It’s no wonder there’s a retirement crisis, with people on the low end of the pay scale having such trouble saving anything at all for a time that’s decades in the future.

They’re having enough trouble just managing to keep a roof over their heads.

A study from the National Low Income Housing Coalition finds that full-time workers who only make minimum wage can’t afford a two-bedroom rental home in any state in the country—or, for that matter, in the nation’s capital—without spending more than the recommended level of 30 percent of their income.

The Huffington Post reports that the report, “Out of Reach,” compares minimum wages and housing costs in all 50 states and the District of Columbia, arriving at the disturbing conclusion that not only can’t people afford the rental, the hourly wage they’d need to be able to afford a “modest” two-bedroom rental is actually more than double the $7.25 federal hourly wage everywhere but in four states.

In the report’s preface, Rep. Keith Ellison, D-MN, writes about a Somali immigrant, now a citizen, who struggles together with her husband to make enough to take care of their family. She’s optimistic about their future, he says, “Except for one thing: the cost of housing is eating up the precious little money she and her husband earn each month. To house their family, they pay nearly half their monthly earnings for rent. And of course, rent eats first. Before diapers for the baby, before medicine, food, and a rainy-day fund.”

And way before retirement savings—the very last item on the priority list when people are struggling just to get by.

With more than 7 million extremely-low-income people lacking “an affordable place to call home” and a half million living “on the street, in shelters, or in their cars on any given night,” it’s no wonder there’s a crisis.

When rent costs rise, saving for retirement becomes just a pipe dream. (Photo: AP)

Who can even think about retirement—much less figure out how to save for it—when money is at such a low level that lodging and food can consume nearly all there is?

Even the potential of a retirement plan offered by an employer is likely far out of reach for these people, although myRAs and the possibility of participating in a state-run plan or even a low-cost robo plan that has low fees and no minimum investments at least provide the potential of saving.

But the Trump administration has struck down state-run and municipal plans (although some plan to proceed with their plans despite that) and myRA hasn’t exactly caught on—nor is it likely to, under the current administration.

And of course those who make the least amount of money will suffer the most when it comes to retirement—with people of color and women among the groups that will most feel the bite of a lack of savings.

Yet as tough as it is to save for retirement, it’s turning out to be pretty tough just to find a place to live, particularly for those who struggle on minimum-wage work.

The study’s parameters are as follows: While the federal standard holds that no more than 30 percent of a household’s gross income should be spent on rent and utilities, households paying over 30 percent of their income are considered cost burdened while households paying over 50 percent of their income are considered severely cost burdened.

The two-bedroom (or one-bedroom) rental unit housing wage, by the way, is the hourly wage that a household must earn (working 40 hours a week, 52 weeks a year) in order to afford the fair market rent for a two-bedroom (or one-bedroom) rental home without paying more than 30 percent of their income. The 2017 national housing wage is $21.21 per hour for a two-bedroom rental home, or more than 2.9 times higher than the federal minimum wage of $7.25 per hour. The 2017 housing wage for a one-bedroom rental home is $17.14, or 2.4 times higher than the federal minimum wage.

Says the report, “A full-time worker earning the minimum wage needs to work 117 hours per week for all 52 weeks of the year to afford a two-bedroom rental home or 94.5 hours per week for a one-bedroom rental home.” Remember, a full-time job is supposed to be 40 hours per week.

It also points out that six out of the seven occupations expected to add the most jobs by 2024 “provide a median wage that is not sufficient to afford a modest one-bedroom rental home.” And people of extremely low income—with an income less than the poverty level or 30 percent of their area’s median—can’t afford the average cost of a modest one-bedroom rental home in any state.

Here are the 10 worst offenders:

10. Washington, D.C.

Shortfall between average renter wage and two-bedroom housing wage: -$6.37.

Even for a one-bedroom, a worker would need to put in 93 hours per week—and the District’s minimum wage is higher than the federal minimum wage.

9. New Hampshire

Shortfall between average renter wage and two-bedroom housing wage: -6.96.

Even for a one-bedroom, a worker would need to put in 94 hours per week.

8. Maine

Shortfall between average renter wage and two-bedroom housing wage: -$7.07.

Even for a one-bedroom, a worker would need to put in 64 hours per week—and Maine’s minimum wage is higher than the federal minimum wage.

7. Massachusetts

Shortfall between average renter wage and two-bedroom housing wage: -$7.68.

Even for a one-bedroom, a worker would need to put in 80 hours per week—and the Massachusetts minimum wage is higher than the federal minimum wage.

6. Connecticut

Shortfall between average renter wage and two-bedroom housing wage: -$7.74.

Even for a one-bedroom, a worker would need to put in 78 hours per week—and Connecticut’s minimum wage is higher than the federal minimum wage.

5. Vermont

Shortfall between average renter wage and two-bedroom housing wage: -$9.39.

Even for a one-bedroom, a worker would need to put in 69 hours per week—and Vermont’s minimum wage is higher than the federal minimum wage.

4. New Jersey

Shortfall between average renter wage and two-bedroom housing wage: -$9.46.

Even for a one-bedroom, a worker would need to put in 106 hours per week—and New Jersey’s minimum wage is higher than the federal minimum wage.

3. California

Shortfall between average renter wage and two-bedroom housing wage: -$10.26.

Even for a one-bedroom, a worker would need to put in 92 hours per week—and California’s minimum wage is higher than the federal minimum wage.

2. Maryland

Shortfall between average renter wage and two-bedroom housing wage: -$11.39.

Even for a one-bedroom, a worker would need to put in 101 hours per week—and Maryland’s minimum wage is higher than the federal minimum wage.

1. Hawaii

Shortfall between average renter wage and two-bedroom housing wage: -$19.56.

Even for a one-bedroom, a worker would need to put in 116 hours per week—and Hawaii’s minimum wage is higher than the federal minimum wage.

Instant Insights /

10 states with the biggest gap between wages and rent

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