Quick Hit Ashlee Rezin Wednesday March 27th, 2013, 8:07pm

Minimum Wage Workers In Illinois Must Work More Than 80 Hours Per Week To Afford Rent

Minimum wage workers in Illinois must work 82 hours per week — more than double the hours of a standard work week — and 52 weeks a year, in order to afford to rent a safe, reasonable apartment unit, according to a recent report by the National Low Income Housing Coalition (NLIHC).

An Illinois renter must earn $17.02 per hour to afford the Fair Market Rent (FMR) price of $885 for a two-bedroom apartment, according to the report. That translates to $2,949 per month in income, or $35,392 annually, to ensure the renter spends less than 30 percent of their income on housing.

But the minimum wage in Illinois is $8.25. Meaning, minimum wage workers must work a staggering amount to avoid destitution.

“If you work you should be able to live a decent life and support your family — no working person should be forced to live in abject poverty,” said Elizabeth Parisian, policy director for Stand Up! Chicago, a coalition of community, faith-based and labor organizations.

FMR is a price annually estimated by the Department of Housing and Urban Development  (HUD) to determine the amount needed for rent, plus utilities, of a privately-owned, non-luxury, decent and safe rental housing unit. In Illinois' case, a two-bedroom apartment is priced at $885 per month.

“Finding a decent, affordable apartment is a challenge for all renters, but the poorest households are the most likely to be locked out of the market entirely,” the report, titled “Out Of Reach 2013” reads. “Large numbers of low-income renters cannot afford the cost of living in the cities and towns where they work."

According to a December report by Stand Up! Chicago, about 57 percent of all households in the Windy City depend solely on minimum wage jobs.

At $8.25 per hour, Illinois has the fifth-highest minimum wage in the nation. But in his February State of the State address, Gov. Pat Quinn called for an increase to $10 per hour over the next four years. But no legislation has been filed to do so as of yet.

“Nobody in Illinois should work 40 hours a week and live in poverty,” said Quinn during the address.

According to Stand Up! Chicago, raising the minimum wage to $15 an hour, for which the group is advocating, would spur approximately $2.5 billion in extra economic activity in Illinois and bring 1.1 million families out of poverty.

“If you raise wages, folks have more money to spend,” she said, noting that raising the minimum wage serves as a boon to the economy because employers would be paying their workers enough to buy their products.

“We really need to ask ourselves, is this the kind of country where, if you work, should you be living a life of poverty,” she asked. “It starts with raising wages, increasing the availability of affordable housing, and just providing more support for working families.”

Parisian said Illinois may have reached this point — where minimum wage workers have to work more than double the hours in a standard work week to afford rent — because minimum wage is not linked to inflation.

Inflation has hit the rental market hard, according to the Joint Center for Housing Studies of Harvard University.

In the 2000s, the number of renters surged by 5.1 million.

“Rapidly rising demand has pushed rental vacancy rates down across the country, sparking widespread rent increases,” the report, “The State of the Nation’s Housing 2012” reads.

In 2011, 35 percent of all households in the nation were renters, according to the NLIHC. With 40.7 million renters and an increasing demand for units, the national rental vacancy rate fell from 8 percent in 2011 to 4.5 percent by the end of 2012.

Yet as demand increases, so do prices. The average price of rental households increased 3.8 percent between 2011 and 2012.

The average renter in Illinois makes $14.08 per hour. Working 40 hours per week, a household must include 1.2 workers earning that wage in order to afford the $885 two-bedroom FMR unit.

Elina Bravve, research analyst for the National Low Income Housing Coalition, and lead author of the report, said increased competition for affordable housing units is “squeezing out” people at the very low end of the income spectrum.

“When developers build housing, they just don’t build housing to serve that market,” she said. “Profit-driven developers generally want to rent to folks on the upper end of the spectrum because they could potentially make more money.”

The NLIHC supports modifications to the mortgage interest deduction to provide funding for the National Housing Trust Fund as a method of increasing affordable housing for low-income renters.

Created by Congress as a provision of the Housing and Economic Recovery Act of 2008, but never funded as a result of the recession, the National Housing Trust Fund would provide subsidies and incentives to preserve, rehabilitate and build housing for extremely low-income renters.

“Folks who are severely cost burdened by rent often have a very difficult time leaving funds for emergencies and health care,” said Bravve. “They are essentially one car breakdown away from missing a rent payment. It’s very, very difficult for those people to get by.”


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