Isn't It Weird That

Isn't It Weird That ... Minimum Wage v. Living Wage

Some weird things we noticed about the minimum wage debate vs. the "living wage" debate.

By Erica C. Barnett March 27, 2014

Isn't it Weird That

And speaking of housing in cities: Isn't It Weird That ... 

While the city is hotly debating whether $15 an hour is too high of a minimum-wage floor for businesses to bear (a little over $31,000 a year, compared to the current minimum income of a little more than $19,000 a year), even that minimal income might not be enough to afford a small apartment in Seattle?

new report from the Washington Low-Income Housing Alliance shows that a worker earning the current minimum wage of $9.32 an hour—which, as opponents of the $15 minimum like to point out, is the highest in the nation—would have to work 75 hours a week to afford $913 a month for a one-bedroom apartment and utilities. (That's using the HUD standard, which stipulates that a person should spend no more than 30 percent of his or her income on rent plus utilities).

That $913 figure, by the way, has nothing to do with what you can actually find on the rental market Seattle, where a one-bedroom now averages well over $1,400 (not counting utilities), according to apartment-market analysts Dupre+Scott. Instead, it's based on the federal HUD "fair market rent" for the entire Seattle-Tacoma-Bremerton region, which includes many less expensive areas than Seattle. Even a theoretical $771 studio apartment would require a worker to spend 64 hours a week on the job(s). 

Raising the minimum wage to $15 an hour would make that studio affordable to a minimum-wage worker, WLIHA reports, although the one-bedroom would still require that worker to spend 47 hours a week on the job. 

Meanwhile, a separate report from the Alliance for a Just Society concludes that a worker in King County, living alone, needs to earn $17.55 an hour—about $36,000 a year—to afford a $923-a-month apartment (a figure that, again, includes utility costs). 

The city's income inequality symposium is underway right now; according to Mayor Ed Murray, one point of contention so far was the fact that multimillionaire investor Nick Hanauer, a proponent of the $15 minimum who has been lauded by supporters for his position, said this morning that he actually supports the idea of counting "total compensation"—that is, actual pay plus things like health care, contributions to retirement, and bonuses—when calculating whether someone makes $15 an hour. 

Murray said earlier this week that he does not support a "tip credit," in which servers and other bar and restaurant workers' tips would count as part of their wages, but is open to discussing whether total compensation should be counted toward worker wages.


Show Comments