Minimum-Wage Workers Cannot Afford One-Bedroom Apartments in the Midwest

A minimum-wage employee working full time cannot afford a modest one-bedroom apartment in Illinois, Minnesota, Wisconsin, Indiana, or Iowa. In all five Midwestern states, the minimum wage should be at least $10.00 an hour.

The intention of a minimum wage law is to ensure workers the most basic standard of living and protect their dignity and well-being. Minimum wage laws across the Midwest are currently failing to achieve this goal.

new Policy Brief [PDF] by the Midwest Economic Policy Institute (MEPI) exposes the disconnect between the rising cost of living and stagnant minimum wage laws in  Illinois, Minnesota, Wisconsin, Indiana, and Iowa.

An evaluation of data from the Department of Housing and Urban Development finds that a single adult working full time at the minimum wage cannot afford a modest, one-bedroom apartment in any county in the five Midwestern states. Minimum-wage earners must spend disproportionately more money at the expense of other necessities, such as food and health care, in order to afford a one-bedroom unit at a fair market rent. Minimum wage laws are out of touch with current cost-of-living realities.

The minimum wage should be at least $10.00 an hour in all five states.

This policy change would make housing affordable in more than 50% of counties in Illinois, Minnesota, Wisconsin, and Indiana; and 30% of counties in Iowa. However, more-populous counties are significantly more expensive and should consider enacting local minimum wage ordinances above the $10.00 an hour wage floor.

A state-by-state look provides more insight:

Illinois

MW_IL

  • State minimum wage: $8.25 per hour
  • Average wage needed to afford one-bedroom rent: $16.36 per hour
  • Average hours per week needed to work at minimum wage: 79 hours per week
  • Counties that become affordable with $10.00 rate: 52 of 102 counties (51%)
  • Cook County, Illinois – requires $19.25 per hour to make rent, should enact $15.00 an hour minimum wage.

Minnesota

MW_MN

  • State minimum wage: $9.00 per hour
  • Average wage needed to afford one-bedroom rent: $13.72 per hour
  • Average hours per week needed to work at minimum wage: 61 hours per week
  • Counties that become affordable with $10.00 rate: 50 of 87 counties (57.5%)
  • Hennepin County, Minnesota – requires $15.63 per hour to make rent, should enact $15.00 an hour minimum wage.

Wisconsin

MW_WI

  • State minimum wage: $7.25 per hour
  • Average wage needed to afford one-bedroom rent: $12.18 per hour
  • Average hours per week needed to work at minimum wage: 67 hours per week
  • Counties that become affordable with $10.00 rate: 46 of 72 counties (63.9%)
  • Dane County, Wisconsin – requires $15.00 per hour to make rent, should enact $15.00 an hour minimum wage.

Indiana

MW_IN

  • State minimum wage: $7.25 per hour
  • Average wage needed to afford one-bedroom rent: $11.58 per hour
  • Average hours per week needed to work at minimum wage: 64 hours per week
  • Counties that become affordable with $10.00 rate: 58 of 92 counties (63.1%)
  • Marion County, Indiana – requires $12.52 per hour to make rent, should enact $12.00 an hour minimum wage.

Iowa

MW_IA

  • State minimum wage: $7.25 per hour
  • Average wage needed to afford 1bdr rent: $10.79 per hour
  • Average hours per week needed to work at minimum wage: 60 hours per week
  • Counties that become affordable with $10.00 rate: 29 of 99 counties (29.3%)
  •  Johnson County, Iowa – requires $12.79 per hour to make rent, should enact $12.00 an hour minimum wage.

The gap between actual state minimum wage and the wage necessary to afford local rent reflects the disconnect between outdated law and reality. The only way a single adult can afford these high housing costs is to either work ridiculous hours or spend an unreasonable portion of his or her income on housing. Either method can have deleterious effects on individual health and well-being.

The current minimum wages in Illinois, Minnesota, Wisconsin, Indiana, and Iowa do not ensure workers a reasonable minimum standard of living. While there has been much public debate on the merits of raising the minimum wage, the Midwest Economic Policy Institute finds a substantial need for a minimum wage of at least $10.00 an hour based on the cost of living in Illinois, Minnesota, Wisconsin, Indiana, and Iowa. To make housing more affordable to low-income individuals, states should raise the minimum wage.


For the full Policy Brief, click here: https://midwestepi.files.wordpress.com/2016/07/mepi-policy-brief-minimum-wage-and-one-bedroom-rents-final.pdf.

4 thoughts on “Minimum-Wage Workers Cannot Afford One-Bedroom Apartments in the Midwest

  1. Grown adults should not be settling for minimum wage jobs. They should get off the couch and do online college courses, learn a trade, and stop whining they don’t make enough. Success don’t fall on you, you have to go and get it. As an ex-con with no education and 3 kids, I worked my tail off as a mechanic and 20 years later here I am, I make almost 6 figures working 2 jobs. WHY? Because I like nice things and I’m not lazy. So if you settle for minimum wage that’s what you get. You don’t have the right to complain because you put yourself in that position

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