So What?

The headline is eyecatching: “WOW: In No State Is a 40-Hour, Minimum Wage Work Week Enough to Afford a Two-Bedroom Apartment” and the associated graphic is interesting. However, when I thought more about the statistic my overwhelming reaction was “So what?”

Consider this summary of workers who earn minimum wage. Here’s the author’s summary:

1. It just simply isn’t true that tens of millions of Americans support their families on minimum wage earnings.

2. There is nothing racist about the federal minimum wage. No racial group can claim that theirs is the one carrying more of the burden than any of the others.

3. High school- and college-aged people are by far the largest groups of minimum wage workers, many of whom are working their first jobs. With a higher minimum wage, one has to wonder if many of these jobs would even exist.

Minimum wage workers are relatively small in number, racially diverse, preponderantly Southern, and mostly below the age of 25. Unless your model of family life is a single-mother family with the mother below the age of 25, the frightening image of a family trying to get by on one minimum wage income is atypical in the extreme.

Should we subsidize single-mother families headed by women below the age of 25? How should we subsidize them? Is it an important societal value for single people below the age of 25 without children to be able to afford a two-bedroom apartment? Those are questions not answers.

2 comments… add one
  • Sam Link

    hould we subsidize single-mother families headed by women below the age of 25?

    A single mother making minimum wage would get a lot in refundable tax credits. In fact, I bet in a lot of states she would be a sucker to earn more than minimum wage because of the implicit negative tax rate due to the loss of means tested transfers.

  • Eric Rall Link

    Also worth noting is the parameters of the study:

    1. They’re looking at two-bedroom apartments, not one-bedrooms, studios, or rooms in shared units. Having a two-bedroom apartment to yourself is a luxury, and one that you should probably expect to forgo if you’re only able to earn minimum wage.

    2. They’re defining “afford” as gross housing expenses at less than 30% of your gross income, and they’re obfuscating this: the way it’s presented, it’s easy to assume that you have to work 66 hours a week in Montana in just to pay your rent, not that you’d have to work 19.8 hours a week to pay your rent (assuming you need a two-bedroom apartment for some reason) and then you need to work some additional number of hours to pay your other expenses.

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