House The Homeless, Inc.
P.O. Box 2312
Austin, Texas
78768-2312
(512) 796-4366
info@housethehomeless.org
SERIES TWO
A UNIVERSAL LIVING WAGE Formula
NOVEMBER 2000
We believe that except for the disabled and those in emergency situations, that food stamps and general public assistance can be abolished. This can be done if all minimum wage employers would stop hiding behind the Federal Minimum Wage of $5.15 per hour and simply pay a Fair Living Wage which is Indexed to the cost of Housing.
The concept is simple. It is based on the premise that if a person works 40 hours a week, then he/she should be able to access basic housing. We use two existing Federal guidelines to determine what the Living Wage should be. The first guideline (a HUD standard also used by banking institutions across America) dictates that no more than 30% of a persons' gross monthly income should be spent on housing. The second guideline the Fair Market Rents (FMRs) are established by HUD throughout the country for each municipality and all other areas. Therefore, the Living Wage will vary per area in accordance with the FMR. FMRs are based on gross rent estimates which include shelter, rent and the cost of utilities except telephone service.
We believe that this format, using already established government guidelines, enables us to utilize existing government formulas to easily justify specific Universal Living Wage figures that are based on the need for housing and are appropriate to each municipality and outlying areas.
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 888
(Docket No. FR-4362-F-02)
Fair Market Rents for the Section 8
Housing Assistance Payments Program---Fiscal Year 2001
Agency: Office of the Secretary, HUD.
Action: Notice of Final Fiscal Year (FY) 2001 Fair Market Rents (FMRs).
Effective Date: FMRs published in this notice are effective on September 25, 2000
FMR STANDARDS
FMRs are gross rent estimates; they include shelter rent and the cost of utilities, except telephone. HUD sets FMRs to assure that a sufficient supply of rental housing is available to program participants. To accomplish this objective, FMRs must be both high enough to permit a selection of units and neighborhoods and low enough to serve as many families as possible. The level at which FMRs are set is expressed as a percentile point within the rent distribution of standard quality rental housing units. The current definition used is the 40th percentile rent, the dollar amount below which 40 percent of standard quality rental housing units rent. The 40th percentile rent is drawn from the distribution of rents of units which are occupied by recent movers (renter households who moved into their unit within the past 15 months). Newly built units less than two years old are excluded, and adjustments have been made to correct for the below market rents of public housing units included in the data base.
ID_AGIS2 AREA ST FMR FMR FMR FMR
___________ NAME_______O BR___1 BR___2 BR___3 BR__
MSA0640________Austin__MS___533_____645____819_____1137___
___________San____ATX________________________________
_______Marcos, Tx_____________________________________
In spite of the overall desperate need for affordable housing in this country, in spite of government subsidies and tax breaks being used to keep building costs down and in spite of mixed use initiatives, low income housing is only rarely being built in America and never at a price affordable to homeless citizens. If we can't create truly affordable housing using these kinds of broad-based approaches, and if the Federal Governments response to our plight is no more comprehensive than to give billions of our Section 8 Housing Voucher dollars to foreign countries while our people live on our own streets, then perhaps we need to take a different approach to addressing the problem. Perhaps we need to ensure that people can simply enter the general housing market under their own financial power. This can be accomplished by embracing the simple axiom that suggests that we should pay people a fair (living) wage for a fair days' work. Can we not all embrace the moral premise that says: anyone working a full forty hour week should be able to access at least the cheapest level of housing without the need for government subsidies?
According to John E. Schwartz, author of "Illusions of Opportunity: The American Dream in Question," the minimum wage in the 1950's paid about 110 percent of the amount required to operate a household with two full-time workers with children. By the 1970's, the minimum wage for two workers had fallen to ninety percent and today is less than seventy percent. Additionally, the "real buying power" of the minimum wage is at its lowest point in nearly forty years. Even 1996's two-step federal wage "increase" from $4.25 to $5.15 an hour, has still resulted in less buying power than it had in the late 1970's.
The federal minimum wage of $5.15 per hour amounts to only $9,880. Even this government standard is one hundred and eighty dollars below the federal poverty guideline of $10,063 for a family of one.
A 1996 Wall Street Journal article dated April 11, 1996, stated that in 1995, a United States CEO earned income at a rate of 212 times that of the average U.S. worker. The Working, Hard, Earning Less 1998 report, announced that CEO salaries in these same industries range from 143 to 812 times the median income of the workers. In response to this type of inequity, major cities across the United States have now launched Living Wage Initiatives. They are moving to pass Living Wage ordinances that will significantly raise the wage floor.
Principally, these cities are creating new wage levels for their employees and for the entities with which the cities or counties have contracts. This effort is admirable and deserves our full support. But realize that while raising the wages of city/county workers and those that contract with them is excellent, it does not directly help homeless persons. That is our principle concern. It is for this reason that House The Homeless, Inc. is calling for the passage of a Universal Living Wage that will affect all workers. This includes all homeless workers. The idea is to provide a basic minimum wage so that people can afford at least a roof over their heads in exchange for labor provided. We have devised a relatively simple national formula that is applied locally. This wage would enable a person who is willing to work a forty hour week to earn the minimal amount needed to access housing in any city or outlying area throughout the entire United States.
Richard R. Troxell, President- House The Homeless, Inc.
Member-Board of the National Coalition for the Homeless
