A recent report by the National Low Income Housing Coalition shows that a minimum-wage worker needs about 3.4 jobs to afford the rent of a two-bedroom apartment in San Jose.
While San Jose raised the minimum wage to $16.20 per hour, the cost of living continues to outpace housing prices.
Andres Benavides works two part-time jobs to face his monthly expenses while studying at San Jose State for his master’s degree in school counseling.
“Navigating being a full-time student and having two jobs has been very stressful and I sometimes contemplate leaving one of my jobs, but then I realize that I need that second income,” Benavides said.
He also said prices in grocery stores have exponentially risen over the past few months.
“I used to go to the grocery store and spend $100 and I would buy a good amount of items,” Benavides said. “Now, I spend the same amount of money on half the [amount of] items.”
The National Low Income Housing Coalition report, titled “Out of Reach 2022,” states California is the second-most expensive state in the U.S. in terms of cost of housing.
Data shows that between the first quarter of 2021 and the first quarter of 2022, median rents for two-bedroom apartments in metropolitan counties increased 15%, or $179.
A worker needs to make about $39.01 per hour and work about 104 weekly hours to afford a two-bedroom rental home in California, according to the Out of Reach 2022 report.
That translates into about 15 hours of work per day to afford rent.
With the cost of housing “skyrocketing” over the past two years, the situation in San Jose seems to be even worse.
Kelly Snider, SJSU urban and regional planning director, said a lot of houses had been built in the San Jose area between the ’40s and ’60s, but a drastic stop in construction contributed to the skyrocketing housing prices.
“Sometime around 1975 or 1985 we stopped building new homes,” Snider said. “The reason we stopped is because a small number of people wanted it to stop and that small number of people were the local city elected officials.”
She also said the small-town planning directors didn't want more homes built with the intention of planned scarcity to happen.
“They prohibited the building of apartments and duplexes and quad-plexes,” Snider said.
Similarly, SJSU economics professor Mark Brady said there are two major causes influencing the cost of housing.
“I think the most obvious and major reason for why the cost of living is higher in San Jose than it is in the national average is because of the demand for rented accommodation and the restrictions on building in the long term,” Brady said.
As of today, the cost of housing in San Jose reaches levels that are 143% higher than the national average, according to PayScale, a American software and data company.
The Out of Reach 2022 report also shows an estimated salary to afford a two-bedroom apartment in the San Jose area is $55.15 per hour.
Snider said people who are in charge of setting policies and working conditions such as the Occupational Safety and Health Administration have fought valiantly to keep the minimum wage low.
Occupational Safety and Health Administration is a large regulatory agency of the U.S. Department of Labor that originally had federal visitorial powers to inspect and examine workplaces, according to its website.
“All of those people were making decisions based on economic outcomes that benefit capitalists and persons owning the businesses,” Snider said.
She said if top companies and leaders can keep minimum wage low then they will have lower labor costs and a major opportunity for making more money.
Although the minimum wage is used as an important indicator in determining the effect of cost of living and housing on residents, Brady said it is important to evaluate the numbers and understand the meaning behind them.
“An awful lot of jobs, which are usually categorized as minimum wage, are actually paying more than $16.20,” Brady said. “If people are earning more than the minimum wage, then actually this particular statistic is not that meaningful.”
He also said it is important to identify the workers who receive minimum wage.
“I am not saying there are not independent people,” Brady said. “But in many cases, they are actually part-time workers and young workers and then they live at home with their families.”
He said another factor that should be considered is the number of people that can actually contribute to the rent payment.
For instance, he said a minimum-wage worker might have a partner who contributes to the expenses.
“In other words, the statistics about cost of living do not expand proportionally to the number of people in a relationship,” Brady said.
However, Snider said the difficulties connected with high costs of housing are not just related to minimum-wage workers, but also to the middle-class workers.
“A 35-year-old professor who lives in his parents’ home is not unusual,” Snider said. “They can't afford to live here themselves. The ones who can afford are probably living in housing that they inherited or grew up in.”
She said people who make more than $80,000 might face difficulties in affording rent in San Jose.
“Those people cannot afford to live here,” Snider said. “They might make far more than minimum wage, but they still cannot afford to have an apartment or a house.”
