Friday, August 24, 2012

Why Obama Must Guarantee Minimum Wage Will Pay for 2BD Apartment or 3BD House


BY   THU MAY 31, 2012

Two Maps That Show Why Grads Are Screwed

.... The New York Times reported fascinating research on metro areas and educational attainment, conducted by the Brookings Institution. The study found that between 1970 and today, the gaps in educational attainment between metro areas has grown considerably. Whereas in 1970, Dayton and San Francisco weren’t all that different, today the differences are vast. In 1970, the average metro population was 12 percent college graduates — New York was right there, average. Washington, D.C. was the most educated city in the nation at that time with 22.4% of the population having at least a bachelor’s degree. Now, 32 percent of the U.S. metro population has a college degree, and the gap between uneducated cities and educated ones has grown considerably: Bakersfield, Calif., the least educated, has just 15 percent college grads while DC boasts nearly 50 percent bachelor’s degree attainment.

...and yet Washington, D.C. just so happens to house the legislature that has not raised the federal minimum wage since 2007 — at which point it was $5.15! At $5.15 an hour, you would need to work 197 hours a week for an apartment (going off of NLIHC’s numbers), which would require that weeks be eight days long.

this was the best response from a rental manager, who is wondering why somebody seems to be asking for the government guaranteeing that minimum wage must be enough to pay for a two-bedroom apartment....

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    asmith  2 months ago
    There is so much information missing information this is impossible to evaluate.
    Why is a college Grad making minimum wage ?
    Why is an entry level worker seeking to house a family ?
    While it might be reasonable to question whether actually poor families can live on a minimum wage.
    At the same time i would presume that a recent college grad would have the sufficient intelligence not to need a two bedroom apartment until they could afford it.
    In my city 400 sq.ft. efficiencies - that is half the size of a family home in 1950, are going for about $400/month. or approximately 30% of ones minimum wage income. The general rule of thumb is that housing should cost 25-35% of your wages.
    This all ignore the fact that the average starting salary in 2011 for a college grad is $48,000.
    Or enough to pay the mortgage on a $300,000 home.
    As a city landlord, none of my tenants are college graduates. Few are high school graduates. Most are receiving significant government assistance.
    I am lucky if I break even - without placing any value on my time. 
    My primary cost is the mortgage on the building. But the next largest cost is the myriads of county and city taxes, permits and fees, further as the mortgage is fixed, it is tax and fee increases that directly drive rent increases. The next major cost is code enforcement. 
    Most tenants are relatively destructive. I generally have to replace the 10 year smoke detectors the city requires in each room, every year. I rarely have time to perform the real repairs that the building might actually need because I am too busy dealing with couches and mattresses that tenants or others have left in front of my building, or trash that was not collected because no one took their trash out, or the city wigging out because the grass in the back yard is now 4" high. While real improvements like renovating kitchens and baths upgrading appliances, installing better locks, and lighting, sealing or replacing windows, languish because time is wasted dealing with the trivialities the city cares about.
    If you are a prospective tenant and want to know how to keep your rent down, it is simple.

    Your apartment is your home. Take care of it. Grasp that with very few exceptions much of what goes wrong is your responsibility. An empty apartment has no pests, the lights do not burn out, the toilet does not clog, fixtures do not get damaged. Smoke detectors do not disappear or mysteriously die, windows do not break. Carpet does not get burned. Stoves do not get dirty, .... If these or any of myriads of other things that are just part of life happen while you live there - take care of them yourself. And for god's sake do not call the city building inspector everytime your light bulb burns out. Don't try to heat your apartment using your stove, and don't throw away the smoke detector when it goes off because you are heating your home with the stove. And pay your rent on time all the time.
    As a landlord, if you do not cost me money. If you take care of your place. If you leave as nice or better than you found it, When i have to raise the rent, I will start with other tenants. 
    If you want to paint your apartment - I will pay for all the supplies. If you treat your apartment like it was your home, i will leave you alone. Never raise your rent, give you an excellent reference and be sad to see you go.
    The supply of inexpensive decent apartments is determined by the supply of reliable self-sufficient tenants. When you increase a landlords costs, your increasing your rent.
    And i would note we live in the internet era. Tenants can check out prospective landlords and apartments before they rent - and landlords can check out prospective tenants before renting. When i process an application, the first thing I do is call the prior landlord. If you are going to be a difficult and expensive tenant. I will know and decide accordingly. If you were a difficult and expensive tenant for me, your next prospective landlord will know too.
    When your application is being constantly denied and the only places you can rent are pretty bad - AND expensive, it is not because you only make minimum wage. It is because the word has gotten out that your trouble, and your not getting into the better places.
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      Erynn Schwellinger  a month ago  parent
      OK, I work nights and it's 7:31 AM. So TL:DR.
      But "Why is a college Grad making minimum wage ?"
      Seriously? You need to ask that? With the job market where it is most college grads are lucky to get ANY work AT ALL. So yea, a lot of them work minimum wage. The people you see stocking the shelves at wal-mart when you go in there? Yea, at least one of them probably has a degree. And no, it isn't a personal failing that resulted in a lack of a well-paid job. There simply aren't the jobs.
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        Ian Kinzel  23 days ago  parent
        $48,000 starting salary for a college grad? You're kidding me, right? I graduated in 2010 from UC Davis and I'm on pace to make a whopping $5,600 on the year. Out of all the people I knew in college, and all the recent grads I know, I'd be really interested to know if any of them are making over $25k. I don't know of any.
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          Praelium  a month ago  parent
          Bravo. Excellent advice. Rent a nice apartment, keep it clean, pay the rent on time, fix minor things yourself, and be kind to the landlord. Then the neighbors will chill, the rent won't go up, and the complex becomes quieter and safer. Why be cool and ethical? To have reasonable rent and a good reference.
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          Just me wondering  a month ago
          Nothing like an article that refers to two maps and then only shows one.
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          Lapsed_Republican  8 days ago
          I have to point out that I made $1.65 per hour (the minimum wage) in 1960. Adjusted for inflation that should have been a minimum wage of $12.01 in 2010 dollars (the latest inflation data I have available). In 2012 the difference is even larger. WTF happened? Where are the responsible lawmakers? It seems to me that the lack of income tax on the difference (about $5.00 per hour) is where much of our fiscal problem is. If the 49% of the population pays no income tax, pay them more.
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            Erynn Schwellinger  a month ago
            One problem with the theory of building more housing: There's already plenty of unoccupied housing around. Companies are still building houses they can't sell, buying houses they can't rent. Setting unrealistic prices and letting it rot. The problem doesn't lie with government alone - a lot of it is plain old human greed at the local level.
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              brandon davidson  2 months ago
              From this I deduce that the areas with the most government regulation have the highest cost of living.
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                Willy Staley MOD  2 months ago  parent
                Correlation and causation: not the same thing!
                The irony here, of course, is that suburbs (which I imagine you're defending?) are actually still more Draconian when it comes to zoning regulations, in an intentional effort to limit housing supply and protect property values. Streets must be wide enough to allow fire trucks to to a U-turn, no mixed-use, minimum lot acreage, etc.
                The driver of increased price in these cities is increased demand, plain and simple -- it's much more a market-driven effect than your comment would suggest. What Yglesias is arguing is that cities facing this increase in demand have outdated zoning laws, and they ought to make an effort to increase their housing supplies in response.
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                Justin McKay  21 hours ago
                Here are some important facts.
                In 2010:
                49% of minimum wage workers were 24 or younger.
                As they age, many of the people will complete a college degree and get a better paying job.
                Many people under 24, particular college students receive some other form of support during these years from sources like family, scholarships, loans and grants.
                28% never graduated from High School
                29% were high school graduates.
                31% never finished college
                5% had an associates degree.
                That means that 93% of minimum wage workers do not have a 4 year college degree. The solution is not to raise minimum wage, but to encourage them to continue their education and take advantage of the already available education funding.
                (Source: US Bureau of Labor and Statistics: Characteristics of Minimum Wage Workers: 2010)
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                  Pete Duffy  9 days ago
                  Dumb story, lots of facts and no relationship at all to the facts or problem. Guess we just found another grad that may be screwed. Now try and review all the data and see the rest of the picture
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                    Ian Kinzel  23 days ago
                    I've suspected the same all along, but this is a very unconvincing way to make the point at hand. How many people need a two-bedroom apartment in the first place? I'd be happy if I could pull off a full-time minimum wage job and a studio apartment. What are the numbers for that? This article doesn't say.
                    What this article DOES show is that you can't raise a family on a single minimum-wage income. How applicable that is to recent grads...well, I don't know many 23-year-old college graduates who are also married and having kids.
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                      TR  2 months ago
                      Willy, I living wage would do nothing more than drive the prices of lower cost goods up. In turn, this has more of a negative impact on the people who make smaller incomes. The cost of goods are directly impacted by the largest expense in running a business....labor.
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                        Erynn Schwellinger  a month ago  parent
                        That didn't happen when minimum wage was introduced, nor at any time when it was brought up to be a living wage. Paying the poorest people sufficiently jsut gets the economy moving faster; it takea a VERY long time for it to become unviable again because the people making they money are also SPENDING the money.
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                        Gil Jacobsen  2 months ago
                        Dang, where's the overlay showing the male-to-female ratio?
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                          Alex Matjanec MOD  3 months ago
                          Classic case of supply and demand.
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                            Paul Randall  a month ago
                            Go west young man. Really really far west. Like SE Asia West. Explore the world while you are young, pay your dues, learn your trade and make your fortune. Companies over there are waiting for you with good entry level jobs and they pay you enough to live well. Then leverage that experience in the wider world to come home and live and work in one of our great cities in a good neighborhood. Don't waste your youth in a crappy neighborhood or a second rate city over here.
                            That is so Boomer anyway.
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                              Michael  2 months ago
                              I agree with the general point, but the math is very suspect.
                              70 hrs* 4 weeks* $7.25 = $2030/month. 
                              88 hrs * 4 weeks* $7.25 = $2552/month.
                              Even in very expensive, very restricted areas like New York you can find an apartment for significantly less than $2,000/month if you need to. Obviously that doesn't include all other expenses and living on minimum wage is very hard and made harder by high rents. I agree with the general article. I just don't understand how they worked out the math to get the numbers they did. Also, if you're one person working minimum wage, maybe you wouldn't get a "fair market" 2 bedroom apartment, duh.
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                                Willy Staley MOD  2 months ago  parent
                                Well I think the point is that a.) an 80 hour workweek is more than a bit excessive and b.) you cannot raise a family on minimum wage -- this is the reason for the two-bedroom consideration. In theory it should be a living wage, and it most certainly is not anymore.
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                                  Gmama  2 months ago  parent
                                  it isn't that complex, wait until you are married to have children so you will have two incomes AND don't have kids if you cannot afford them. Minimum wage is designed for entry level low skill jobs, not head of family jobs. If you show up on time, not hungover or high, do a good job and make yourself valuable to your employer you move up in income.
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                                    Willy Staley MOD  2 months ago  parent
                                    This is excellent career advice, I'll give you that. You can't deny the fact that the minimum wage has stagnated for the last four decades, though, while corporate share of profits has skyrocketed. It's a transfer of wealth from worker to shareholder, plain and simple.
                                    I agree that people could be wiser about family planning, but I'm not trying to tell people how to live. I just think the corporate-profit-pie could be shared differently.
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                                      Gmama  2 months ago  parent
                                      Willy Staley: Well I don't care how anyone lives UNTIL they begin complaining that things aren't fair. I also don't think I know the magic formula for deciding how much a corporation should profit.
                                      Furthermore it really is that simple, according to census data people who finish high school get any full-time job and wait until they are married and 21 before having children have only a 2% chance of living in poverty. There are jobs that cannot be filled, and Americans refuse to do them. If you were hiring someone would you hire the person who previously worked full time at minimum wage or the person who had collected welfare and told you they were better than the minimum wage jobs offered. Now add to the mix that the first candidate finished high school and the other did not.
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                                        Erynn Schwellinger  a month ago  parent
                                        Gmama: It's designed for, but is not used for, entry level jobs. As for 'wait until you have two incomes' - seriously? Do you know ANYTHING about infant development? That's FAR from the optimal situation for a baby OR a pregnant woman. How long do you think she's going to get off work, paid, to have her baby? A month? Two? Try not at all. Most places won't give paid maternity leave. And unpaid maternity leave... if you're relying on two incomes, how, exactly, are you going to pay for that? She's going to need to be working at 9 months and then a week after she gives birth? How is that OK? How is that even supposed to be viable? How is the infant supposed to develop properly without time with it's parents? How is breast feeding going to be viable in the long term? Or even the short term. Breast pumps don't work like a baby suckling. The actual suckling needs to happen, and regularly.
                                        As for 'do a good job and make yourself valuable'... do you remember what it's like to be working a shitty job because there aren't any other options for an employer who only cares about you when you don't do a fantastic job and ignores you the rest of the time? Because that's what nearly every low paid job is like.
                                        Employers do not pay people a fair wage, by large, if they do not have to.
                                        Also, judging people by their not being at the poverty line is unrealistic. Even up to 200% of the poverty line, there are SERIOUS financial difficulties surrounding child-birth, pre-natal care and child rearing.
                                        Americans, by large refuse to fill jobs that are underpaid and overworked - jobs like farm work, where people aren't paid nearly enough for the INCREADIBLE physical hell they put their bodies through... because the people at the supermeket don't want to pay more for their food. People want a living wage if they're going to break their backs every day. They don't get it. What's the point of working for a wage that doesn't pay the bills and doesn't leave enough time to search for other work?
                                        As for welfare - that isn't an issue here. I don't even know why you brought it up. This is about WORK. Minimum wage should be better than welfare, and that's a fact of life. But this isn't about welfare and it shouldn't be factored in.
                                        Nor should the pitiful excuse for a 'which one would you hire'. That presumes there's a job to be had. Have you looked at the employment statistics lately? Even better, have you looked at what percentage of available jobs are full time and exceed minimum wage? Your statements smack of having forgotten or never been in a situation where minimum wage - or just over it - was all you had to work with for you and your family.
                                        Even more than that, you presume that people always have been making minimum wage and, somehow, when they get a better job they'll keep that and be secure forever. That doesn't happen. In fact in the last few years lay-offs have been huge. Families that WERE stable and making enough now make close to nothing as people kill themselves to try and take care of their children. You show no understanding of the current job market or the volatility of life.
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                                          Gmama  a month ago  parent
                                          Erynn Schwellinger: Uhhhh I have 3 kids, but thanks for the lecture on infant development. I was married before I had them and had two stable incomes. In fact we gave up a lot to allow me to stay home and work at freelance jobs for the first few years of my kids lives. I know it is difficult for you to comprehend, but there should be two people able to bring income into the family before a baby is brought into the world. A single woman without substantial savings to weather the post natal period should consider getting a gerbil, not having a baby.
                                          God forbid anyone work hard. In high school at the age of 16 I worked as a home health aide. That job involves lifting overweight incontinent elderly people and cleaning their waste when they soil themselves. It wasn't exactly high end. Most of the patients had no idea if I was there or not. However I made sure that although no one was watching I treated them with dignity and respect and tried to make them as comfortable as possible. It did teach me to work hard and take pride in my work and develop a reverence for the helpless.
                                          Get trained to be a machinist, there are plenty of jobs.
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                                            Andrew  2 days ago  parent
                                            Gmama: Way to go. Skim an article proving by the numbers that there isn't as much opportunity as there used to be, and respond by simply asserting that there is, because you worked hard. Brilliant analysis.
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                                  Ivan Souffront  2 months ago  parent
                                  In addition to daily living expenses, there is also a thing called "taxes" which needs to be added into your math.
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                                    Erynn Schwellinger  a month ago  parent
                                    No State tax included, 70 hours becomes 1725.5. Keeping in mind that is one 40 hour a week job and one 30. That's still a lot, and yes, no-one working minimum wage is going to get a 2 bed 2 bath on their own.... but surely two jobs counts for something here? I was paying over $700 for a 1 bed 1 bath in Georgia. That's not a lot of money left to work with given the amount of work that is being done - including several 18 hour days in a row (each 8 hour shift requiring a 1 hour lunchbreak).... or no weekends at all. They worked with an average of rents, not the cheapest rents - which are, in my experience, still well out of viable reach when including food bills, fuel costs, health insurance and utility bills. This is still not a viable option to expect from the poorest elements of the population.
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                                    Filby  2 months ago
                                    Good point on zoning regulations being at fault, but bad point on minimum wage. Most people earning the lowest wages aren't concerned with paying rent, but with getting a summer job or building skills which allow them to move up the economic ladder. Minimum wage kicks out the bottom rungs of the economic ladder and hurts the poorest and weakest members of society.
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                                      Willy Staley MOD  2 months ago  parent
                                      See, I think we actually agree on this? I think you're assuming that minimum wage earners are only teenagers, and that unfortunately is not the case -- plenty of people try to make a living on minimum wage (ask the Walton family!).