New York City (NYC) is facing its worst homelessness crisis since the Great Depression. There are currently over 60,000 people in the shelter system, and alarmingly over 25,000 of them are children. While popular perception often characterizes homelessness as a problem caused by mental illness and addiction, the data collected by shelters tells another side of the story: nearly one-third of families in the NYC shelter system are employed.
The affordable housing crisis in NYC is largely attributable to the growing imbalance between surging rents and stagnating wages. With more and more low-income families unable to pay their rents, evictions have increased, leading to unprecedented rates of homelessness. One in three people who enter the city shelter system cite eviction as the cause. Many of these families are minimum wage employees who work in industries such as fast food, retail, construction, and healthcare.
While the State of New York has made plans to increase the state minimum wage from $8.75 to $9 at the end of 2015, this is far from enough. At $9 per hour, a single parent with a full-time minimum wage job will earn $1,440. This is below the NYC “fair market rent” of $1,481 for a two-bedroom apartment as defined by the U.S. Department of Housing and Urban Development. To make matters worse, hourly workers often struggle to attain 40-hour schedules from their employers. Clearly, $9 per hour is not enough to enable these families cover their living expenses. Until policymakers begin to see homelessness as a direct effect of an unlivable minimum wage, evictions will persist and homelessness will continue to surge.
The minimum wage should be increased to $15 per hour to match the uniquely high cost of living in NYC. An overwhelming number of advocacy groups, public officials, and citizens share this belief. Earlier this month, Homes For Every New Yorker, a coalition of thirteen homelessness advocacy organizations, published a report outlining nine essential steps to eliminating homelessness by 2020. Unsurprisingly, one of these nine steps was increasing the minimum wage to $15. A number of powerful public officials, including Mayor Bill de Blasio and Comptroller Scott Stringer, have also called for a phased policy change that would bring NYC’s minimum wage to $15 by 2019. And finally, minimum wage workers themselves have begun mobilizing and demanding change; on April 15th, 60,000 workers in 200 cities across the country, including NYC, marched to demand a new federal minimum wage of $15.
Despite this widespread support, the chances of a meaningful policy change appear discouragingly unlikely. While Mayor de Blasio and Governor Cuomo have agreed on the need for a separate minimum wage for NYC that differs from that of New York State, Cuomo’s view on the appropriate amount seems far from promising. In January, he suggested a rate of only $11.50, roughly $2 lower than the amount he endorsed a year ago. Additionally, the prospect of getting buy-in for a $15 minimum wage from a stubborn Republican-led New York State Senate seems bleak.
Opponents of a substantial minimum wage adjustment claim that the additional employer costs will result in increased unemployment, making such a policy change economically inefficient. While there may be slight adverse effects on employment rates, the economic benefits of increasing the minimum wage to $15 per hour will far outweigh the drawbacks. The strengthened purchasing power of minimum wage families will allow them to not only pay their rents, but to pay for other things as well, increasing overall consumer spending and boosting government tax revenues. Helping families to stay in their homes will decrease government expenditures on social services, such as emergency shelters.
Dealing with homelessness after it starts has proven to be remarkably cost-intensive: the annual cost of housing a family in a city shelter is $38,000, and the average length of stay for a family in a New York City shelter is 14.5 months. And these short-term costs are only the start. What about the health care costs incurred when people’s physical and mental health inevitably deteriorate due to time spent on the street or in unsanitary and unsafe shelter conditions? What about the economic consequences of children not being consistently in school because their families are moving around from shelter to shelter?
NYC is by far the most expensive city in in the United States; its minimum wage should reflect this. Our low-wage families cannot afford to live on less than $15 per hour, and NYC cannot afford to continue allowing them to try. How many more working families will become homeless before enough policymakers recognize this?
Laura Sellmansberger is a Master of Urban Planning student specializing in Economic Development and Housing. She has a passion for issues relating to urban income inequality, affordable housing, and homelessness.