What are the minimum hourly wages required to cover rent expenses in 15 major U.S. cities?

Across the country, the minimum wage is not sufficient to cover the cost of average rent in major cities.

While it's advised to spend no more than 30% of your income on housing, the increasing housing costs make it challenging for many Americans to adhere to this budget.

For the past 15 years, the federal minimum wage has remained at $7.25 an hour, while tipped workers receive only $2.13 an hour. Although 34 states have increased their state minimum wage, others have kept it at $7.25 or below, as stated by the National Conference of State Legislatures.

Despite the higher minimum wage in certain areas, it is still not enough to cover the cost of a one-bedroom apartment at the fair market rental price, according to a report from Clever Real Estate.

To rent a one-bedroom apartment in New York for $2,330 a month without exceeding 30% of your income on housing, you must earn approximately $45 per hour, as determined by Clever's research.

The fair market rent standard established by the U.S. Department of Housing and Urban Development serves as the basis for determining fair market rent. According to this model, approximately 40% of comparable units in the area rent for less than the listed fair market rental price, while 60% rent for more.

According to Clever Real Estate's data, the minimum wage in 15 large U.S. cities is compared to the hourly wage needed to comfortably afford a one-bedroom dwelling at fair market price.

1. New York

• Fair market rent: $2,330
• Hourly minimum wage: $16
• Necessary hourly minimum wage: $44.81

2. Los Angeles

• Fair market rent: $2,081
• Hourly minimum wage: $17.27
• Necessary hourly minimum wage: $40.02

3. Chicago

• Fair market rent: $1,560
• Hourly minimum wage: $14
• Necessary hourly minimum wage: $30

4. Houston

• Fair market rent: $1,279
• Hourly minimum wage: $7.25
• Necessary hourly minimum wage: $24.60

5. Phoenix

• Fair market rent: $1,679
• Hourly minimum wage: $14.35
• Necessary hourly minimum wage: $32.29

6. Philadelphia

• Fair market rent: $1,512
• Hourly minimum wage: $7.25
• Necessary hourly minimum wage: $29.08

7. San Antonio

• Fair market rent: $1,231
• Hourly minimum wage: $7.25
• Necessary hourly minimum wage: $23.67

8. San Diego

• Fair market rent: $2,328
• Hourly minimum wage: $16.85
• Necessary hourly minimum wage: $44.77

9. Dallas

• Fair market rent: $1,606
• Hourly minimum wage: $7.25
• Necessary hourly minimum wage: $30.88

10. Jacksonville, Florida

• Fair market rent: $1,454
• Hourly minimum wage: $12
• Necessary hourly minimum wage: $27.96

11. Austin, Texas

• Fair market rent: $1,650
• Hourly minimum wage: $7.25
• Necessary hourly minimum wage: $31.73

12. San Jose, California

• Fair market rent: $2,975
• Hourly minimum wage: $17.55
• Necessary hourly minimum wage: $57.21

13. Columbus, Ohio

• Fair market rent: $1,194
• Hourly minimum wage: $10.45
• Necessary hourly minimum wage: $22.96

14. Charlotte, North Carolina

• Fair market rent: $1,647
• Hourly minimum wage: $7.25
• Necessary hourly minimum wage: $31.67

15. Seattle

• Fair market rent: $2,293
• Hourly minimum wage: $19.97
• Necessary hourly minimum wage: $44.10

The future of the federal minimum wage in America is complicated

A full-time worker earning the federal minimum wage of $7.25 an hour would earn only $15,080 annually, which is just above the federal poverty threshold, according to the Department of Health and Human Services' 2024 guidelines.

Despite the federal minimum wage remaining stagnant for almost twenty years, legislators have made attempts to increase it.

In July 2023, Senator Bernie Sanders, I-Vt., presented the Raise the Wage Act bill, which aimed to gradually increase the federal minimum wage to $17 per hour over five years. Despite this, no further action has been taken by Congress on the bill.

The Congressional Budget Office's analysis of the Raise the Wage Act of 2023 shows that raising the federal minimum wage could have both positive and negative effects. While it could lift many workers out of poverty, employers may choose to hire fewer workers due to the higher minimum wage they'd need to pay, per the CBO's study.

"According to the CBO's study, increasing the federal minimum wage would increase the earnings and family income of most low-wage workers, lifting some families out of poverty. However, it would also cause other low-wage workers to become jobless, resulting in a decrease in their family income."

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