Here's how much you need to earn hourly to afford rent in each US state
Contrary to what anyone over the age of 35 believes, us Millennials have it tough. Not only do we feel pressured by Instagram to eat vast quantities of avocado toast daily, but we're also expected to be financially stable in an incredibly precarious economy (thanks a lot, baby boomers). As such, those of us who live in cities are finding it increasingly difficult to find housing where the rent isn't astronomical.
And according to conventional wisdom, we should only be spending 30 per cent of our take home salary on accommodation. However, in an economy where it's hard enough to find employment, let alone a job that pays above the minimum wage threshold, it's likely that the majority of us are paying over half of our salary on rent.
Certainly, a report from the National Low Income Housing Coalition has found that full-time workers who earn minimum wage salaries are unable to afford a two-bedroom rental in any state in the U.S without spending more than the recommended 30 per cent of their income.
The National Low Income Housing Coalition's annual "Out of Reach" report compares minimum wages and housing costs in the states across America. And this year's report showed something rather worrying: the hourly wage needed for a "modest" two-bedroom rental property is more than twice the federal minimum wage of $7.25 an hour, in all but four states.
The results varied greatly across the states. While Arkansas had the lowest hourly income needed for a two bedroom rental property at $13.72 (the state minimum is $8.50), in Hawaii workers need to make a whopping $35.20 an hour to rent a two-bedroom there, and the state minimum is just $9.25.
Take a look at the diagram below to see how your state racks up...
The report surmised that at federal minimum wage, the ordinary American worker would have to work 117-hour weeks for 52 weeks per year in order to comfortably afford a two-bedroom rental. And it even took into account those who would share the property with a fellow minimum wage-earning partner, discovering that even that wouldn't cover a two-bedroom rental property in the majority of states.
In a press release, the president of the National Low Income Housing Coalition, Diane Yentel said:
“[The report] shows why millions of low income renters are struggling to afford their homes. We have the resources to solve the affordable housing crisis in America by rebalancing federal housing expenditures to serve our country’s most vulnerable households. We lack only the political will to do so.”
As CNBC reports, this problem has something to do with how the minimum wage has failed to keep up with inflation. Certainly, in 1968, the federal minimum wage was equivalent to $10.90 in 2015 dollars, this is $4 more than 2017's current federal minimum wage. It's consequently not difficult to see why there's such a problem at hand.