Minimum Wage vs. Cost of Living: A Persistent Disconnect

Image Credit: @seemenomore/Twenty20

Minimum wage is supposed to give workers enough income to create stable lives for themselves. That was the original purpose, at least. However, cost of living far outpaces the federal wage floor. For yet another year in a row, no state can provide a minimum wage that allows a worker to rent a two-bedroom apartment.

On Wednesday, the National Low Income Housing Coalition released its annual report saying as much. Even the movement for a federal minimum wage of $15 wouldn't improve earnings enough to support most workers, especially in places like the Bay Area. In Hawaii, minimum workers earn about one-third of what's needed to rent a one-bedroom apartment.

Image Credit: National Low Income Housing Coalition

Nationally, the minimum wage is still $7.25, although many states have been raising their requirements, including 18 that enacted higher minimum wages at the start of this year. It's one more sign that whatever economic recovery is officially on the books, you shouldn't feel like it's your fault if that doesn't include you. In Arkansas, where housing is cheapest in the continental United States, the minimum wage ($8.50) still only gets you about 61 percent of the way to affording a two-bedroom apartment.

Even if you're not a minimum-wage or low-income worker, the minimum wage affects the entire economic ecosystem around you. There are loads of arguments for and against raising the minimum wage; if you feel strongly about it either way, it's worth telling your elected representatives why you think so.