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Increasing the Minimum Wage Would Boost the Housing Market: A Firsthand Account

Increasing the Minimum Wage Would Boost the Housing Market: A Firsthand Account

This is a cross-post, by Doug Foote, from Working America's Main Street blog

This week, Minnesota State Rep. Jason Metsa (D) is taking the Working America Minimum Wage Challenge—living on the minimum wage of $7.25 an hour. He’ll report his experience back to the Minnesota legislature, where they are considering a bill to raise the minimum wage to $9.95.

On Wednesday, Metsa’s challenge was to find a place to live. Why a challenge? His budget that he set out on Monday allowed for only $359 a month for housing.

Metsa researched apartments both in the St. Paul/Minneapolis area (close to work) as well as up north in Virginia, Minn., (where he is from).

What he found was that it is very time consuming and almost impossible to find a place for that amount.

First off, there were not many listings available. Listings that did fall in Metsa’s budget didn’t have phone numbers available, so he had to inquire mostly through email. Many low-wage workers can’t afford an Internet connection at home or don’t own a personal computer. If Metsa was really living on minimum wage, he might have had to do this research at a local library, if he was in an area where there was one. And, of course, there’s the issue of time and transportation.

Metsa did find the option to be a roommate for $323 in a house in Minneapolis, one of the few metropolitan locations in his price range. When he looked in Virginia, Minn., his home town, he found an apartment listing for $100 a month. He called to follow-up, and learned that if he wasn’t on housing assistance the one-bedroom apartment was $585 a month with a $250 deposit for the utilities. Most of the utilities were included except electric, and the apartment was heated on electric heat. And if you’ve ever been to Virginia, Minn., you know that heating bills run high.

As a test, we recalculated Metsa’s housing budget if the legislature successfully passed the minimum wage increase to $9.95. The new housing budget was $490: this gave us a dozen more options with legitimate phone numbers to call, actual property managers to speak to, pictures of the apartments and better locations.

Metsa’s initial reaction was how time consuming this was. Because there were so few options, 45 minutes of research and following up could get him nowhere. At a public library, the limit at a computer is 30 minutes—sometimes up to an hour—which meant that a round trip to the library to find housing could all be for naught.

“If I was really on minimum wage, I’d have to rely mostly on friends and family on what house they knew about or even canvass the neighborhood looking for ‘For Rent’ signs and hope some of them were in your price range,” Metsa said. “It’s clear that you wouldn’t be able to find housing without assistance of some sort with $359 a month.”

“What I’m really learning from this challenge is that on minimum wage, it’s a constant juggle of what I don’t pay this month,” Metsa continued. This lines up with a lot of the comments we hear from Working America members who work low-wage jobs.

On Thursday, Metsa met with small business owners and low-wage workers to talk about their experiences. Follow along on Twitter by using the hashtag #Minn.wage.

See more photos on Facebook here.

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