(hint: a lot)
On July 1, the DC minimum wage increased to $9.50 an hour. This increase will help an estimated 40,000 DC workers who will now bring home more money each week. We wondered, with DC’s increased minimum wage, how close does that get workers to affording market rent in DC. So we reached out to the National Low Income Housing Coalition, who track the relationship between wages and housing costs in states across the country.
Here’s their updated analysis for DC’s new minimum wage:
In the District of Columbia, the Fair Market Rent (FMR) for a two-bedroom apartment is $1,469. In order to afford this level of rent and utilities – without paying more than 30% of income on housing – a household must earn $4,897 monthly or $58,760 annually. Assuming a 40-hour work week, 52 weeks per year, this level of income translates into a Housing Wage of: $28.25
In the District of Columbia, a minimum wage worker earns an hourly wage of $9.50. In order to afford the FMR for a two-bedroom apartment, a minimum wage earner must work 119 hours per week, 52 weeks per year. Or a household must include 3.0 minimum wage earners working 40 hours per week year-round in order to make the two-bedroom FMR affordable.
In the District of Columbia, the estimated mean (average) wage for a renter is $25.52. In order to afford the FMR for a two-bedroom apartment at this wage, a renter must work 44 hours per week, 52 weeks per year. Or, working 40 hours per week year-round, a household must include 1.1 workers earning the mean renter wage in order to make the two-bedroom FMR affordable.
Before the minimum wage increase, NLIHC calculated that a worker would need to work 137 hours per week to afford fair market rent. Increasing the minimum wage is going a long way to improve the lives of DC’s low wage workers and close the gap between wages and housing cost. This will continue to improve as the wage increases over the next two years, to $11.50 in 2016. However, even with these increases, the cost of housing in the open market will remain unaffordable for many minimum wage workers, even with multiple adults in the home, and working more than one job.