U.S. Voters See The Price Of Gas, Groceries, And Housing Rising A LOT Where They Live!

 

The charts above reflects the results of the Economist / YouGov Poll -- done between May 15th and 18th of a nationwide sample of 1,380 registered voters, with a 3.3 point margin of error.

23% Of Workers Pay 50% Or More Of Income For Housing

The chart above is from the Pew Research Center. It shows a big (and growing) problem in the United States -- too many Americans have to pay too much of their income for Housing. Nearly a quarter of U. S. families (23%) pay 50% or more of their income for Housing, and another 8% pay more than 40% of their income. That is not sustainable, especially since these people are mainly in the lower income portion of workers. Having to pay so much for housing leaves very little for other necessities (food, clothing, school, etc.). Congress needs to address the shortage of affordable housing in this country.

About Half In U.S. Say Affordable Housing Is Major Problem

 

The chart above is from the Pew Research Center. They questioned 9,676 adults between October 18th and 21st, and the survey has a 1.6 point margin of error.

It shows that nearly half (49%) of Americans say that affordable housing is a major problem where they live. This is 10 points more than said the same thing in 2018. Another 36% said it was a minor problem.

People Working 40 Hours A Week Need A Livable Wage

Donald Trump recently bragged about the official unemployment rate dropping to 3.9%. And I will admit that the rate is finally getting down to an acceptable range. But that doesn't tell the whole story about employment in the United States.

While the incomes of the top 10%, and especially the top 1%, have grown to record levels, that is not true for most American workers. The income for the lowest 80% of workers has basically remained stagnant for several decades -- and that means they actually have less buying power (thanks to inflation).

It's even worse for those who make at or near the minimum wage (which for most states remains at $7.25 an hour -- $15,080 a year). Too many of those new jobs currently being created are low-wage jobs, and it is expected that soon about 25% of the workforce will be working in those low-wage jobs (jobs paying at or near the minimum wage). Those people are already in serious economic trouble, and as prices climb, that trouble gets worse all the time.

One way of illustrating this economic trouble for low-wage families is to look at the cost of housing. The federal government standard for affordable housing is that it not take more than 30% of a workers income. Limiting housing to 30% of income leaves money for other necessities (food, clothing, transportation, etc.). Households paying more than 30% for housing are considered cost burdened, and those paying over 50% are considered severely cost burdened.

The charts above, from the National Low Income Housing Coalition, shows the problem facing low-wage workers. The top chart shows the income level that would be required for a family to rent a decent 2-bedroom apartment. Note that the minimum wage would not allow a family to rent a 2-bedroom apartment without severely burdening that family. It would require double the minimum wage (or more) in any state.

But it's worse than that. It's not just families that are severely burdened by low wages. The second chart shows how many hours an individual must work in each state to afford a 1-bedroom apartment. Again, in no state could a minimum wage worker afford a 1-bedroom apartment by working only 40 hours. It would require over 60 hours a week, and in many states it would require over 80 hours a week.

The existence of (and growth of) low wage jobs in this country is a national shame. No one who works 40 hours a week should have to live in poverty -- but that is the case currently for millions of hard-working Americans. We can, and should, do better than that. In the richest nation in the world, it is a crime (wage theft) for 20% to 25% of workers to be working for a wage that keeps them mired in poverty.

We need to substantially raise the minimum wage. Republicans will try to tell you that would hurt our economy and cost jobs. That's a lie. Raising the minimum wage would actually help most Americans and boost the economy. It would provide a decent standard of living for the lowest-wage workers. It would boost economic growth because those workers would spend that new money. It would boost business profits as they met the increased demand created by that increased spending. And it would take many off of government assistance rolls -- saving the taxpayers money.

New Evidence Shows Anti-Poverty Programs DO WORK!

Republicans like to tell Americans that the anti-poverty programs of the federal government have not been effective in reducing poverty. They are wrong! Those programs have been very effective. Consider this article by Michael Hiltzik in the Los Angeles Times (a part of which is posted below):

Few U.S. government efforts are consistently more vilified than anti-poverty programs. They're dismissed as ineffective and ridiculed as giveaways to undeserving recipients.

A new paper puts the lie to these assertions by showing that the nation's most important anti-poverty efforts all succeed in serving their goals — in the case of Social Security, spectacularly. The authors, Bruce D. Meyer and Derek Wu of the University of Chicago, used administrative statistics from six major programs to demonstrate that five of the six "sharply reduce deep poverty" (that is, income below 50% of the federal poverty line) and the sixth has a "pronounced" impact among the working poor.

The programs that reduce deep poverty are Social Security; Supplemental Security Income; Temporary Assistance for Needy Families (TANF), which is what commonly is known as "welfare"; housing assistance; and food stamps, or SNAP. The sixth is the Earned Income Tax Credit, which helps mostly families that earn around 150% of the poverty line. (That line is about $25,100 in annual income for a family of four.)

In each case, Weber and Wu found that the effect of each program has been materially underestimated by traditional measurements. That's because the earlier estimates are based on Census Bureau surveys that underreport benefits from these programs. As a result, the authors say, the effects of food stamps and TANF are underestimated by one-third to one-half, and the impact of Social Security is underestimated by as much as 44%. Their research covered 2008-13, the period of the Great Recession. . . .

These findings are important because all these programs, with the possible exception of the EITC, come under constant attack by budget-cutters and other conservatives. The claim is that, despite the expenditure of trillions of dollars in public funds, the poverty rate has barely budged in more than a half-century. . . .

Meyer and Wu find that Social Security alone has reduced poverty among the elderly by 75%; the other programs do more for non-elderly households, though at lower rates. . . .

The official measurement indicated that the poverty rate fell by a scant 4.4 percentage points from 1960 to 2010, ending at 15.1%. Adjusting for flaws in the measurement however, Meyer and Sullivan determined that the percentage of Americans living in poverty had fallen by more than 26 percentage points, to about 4.5%.

Housing Discrimination Contributes To Big Racial Wealth Gap

I have posted a lot about the wealth gap between the rich and the rest of America. It is huge and it is still growing. But there is another wealth gap in this country -- the gap between Whites and Blacks. This pernicious wealth gap is not closing, and the reason is continuing discrimination.

Much of that gap is due to lower wages/income for Blacks compared to Whites, and a much higher unemployment rate among Blacks. But there is another factor that is a major cause -- housing discrimination.

Some may have thought that housing discrimination was eliminated when it was outlawed in the late 1960's. It was not. Like the discrimination that continues in education, the business community, and the justice system, discrimination in housing persists -- and it contributes to the inability of Blacks to accumulate wealth in this country.

The following article on this subject is by Janelle Jones at the Economic Policy Institute. It is worth reading by those who think equality is an important concept in a free country.

Wealth is a crucially important measure of economic health. Wealth allows families to transfer income earned in the past to meet spending demands in the future, such as by building up savings to finance a child’s college education. Wealth also provides a buffer of economic security against periods of unemployment, or risk-taking, like starting a business. And wealth is needed to finance a comfortable retirement or provide an inheritance to children. In order to construct wealth, a number of building blocks are required. Steady well-paid employment during one’s working life is important, as it allows for a decent standard of living plus the ability to save. Also, access to well-functioning financial markets that provide a healthy rate of return on savings without undue risks is crucial.

Failures in the provision of these building blocks to the African-American population have led to an enormous racial wealth gap. The racial wealth gap is much larger than the wage or income gap by race. Average wealth for white families is seven times higher than average wealth for black families. Worse still, median white wealth (wealth for the family in the exact middle of the overall distribution—wealthier than half of all families and less-wealthy than half) is twelve times higher than median black wealth. More than one in four black households have zero or negative net worth, compared to less than one in ten white families without wealth, which explains the large differences in the racial wealth gap at the mean and median.  These raw differences persist, and are growing, even after taking age, household structure, education level, income, or occupation into account.

Overall, housing equity makes up about two-thirds of all wealth for the typical (median) household. In short, for median families, the racial wealth gap is primarily a housing wealth gap. This is no accident. Besides facing discrimination in employment and wage-setting, for generations even those African-American families that did manage to earn decent incomes were barred from accessing the most important financial market for typical families: the housing market. Housing policies that prevented blacks from acquiring land, created redlining and restrictive covenants, and encouraged lending discrimination reinforced the racial wealth gap for decades. Richard Rothstein’s forthcoming book The Color of Law documents exactly how such policies at all levels of government robbed black families and communities of wealth.

Even as much de jure discrimination in housing was dismantled by public policy, de facto segregation and the legacy of wealth non-accumulation kept the racial wealth gap from closing. During the housing bubble that was the disastrous run-up to the Great Recession, the exposure to predatory, high-interest, and high-leverage mortgages led to an absolute wealth disaster for African-American families when the bubble burst. In the aftermath of the bubble’s burst, black unemployment rates rose to levels twice as high as white unemployment, leading to higher rates of delinquency and foreclosure for black families. And the sluggish recovery has only made matters worse, as home values recover at different rates across racial lines.

The role of policy in creating and maintaining the racial wealth gap makes it clear just how difficult it will be to close the gap through the individual choices and behaviors of African-Americans. Educational attainment, the right occupation, and full-time employment are necessary, but not sufficient conditions for building wealth (and even equalizing these between races would be nothing short of miraculous). The typical black family with a head of household working full time has less wealth than the typical white family whose head of household is unemployed. This outcome holds for black families regardless of the time and money spent on educational upgrading. Median wealth for black families whose head has a college degree, for example, has only one-eighth the wealth of the median white family whose head has a college degree. Even the typical black family with a graduate or professional degree had more than $200,000 less wealth than a comparable white family. This is not surprising given that my previous research with John Schmitt has found a college degree really is no guarantee.

Malign social policy has created and maintained the racial wealth gap, and only a progressive reorientation of this policy can close it. 

The Minimum Wage Is A Poverty Wage

 (This map is from the website Daily Kos.)

The Republicans don't wage to raise the minimum wage -- and some would like to eliminate the minimum wage altogether. That shows they simply don't care about the working poor in this country -- because the current minimum wage of $7.25 an hour is a poverty wage. A wage that keeps millions of working people in poverty.

Note the map above. It shows the wage that would be necessary in each state to rent a two-bedroom apartment using 30% of income (the accepted percentage that allows a family to afford other necessities (food, clothing, transportation, etc.). It ranges from $12.95 an hour in Arkansas to $26.67 an hour in California. In no state does $7.25 an hour even come close to being adequate.

Now the Republicans will try to tell you that doesn't matter, because the minimum wage is mostly paid to teenagers living at home with their parents. That's a lie. About 89% of minimum wage workers are over 20 years old, and the average age is 36 years old. These are people trying to make a living on their own by working full-time -- and many of them are trying to support a family on that pitiful wage -- a wage that insures they will continue to live in poverty.

It is simply immoral to refuse to raise the minimum wage to a livable wage. These are not freeloaders. They are hard-working Americans, and anyone will to work hard should be paid a livable wage. Personally, I think a raise to $15.00 an hour is easily justifiable, but we must raise it to at least $10,00 an hour (and tie future raises to the rate of inflation). Anything else will not be adequate.

We are supposed to be a nation that orders equal opportunity to all -- but the current minimum wage offers no opportunity at all except to continue living in poverty.

A Growing Problem Of Unaffordable Housing In U.S.

The following is part of an article at Moyers & Company written by Joshua Holland. There is more,and I urge you to read it. This is a serious problem, that will only grow worse if something is not done.

A series of ugly economic dynamics have come together to create a serious shortage of affordable housing in the US.

The rent is too damn high, and here are some reasons why: Demand for rental properties is way up. Millions of families lost homes in the crash. Others, who might have been able to secure a loan to purchase a home when the banks were handing mortgages out like candy are now unable to meet stricter lending requirements that were put in place after the bubble burst. According to Census data, today’s home ownership rate is around four percentage points lower than it was before the Great Recession.

Supply isn’t keeping up. The crash brought new housing construction to a screeching halt. Typically, builders add around a million housing units per year to keep up with population growth. But between 2008 and 2010, we added only a half million units, and two million more in the three years since then.

So demand for rentals has outpaced supply. Before the crash, 10 percent of rental units were vacant. Today, that figure stands at 7.4 percent. You have to go back almost 20 years, to early 1995, to find a vacancy rate that low.

Meanwhile, incomes for most Americans remain well below what they were before the crash. In fact, when adjusted for inflation, the median income — for the family right in the middle of the pack– is below what it was in 1989. So taken together, median income and rental costs look like this graphic from Mother Jones:

That means renters are spending a larger share of their incomes on housing. The federal government defines housing costs as “unaffordable” when they exceed 30 percent of one’s income. The number of households shelling out more than that — and in some cases more than half of their incomes — has been rising, as this graphic reveals:

(Those who can afford to own aren’t necessarily doing better. While loan rates remain low and sales prices haven’t fully rebounded since the real estate bubble burst, the latest trend on Wall Street is to buy up distressed properties in bulk, take them off the market for a while and then resell them down the road when prices go up. Financial reporter David Dayen writes that this process is “starting bidding wars that have driven up some prices well above national averages.” According to the real estate tracking firm Zillow, even with today’s low interest rates, the total costs of owning a home are above historical norms in 24 of the 30 largest metro areas it covers.)

And these national trends don’t tell the whole story. The real estate markets that were hottest during the growth of the real estate bubble have seen the most painful crashes. So the “affordability gap” is a problem that’s concentrated in select urban areas, and is hitting renters the hardest.

Some cities — and some states — are taking an aggressive approach to their affordability gaps. Others are doing little or nothing to increase the supply of affordable housing.

What’s clear is that at the federal, state and local levels, a lot more could be done.

The Minimum Wage Is Grossly Inadequate

The following is part of an article written by Theresa Riley and Charina Nadura on the blog Moyers and Company. It's an excellent article, and the whole thing is well worth reading, but this part clearly illustrates just how inadequate the minimum wage in the United States has become.

Starting next year, more than half the states will mandate higher minimum wages than the federal standard.

And as much of a victory as that might sound like for low-wage workers and their advocates, it’s still not enough. In every state in the union, even those that mandate a minimum wage high above the federal mark, such as Washington state, where it’s currently $9.32 (rising to $9.47 in 2015), it’s still not enough to pay the rent. Earlier this year, the National Low Income Housing Coalition released this map (see above), showing the number of hours a low-income earner would need to work per week in order to afford the rent on a two-bedroom apartment without paying more than 30 percent of their income.

According to NLIHC’s report released earlier this year, Out of Reach 2014, “a minimum wage worker today has to work, on average, 104 hours a week to afford a modest two-bedroom rental unit.” Many advocates talk about a “living wage” when they talk about $15 an hour, as some fast-food workers have been striking for recently. But according to the NLIHC report, a full-time minimum wage worker can’t afford a one- or two-bedroom rental unit in any US state.

The hourly wage that we’d have to hit in order make the rent on a 40-hour work week? $18.92 an hour.

Greens Say Austerity Hurting The Poor

The Republicans want Americans to believe that austerity is the answer to all of America's economic problems. But the truth is that it is exactly the wrong thing to do in a sluggish economy, since it just takes money out of that economy and slows it down even more. Austerity also hurts the most vulnerable citizens in the country. The latest missive from the Green Party Shadow Cabinet shows how this new austerity that has been imposed is hurting the poor, especially in the area of housing. Here is what Green Party's Sandy Perry had to say on September 10th:

Most Americans do not see or hear about it, but the devastating effects of the bipartisan federal sequester are now emerging. Take a look at this graphic eight-minute video: http://www.siliconvalleydebug.org/articles/2013/08/26/priced-out-valley-sequester-cuts-devastate-section-8-housing-tenants

The March 1 across-the-board cuts took away $2 billion from the housing and homelessness programs of the Department of Housing and Urban Development (HUD), or about 6% of what it requires to continue assisting the families it did in 2012. The most immediate impact has been on rental subsidies because it directly withdraws funds from those families most in need. The Section 8 Housing Choice Voucher program has been the hardest hit, with up to 140,000 fewer families expected to be served by early 2014.

Also cut were project-based Section 8 vouchers, public housing, homeless assistance, Native  American housing, and housing for seniors and people with disabilities. Taken together, all of HUD’s programs were already grossly inadequate to meet the need: only about a quarter of families eligible for rental assistance actually receive it, with many stranded on waiting lists for a decade or more.

In most areas, local housing authorities absorbed the cuts by so-called “shelving” of the vouchers: they freeze the waiting lists and do not reissue vouchers when families leave the program. This has happened in Chicago, Durham, Los Angeles, Oakland, Rochester, Minneapolis-St. Paul, Salt Lake City, Lincoln Nebraska, New York City, and countless other jurisdictions. Others are rescinding vouchers after they were issued when the recipient fails to find an apartment quickly enough. Still others have simply increased the tenant portion of the rent by raising it above the traditional 30% of income, or by reducing the payment standard. Santa Clara County, California has enacted some of the worst rent increases in the nation, from 10% to up to 900%, by eliminating deductions and reducing voucher sizes, in addition to an overall increase.

Even more alarming, this is just the first year in an auto-piloted process designed to increase these cuts every year until 2021. The sequester is so cruel and stupid that neither party will now take credit for it. However, the fact is that both supported it. It passed the Republican House of Representatives, the Democratic Senate, and was signed by the Democratic president.

The sequester makes us take a hard look at ourselves. Who are we as a people, and what do we stand for? Demagogues attack Section 8 housing as “enabling” the poor, but the fact is over half of all HUD housing assistance goes to families where the head of household is a senior or disabled. To demand that they “get a job” or be removed from the program is unrealistic and unreasonable.

Many advocate that the poor, seniors, and disabled simply leave high-rent areas to make room for “value creators”. Is this the kind of community we want to live in? Do we want to be known as a place where the economy uses up our workers until they are too injured or too old to be productive, and then rudely expels them from our midst? What if they are our own family members? Are these our family values?

Some people are angry because they work hard and feel they are being asked to subsidize others when they barely get by themselves. This is understandable. But is not a better solution to expand this program so all the people who need it are helped, rather than cut it and spread the misery? It is not as if we as a country are suddenly too poor to take care of our own people. We have more wealth now than ever before in our history. The problem is that it has been redistributed upward into the hands of the corporations and extremely wealthy.

An economy and a society that has no room for the poor, elderly, and disabled is broken and needs to be replaced. It definitely needs government intervention such as the Section 8 housing program. The Green New Deal advocated by Jill Stein and Cheri Honkala would reorder our priorities by putting protection of human life before corporate profit. The purpose of the economy should be to serve people, not vice versa. Human life is sacred. Let us begin to act like it, reverse this sequester, and provide for the basic needs of our people.