Earning Minimum Wage? You Should Buy a Home Here

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How long would someone have to work at minimum wage to pay for a house? It all depends on location.

Snagajob, an employment website geared toward hourly workers and employers of hourly workforces, recently compiled data on how many years of minimum wage work it would take to equal the median home value in 25 cities across the country.

Snagajob then crunched the numbers for an increase in minimum wage to $10.10 per hour. President Obama and some in Congress want to raise the federal minimum wage from $7.25 to $10.10.

The results showed a startling difference between some cities. For instance, minimum wage workers in New York City ($511,200 median home value, $8-an-hour minimum wage) would have to work 28 fewer years if they lived in Detroit ($41,100, $7.40 an hour).

And if the minimum wage were raised to $10.10 in New York, that would shave more than six years off the time it would take to earn that $511,200.

Snagajob said:

According to the data, Detroit comes in as the most affordable city, taking the equivalent of two years of work to become a homeowner (median home value of ~$41K), while San Francisco is the costliest and would require 39 years of work ($875K+).

Below are highlights of a few of the best and worst cities for hourly workers to buy a home, including the city’s median home value, current minimum hourly wage, and how long it would take them to earn the equivalent of the cost of a home at that wage and at a $10.10 hourly wage.

  • No. 1 – Detroit. $7.40 an hour, $41,100 median home value, 2.5 years at current minimum wage, two years at $10.10 minimum wage.
  • No. 2 – Cleveland. $7.95, $52,100 home, three years, 2.5 years.
  • No. 3 – St. Louis. $7.50, $95,500 home, six years, 4.5 years.
  • No. 12 – Phoenix. $7.90, $160,200 home, 9.75 years, 7.75 years.
  • No. 23 – Los Angeles. $8, $491,000 home, 29.5 years, 23.5 years.
  • No. 24 – New York. $8, $511,200 home, 31 years, 24.5 years.
  • No. 25 – San Francisco. $10.74, $875,200 home, 39 years, N/A.

We recently looked at what $1,000 a month in rent could get you in cities across the country. Like buying a home, what you’ll pay for rent is also dependent on location.

Are you surprised by the numbers? Share your comments below or on our Facebook page.

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Comments & discussion

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  • bigpinch

    But then, you’d have to live in Detroit and good luck finding a buyer when (not if) you want to move.

  • Kent

    Don’t buy a house unless you are in one of the higher tax brackets so you can take part in the mortgage and property tax deduction subsidies. It’s ironic that we subsidize the higher brackets more than the lower brackets.

    • bigpinch

      I’ve got to disagree. However humble, owning your own home (actually owning the home, not the mortgage) is one of the best things that a person can do if the price of the mortgage reflects the real value of the property. Even just owning the mortgage, over time, yields benefits, like the liquidity of the equity if you should really need it.
      I own my home, acreage, and mineral rights after about 25 years of payments. I’ve got to say that not paying rent every month is pretty sweet. I never got a mortgage deduction during any of those years because my finances were never complicated enough to itemize.
      I wouldn’t let the deduction be a factor in making a decision whether to buy a house. There are other more important considerations when deciding whether to own or rent.

      • Kent

        Sorry, but the deduction is a huge factor and can reduce your payment and taxes by 40% or more if you are in one of the higher tax brackets. People making minimum wage are probably in the 0 percent tax bracket and get no subsidy whatsoever. Houses have a limited life expectancy and we pay like they last forever, they don’t.

        • bigpinch

          O.K. Go ahead and rent for the rest of your life. Own nothing. Have no equity. Leave nothing behind for your heirs. It’s your choice and you can comfort yourself by the sure and certain knowledge that you’ve made your landlord rich while impoverishing yourself in the process.
          Maybe you might think about what you can do for yourself without waiting for Uncle Sam to do something for you. Yes, the rich get richer. Life isn’t fair. Those who work hard end up with more than those who don’t. Boo hoo hoo.