Minimum Wage Employees Aren’t Working 20 Hours a Day to Afford Rent

You’ve probably seen this chart. Perhaps you shared it on Facebook.

Taken literally, the chart means that—in a state like New York—people who earn the minimum wage are working almost 20 hours a day, seven days a week, just to put a roof over their head. In the remaining four hours of each day, they eat, sleep, bathe, and commute to work.

If that sounds bogus, it’s because it is.

Here’s why:

  1. Very few people who earn the minimum wage are living on that wage alone; a majority are working part-time, and live with a working spouse or in a family with an income far above the poverty line.
  2. Those who do earn just the minimum have access to additional income via policies like the Earned Income Tax Credit. (That’s especially the case for a family that would need the two-bedroom apartment misleadingly used as a benchmark in the chart above).

Consider New York, where—according to government estimates—199,000 people earn at or below the minimum wage, and about 65,000 people are homeless.

Even if every homeless person in the state is in their predicament because of the minimum wage–an unlikely hypothetical, considering that a majority of people who live below the poverty line don’t work—we’d still be left with 134,000 minimum wage earners that are able to put a roof over their heads.

How can this be? Turns out, most people who earn the minimum wage aren’t living in poverty. In New York, for instance, the average family income of a person who would benefit from a hike in the state minimum wage is over $53,000 a year. Sixty percent are either living with family (e.g. a teen at home with their parents), or are second earners whose spouse also works.

By contrast, just over eight percent are single parents supporting children—families that qualify for up to about $7,500 in additional income from the tax credit mentioned above. They’re also eligible for a variety of other public programs.

Well-meaning attempts to help a small group of people by raising the minimum wage to $25 an hour (the amount needed to match the two-bedroom rental cost) would do nothing more than put a lot employers out of business—and put a lot of their employees out of a job.

Food for thought the next time you decide to share a slick-looking chart.