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Not Enough Wages
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Photo: Roy Mattappallil
Minimum wage does not pay the rent. This is true on a nation-wide average. The Federal Department of Housing and Urban Development (HUD) calculates the actual cost of “fair market rent” for each metropolitan area and state, based on the latest census adjusted by the CPI. You can see the specific data for your community below.

The cost of rent is considerably less in rural areas such as West Virginia, Arkansas, North Dakota, Alabama, and Mississippi than it is in major metropolitan areas such as San Francisco, New York City, and Boston. On the other hand, those rural areas have few jobs, so it is impossible for homeless families from the big cities to move to the rural areas and find affordable situations.

These economic realities obviously contribute to the significant increase in the number of homeless families among the working poor. Under Section 8 of the U.S.Housing Act of 1937, the American government provides rental subsidies to some low-income families, but the program has been reduced in size over the years while the need has increased. The Federal budget recently adopted by Congress increases the program from $20 billion a year to $30 billion a year, but that increase is all intended for families left homeless by Hurricane Katrina.

These facts raise significant ethical questions, too. Is it ethical to pay a person a wage that the employer knows cannot put a roof over their head? If you travel in India and Latin America, you will find that workmen on construction sites are allowed to camp on-site with their families because the developers know they cannot find housing they can afford. Should North American employers be held to a lesser standard?

What Can Be Done About It?

On a local level, churches and nonprofit organizations can sponsor the construction of affordable housing. When a nonprofit organization sets up a real estate partnership to build low-cost homes or apartments, there is a tax benefit that can be syndicated to for-profit partners in the venture. This effectively eliminates the profit motive, which keeps the rents down; but it also means that other motivations–those of a religious and charitable nature–must drive the enterprise.

Some communities have rent control laws to keep the cost of housing down. Over time, these prove difficult to enforce and are seen as unfair by landlords who know about the much higher rents being charged in neighboring areas. Such laws may even encourage “disinvestment” in which landlords quit putting money into the up-keep of their properties, going as far as allowing basic necessities such as plumbing and heating to go unrepaired.

Many churches have petitioned Congress to increase the funding for Section 8 rent subsidies, but other faith groups feel it is unjust for taxpayers to subsidize employers who pay artificially low minimum wages. The Bible says, “...the laborer is worthy of his wages" (Luke 10:5). Perhaps we should avoid establishments where the low prices are financed in part by paying the employees such a low wage that their families cannot afford a roof over their heads without help from the government or charity. If the minimum wage were raised to $15.78 an hour across the U.S. (perhaps with local variations), then the charitable and government programs would no longer be necessary and the Biblical principle would prevail.

Fair market rental calculations

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By Norma Sahlin. Copyright © 2014 by GraceNotes. All rights reserved. Use of this material is subject to usage guidelines. Scripture taken from the NEW KING JAMES VERSION © 1982.


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