Would You Rather Have 3 Roommates Or 4 Jobs? What It Takes to Afford Rent on Minimum Wage

Though prices have eased in some places, rent was still up 8.3% nationally in December 2022, compared with a year earlier, according to the Bureau of Labor Statistics. 

Given the federal minimum wage sits at $7.25 and hasn't risen since 2009, it's increasingly difficult for minimum wage earners to afford rent. In fact, it would take four full-time minimum wage workers to reasonably afford a two-bedroom apartment, according to new Zillow research.

The real estate company gathered minimum wage and rent data in the 50 largest U.S. cities to see what it takes to make rent on some of the lowest legal salaries. Zillow estimates "typical" rent in each of the cities using data from the Census Bureau's 2021 5-year American Community Survey with monthly changes calculated using the Zillow Observed Rent Index.

It concluded that a renter earing minimum wage has two options: find three roommates (and assign two people per bedroom) or work four full-time jobs on their own to keep their housing costs below the recommended 30% of their income.

But the situation is tighter in some cities than others. Even in places like San Francisco where the $16.99 minimum wage is more than double the federal wage, sky-high rents leave workers without a lot of comfortable options — you'd still need wages from three full-time jobs to afford a two-bedroom there.

Renters in just 10 of the 50 cities Zillow analyzed can comfortably afford a two-bedroom apartment with just one job per person and one person per bedroom.

An ideal situation would be an area with high local wages and low rents, but such a city is hard to come by in the U.S., according to Zillow's analysis.

A total of 26 states raised minimum wages in 2023, but none come close to the estimated $24.16 an hour living wage researchers at the Massachusetts Institute of Technology say it takes for a family of four with two working adults to get by. 

Higher minimum wage earners fare better despite higher rents

While the majority of states have set their own minimum wage rules, 16 states default to the federal level of $7.25 an hour, according to the Department of Labor. Beyond state guidelines, cities may set their own minimum wages. In Denver, minimum wage is $17.29 — nearly $4 higher than Colorado's state minimum. 

Rent is typically cheaper in cities where the minimum wage is $7.25, Zillow found. But residents of those cities still need an average of 3.5 full-time minimum wage salaries to afford a two-bedroom apartment. In cities with wages higher than $7.25, it takes an average of 2.5 salaries to make rent.

Here are the five cities that require the most minimum wage jobs to afford a two-bedroom apartment:

1. Austin, Texas

• Minimum wage: $7.25
• Typical rent: $1,764
• Jobs needed: 5.1

2. Atlanta

• Minimum wage: $7.25
• Typical rent: $1,664
• Jobs needed: 4.8

3. Charlotte, North Carolina

• Minimum wage: $7.25
• Typical rent: $1,552
• Jobs needed: 4.5

4. Nashville

• Minimum wage: $7.25
• Typical rent: $1,477
• Jobs needed: 4.2

5. Dallas

• Minimum wage: $7.25
• Typical rent: $1,412 
• Jobs needed: 4.1

Here are the five cities where it takes the fewest number of jobs to afford a two-bedroom apartment:

1. Fresno, California

• Minimum wage: $15.50
• Typical rent: $1,168
• Jobs needed: 1.6

2. Tucson, Arizona

• Minimum wage: $13.85
• Typical rent: $1,165
• Jobs needed: 1.8

3. Mesa, Arizona

• Minimum wage: $13.85
• Typical rent: $1,256
• Jobs needed: 1.9

4. Minneapolis

• Minimum wage: $15.19
• Typical rent: $1,394
• Jobs needed: 1.9

5. Detroit

• Minimum wage: $10.10
• Typical rent: $1,028
• Jobs needed: 2.1

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