I read recently that in a growing number of cities, the average cost of a starter home costs close to 1 million dollars. A majority of these high-priced starter homes are in California but you’ll find similarly-priced homes in cities in Texas, Florida, Massachusetts, and New York. This leads me to the topic of this post, which is the working homeless. These are people who are employed but whose wages aren’t enough to rent or buy a home.
We need to dispel the myth that many people are homeless due to the lack of a work ethic. Some people work two jobs or take on multiple side hustles to make ends meet. The problem is that housing costs have skyrocketed in recent years, and it is becoming almost impossible for middle-class families to own a home. This is especially true for people of color who are employed in service jobs that do not pay living wages.
Take 29-yr.-old Curtis Banks of California for example. For the past two years he’s lived in his car because of his struggle to find affordable housing. He also has a full-time job at a hospital where he sanitizes various rooms throughout the hospital. Here is what Banks said about his situation:
“The whole process of apartment hunting is crazy because your average studio out here won’t be anything less than $900 and they want deposits,” Banks said. “Gotta have gas. Gotta have food. I pay my insurance. I keep my cell phone on so people can reach me. It’s just survival and half my wages are gone with every paycheck.”
It also affects workers in service and retail positions. 14% of Kroger employees in Southern California, Colorado, and Washington State said they were homeless despite having a job. It is a disgrace that in a country with so much wealth and resources, we can’t provide affordable and quality housing for working families. Yet Wall Street landlords continue to deprive these families of affordable housing by purchasing homes in mass and then charging high prices to potential tenants. These companies are also buying up mobile homes, which were long considered affordable housing.
Even professionals such as teachers are not immune to homelessness. In an article from Business Insider, teacher Ellen Tara James-Penney teaches full-time at San Jose State University but can’t find an affordable place to stay so she sleeps in her car that’s parked at a church that helps the homeless. Penney also eats meals at her job’s dining hall and the church. If that’s not bad enough, she grades papers and prepares lessons using a headlamp light in her car.
This same article also mentioned a security officer named Albert Brown III. He’s currently having issues with his feet but can’t miss days of work. He was homeless but recently signed a lease and says he can barely afford the high rent for the apartment. How is it that teachers, security officers, and many other workers have to live in their cars or on the streets? It’s not always because these individuals are mismanaging their income. Many personal finance gurus say this, and I think they’re out of touch with the struggles of the working homeless today.
Even if the working homeless found a place to stay, they would still struggle because they’d have to pay high rent, groceries, utilities, car notes, insurance, and kids’ expenses. And if your wages are inadequate, you could be homeless again.
Here Is Amber Drummond’s Story
Amber Drummond is another example of the working homeless. Drummond is a security guard at a homeless shelter in New York City but she also lives at her job because she can’t afford to buy or rent a home. She also lived in different shelters since 2019 while working two jobs and using her off days to find an affordable place to live. Drummond searched at 30 apartments but the landlords all rejected her. Just like in California, many New Yorkers have multiple jobs yet still can’t find affordable housing.
In New York, the minimum wage is $15.00 per hour but the average rent in New York City is $2,500 a month. This amount is too high for a lot of everyday workers in this city and this explains why Drummond has a hard time finding a place to live. Christine C. Quinn, who operates 13 shelters in the city, said that a lot of the city’s shelter employees are homeless.
So why are shelter employees still not able to afford housing? Isaac McGinn, who heads the city’s Department of Homeless Services, said that the de Blasio administration put millions of dollars into this department to increase shelter workers’ salaries. However, some shelter directors said that the workers’ wages are mostly determined by competition for city contracts. Local union leaders say that this is no excuse for not paying shelter employees better wages since these shelters receive millions in contracts.
Here Is Deborah Bower’s Story
Deborah Bower, a dog groomer in San Ramon, California, has been homeless since last year after breast cancer treatments cleaned out $100,000 of her savings. She now lives in her car and occasionally stays in cheap hotel rooms due to an inability to find affordable housing. Others like her also stated that they earn too much to qualify for SNAP and other government benefits that could help them during this tough time.
It’s Happening Nationwide
This is not just a California and New York issue. The working homeless are on the rise in many other states and cities across the country. For example, a recent Washington Post article profiled a lady named Marie. Marie is a casino supervisor in Biloxi, Mississippi who fell on hard times when her van’s transmission stopped working and after paying for repairs, she didn’t have enough to pay rent. Although she earns $900 every two weeks, this income is insufficient to get an apartment and afford utilities.
Many homeless employees use various strategies to take care of themselves to keep their appearances decent and maintain their sanity. They shower at gyms, wash their clothes at truck stops, and buy movie tickets to spend a few hours in a cool room on hot days.
Gig Economy Workers and Homelessness
The housing affordability crisis also affects gig economy workers in negative ways. Gig workers often have flexibility with their hours but their wages are low. These gig workers work for companies such as Uber, Lyft, Instacart, and Doordash. These workers are also online freelancers for clients through job sites such as Upwork and Fiverr. According to the Economic Policy Institute, 14% of gig workers earned less than the federal minimum wage. 19% of gig workers went hungry because they didn’t earn enough for food. 31% of gig workers struggled to pay their monthly utilities.
Many gig workers are classified as independent contractors instead of employees. This means they don’t have access to benefits such as health insurance, retirement plans, childcare benefits, or workers’ compensation benefits. And without the ability to build long-term savings, it will be harder for them to afford rent or save enough to buy a home. California recently passed a law that required Uber workers to be classified as employees.
Self-employed workers in the gig economy also have a hard time obtaining a mortgage because of the requirements to get one. Mortgage lenders prefer self-employed applicants to have two years of uninterrupted income. This leaves out many workers who experienced periods when their income fluctuated or decreased. Gig workers also don’t have the same documentation as W2 employees so this is also a challenge. Finally, they may have to put a higher down payment on a home.
So How Can We Help The Working Homeless?
The solutions to this problem must involve employers since wage inequality and stagnation contribute to the problem. One issue they can solve is eliminating the “paper ceiling.” The paper ceiling is when skilled and experienced job applicants face barriers to employment because they lack a college degree. More companies should adopt a skills-based hiring method for applicants and accept alternative credentials such as certifications and even visual examples of previous work. The companies should also offer more on-the-job training to new employees.
Our cities have so many abandoned buildings. Why not take those buildings and turn them into affordable housing units that won’t cost over a thousand dollars a month for renters to pay? Cities can place caps on the amount that landlords can charge their tenants, and this can also be done at the state and federal levels.
There are no easy solutions to this problem, but we can no longer sit back and do nothing. Let’s truly understand the plight of the working homeless and create situations that will enable them to thrive, not just get by in life.
