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In the News

In the News

How much do you need to work to afford an apartment in Maine?


An analysis by BDN writer Seth Koenig

 

Bangor Daily News

By Seth Koenig

May 31, 2015

 

CityLab, an online research and analysis offshoot of the wide-ranging news magazine The Atlantic, posted data this week showing disparities between wages people make across America and the amounts needed to afford apartments.

The analysis is based on a report released by the National Low Income Housing Coalition, and comes at a time when several Maine municipalities are eyeing local minimum wage increases — and lawmakers on both sides of the aisle are seeking to intervene in one way or another in Augusta.

The statewide minimum wage is $7.50, higher than the federal minimum wage of $7.25.

In the city of Portland, where Mayor Michael Brennan made the establishment of a higher citywide minimum wage a top priority, an ordinance proposal is perhaps closest to fruition. After more than a year’s worth of task force and committee work, a proposal to establish an $8.75 per hour minimum wage in Portland is ready for City Council review and should be up for a vote within the next few months.

The version of the minimum wage ordinance calls for a lower wage than Brennan hoped for — the mayor had proposed $9.50 per hour by July 1, with increases up to $10.68 by 2017 — and way lower than the city’s Green Independent Committee would like to see. The Greens have launched a campaign to place a $15-per-hour minimum wage on the citywide ballot.

Bangor City Councilor Joe Baldacci has championed a new, higher minimum wage in the Queen City, but said this week he won’t press for a council workshop to discuss his proposal until after the panel finishes its work on the 2016 budget, likely delaying meaningful wage talks until July or later.

The South Portland City Council also began workshop-level talks about establishing a locally higher minimum wage this month.

Nationally, political groups have begun ambitious campaigns for minimum wage increases up to anything from $10.10 per hour to $15.

Opponents of the wage increases at all levels, including small business and fast food franchise owners, have argued that driving up their payroll costs could gobble up their slim profit margins and force them to close.

An off-cited study by the nonpartisan Congressional Budget Office found that raising the federal minimum wage to $10.10 per hour — a number promoted by President Barack Obama — would lift 900,000 workers out of poverty, but would crowd another 500,000 people out of jobs.

Supporters of higher minimum wages have countered that there’s been little track record of mass business closures during previous minimum wage increases, and point to the growing disparity between income levels and costs of living as a sign the system needs to be fixed.

The data released this week by CityLab and the National Low Income Housing Coalition bolsters the latter argument.

According to CityLab, in order to afford a two-bedroom apartment in Maine, a worker needs to earn $16.71 per hour over a normal work week — and that’s by far the lowest figure northeast of West Virginia. The wage necessary to afford a two-bedroom apartment in even nearby New Hampshire and Vermont is higher than $20 per hour.

Unfortunately, in Maine, the average renter only actually makes $10.39 per hour, according to the coalition report — creating the ninth highest disparity between wages and apartment costs of any state in the nation.

Recent data from the U.S. Bureau of Labor Statistics shows that about 31,000 people in the Greater Portland area work in food service, food preparation and retail occupations, which make, on average, between $8.39 per hour and $13.33 per hour locally.

It’s worth noting that the Department of Labor says a single adult with no children needs to make $12.53 per hour to live in Portland.

The above $16.71 figure assumes an apartment with a second bedroom, and likely by extension children or, even better, a roommate to share expenses with. That number is also a statewide average, and it’s safe to assume the two-bedroom apartments in Portland are more expensive than those in, say, Millinocket.

In perhaps a more apples-to-apples comparison, CityLab also mapped out how many hours a minimum wage employee would have to work in each state to be able to afford a one-bedroom apartment.

In Maine, a minimum wage worker would need to log, on average, 71 hours at work each week to afford a one-bedroom apartment. In six states, minimum wage workers need to clock in for more than 90 hours per week to be able to afford one-bedroom apartments, and in four of them, more than 100 hours.

According to the CityLab and coalition analysis, fewer and fewer Americans can afford to buy homes in the current economy, driving up demand on the rental market and, in a cruel twist, pushing even apartment rentals out of many people’s price ranges.

For every 100 extremely low income households, there are 31 affordable and available housing units on the market, the coalition found.

And Mainers can’t just attribute that gap to skewed out-of-state data.

In April, the Portland-based nonprofit Avesta Housing reported that it was able to provide homes for just 24 of the 302 households approaching the agency in search of affordable housing (more on that in the graphic below) — the rest presumably found their way onto Avesta’s nearly 2,500-household waiting list.

These data points are also behind what Maine shelter providers say is a growing population of “working homeless,” people who have jobs, but still end up on the streets.

Behind the Scenes

Check out Avesta's blog, The Porch Light, for more news, updates and stories.