Realtor Explains That Today's Rents Are So High That $24 An Hour Is Actually The Same As Minimum Wage In 1980
Money doesn't go nearly as far now as it once did.
Kmpzzz / Shutterstock It’s no secret that prices are out of control. While inflation is decreasing, prices remain as high as ever, making it nearly impossible to pay essential bills like rent, let alone purchase a house.
However, many Boomers have expressed confusion as to why younger generations are complaining. After all, they’re making more money than they did at their age. But, as one realtor online illustrated, money does not go nearly as far today.
A realtor explained that $24 per hour today is essentially the same as the minimum wage in 1980.
Freddie Smith is a realtor from Orlando, Florida who discusses financial topics on TikTok. In a recent video, Smith reviewed why it’s so hard to pay rent nowadays.
“The Millennials and Gen Zers who are complaining that they can’t buy a house are not working for minimum wage,” he said. “These are people making 60, 70, 80, $90,000 a year who can no longer afford a house. But minimum wage workers are also complaining because they can’t afford rent.”
With a helpful chart, Smith detailed how someone working a minimum wage job in 1980 made $3.10 an hour, or approximately $496 a month. Average rent costs were around $243, meaning rent took up 48.9% of one’s income. That is far from the case today.
According to Smith, average rent now costs $1,747 a month, meaning someone making the federal minimum wage of $7.25 an hour does not even make enough to pay this rent.
Since many employees make double the federal minimum wage, Smith plugged those numbers in too. If one makes $14.50 an hour, that adds up to $2,320 a month. In that case, $1,747 rent would require 75% of one’s monthly income.
Photo: 88studio / Shutterstock
Smith then took it one step further. He quoted a statistic from ZipRecruiter that claimed the average college graduate makes a starting salary of $24 an hour, which leads to a monthly income of $3,840. So, sure, a college graduate is able to afford rent. But, at 45.4% of their monthly income, it’s almost identical to the amount someone paid for an apartment in 1980 on minimum wage.
Of course, as Smith pointed out, graduating from college takes time and money that most minimum-wage jobs do not require.
"The minimum wage worker in 1980 put on a hat, learned skills for two weeks, and started their job," he explained. "[Someone with] a bachelor’s degree spent four, five, six years of their life in school and 50, 60, $70,000, and now have to spend the same amount of money on rent."
Commenters on Smith’s video were far from surprised. Instead of exhibiting any kind of shock over Smith’s words, fellow TikTok users seemed thoroughly nonplussed by what he said.
“And that’s just rent,” one person added. “That doesn’t account for food, kids, car insurance, car payments, and student loan payments.” “Don’t forget to be able to rent an apartment you have to make three times the amount of money," another commenter pointed out. “You’re not supposed to spend more than 30%,” a third user chimed in.
Why is rent currently so high?
Financial experts are taking note of the issue. According to CNN, “With over half of US renters already paying more than 30% of their income — the standard threshold — it is clear there’s an affordability crisis.”
CNN also stated that the apartment “affordability crisis” is directly linked to “lower vacancy rates.” While it seems complicated, it’s a simple issue of supply and demand. Supply is low and demand is high, so prices continue to increase.
So, as Boomers wonder why Millennials and Gen Z can’t afford to buy a home, or even rent an apartment, it’s important to remember that the generations of today are doing the best that they can. Money doesn’t go nearly as far today as it once did, and high-paying jobs are few and far between.
Mary-Faith Martinez is a writer for YourTango who covers entertainment, news and human interest topics.