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Affordability in Hours: A Time-Indexed Minimum Wage and an Essential Hours Credit

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  • Pow, Alec
  • Stonden, Lora

Abstract

We measure Monthly Survival Hours (MSH, or Essential Hours), the paid work time required to buy a fixed essentials basket, revealing a sharp affordability crisis: D3 renter hours spiked 50% from 117.4 hours (2019) to 175.7 hours (2022), with 2025 levels at 157.7 hours. We test two implementable policies: a Time-Indexed Minimum Wage (TIMW) that sets the wage floor by rule wmin,t = Ct/Htarget to cap essentials at 120 hours/month, and an Essential Hours Tax Credit (EHTC) that refunds gaps below 100 hours/month for low-wage cohorts via monthly advances. Using CPI components and CPS/OEWS wages across six metros, we show how TIMW stabilizes MSH near target while EHTC backstops D1–D3 renters during shocks, delivering a dual-key hours guarantee without price controls. Case studies for Phoenix, NYC, and Houston illustrate both ends of the metro spread.

Suggested Citation

  • Pow, Alec & Stonden, Lora, 2025. "Affordability in Hours: A Time-Indexed Minimum Wage and an Essential Hours Credit," SocArXiv ztbx2_v2, Center for Open Science.
    • Handle: RePEc:osf:socarx:ztbx2_v2
    DOI: 10.31219/osf.io/ztbx2_v2
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    References listed on IDEAS

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    1. Sylvia Allegretto & Arindrajit Dube & Michael Reich & Ben Zipperer, 2017. "Credible Research Designs for Minimum Wage Studies," ILR Review, Cornell University, ILR School, vol. 70(3), pages 559-592, May.
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    3. Doruk Cengiz & Arindrajit Dube & Attila Lindner & Ben Zipperer, 2019. "The Effect of Minimum Wages on Low-Wage Jobs," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(3), pages 1405-1454.
    4. Sun, Liyang & Abraham, Sarah, 2021. "Estimating dynamic treatment effects in event studies with heterogeneous treatment effects," Journal of Econometrics, Elsevier, vol. 225(2), pages 175-199.
    5. Callaway, Brantly & Sant’Anna, Pedro H.C., 2021. "Difference-in-Differences with multiple time periods," Journal of Econometrics, Elsevier, vol. 225(2), pages 200-230.
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