I have to thank / blame Ezra Klein for getting me back on the blogging horse. He posted a chart that really brought home the problems facing our state and our country. Most people who read this blog are, I expect, reasonably well ensconced in the American middle class. Most folks probably own their homes or, if they don’t own, rent and have no trouble making the rent month to month. I could be wrong, but I expect that that’s a reasonable assumption for most of the folks here. But I don’t think any of us realize how lucky we all are. When I see a chart like this
that shows that even in a state like Wisconsin, a family must work nearly 80 hours / week at minimum wage just to be able to afford a 2 bedroom apartment at the prevailing rate I have to question the objectives of our whole society. What are we doing that people must work 80 hours per week, 52 weeks per year just to afford a place to live? Where did we go wrong?
This chart and the associated data come from a report by the National Low Income Housing Coalition. The report states
With the number of low income renters on the rise, the argument for sustaining affordable housing assistance is timely.
- In 2012, a household must earn the equivalent of $37,960 in annual income to afford the national average two-bedroom FMR of $949 per month.
- Assuming full-time, year-round employment, this translates into a national Housing Wage of $18.25 in 2012.
- This year the housing wage exceeds the average renter wage, $14.15, by over four dollars and is nearly three times the minimum wage.
Despite the great need for affordable housing units, subsidies for critical affordable housing programs continue to face the threat of cuts, as do many social safety net programs. For FY12, HUD suffered cuts of $3.7 billion dollars, 9% below FY11 funding levels. Although HUD estimates that its public housing capital needs are in excess of $25 billion, the Public Housing Capital Fund received 8% lower funding for FY12.19 The HOME program, key to the production of many new affordable units at the local level, suffered a cut of 38% between FY11 and FY12, a cut that is estimated to result in 31,000 fewer affordable rental homes. Meanwhile, the National Housing Trust Fund (NHTF), which Congress authorized in 2008, remains unfunded. The NHTF would fund the production and preservation of homes affordable to the lowest income households. Funding the NHTF is NLIHC’s top priority.
As foreclosure pressure mounts on homeowners, former homeowners are driving the cost of renal stock up pushing lower income families into ever more marginal housing.
Imagine the insecurity this must breed in these families who can barely make it. But what about Wisconsin, you ask? Wisconsin’s Fair Market Wage, that is the wage needed to afford a 2 bedroom fair market rental is $14.23 or nearly 2x the minimum wage. In the Milwaukee / Waukesha area, that number is $15.81 or 2.2 full-time minimum wage earners.
In Wisconsin, the estimated mean (average) wage for a renter is $11.05. In order to afford the FMR for a two- bedroom apartment at this wage, a renter must work 52 hours per week, 52 weeks per year. Or, working 40 hours per week year-round, a household must include 1.3 workers earning the mean renter wage in order to make the two- bedroom FMR affordable.
The report also contains detailed data, broken down by county for each state.