Odd, I checked and I'm not homeless

For years I've seen left-wing advocates share maps claiming that there are no places in America where someone can afford to live in an apartment on minimum wage. Well, it turns out their logic is grossly misleading.

Click on the blue map above and to the left for the actual numbers of the claim.

I always mistakenly rejected this on the assumption that they simply mean that's what is costs for a person living without roommates must earn. As Bryan Caplan wrote on the social safety net and roommates:

To put it more concretely: Before anyone starts collecting welfare, it is more than fair to ask them - for starters - to try to solve their own problem by taking on some roommates. Is it beneath their dignity to live like college students? I think not.

That always seemed to satisfy me, and refute a lot of the Nickel and Dimed crowd bellyaching about it being impossible to live on minimum wage. These were people who weren't willing to make lifestyle sacrifices and wanted the government to subsidize their Starbucks and beer.

Well, it turns out I was giving the activists too much credit. A piece I stumbled across this week showed the numbers being used are dishonestly mislabeled:

It’s conventional wisdom in personal finance that housing costs shouldn’t exceed 30% of your income. What this chart is actually measuring isn’t how many hours you would have to work at minimum wage to afford a two bedroom apartment, it’s measuring how many hours an individual would have to work for an apartment meant to house two people – and have it only consume 30% of their income. 

The chart thus doesn’t measure how many hours of work it takes to pay for rent, it measures the amount of hours it takes to earn rent – times three!

Hmm, sometimes figures are presented misleadingly and we gloss over the fine points when we read a chart or graph. However, in this case the chart merely states "Hours needed to afford apartment" and later on says this is in a week, not a month. That's a completely dishonest way to say one needs to keep the rent in the 30 percent bracket.

Notice another detail that was left out - this is for a two-bedroom apartment, not a single apartment. That's an easy way to inflate figures, but not relevant when most minimum wage workers aren't the sole earner in a household.

But wait, there's more.

Politifact didn't respond to this map, but last month it did respond to a related viral image that claims "There is no state in the U.S. where a 40-hour minimum wage work week is enough to afford a two-bedroom apartment," While it rated this "mostly true," it went into the 30 percent detail that was glossed over and exposed another crucial detail: This is the average Fair Market Rent, not the average rent people pay.

The group left out a key distinction from the study they cite: Minimum wage workers can’t afford a two-bedroom apartment at Fair Market Rent, a number determined by the federal government for each region set at the 40th percentile of all rents in that area. 

That means that in some areas, minimum wage earners would be able to find and afford housing that is cheaper than the Fair Market Rent. Though, in states where rent is more expensive, minimum wage earners would not be able to afford apartments even well below the Fair Market Rent.

I'm a little confused why they generously rated this as "mostly true" when Megan Bolton of the National Low Income Housing Coalition, a spokesperson for the activist group that crunched the numbers for this claim, admitted that someone can live alone for minium wage. Using their 30 percent figure, that gives a full-time minimum wage worker $377 to spend on rent in a month.

"Absolutely, certainly there are places with rents at $377, especially if you’re in smaller areas, and they may be of okay quality," Bolton said. "If a minimum wage earner can get an apartment at that price, it would be affordable for them."

So there are indeed places where in American where someone can afford an apartment on minimum wage. Sounds like "mostly false" to me.

The above chart being passed around represents 2012 numbers. Click here for the 2014 numbers from the National Low Income Housing Coalition. Notice that the chart starts by saying, "In no state can a minimum wage worker afford a two-bedroom rental unit at Fair Market Rent, working a standard 40-hour work week, without paying more than 30% of their income." That lakes the bite of the popular claim that no one can afford to live in an apartment on minimum wage, but at least they are being upfront about what the numbers represent.

However, I'm still not convinced it's accurate. Matt, Palumbo, showed that the numbers don't make sense in New Jersey where he lives. Looking at their related chart of what a full-time worker needs to make to pay rent, I can see that in my apartment in Massachusetts I must make $24.08 to be able to pay my rent.

When I first moved here in 2011, I was making $13.50 an hour, hardly minimum wage but still below what they say is needed to live. I was also living in a one-bedroom apartment. With what I'm making now, this chart says I'm still only making five-eighths, or about 62.5 percent, of what it would cost to have a second bedroom, despite the difference in rents between single-and-double apartments being rather small.

So how come I'm not homeless? I'll admit, I'm still on my parents cell phone plan, but I'm not getting any government assistance or regular outside source of income. Perhaps these numbers are horribly skewed by the high rents in Boston. Either way, I've been living below what they say is possible for a long time.