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Minimum Wage and the Universal Living Wage

Black square sunFull Disclosure: Richard R. Troxell is President of House the Homeless, in whose online presence you are at this very moment. Richard is the guy in the picture, holding up Homey Too, the official thermal underwear model of the Thermal Underwear Drive in Austin, Texas, which is in progress even as we speak. In my capacity as newsblogger, I feel moved to read with interest, then capsulize and remark upon, his essay, “Reasons for raising the minimum wage,” the same as any other piece of journalism. So here goes.

The Universal Living Wage idea has three basic tenets. One of them is,

Spend no more than 30% of one’s income on housing.

See? I knew this would be interesting, and I’ll tell you why in a minute. Troxell explains that the 30% figure was established by the banks, as the cutoff beyond which a person presumably could not afford to make mortgage payments. The assumption is, a person needs 70% of his or her income for other things, such as food, transportation, medicine, etc. And if the mortgage bill is more than 30%, this person will continue to spend the 70% on those other things anyway, and the bank will get the short end of the stick.

Also, 30% is the standard guideline used by the Department of Housing and Urban Development, aka HUD. If a family is paying more than 30% of its income for housing, it needs help. So, the business community and the government agree that, theoretically, shelter should not eat up more than 30%, or approximately one-third of what a person or family has coming in.

This is the part that blows me away. When I was growing up and taking classes like Home Economics in school, we learned that the magic number was 25%. The received wisdom was that a person or family oughtn’t pay more than one-fourth of its income for housing. See, someone has sneakily raised the bar. In the old days, it was, “If you pay more than one dollar out of four, you are a bad household manager and a fiscal profligate.” Then, somehow, our expectations were re-engineered. Now, it’s, “If you pay more than one dollar out of three, you are a careless and irresponsible.”

We were once taught that one-fourth of what we had was the reasonable amount to spend for housing. We’ve been re-programmed to accept the idea that instead, now a larger proportion, one-third of what we have, is the reasonable amount to spend for housing.

And, of course, the whole thing is a crazy dream anyway. People are willing to pay half of their income just to get under a roof and avoid being homeless. They are willing to scrimp and do without other things to make their budget viable. But even if tenants are willing to get along without much else in order to be housed, landlords have their rules, too. They go by the same standards that the banks do. When you fill out a rental application, those numbers had better look good to them.

Another of the Universal Living Wage’s three prongs is the proposition that the minimum wage would vary by region, being indexed to the cost of housing locally. This would mean changing the way the federal government determines poverty guidelines. Rather than being based on food costs, it would be based on the cost of housing, which is less volatile. Troxell explains how the HUD voucher rental program currently works and how it determines Fair Market Rent.

The formula that would be used to determine the ULW is explained in great detail on the Universal Living Wage website. (Choose “ULW formula” from the menu on the left.) Also available there is the opportunity to endorse the ULW:

In just the first three years of our five year campaign, we have the following international, national, business, celebrity, enlightened markets, regional, religious and union endorsements for the Universal Living Wage Campaign. Would your group like to stand up and be counted on the subject of a Universal Living Wage? Sign our Resolution and send it to us! We’ll add you to our roster.

We also recommend the “Facts and Myths” section of the site, which contains an exhaustive list of facts and information about why the myths are wrong. The ULW idea is based on the assumption that a person is putting in a 40-hour workweek, either at one job or perhaps a combination of two part-time jobs. The idea is simple: Anybody who works a 40-hour week ought to be able to afford basic rental housing. And if they can’t, something is wrong with the system.

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Source: “Reasons for raising the minimum wage,” Helium.com
Source: “Endorsements,” UniversalLivingWage.org
Image by quapan, used under its Creative Commons license.