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.
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.
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This article was originally published on MoneyTalksNews.com as 'Earning Minimum Wage? You Should Buy a Home Here'.