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The new 2 bedroom poverty indicator

June 13, 2018

Pop quiz. 

 

Think back to your younger, poorer days. Could you have afforded a two-bedroom apartment when you were working for the minimum wage?

 

In my dreams!

 

Meet the new and improved poverty indicator, the two-bedroom wage test. So long living wage. I barely knew ya. 

 

It was a long time ago, and much of the period is a blur, but I do remember my first downtown Ottawa apartment. It was 1990 and I was a wide-eyed frosh attending university. It was a top floor unit on Metcalfe St. (pictured above) featuring two bedrooms. I lived there with three other people. Four students, all sharing a two-bedroom apartment.  

 

The monthly rent was $1400. My share was $300, because my bedroom was actually the dining room. I shared it another student. The two others paid $400 each for the luxury of having their own rooms.

 

Oh! How I envied them.

 

We all worked (part time). But we were not the working poor. And not a single one of us could have afforded that apartment on the minimum wage, then hovering at around $5.40/hr. Nor could we afford a two-bedroom apartment in that Centretown neighborhood today, even with the Ontario minimum wage of $14/hr. These same sort of three-storey walk-up units are now fetching north of $2,000 a month. 

 

It seems not much has changed in the last 28 years, other than the metrics used to measure poverty. 

 

The National Low Income Housing Coalition, a Washington D.C. based affordable housing advocacy group, released a report this week called Out of Reach: The High Cost of Housing. The Washington Post has a fine account here

 

The conclusion is designed to shock. The economy’s booming. Some states have raised minimum wages. But even with recent wage growth for the lowest-paid workers, there is still nowhere in the country where someone working a full-time minimum wage job could afford to rent a modest two-bedroom apartment.

 

 

 

According to the report "the 2018 two-bedroom fair market rent" is averaging $1149 a month across America. "A full-time worker must earn at least $22.10 an hour to afford a modest, two-bedroom apartment without spending more than 30% of income on rent."  

 

This new measure, "the housing wage", varies widely across that country. It would need to be $32.68 in California, $30.03 in New York, $23.93 in Colorado, but just $13.84 in Arkansas. The NLIHC says the maximum affordable rent at an extremely low income ($15,080) is $660 a month. 

 

Social justice language is constantly evolving. The poverty rate gave way to the low income cut off. While the living wage ($15 and fairness!) is so 2017. Now make way for the two-bedroom income test, "the national housing wage". 

 

While this news story has made headlines across the United States, I'm not sure what's so new. I would imagine two-bedroom apartments have always been out of reach for the lowest income workers, most of whom are teenagers (living at home) and college students (with roomies), or seniors supplementing retirement income (home owners).

 

As a poverty measure it is flawed. 

 

In the fast moving vocabulary of social justice, I anticipate the next report: Out of Reach: The High Cost of Mercedes Benz.

 

 

 

 

       

 

 

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