In January 2021, a Facebook post from three years before began to pick up notice on social media platforms again; it maintained that the average cost of rent was $1,234 a month — a sum that the post argued was unaffordable with a federal minimum wage of $7.25:
The post, which was originally shared by the page “Millennials for Democratic Socialism,” maintained a six-figure share count, and most likely recirculated due to its appearance in Facebook users’ “On This Day” or “Memories” function. In addition, the federal minimum wage was in the news at the time in relation to the new Biden administration.
The post consisted of a screenshot of a January 25 2018 tweet by user @pookleblinky:
That tweet read:
The average US rent is $1234/month.
For rent to cost less than a quarter of income, as suggested, you’d need to make $4924 a month.
At 40 hours a week, that’s $30.77/hr.
The federal minimum wage is $7.25/hr
As mentioned, three years had passed since the tweet first appeared in January 2018, allowing for a change to the figures cited.
‘The Average US Rent is $1234/Month’
If the average rent in the United States was ever $1,234, the popularity of the tweet quickly drowned out that information.
The closest we found to regular rent tracking was via real estate site Zillow.com, in the format of sidebar figures for the Zillow Observed Rent Index (ZORI). We also located archived numbers in early 2018, which came in higher than the tweet — at $1,439 for December 2017 as of February 2018.
By July 2020, Zillow’s average rent estimate was up to $1,665. We archived the average monthly rent according to Zillow in January 2021, as of November 2020 — $1,734. Assuming all figures in the post were otherwise static, the tweet and circulating screenshot might underestimate the severity of housing costs against the federal minimum wage.
‘For Rent to Cost Less Than a Quarter of Income, As Suggested, You’d Need to Make $4924 a Month’
If rent was supposed “to cost less than a quarter of income,” the $4,924 figure came in just slightly under the $1,234 figure multiplied by four — $4,936.
A CNBC item from June 2018 referenced another extremely common proportion of housing costs to income — 30 percent, or a little over a quarter:
As a general rule, you want to spend no more than 30 percent of your monthly gross income on housing. If you’re a renter, that 30 percent includes utilities, and if you’re an owner, it includes other home-ownership costs like mortgage interest, property taxes and maintenance.
Why 30 percent? It’s a standard that the government has been using since 1981: Those who spend more than 30 percent of their income on housing have historically been said to be “cost burdened.” Those who spend 50 percent or more are considered “severely cost burdened.”
In terms of accuracy, the tweet was reasonably close to that figure — 30 percent is reasonably close to a quarter, and the figure of 30 percent was a maximum. Anyone spending more than 30 percent in total of their gross (pre-tax) income on housing was considered “cost burdened” in an economic sense.
In short, the claim hewed fairly closely to the 30 percent figure, and with the far higher “average monthly rent” in late 2020 and early 2021, the subsequent numbers would be further distorted.
‘At 40 Hours a Week, That’s $30.77/hr’
Using the tweet’s figures — $1,234 a month in rent as a quarter of income, the putative wage earner would need to earn $4,924 (or $4,936) per month to comfortably afford housing.
At forty hours a week and four weeks per month, the worker would clock about 160 hours in any given month. $4,924 (the figure in the tweet) divided by four 40 hour weeks (160 hours) worked out to $30.775 an hour — so the math was accurate based on the figures.
Between January 2018 and January 2021 (when the tweet recirculated on Facebook in screenshot form), the average American’s monthly rent climbed from $1,439 to $1,734.
If we placed those numbers into the proportions in the tweet, the worker with a $1,734 rent payment would need to earn $6,936 per month versus $4,924 — almost $2,000 a month more, or an additional $24,000 a year. Broken up into four 40-hour weeks, the worker’s 2018 wage of $30.77 per hour would have to have risen to $43.35 per hour in 2021 — or a little over $83,000 a year.
‘The Federal Minimum Wage is $7.25/hr’
In the three years since the tweet was first published, average rents went up considerably, creating higher benchmarks for our imaginary average wage earner to afford an apartment to rent.
On January 27 2021 (the day we published this fact check), CBS News referenced the federal minimum wage in an article about the debate over raising it:
The federal minimum wage currently sits at $7.25 an hour and has not been increased since 2009. Meanwhile, the so-called living wage, meaning the bare essentials in the U.S, is estimated to be roughly $16 an hour or higher.
In 2019, the House passed a minimum wage hike nearly along party lines, 231 to 199. But it was dead on arrival in the GOP-controlled Senate. Now, Democrats control both chambers, but their majorities are tight.
A Pew Research Center survey from 2019 shows that a $15 minimum wage has strong popular support, with 67% of Americans in favor of it, including 41% who say they strongly favor such an increase.
One figure in the 2018 tweet had stayed the same — the federal minimum wage, frozen at $7.25 since 2009. But it bears mentioning that the federal minimum wage, while a factor, was not the average wage in the United States.
In February 2020, 2018 figures from the U.S. Census Bureau published by Motley Fool indicated:
As of 2018, the average U.S. household income was $87,864, while the median household income was $61,937.
When the median is considerably lower than the average, it means that there are outliers on the top end. In short, a few people who make a lot of money boost the average. So $61,937 may be a more accurate representation of typical household earnings.
High living costs coupled with stagnant wages explain why so many households consist of multiple earners. The median income among households with a single earner is $52,557 — among two-earner households, it’s $98,586.
As that excerpt noted, averages were likely pulled up by a small number of high earners — and the median of just over $60,000 per household didn’t really cover the amount needed to pay the average rent as of November 2020 ($1,734). Neither did it cover the average rent in 2018 of $1,439, where by the same metric, a household would need to pull in $74,828 to keep housing costs at 25 percent of their gross income.
In fairness to the original tweet’s creator, figures in 2018 fluctuated tremendously, and the likelihood of the tweet being mathematically accurate more than three years later was low. That said, the tweet was as much of a proportional observation as it was tacked to specific figures — and in that respect, its claims were reasonably accurate. Average rent costs were higher at all points we examined in the three year period than the average of $1,234 cited — and a wage earner would need to make at least $30 an hour to avoid being “cost burdened.” One sobering element of the tweet was the federal minimum wage in the United States, which remained at $7.25 — the same as it was in 2009 and 2018. Although the figures were inexact, the underlying point of the tweet was accurate; if anything, it understated the severity of the issue.