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Can You Dig It

The divergence of rising rents and the minimum wage

$18.69 per hour.

That's the minimum amount of what a worker would have to be paid in order to rent a two-bedroom apartment in Lehigh and Northampton counties at fair-market rent.

That’s according to a study by the Pew Research Center, which shows an inequality between rising rental costs and the minimum wage.

In Pennsylvania, the minimum wage is $7.25 per hour (the federal standard) but Gov. Tom Wolf is looking to boost that to $10.15, a figure adjusted for inflation. You can read about it in the next print edition of Lehigh Valley Business on March 21.

An interesting article from CityLab notes how much income an American worker needs to rent a two-bedroom apartment in every state. It found that in no state can a person earning minimum wage afford such an apartment at market rent. You can read it HERE

According to the Pew Research Center, 30 percent of America’s workforce earns a near-minimum-wage salary — nearly 21 million people. And this is happening as rents across the country keep rising.

A report by the National Low Income Housing Coalition examines how these opposite trends play out regionally.

In Bucks and Montgomery counties, a worker would have to earn $22.23 per hour to afford a two-bedroom apartment. Meanwhile, in Berks County, that figure is $16.69, while in Monroe, it’s $18.31.

With a $7.25 minimum wage, a person would have to work 78 hours each week to afford a modest one-bedroom apartment at fair-market rent, according to the report.

While lawmakers have yet to act on a bill that’s still pending action at the state level, this study shows the interesting phenomena fueling construction of rental units throughout the Valley, of which are mostly luxury units.

It’s a trend that’s increased the past several years. Whether it’s City Center in Allentown, the suburbs of Palmer Township or downtown Easton or Bethlehem, rents for new apartments are starting at $1,000 per month (sometimes for a studio) and going up.

It’s a trend that continues with each new proposed apartment project, but is it sustainable?

Aside from potentially raising the minimum wage, we should be expanding the nation’s affordable housing stock and increasing the options for people who cannot afford to buy a home, let alone rent.

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