Is Minimum Wage Enough?
Using data analysis to dig in the issue of homelessness
Four days ago, The New York Time posted an article Job Growth Underscores Economy’s Vigor; Unemployment at Half-Century Low mentioned that “The unemployment rate sank to 3.6 percent.” Despite the unemployment rate at record lows, homelessness is still on the rise. We want to believe that jobs can help homelessness and poverty. Actually, they are not enough. There is an article called I’ve been homeless 3 times. The problem isn’t drugs or mental illness — it’s poverty on vox.com. The article talked about a person’s story of being homeless.
I attended college pay-as-you-go for a couple years while working, then left because I couldn’t afford to continue and knew better than to take on student debt. My moderate savings was destroyed in my 30s by health care costs that insurance wouldn’t cover.
Poverty is the main reason that leads to homelessness. People live in poverty find it hard to afford college tuition. It may increase the difficulty for people with lower educational attainment to find a well-paid job. However, having a higher education doesn’t mean there is no possibility of living in poverty. According to the data collected in 2016 and 2017 from U.S. Census Bureau, the total number of people lived in poverty with a bachelor’s degree or higher was the highest among the four different educational attainments. It is also possible that the population having a bachelor’s degree or higher is relatively large.
Although people with higher education level have a larger group of people lived in poverty, there are more people with lower education level lived under the poverty line. For people with no high school diploma, they have the highest percentage of people living under the poverty line.
Federal minimum wage is on the rise from 1938 to 2019. Especially, the Fair Minimum Wage Act of 2007 was signed into law on May 25, 2007. The act finally raises the federal minimum wage to $7.25 per hour.
However, this amount of minimum wage is still not enough as the housing rate is on the rise. Due to the lack of affordable housing, people who work full time(40 hours) at minimum wage can not afford one bedroom rate in any of the states in the US. Given an example of a housing wage of four different bedroom size in Colorado, people who work full time at minimum wage, which is $10.20 per hour in 2018, in Colorado cannot afford any of the MSA rent in Colorado.
People who work at minimum wage need to work more than 40 hours a week to afford just a 0 bedroom place in Colorado.
For someone working at mean renter wage in the local area, if they live in Boulder, Fort Collins, and Teller County, they may find it hard to afford housing rent.
Thus, the minimum wage is way not enough for supporting people live in any of the states in the US. Although people with higher education are not without the possibility of living in poverty, they are still less likely to live under the poverty line which decreases the possibility to be homeless. Also, people with less education and those without insurance are most likely to have financial problems due to medical expenses. High out-of-pocket costs are a growing problem. The inability to pay the out-of-pocket portion leads to “medical debt,” as well as anxiety about a family’s financial situation.
Keeping unemployment rate low is not enough. Unless the government increases the supply of affordable housing units such as indemnificatory housing and section 8 communities housing, increases the minimum wage, gives financial support for education tuition, offers job skills program and training service, homelessness will be still on the rise.
