On July 15, 2020, CNBC reported from the National Low-Income Housing Coalition’s annual “Out of Reach" report that full time minimum wage workers cannot afford to rent a two-bedroom apartment anywhere in the United States, and 95% cannot afford to rent a one-bedroom apartment. Affordable housing is defined by most budgeting experts as costing no more than 30% of gross monthly income. To afford a two-bedroom apartment, the average minimum wage worker would need to work 97 hours per week or earn $23.96 per hour, and to afford a one-bedroom apartment, work 79 hours per week or earn $19.56 per hour. While the average hourly worker earns $18.22 per hour, grocery store cashiers earn a median wage of $11.61 per hour, and cleaning workers and home health and personal care aides earn $12.94 per hour. They cannot afford rent.
There was a housing crisis long before the COVID-19 pandemic hit, but like healthcare, the pandemic has revealed and exacerbated the dire situation. During the pandemic with tens of millions of people losing their jobs, housing experts are forecasting an apocalypse with the end of eviction moratoriums and the expiration of unemployment benefits. The minimum wage worker has to make a decision between rent and basics, like food and medicine. It is estimated that approximately 32% of households were unable to make rent at the beginning of July.
On July 13, 2017, CNBC reported on Harvard University's research that 40 million Americans “live in housing they cannot afford.” With rental prices rising while salaries stay stagnant, home ownership has gone down, and people earning minimum wage are unable to save. Slightly over 70% of the lowest-income households face "severe housing cost burdens” and with 50% of their income going toward housing, they are unable to pay down debt or save to purchase a home.
Between 2005 and 2015, most new units built were high-end, with rents of $2,000 and over, jumping by 1.5 million and modestly priced unites available for under $800 declined by 261,000, increasing the shortage of affordable housing.
WHAT WE CAN DO TO ADDRESS THE AFFORDABLE HOUSING PROBLEMS
Offer tax incentive to builders for building middle and low-income housing units for every high-end housing unit they build.
Use grants to reuse warehouses and abandoned malls for affordable housing for seniors, veterans, disabled and low-income families.
Construct Tiny Houses with Community Centers for those who are homeless. Many other countries including Canada have adopted this resolution as well as many cities in the U.S., such as Austin, San Jose, Seattle, and Washington. These centers offer job placement, job training, drug/alcohol, medical and mental health programs. When they are stable with good paying jobs they can move to affordable housing units.
Lastly, we need to raise the minimum wage to a living wage. All minimum wage should currently be $15 and this should increase every year by a dollar plus the GPI percentage. We need to continue to increase until the minimum wage is a livable wage of $25, then continue to increase by just the GPI percentage. This way the minimum wage is always viable for workers to live on.