A Stitch in Haste

Expect a lot of noise over this report that the poor can't afford to live in America:

Most Americans who rely on just a full-time job earning the federal minimum wage [i.e., $5.15 per hour] cannot afford the rent and utilities on a one- or two-bedroom apartment, an advocacy group on low-income housing reported Monday.

For a two-bedroom rental alone, the typical worker must earn at least $15.37 an hour -- nearly three times the federal minimum wage, the National Low Income Housing Coalition said in its annual "Out of Reach" report.
...
The median hourly wage in the United States is about $14, and more than one-quarter of the population earns less than $10 an hour, the report said.

"A lot of people continue to be squeezed out," said Judy Levey, executive director of the Homeless and Housing Coalition of Kentucky. "Housing here is relatively inexpensive, but because the wages are so low, people can't afford housing."
...
In only four of the nation's 3,066 counties could a full-time worker making the federal minimum wage afford a typical one-bedroom apartment, the coalition said.
...
California topped all states in the hourly wage needed to afford a two-bedroom apartment, at $21.24, followed by Massachusetts, New Jersey, Maryland and New York.

Notice the sleight-of-hand (actually "bait-and-switch" might be a more appropriate term). First we're talking about the federal minimum wage, then about $14 per hour, then $10, then the minimum wage again. Which is it?

We're told that a minimum wage family cannot afford housing, then we're told that 25% of the population work below the median wage (not the minimum wage), therefore 25% of the population is paying too much for housing.

Three lies for the price of one.

Of course, the federal minimum wage grabs the most headlines, so no wonder it appears first in the report. Just one minor detail -- primary income earners (what were once called "breadwinners") rarely if ever make only the minimum wage.

Indeed, almost no one makes the minimum wage. Those who do fall into three main categories: teenagers, part-timers (e.g., working mothers, retirees), and newly-arrived unskilled immigrants -- none of whom tend to be solely responsible for their own housing costs. For details, see this piece that debunks the "minimum wage = poverty" myth.

Meanwhile, here are some real scandals regarding the poor and housing costs --

--Although poor workers generally pay little or no federal income tax (many actually receive money on balance, via the Earned Income Tax Credit), they do, however, pay Social Security tax (and Medicare tax). Yet "advocates" for the poor are typically the loudest opponents of privatized Social Security accounts. Go figure.

--Affordable housing tends to be the hardest to find where there is rent regulation (e.g., New York City, San Francisco), in a basic application of Economics 101 -- choke off supply with a price ceiling, and you get a shortage. Go figure.

--Similarly, housing tends to be expensive where -- surprise -- property taxes are high, along with local income taxes and other costs of living and doing business. Where are the calls from the "housing advocates" for reduced municipal spending and taxes? Go figure.

It is true that no one in America should have to be bankrupted by housing costs. But the best way to avoid it is by restoring sanity to housing markets, tax policy and municipal finance rather than by deceptively presenting misleading statistics in a call for an expansion of the redistributionist welfare state.

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New York State Shoots Itself in Foot Raises Minimum Wage