Economic Development
The National Low Income Housing Coalition reports that fair market rent for a two-bedroom unit in Minnesota is $762, and that the hourly wage required to afford this rent is $14.64.
Although a study by the Wilder Research Center found that 41 percent of homeless adults are employed, the same study revealed that their average monthly income is $622 (or about 80 percent of the wage needed to afford fair-market rent).
In Minnesota, 33 percent of renter households pay more than 30 percent of their income for rent. A person earning minimum wage ($5.15 per hour) can afford monthly rent of no more than $268. An SSI recipient (receiving $545 monthly) can afford monthly rent of no more than $164.
The National Coalition for the Homeless points out that the growth in real wages at all levels over the past few years has not closed the gap created by stagnant and declining wages over the past decades.
Low-wage workers have been particularly hard hit by wage trends. As recently as 1967, a year-round worker earning the minimum wage was paid enough to raise a family of three above the poverty line. During the 1980s, the minimum wage was frozen at $3.35 an hour. However, the cost of living increased 48 percent over the same period.
The increase in minimum wage to $5.15 per hour in 1996 helped to make up half the ground lost to inflation during the 1980s. But, the real value of the minimum wage in 1997 was 18 percent less than it was in 1979.
Today, a full-time, year-round minimum wage job will not get a family of three past the estimated poverty line. This is important to note, especially since more than 70 percent of people earning minimum wage are age 20 or older.
Links for Further Research
Further information on the impact of homelessness on economic development can be found at:
- Cost of Living in Minnesota report from the JOBS NOW Coalition
- Fact sheet on employment and homelessness from the National Coalition for the Homeless
