled as a Social Darwinist, which not incoincidentally, is the one that also seems to bolster the argument that this graphic would seem to make (That is, that minimum wages are too low.) is that housing, ideally should not exceed 1/3 of income.  A full time worker (40 hours/week), assuming a 4 week month as standard, has 160 hours in a month.  So a minimum wage worker should not be paying more than 53 hours worth of wages for housing.  North Dakota’s is the lowest at 67 hours.  But, here’s where I get my Social Darwinist badge, this also assumes that the minimum wage worker is the primary and sole bread winner–not an intended proposition.  Also, “full-time” and “minimum-wage” are two compounds that almost never compound.

The scenario that generated the graphic plays into that as well.  The cost calculated against is for a two-bedroom apartment, implying single-mothers, families of three or more, and a host of other conditions that the minimum-wage job is not sufficient to, and was never intended for.

But here’s the real story, under the story.  The problem isn’t the low wages, or the high rent.  The problem is the factor that drives the rent.  The largest single cost that a landlord faces aside from the purchase of the property is the property taxes.  If we were to make a new map showing property tax rates, how well do you think this would correlate?  It won’t be perfect, Florida and Texas, for example, make up for not having state income taxes by higher property taxes.  But this is, once a gain, a problem of taxing too much.


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