Dispatch from the post-Great Recession #economy | #Housing on Blog#42

In my blog post, Living the Great Recession: Notes from our new digs,  I described the living conditions in the apartment next door and many of the units in the complex we had just moved into. Little did I know that, just a couple of months later, we too wouldn’t be able to hang on and our family would be in a similar position as the family profiled in KPCC’s story below. While we are managing with great difficulty, our white privilege and varied skill sets have kept us from sliding further. I always laugh, wryly, whenever I read comments about how rich and safe my city is. Yes, it looks affluent, on the surface. Scratch a bit, and you will see the same hurt that exists everywhere else.

There are millions of Americans who have yet to recover from the worst of the Great Recession and, who, due to age and seniority at the last good job held until the start of the recession, are unable to make the climb back, not because their skills have become obsolete, but because the demand in our economy just doesn’t support the return of those kinds of jobs, or employers are hiring new graduates to fill senior positions at a third of the salaries those used to pay.

Ageism and many an employer’s perception that a six year break in many disciplines means skills must rusty beyond revival have kept perfectly good workers out of the job market. While skills might get rusty in some professions, it isn’t in most, even in tech, where people have a natural tendency to keep up with technologies and the tools of their trade. At most, for the extra careful employer or job applicant who hasn’t had a job in some time, all it would take is a relatively low-cost investment to brush up, if it is even needed.

As best I can tell, using the BLS data that is almost never quoted in mainstream economic pieces (by both journalists and famous economists who write columns), real unemployment is at 11%. The actual number of Americans who are either unemployed, underemployed, have given up looking for work because there is none, or can’t get hired, is at least 7 million. I’ve written about U6 in a recent essay in the context of general unemployment data versus Black unemployment.

Of those who are working, in some fashion, whether full time at one or multiple low-paying jobs, like my former neighbors who work in service industry jobs, the only option is to live with several other families in a two-bedroom apartment in order to secure housing. Even then, after expenses, it was clear that, even with as many people sharing the biggest expense of the household, meeting basic needs after expenses was difficult for each individual or couple.

Housing costs are still rising. Young people are not buying homes because higher education debt to earnings ratio disqualifies them, with the tighter borrowing rules since the housing crisis. That is not to say that the rules should be relaxed to accommodate buyers, that’s how we got into trouble with the housing bubble in the first place. What it does say, however, is that earnings are just too low across the board.

If a restaurant server or store sales clerk might not typically have been in a position to qualify for a mortgage and been able to afford making monthly payments, they were able to afford modest rental housing and support a family, with the spouse working part-time. This is no longer the case. My grandfather was able to buy a home on his salary and sales commission over his career working for Sears in the fifties and sixties. This would not be possible today.

New college graduates entering the job market are finding that jobs in their chosen disciplines aren’t there for them and what is there doesn’t pay the entry level salaries their parents used to command. Student debt has become so burdensome that they cannot live on their own even in shared housing, and many are returning to live in their parents home.  These young people are not marrying or having children, whereas their parents did at this juncture in their lives, to the point where there are clear indications of a shift in demographics. In an article excerpted from his book, William H. Frey writes:

“States losing white population fall into two categories: those in which employment slowdowns have triggered major out-migration (e.g., Michigan, Ohio), and urbanized coastal states with high costs of living (e.g., California, New York, New Jersey). In fact, metropolitan New York and Los Angeles lost over 1 million whites each between 1990 and 2010.

The areas that are gaining whites overlap heavily with those that are attracting dispersing minorities— prosperous and affordable parts of the Southeast, Southwest, and Mountain West—including suburbs, exurbs, and smaller metropolitan areas.”

Click here to read the rest of his article on the Brookings website. 

Affordable housing isn’t meeting demand and prices are still rising as a result. Salaries have been declining. The new part-time job economy that has become our new normal will not sustain us, even if the minimum wage is raised. Raising the minimum to $10.10 is well-below what it takes to live anywhere in the US. $15.00 an hour is the bare minimum in most places, though in the big cities like Los Angeles, Boston, San Francisco, and New York, no less than $20.00 an hour is required to meet the most basic of needs.

Student debt is at the point where it is reaching critical mass. Currently, there is neither the will or leadership in Congress to do anything about it. New college graduates are entering a workforce that just doesn’t have the jobs or salaries to support the crushing debt they face.

Without building new affordable housing, the current situation will only get worse. Without investing in our economy, hope will dim further. Without the resumption of real governance in Congress, the executive branch will remain unable to guide economic policy any better than it has over the last four years. The kind of investment required to rebuild and properly recover from the Great Recession can only be undertaken in partnership with Congress.

Seven million people are still jobless. How many are homeless? Where do they live? How do they manage to survive? No one writes about them anymore.

As a result of police brutality and the ensuing protests, we are finally learning about the horrendous conditions African American communities are under. In Baltimore, the conditions and expectations are being compared to those in India and Nigeria:

In this April 8, 2013 picture, a boy shoots a basketball into a makeshift basket made from a milk crate and attached to a vacant row house in Baltimore. The U.S. Census Bureau estimates that 20 percent of American children are impoverished. An estimated 16,000 buildings are vacant or abandoned in Baltimore. (AP Photo/Patrick Semansky)
In this April 8, 2013 picture, a boy shoots a basketball into a makeshift basket made from a milk crate and attached to a vacant row house in Baltimore. The U.S. Census Bureau estimates that 20 percent of American children are impoverished. An estimated 16,000 buildings are vacant or abandoned in Baltimore. (AP Photo/Patrick Semansky)

Baltimore Youths Have It Worse Than Those in Nigeria

A global survey of 15- to 19-year-olds living in vulnerable cities shows that social support and outlook are driving factors in health outcomes

When a teenager from East Baltimore was asked to describe his neighborhood, he spoke of “big rats going around in people’s trash, vacant houses full of squatters and needles on the ground.” A young woman in New Delhi, asked the same question, described the dirt and the “dirty water found lying on the roads,” while a young man in Ibadan, a large city in Nigeria, spoke of the smell of urine and streets “littered with paper and other refuse.”

Curated from Baltimore Youths Have It Worse Than Those in Nigeria, India

Over the next days and weeks, efforts will be made to pass a terrible trade pact, one that was negotiated in secret, by lobbyists. While there are downsides to protectionist policies, there also are downsides to the kinds of trade policies we’ve instituted since Bill Clinton’s NAFTA. The result is the economy we now have.

We need to reverse course. It may take what Bernie Sanders calls a political revolution. If electing him president is a revolution, I say, bring it on!

ABC Breaking US News | US News Videos

1 in 4 US renters must use half their pay for housing costs

| 89.3 KPCC |

That’s the finding of an analysis of Census data by Enterprise Community Partners, a nonprofit that helps finance affordable housing. The number of such households has jumped 26 percent to 11.25 million since 2007.

Since the end of 2010, rental prices have surged at nearly twice the pace of average hourly wages, according to data from the real estate firm Zillow and the Labor Department.

“It means making really difficult trade-offs,” said Angela Boyd, a vice president at Enterprise Community Partners. “There are daily financial dilemmas about making their rent or buying groceries.”

The crisis reflects one of the shortcomings of the recovery from the Great Recession: Income has failed to match rent increases. At the same time, construction has failed to keep pace with demand from renters. The recession pushed more millennials, former homeowners who faced foreclosure and low-wage workers into rental housing.

A result is that 2.3 million more families face pressures that leave them perilously close to homelessness. It’s a reality faced by Lisette Duarte, a 37-year-old living in a two-bedroom apartment with her family in northeast Los Angeles.

Duarte’s husband lost his job as an electrician more than three years ago. With both their son and daughter on the autistic spectrum and in need of care, he chose to stay at home while she worked a job requiring a 90-minute commute each way. The lost income forced them out of a three-bedroom house and eventually into a hotel, where vouchers over the course of five months helped them save for a security deposit for an apartment.

About a year ago, the family moved into a two-bedroom apartment in the Highland Park neighborhood where Duarte had grown up. Two-bedrooms in that gentrifying community rent for an average of about $1,600 a month, according to the online service Apartment List. The expense, along with utilities, consumes half of Duarte’s paycheck. The government defines housing costs in excess of 30 percent of income as burdensome.

The family relies on prepaid cellphones. They don’t dine out or go on vacations. Whatever extra income they have often goes for health care.

More than 30 percent of renters in California, Florida, New Jersey and New York state devote at least half their incomes to housing and utilities, according to the analysis. Other than Alaska, South Dakota and Wyoming, at least 20 percent of renters in every state face similarly high costs relative to income.

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