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Thursday September 21, 2000

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Study: minimum wage insufficient

By The Associated Press

WASHINGTON - Employees earning the federal minimum wage over a 40-hour week cannot afford what the federal government considers a "modest" two-bedroom apartment in any county, according to a study released yesterday.

Federal Housing Secretary Andrew Cuomo said the report by the National Low Income Housing Coalition, an advocacy group that favors raising the minimum wage, demonstrates the flip side of the booming economy.

"Rents continue to increase dramatically, while the minimum wage has not," he said.

The study used the Department of Housing and Urban Development's definition of "fair market rent" to determine the hourly wage needed to pay for an average apartment in each state, county and metropolitan area.

The federal minimum wage is $5.15 an hour.

HUD says people should not spend more than 30 percent of their gross income on housing. Using that standard, no minimum-wage earner on a 40-hour week can afford an average rent in any county, the coalition said.

Marin, San Francisco and San Mateo counties, all in California, tied for the least-affordable county, with a worker needing to earn $28.06 for an average apartment. Nantucket County, Mass., was next ($25.54), followed by Santa Clara County, Calif., ($25.15). Barbour County, Ala., was ranked most affordable ($6.73).

New Jersey was ranked the least-affordable state, with workers having to earn $16.88 per hour to pay for an average apartment, the study found. Washington, D.C., was next ($16.60), followed by Hawaii ($16.52), Massachusetts, ($16.43) and New York ($16.04).

Excluding the self-employed, the average U.S. worker earns $16.17 an hour, according to the Bureau of Labor Statistics.

Although some states, including California ($5.75) and Connecticut ($6.15), have higher state minimum wages, they still fall far short of covering an average rent, said the report, titled "Out of Reach."

House Speaker Dennis Hastert, R-Ill., said last month he supports boosting the minimum wage by $1 over two years. Clinton favors an increase in the minimum wage but is concerned about GOP attempts to tie it to tax cuts.

Cuomo and affordable housing advocates are using the report to push for an increase in the minimum wage and more funding for Section 8 rental assistance vouchers.

Earlier this month the Clinton administration announced it was providing $100 million a year to expand Section 8, which helps more than 1.4 million low-income households.

HUD also has increased fair market rents in certain high-income areas, in effect, increasing the value of the rental voucher.

Missouri Sen. Christopher Bond, who chairs the Senate Appropriations subcommittee on HUD, wants to increase the value of the vouchers beyond the level of HUD's new policy and provide the $1 billion grant to build new homes for low-income families. Bond says one in five vouchers currently go unused.

The wages needed to pay for housing increased in 98 percent of the 3,646 local jurisdictions studied from 1999 to 2000. The average increase was 3 percent.

The study examined every county in the U.S., except in New England states, where town-level data were combined to produce a county figure.

The report is being distributed to members of Congress and the presidential candidates.

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