Wage Required to Afford a 2-Bedroom Rental in Every State

a reply to: Xtrozero

Maybe they'd do more business if people had more money to spend on their product or service?

Just a thought...

a reply to: MystikMushroom

He doesnt know what hes saying.

I have a service based business that I run and it requires a disposable income from other members in the community to have in order for me to stay in business so this topic in this thread directly relates to my ability to run a small business in the states.

Hes probably not running a small business.

I had to move from Pennsylvania to a nicer area in California at the risk of being homeless with nothing because the community in Pennsylvania cannot afford to support my business.

originally posted by: MystikMushroom
a reply to: Xtrozero

Maybe they'd do more business if people had more money to spend on their product or service?

Just a thought...

They'll just buy them as slaves via rent money and kick them out for causing trouble.

a reply to: onequestion

Right, a small business can only make money if it can sell its product or service.

If no one has any money, a business can't operate. This is so basic, I'm amazed it needs to be said.

Lightening the ballasts of the top 1% helps EVERYONE float higher. I'm sure those people know this, and they're just seeing how far they can run with the game they've been playing before it collapses.

I mean, they'll be fine...they've insulated and protected themselves so that any market crash won't cause them to be be homeless or suffer.

Housing IS out of control. I live in a "cheaper" part of the state, yet my humble 1 bedroom 460 sq foot one bedroom apartment costs about 900 a month. And this is a supposed "low income" complex, lower rent rates. The minimum wage here, before the hike, was about 9.35 an hour. That is what I was making at my entry level machine job 15 years ago, when minimum wage here was like about 7 bucks an hour. My apartment back then, while not in a "low income" designated complex, was still one of the cheapest rents around without living in a roach motel or trailer park. It was about 625 a month. One bedroom, one bath. Nothing terribly fancy, and the area was a bit crappy, but it was a decent place in a decent complex. At that time, the "low income" apartments ran about 400 a month, or so. Even with what I was making, it was still paycheck to paycheck. And I don't even have kids.


Now a good 15 years later, rent has doubled, but wages have not. In fact, over all wages, whether minimum wage or "real job" wages, have not kept up with the costs of housing, let alone living. And whenever I job search, I look at general job offerings to get an idea of what is "average" for salary overall. And one thing I noticed is that hardly any jobs, including the ones you have to get schooling for, have seen much of a rise in income. Even professionals are only making marginally more money these days. So it is not about people on minimum wage, its about anyone who is not upper management or CEO level getting nowhere despite bettering themselves. They call it a rat race, but it's more like a hamster wheel, since a race implies an actual finish and purpose. No matter how fast you run, that wheel just stays right where it's at. Which is about the state of pursuing "the dream".

a reply to: Skadi_the_Evil_Elf

They do call it a Rat Race, don't they? It's really not. A race implies there's a winner. With the current economy, the only "winner" is the rat that can afford a jetpack before the race even begins.

originally posted by: Xtrozero

originally posted by: BuzzyWigs

a reply to: Xtrozero

I been around a good while, started working in 1978

Yeah? Woot!!!

In 1978 I was a sophomore in college.



I started working 'formally (with taxes withheld and all that jazz) in 1972. (Prior to that I was a babysitter and a paper-girl from the time I was 12). Yeah, so my first "official" job was in a brand new grocery store, in the bakery..... I was 14. My co-workers were Millie, Fern, and Gladys.

Paper girl, impressive, not too many of them back then. I think my first job after paper boy was a mover busting my butt.

I worked in a field pulling tassles off corn when I was 14. That was the absolute worst job I ever had. I would come home hot, sore and crying. LOL.

a reply to: texasgirl

I worked in a field pulling tassles off corn when I was 14. That was the absolute worst job I ever had. I would come home hot, sore and crying.

I did that, too! When I was in college.

It made me think that EVERY youth should have that experience.
It was horrible.

a reply to: Xtrozero

My big question is how does EVERY small business adsorb a nice big pay increase? The answer is they can't,

We aren't talking about SMALL BUSINESS. We are talking about corporate globalism, off-shoring, out-sourcing, tax-evading,
loophole-writing, loophole-buying/exploiting, lobbying, intern-exploiting GIANT CORPORATIONS, with CEOs who earn 500 TIMES the amount their laborers earn.$

As for small businesses, they roll with the flow - if EVERY EMPLOYEE holds stock in the company, then they are 'enfranchised.'
They COLLECTIVELY agree to compromise on things. Owner takes a pay-cut, workers accept fewer hours - closed on weekends........the PEOPLE who are physically invested in the job, and physically dependent on HAVING THAT JOB - work together to figure out a compromise.

Like families do - tighten their belts to save a bit, to make ends meet........FAMILIES. We do that.
Have I sacrificed things for my kids? You bet I have.

NO ONE who has billions hoarded in the Cayman Islands is that sort of 'owner.'

Now ------
what else were you asking?

the other question is why are so many people working crappy jobs that only pay minimum wage when they should be long past that point of their life?

Off-shoring, down-sizing, hiring "fresh blood" who haven't a clue what life is really like, tax-loopholes, lobbying, etc. .......see above.

Also, do you realize that only 5% of workers make minimum wage?

On that question: SOURCES, please.

And also, do you realize that HALF of all Americans are on government assistance? Because those globalist firms know that they can get away with it, and the 'taxpayers' will shore up the deficit.
DO YOU realize that??



Here ya go:

Providing a safety net through government assistance makes our country stronger – and it’s time for Americans to stop spreading untrue and damaging rumors decrying the very programs that are creating a brighter future for our nation’s most vulnerable. It’s time for politicians to stop trying to cut meager benefits to struggling families.

Because there are millions of people out there who truly need these programs to help them get back on their feet. And you never know – someday, you might be one of them.

Seven Common Myths about People on Welfare

a reply to: BuzzyWigs

I'm tired of the small business angle.

Please offer a real life example of a small business that couldn't handle 15$ minimum wages with metrics and everything.

Otherwise I don't want to hear that excuse anymore.

a reply to: onequestion

I'm tired of the small business angle.

Please offer a real life example of a small business that couldn't handle 15$ minimum wages with metrics and everything.

Are you sure you replied to the right person?

I am a proponent of small business.....
I explained it above.....I did edit that post several times, though.

a reply to: onequestion
Honestly, I know many small business owners. Not a single one is paying employees minimum wage. You pay people peanuts, you don't get effort, and you sure as hell don't get loyalty.

a reply to: TKDRL

That's what I'm saying most small business takes great care of their employees.

I don't know if anyone has looked around but most small business in my area is all service sector. Everything else is pretty corporate.

originally posted by: MystikMushroom
What I'm sensing here from those who don't want to provide a "living wage" to people making the federally mandated minimum is anger.

No anger here...

I just understand the economics of it all. In the end it effects me very little for I work for a very large company and my pay is well beyond what would be a part of the domino effect to it all. I truly wish everyone could make 30 bucks an hour, or have a system where everyone at least gets a clean living space with basic needs, for free even, but I'm not sure how we afford that or the repercussion of a large part of society that spends most of their lives at the subsistence level.

I think deep down, perhaps even unconsciously these people are mad and upset because they think it devalues them and what they make.

"Well if they get paid more, enough to live on -- then by God I should get paid more too!"

So you pay a guy off the street day one 15 to 20 bucks an hour and you also pay the junior manager that has worked there for 5 years 15 to 20 bucks an hour too. Do you have a problem with that?

Maybe that's why people hate union workers and say things like, "There overpaid!" ... No, perhaps YOU'RE underpaid.

What is a job worth? What would you pay someone to mow your lawn? 10, 20 50 100 500?

There aren't enough technical or skilled jobs for everyone, someone is always going to have to the the crap jobs. Someone is going to have to collect the garbage, mow the grass, change lightbulbs and hem pants. Until we all decide not to eat fast food, someone is going to have to flip burgers.

I disagree... you mow the grass and a few years later you have 50 accounts and 5 people working for you that now mow the grass. You created not only a job for you but for 5 other people.

Sure, you can work your way up to a manager at McDonalds and make a really good living -- but how many positions at each McDonalds are there?

Hint, stay away from services...

So lets say you make 10 bucks an hour, so 1600 a month, but you need 1000 per month for rent, electrics, internet etc, how do you cut that 1000 in 1/2? I did it for about 12 years until I was able to live on my own, and I would have done it 35 years if I never went past a certain point.

single person with a minimum wage job can't house, clothe, and feed themselves working 40 hours a week?

The question is whether single living is a luxury/desire or a need/right? I see it as a luxury that when you get to that point it means you are independent. It is funny how someone can have subsistence, but then demand an independent lifestyle. 2 or 3 working people that live together can really cut down living expenses...

Paying people more money is a great way to stimulate the economy. When people have money, they buy things. Demand for products and services go up. When demand for products and services go up, companies sell more products. When companies sell more products, they make more money and can hire more people. Everyone wins.

Drives inflation too, so prices go up. Drives business cost so less employees. I can tell you that Seattle will be a great experiment in how 15 bucks an hour minimum wage works.

originally posted by: BuzzyWigs
We are talking about corporate globalism, off-shoring, out-sourcing, tax-evading,
loophole-writing, loophole-buying/exploiting, lobbying, intern-exploiting GIANT CORPORATIONS, with CEOs who earn 500 TIMES the amount their laborers earn.$

What giant corp pays minimum wage, hell I work for Boeing 180k employees and summer intern help make 25 bucks an hour alone. Don't work in services...period...

As for small businesses, they roll with the flow - if EVERY EMPLOYEE holds stock in the company, then they are 'enfranchised.'

How does that work? I start up a subway and need 10 people to work for me, are they going to invest 60k to 100k each to be part owner?

They COLLECTIVELY agree to compromise on things. Owner takes a pay-cut, workers accept fewer hours - closed on weekends........the PEOPLE who are physically invested in the job, and physically dependent on HAVING THAT JOB - work together to figure out a compromise.

Most small businesses have tight margins, do you know what that means?

Like families do - tighten their belts to save a bit, to make ends meet........FAMILIES. We do that.
Have I sacrificed things for my kids? You bet I have.

Then open a family business...

NO ONE who has billions hoarded in the Cayman Islands is that sort of 'owner.'

Anyone like that is not part of the large masses of business owners that will get hit hard. My neighbor had a Quiznos and worked 16 hours a day and could not afford to pay the 9+ bucks an hour in Washington, so he closed i up.

a reply to: Xtrozero

What giant corp pays minimum wage

Xtro, are you serious? McDonalds, Walmart, Target, Macy's/Bloomingdale's, Wendy's, KenTacoHut (KFC/Taco Bell/Pizza Hut - YUM! Foods), Sears/K-mart, Olive Garden/Red Lobster/Longhorn Steakhouse (Darden Restaurants), IHOP/Applebee's (DineEquity), Burger King, Penney's, Starbucks and not in that order.

The 12 Companies Paying Americans the Least

Global Hotel chains (Marriott, Hyatt, Westin, etc) should also be on that list (which was from 2012). And probably every other fast-food place, all of the crafts shops (Hobby-Lobby, for example), Hancock Fabrics, Staples, Home Depot, Lowe's, Cabela's, Bass Pro Shops, any barbeque chain you can think of (and btw, Arthur Bryant's sucks!! lol).

etc.


and then some more
etc.

a reply to: Xtrozero

Most small businesses have tight margins, do you know what that means?

Yes, I do. Thanks for asking.



Edit: OH!!! And ALSO - those Giant Corps that I listed above are the companies whose employees rely on that horrid Federal Safety Net!!!
GadZooks! And who were forced into buying the Dreaded, Malignant Obamacare (cuz, no coverage, you know - part-timers on minimum wage with no benefits)! OH NOEZ!! And...and....they're ALL lazy good-for-nothing, mooching, ne'erdowells!!!!

BUT! It all turns out okay.....if you have a look at that article I linked - you'll see that the CEOs of those big 12 are EACH earning a salary of MILLIONS of dollars!!!! And you know what they do with those bejillions of dollars?? They give everyone a raise

(wait..no... that's not it. That was my idealist, lily-livered, liberal, bleeding heart typing. sorry.....)

* .........Aherm.......*
so - yeah, those CEOs? They are HIDING THEIR MONEY and AVOIDING TAXES, and "employing" people (including children) at pennies per hour. And their 'factories' collapse, and people are kept inside the factoryworks, with RAZOR WIRE.




So - anyway.....
"Then open a family business," you say.... ?!!

Well, oh - Yeah!!!

Like, erm, you mean - like the Waltons? The Pritzgers? The Koch Bros? The Bushes and Clintons, the Vanderbilts, and JPMorgan's family...Rothschilds and Rockefellers????
Like those people???

Okay. I'll think about it. --




No, no You're RIGHT - that's what I'll DO!!!!





Dude! You NAILED it! Thanks so much!!

originally posted by: Pants3204
a reply to: BuzzyWigs

I'm interested in how these numbers were calculated because I currently rent a 3 bed 2 bath house about a mile from a major university campus for less than half of that per month. Even luxury apartments in the nearby metropolitan area don't even begin to approach that.

No one gave you an answer, I just read the thread though so I will. Rents are calculated as what is required to purchase such a home using no more than 30% of your income. This is the metric most bankers look for in mortgages and it is what most landlords look for. However in lower income areas this simply isn't possible and they've begun renting to people at 50%, 60%, or 70% of their monthly income for rent. I'm lucky myself, I only pay 45% for an unsafe apartment in a drug ridden town where the police have a clearance rate of 5%.

The disconnect you are going to see with this study is that you're going to find many examples (some in this very thread) of people who claim to have those types of dwellings with less of a wage. They aren't lying but they aren't financially stable either. One of the phrases most often parroted by people towards the poor is that they need to practice some financial responsibility and buy only what they can afford. The problem is that wages for the poor are so low that quite literally every single purchase you make is a bad financial decision. I already mentioned rent, you should be paying no more than 30% of your income on housing+utilities but for the poor (minimum wage or slightly above minimum) you pay over 50% and sometimes closer to 60%.

Here's the baseline. This is considered the absolute minimum for financial security:
Housing+Debt - 30%
Taxes - 25%
Insurance - 4%
Savings - 15%
Living Expenses - 26%

Lets forget minimum wage for a moment, lets look at $15/hour (which is still too low). This baseline gives you the following
Monthly income - $2600
Rent+utilities+debt - $780
Taxes - $650
Insurance (car/health) - $104
Savings - $390
Living expenses (discretionary income) - $676

So you should be able to rent at $800/month, pay little in insurance, have about $100/week for groceries, another $100 for gas, and $150 to play with.

With the prices things cost these days not a single poor person has that type of budget. I can speak to being poor because I've been poor for most of my life. Being poor involves making a string of poor financial decisions, one after the other, every single day, week, month, and year and there is no alternative. You can't bring rent down to a reasonable value, you can't stop eating past a certain amount, because of the rents you have no savings, and so on.

Different finance experts will give you different values as to what constitutes a major purchase, in my opinion (I am not a finance expert, I just know how to type words) a major purchase, the type you are supposed to do once every maybe 10 years is something that makes up 10% of your annual income. If you are poor, do you know what makes up 10% of your income? Paying for groceries. Something as simple and requires as having food to eat for the poor is so expensive and so frequent that it is financially devestating. Let that sink in for a moment.

originally posted by: intrptr
a reply to: St Udio

Thanks for clarifying. I agree. I read that the last "crash" (2008) was triggered by all the toxic mortgages bundled off as securities (if I got that right) and the next one will begin with the collapse of the housing bubble.

Thoughts?

After the crash and the scrutiny over bundling mortgages they started bundling rents, in part due to there being far more renters. Every time you send a rent check to your landlord you are likely feeding the machine that is going to bring about the next collapse.

originally posted by: Xtrozero
No I understand, but the fix isn't to raise minimum wage. Raising minimum wage would be like putting a band-aid on a cut that needs stitches.

My big question is how does EVERY small business adsorb a nice big pay increase? The answer is they can't, the other question is why are so many people working crappy jobs that only pay minimum wage when they should be long past that point of their life? Also, do you realize that only 5% of workers make minimum wage?

You're wrong and you're right. You're right about the problem but wrong about the lack of a solution and the scale. If you refer to the literal minimum wage worker you're right that it's only 5% of workers, but if you extend it to people within 10% of the minimum wage (less than even $1/hour more) it's 35% of the work force.

Now for the part you're right about. Business can not weather a sudden $15/hour shift to minimum wage. Large price shocks will put far more people out of work than they'll help. Instead the action that you can take is to reverse course on the decline of the minimum wage. Here's the whole problem, minimum wage increases at roughly the CPI rate of inflation (currently 3.5%), but CPI is wrong, the actual rate right now is 7.8% (and for most of the last decade it was over 10%). By increasing wages at 3.5% while goods increase at 7.8% it falls behind. This has been happening to one extent or another since the 80's. If we want to fix it we need another 35 years of increasing the minimum wage a few percent above the inflation rate. It won't fix my generation, and it won't fix my kids generation, but my grandkids would have a chance then.

originally posted by: DogMeat
You were never meant to live off min wage...period.
It is a starting place, to go gain the life lessons to do better.
I was meant for high school kids make a few $$ to put gas in a car to hang out with buddy's.
I was never meant to be a life long profession. If you think flippin burgers is a career and should pay you $15 per hr....
You have just failed at life...try again.
Also and I quote,...not sure who by:
"A Poor Man Never gave me a JOB"

Unions had there time and place, for the most part they are now un-needed.

/flame on

The person who made the minimum wage in the first place stated in no uncertain terms that yes, you were meant to be able to live well on the minimum wage. Then after he was out of office for 20 years the minimum hit it's purchasing power peak. You could own a moderately decent home, own a car, have things like a TV, eat like a king, and even pay for college out of pocket all on minimum wage. A 50k/year job today is roughly equivalent in purchasing power. If you make less than that, you have less purchasing power today than a burger flipper at McDonalds had in 1967.

As to the last part of your quote, it shows off a dreadful ignorance of economics. Your employer may hire you, but who actually creates the work for you to do, and gives the employer the money that becomes your wage? The answer to that is your customers, and unless you only cater to high end clientele your customers are poor. As the largest group of Americans the poor make up the largest group of people that will employ you.

a reply to: Aazadan

Quite simply false.

I have zero debt and I am stable, I could rent my 2 spare bedrooms and make $13k+, but I don't because I don't need to.

You did not answer how they are calculating how they get these figures, since I actually used 33% of income for rent as my mark and found their numbers were completely off, by about 50% higher than the actual figures.

originally posted by: OccamsRazor04
a reply to: Aazadan

Quite simply false.

I have zero debt and I am stable, I could rent my 2 spare bedrooms and make $13k+, but I don't because I don't need to.

You did not answer how they are calculating how they get these figures, since I actually used 33% of income for rent as my mark and found their numbers were completely off, by about 50% higher than the actual figures.

I don't know precisely how they did it since I haven't read the methodology paper, but I can tell you how to do it.

For each county in the US take an average of advertised rents. Divide that rent by .3 (because rent should be 30% of income) and that gives you the minimum monthly income for that person to rent that place without risking severe financial ruin. Multiply that value by 12, divide it by 52, then divide it by 40. That will give you the minimum wage one needs to earn after taxes to rent the place.

From here you can average all counties in the state together, possibly weighted by population (more accurate for urban centers, less accurate for those out of the city). This gives you your state average.

If you have a $130k house, with $100k owed on it, and you are paying it off with a wage of $12/hour you are not in good financial shape. In order to avoid getting screwed on the interest you need to pay two mortgages a month (one going directly to the principal), and the two combined still need to fit into your 30%.

On a 130k 30 year mortgage (I think that's the scenario you presented earlier) ignoring interest because I don't want to calculate it that's two payments of $362 each or $722 per month. That means you need $2407 per month in income on that house to not be financially stressed. That's $13.89 as a wage.