Posted on: Wednesday, October 3, 2001

Gap widens for minimum wage, rent

Associated Press

WASHINGTON — The average Hawai'i worker must earn at least $16.65 an hour — more than three times the federal minimum wage — to pay rent on even a modest two-bedroom apartment, according to a private study released yesterday.

The annual report "Out of Reach" by the National Low Income Housing Coalition found, as in the past, that there is no place in the country where a worker at a full-time job at the $5.15-an-hour federal minimum wage can afford an apartment.

Hawai'i was among the top 10 locations with least affordable housing, the study found. At the top of the list was California, where the average worker needs to earn $18.33 an hour to afford a two-bedroom apartment. Nationwide, the average U.S. worker must earn at least $13.87 an hour.

This year's analysis concluded the gap between a minimum-wage salary and the cost of housing had grown faster than before and widened virtually everywhere. The Washington-based advocacy group favors increased federal spending on affordable housing, and raising the minimum wage.

Although some states, including Hawai'i, mandate higher minimum wages than the federal level ($5.25 here, set to increase to $5.75 next year), they still fall far short of covering an average rent, according to the report.

The study is based on the Department of Housing and Urban Development's determinations of fair market rent in 3,779 states, counties and metropolitan areas. Each jurisdiction's "housing wage" was established by calculating how much a person would need to earn to pay no more than 30 percent of gross income for rent, a level the HUD considers affordable.

The national housing wage, $13.87, is less than the $16.97 an hour the average U.S. worker earned in 2000, according to the Bureau of Labor Statistics. But it is far more than the federal minimum wage of $5.15 an hour, earned by 2.7 million people in 2000.