Businesses are required by law to pay at least the minimum wage to their employees. Many people believe the minimum wage should be high enough to cover basic needs like food, clothing, and a roof over one’s head. As a rule, you should devote 30 percent of your salary to housing costs. How much rent can you pay if your income is at or below the federal poverty line? Where you call home determines the response.
The federal minimum wage in the United States is $7.25 as of 2022.1938. Congress passed a minimum wage law to protect workers from being underpaid.2 According to the BLS, in 2020, 1.1 million workers earned less than the federal minimum wage. They tended to be young women working in the service sector part-time.
If the minimum wage had been adjusted to the CPI from 1968 to 2018, it would be $10.15 per hour 2018. If it had increased at the same rate as executive salaries, it would now be $23 per hour.
Housing and Minimum Wage
Fifteen states will have adopted the federal minimum wage by 2022.
• Georgia
• Idaho
• Indiana
• Iowa
• Kansas
• Kentucky
For the Granite State, See: • New Hampshire
North Carolina
It’s the state of North Dakota.
• Oklahoma
• Pennsylvania
• Texas
• Utah
• Wisconsin
• Wyoming
Also, the minimum wage needs to be set at the state level in Alabama, Louisiana, Mississippi, South Carolina, or Tennessee. When in doubt, they pay the bare minimum required by law.
If you lived in one of these 20 states and worked a standard 40-hour week for 52 weeks out of the year, earning $7.25 per hour would get you around $15,080. That’s over the poverty threshold for a single person in the United States. Thus, they wouldn’t qualify for aid.
Rent at 30% of your income is $4,524 (out of a total of $15,080), which is more than you can afford. If you split that by 12 months, your monthly housing budget will be just $377.
Where in the United States Could You Reside on the Minimum Wage?
Studio apartments in the $377 per month range are more likely to be available in states with a cheap cost of living, college towns, and rural parts of larger cities.
Some cities’ historic districts still provide reasonably priced lodging. Some of these may be in less affluent regions.
Student accommodation is frequently more reasonably priced in smaller cities, home to colleges. You’ll rent a single room in a larger apartment with three or four other students, much like a hostel.
Arkansas, Mississippi, Kentucky, and West Virginia are places where you can find an affordable flat.6 While some of these states have some of the lowest median household incomes in the country, the typical cost of a studio flat in such a location is still likely to exceed 30 percent of take-home pay.
States like California and Virginia, where living costs are high, are unlikely to offer such alternatives. In specific neighborhoods, you’ll likely need to find a sublet. Even if you did discover such a deal, it’s unlikely that you’d be located near a large city in Virginia or California.
Higher Minimum Wage States
As of 2022, the minimum wage in thirty states and Districts of Columbia is higher than the federal standard.5 The cost of living is higher, yet you could afford a higher rent if you wanted to. Even a cheap studio flat might be out of your price range.
To calculate 30% of each state’s minimum wage, multiply its value by 40 hours per week, 52 weeks per year, and 12 months.
This map shows the locations of the states where affordable housing options are within a third of the federal poverty line.
The National Low Income Coalition has calculated average studio (zero bedroom) rent prices for 2021.
Some workers in the highlighted states can make even less than the minimum wage, while the minimum wage in other states is set to rise in 2022.
• Only California companies with 25 or fewer employees must pay the state’s $14 minimum wage. Those with more workers must pay $15 per employee. By 2023, all businesses must pay at least $15 per hour.
The state of New York mandated a $15 minimum wage for workers in Nassau County, Suffolk County, Westchester County, and the City of New York.
The minimum wage in Connecticut will increase to $14 on July 1, 2022, and $15 in 2023.
Seasonal workers, farm workers, and employees of businesses with six or fewer workers in New Jersey earn the lowest average wages, at $11.90 per hour.
• As of July 1, 2022, the minimum wage for workers in the Metro Portland area of Oregon will be $14.75, up from the current $14. On July 1, 2022, the price for everyone else will go up from $12.75 to $13.50. Rural areas currently pay a lower cost of $12, which will rise to $12.50 as of July 1, 2022.
• The minimum wage for Minnesota’s small enterprises is only $8.42 per hour.
• Only workers who do not receive health insurance are eligible for Nevada’s lower minimum wage of $9.75 per hour. Those who qualify pay only $8.75. These prices are set to rise to $9.50 and $10.50 on July 1, 2022.
The minimum wage in Florida will rise to $11.00 on September 30, 2022.
