Record Number of Americans Can’t Afford Their Rent

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This post first appeared in ThinkProgress.

Public Housing New Neighbors
Public housing buildings in New York City. In 1970 there was a surplus of low-cost housing rental units, but by 2011, there was a shortage of 5.3 million units. (AP Photo/Frank Franklin II)

Paying more than 30 percent of your income on rent is what experts call unaffordable. Yet the number of people who fall into that group has reached record numbers, according to a new report from the Joint Center for Housing Studies of Harvard University.

The share of renters who pay more than 30 percent of what they make on housing, or what the study labels “cost-burdened,” rose 12 percentage points last decade, reaching 50 percent in 2010. That includes 27 percent who face a “severe burden,” or in other words, pay more than half of their income on rent, a figure that rose eight percentage points. Initial estimates show that there were a record 21.1 million renters who were cost-burdened in 2012.

The most recent data is for 2011, however, when 20.6 million people were cost-burdened and 11.3 million paid more than half what they made for housing. This problem falls heavily on low-income renters. More than 80 percent of those who made less than $15,000 in 2011 paid 30 percent of their income or more on housing, with 71 percent paying at least half. Given their tight budgets, these renters spend about $130 less on food, “a reduction of nearly 40 percent relative to those without [housing] burdens,” the authors write. “Housing affordability is thus clearly linked to the problem of hunger in America.” They also spend significantly less on health care and retirement savings.

It’s not too hard to figure out why so many struggle to afford rent. There is very little affordable housing available. These low-income renters who make $15,000 or less would have to find housing that costs less than $375 a month, yet the median monthly cost for housing that was built in the last four years is more than $1,000. Less than a third of those units rents for under $800, and a mere 5 percent go for less than $400. There were just 6.9 million housing units that these renters could afford in 2011, but there are 11.8 of these renters, and to top it off, 2.6 million of the affordable units are occupied by higher-income people. The availability of low-cost housing has been declining for decades — in 1970, there was an actual surplus of 300,000 low-cost rental units, but by 2011, there was a shortfall of 5.3 million units.

Unemployment also exacerbated the situation, although the report notes that “high unemployment rates are not the main culprit because the spread of burdens has been even greater among households with full-time workers.” Three-quarters of renters whose household heads couldn’t find a job in the previous year had a housing cost burden. But the share of those who were burdened while also working throughout the year before rose nearly 10 percentage points from 2001 to 2011, reaching more than 2.5 million people.

Meanwhile, federal subsidies to help low-income people afford housing have been hammered by budget cuts and are far from reaching everyone who needs help. One quarter of the households who are eligible for rental assistance actually gets it given the high demand that puts many on lengthy waiting lists. That problem got even worse this year thanks to sequestration, as some people who had finally moved off the waiting lists got their vouchers snatched back because of the automatic budget cuts. Between 40,000 and 65,000 fewer people will have gotten assistance this year compared to last, and if the cuts remain in place next year somewhere between 125,000 and 185,000 additional people will lose the support. Yet housing subsidies kept 2.8 million people out of poverty last year.

The inability of so many to afford rent has pushed many into homelessness. Almost half of the country’s homeless population works but doesn’t make enough to pay for housing. While there has been a decline in the numbers nationally, on any given night there are more than 600,000 homeless people, according to government data, and some of the most populous states actually saw big increases. The number of homeless students reached a record last year at 1.1 million.

Yet sequestration is also hurting the services that help the homeless. The Department of Housing and Urban Development estimated that more than 100,000 homeless and formerly homeless people would be removed from programs thanks to the cuts. Instead of pulling back on all of this investment, a way to fight homelessness would be for Congress to support the creation of more affordable housing by providing financing through the Federal Housing Administration, Fannie Mae and Freddie Mac.

Bryce Covert is the economic policy editor for ThinkProgress and a contributor for The Nation. Follow her on Twitter at @brycecovert.
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  • Bil Wood

    If the minimum wage had kept up with the rate of inflation instead of being stalled and kept down by the GOP who are paid by the richest in the country then this would not even be a story… But what do you expect when costs go through the roof on everything but over the last 30 years wages have stagnated… this is the result and I find it funny they do not even mention it in the article… priceless… like many apartments are these days.

  • Bil Wood

    Also priceless instead of saying people need to be paid more the author suggests the Government should do something about it… Yeah they should… raise the minimum wage for one and then this issue would not require aid.

  • Dylan Tiberius Pumpson

    But corporate profits!! They might move jobs to China! Y’know…moreso!

  • Thaddeus Kozubal

    I think they ought to move affordable housing to China along with the jobs. Let’s raise the white flag and turn the whole damn country over to China because the GOP doesn’t know how to run a country. Whatever happened to taxes on conspicuous consumption? Is that why all the celebrities are selling their multi-million houses and yatches because they know those taxes are coming, or is it that they can’t afford the real estate taxes anymore? John Boehner: where is your head? Is it in a warm dark place where people have been suggesting you put it for years?

  • Anonymous

    In some part of the country federally subsidized rents are much too high–pushing up rents for those poor who cannot get into the subsidized rent programs

  • Anonymous

    What kind of country are we creating? In my town they have just completed condos selling for at least a million. The baby boomers are aging and retiring and where will they live. Millenniums rent an apartment together (sometimes three to a studio) sometimes paying 2k per month. Three story “mcmansions” within 6 feet of each other sell for over 5K. Where are the ranches that older people can buy to live in? So older people have the choice of staying in their homes and taking a reverse mortgage or selling their homes to move into assisted living or renting an apartment. What kind of country are we creating?

  • Barbara Saunders

    The notion that people who live in expensive cities or regions should just leave sounds good on paper; practically it doesn’t pan out. I actually agree with you to some extent where the issue is a twenty-year-old person from, say, Michigan who moves to the “big city” and fails to “make it” there. But what about the individual who was born in NY or San Francisco or some other expensive place? Moving itself costs money, all of the job *connections* are in the home city, the support system is in the expensive place, as are (possibly) the dependent older parents. Add in all those costs, financial and otherwise, and you see that moving doesn’t solve the problem.

  • Bil Wood

    Your landlords are going to raise the rent even if you do not get more per month… case in point. The last 30 years.
    The issue is not complicated. The issue is wages have stalled the last 30 years while prices and rents increased and wages need to be raised to current levels at least. The rich will still be rich… you can relax.

  • jschlue2

    Blame it on the rich. Why is that always the fallback answer?

  • utahgirl

    There’s another issue regarding “rent”. That’s the fees associated with but not part of rent. If you ask a manager what the rent for a unit is, he/she might answer 750.00. But there are fees for parking, fees for sewer, fees for water, fees for calculating fees. The rent figure is bogus.

  • Anonymous

    Go work full time on minimum wage and then get back to me. Did you not read the article? More than 70% of people are spending HALF OR MORE of their income on housing alone, and you expect these people to be able to put aside 20-30% of their income?Listen honey, I work three part-time jobs because I can’t find full time work. I rake in about $1100/month in income. My rent is $500. My utilities is $103 because I do budget billing. I have to have the internet at home for two of my jobs. That’s $75. I pay $50 to my student loan that defaulted. My others are in deferment. Two of my three jobs are 20 min. away from where I work, so I spend about $60 or so on gas per month. There’s $30 for the phone bill. And then about $100 for food. That’s $918, and believe me- I’ve been trying to save up the extra money I have at the end of the month, but then there’s things that happen – The car needs new tires. I’ve gotten Strep Throat and have to go to the doctor all the while not having health insurance. The car needs a new battery. And now it’s the holidays, and I want to get gifts for my mother, father, sister, and nephew. If the “vast majority” are able to plan ahead and save some money, it’s because you actually MAKE decent money, so please feel free to shove on off now.

  • Anonymous

    Maybe because the rich are like triple richer than the lower and middle class combined, yet they’re the ones getting tax breaks?

  • Anonymous

    Amazingly, places like Costco are able to pay their workers a livable wage AND still have affordable prices on their merchandise. The CEOs of these massive corporations are multi-billionaires. BILLIONAIRES. Do you know how many people could be paid, full time, $15/hr for an entire year with just one billion dollars? Almost 35,000.

  • janet klein

    Find an apartment where you would consider the barebones for YOU if you were on minimum wage…add utilities, transportation ( do you know busfare?), cheapie phone, food( the basics YOU could eat if on minimum wage), paper products/toiletries/ weekly laundramat costs ( ever check out those prices?)/clothes that wear out. a haircut every 3 months, some medical out of pocket/OTC, ..now remember out of the minimum wage, FICA is subtracted…even if the state/federal taxes are minimal…so start with the net of approx $1200/month..and take out expenses…what’s left over to save so someday you can go to a movie, restaurant, or buy a gift for Christmas?

  • ozaffer

    “Paying more than 30 percent of your income on rent is what experts call unaffordable.” Shyt apparently I’ve never been able to afford rent. I live in a house with 5 other people renting out a room and working 40+ hours a week while working towards a career in my spare time and I still cant afford rent apparently.

  • ozaffer

    Try 100x – 1000x higher income. It’s because their income which is set by those rich individuals that they work so hard for every day is garbage in comparison. Work hard for 8 hrs being treated like your nothing for something they wouldn’t bother picking up off the floor.

    They are saying their time and effort is worth more then they are being payed and it’s taken them to the point of starvation and everyone speaking out to be heard. Why do these rich people believe they’re entitled to such a high wage + bonuses + benefits + payed vacation while those underneath them are never entitled to more?

  • jschlue2

    It’s too bad that so many have bought into the fallacy that if the rich had less the rest of us would have more. The rich are not rich because they have preferential treatment. In most cases they’re rich because they’ve worked harder and have been successful. They’ve learned how to make money work for them instead of working for money. The whole idea of “take from the rich and give to the poor” has failed wherever in the world it was tried. The only one’s who wound up with enough were those in power. So, if we raise taxes on the rich, just how does that money find it’s way into the hands of us in the lower and middle classes?
    Speaking of tax breaks, when Bush implemented his tax cuts, the liberals cried because it would wreak havoc on the deficit. Now they say we need to raise taxes. Under Obama I’ve paid more taxes even though I’ve made less. Also, there was a period of several years where we paid no taxes yet were able to get huge refunds due to the Earned Income Credit, among others. There are thousands of people every year who only file a tax return so they can claim the EIC and get money back. So you see, it’s not only the rich who get the breaks.

  • jschlue2

    You agree to the pay when you accept the job. If you don’t like it, go work someplace else. It’s been my experience in most jobs I’ve worked that the ones who complained about not making enough were the ones who didn’t really deserve what they did make.

  • jschlue2

    They probably think they deserve it for the same reasons everyone else thinks they deserve more.

  • ozaffer

    Yea because there’s really no reason for a minimum-wage, employers always treat their employees with some degree of humanity. There are tons of places’s that pay hard working employees well based off the effort they put in rather then a rare skill set. Because you can never go to school to get a skill then find that there aren’t jobs available for that certain skill.

    Right.. and in my experience some of the hardest workers and nicest intelligent people continue to be disrespected or ignored while being payed a low income. Mean while those in managerial positions coast by doing nothing but telling others to work. People with the only visible skill of never questioning status quo or just being at the right place at the right time.

  • jschlue2

    My wife was a general manager in the restaurant industry for many years and she managed many minimum wage workers who weren’t worth what they were making. They did just enough to get by, they called in “sick” a lot, they worked only what they were scheduled and even then they did a crap job. The hard workers were in the minority. The one who got screwed pay-wise was my wife. Even though she made more per year than her employees, because she was salaried she ended up making less per hour than most.
    I know what you mean about managers who aren’t worth anything and who get paid big bucks for simply being bossy. But you’ll have that and it’s been that way for decades. I worked in a large company that was very good to it’s employees – until they were bought out by a larger company from out east. After that things gradually went down hill. Regardless, there’s always opportunity for those whose are ambitious enough.
    Raising the minimum wage would only be temporary because everything else would just go up to match. In fact, it would probably mean job cuts and it would put a pinch on the small to medium businesses that employ a lot of people. Capping CEO salaries would do nothing to put more money in the pockets of the workers as it would probably be diverted to other things. Taking from the rich and giving to the poor never works – everyone just winds up poor.
    Finding ways to lower the cost of living is more sustainable in the long run. IMO, sky high fuel prices have caused everything to go up, so that’s one place to start. High taxes and wasteful government spending are another area that needs work. Needless government regulations also cause prices to soar as businesses pass the cost of compliance on to the consumer.

  • Paul Merritt

    It is like you’re living in some fantasy world where we can’t see the counterexamples of Western Europe or the Scandinavian states. Wealth redistribution, even what we would consider extreme redistribution, neither necessarily makes everyone poor nor removes incentives to work. It simply makes the lot of those who would otherwise be poverty-stricken much less horrible while reducing the grotesque wealth of the super rich.

    I understand how awful these policies seem to those who are indulging in the delusion that luck had at most a minor role in their own success (or the failure of others), but that’s no reason to ignore the only good solutions to the very real and pressing question of how to address an increasing lack of jobs that pay even a subsistence wage.

    While your passing swipes at regulation and government waste don’t merit any discussion, you should reexamine your belief that hard work and ambition are all that are required for “opportunity” and presumably a path out of poverty. Neither are a guarantee, and you don’t actually need to work hard or have ambition if you are sufficiently fortunate in your circumstances of birth. To take homelessness and poverty as a sign of moral failure as you are implicitly doing is a pretty galling example of both being hilariously out of touch with the reality of the working poor and shifting additional blame onto those who are already social pariahs.

  • ozaffer

    I agree there are lazy people on both sides and hard workers on both sides. I do not agree that there are always opportunities as not everyone can be promoted there are actually a very small amount. Not everyone can be managers (as you pointed out GM really isn’t that glamorous anyway but it is a little better for a lot of your time) and even less positions are available higher then that.

    Agree completely on minimum wage increases. If anything it’s just a very short term solution for low income people and it hurts small businesses. I do not agree on the CEO cap, money can’t just vanish if it’s not going into their pockets and it’s not going into business cost then it only makes sense the profit would go towards the lower income employees that way the CEO’s could raise their own income. Now I do believe they could find ways around the law but the law could always evolve to counter what ever new shady business practices are created. Not everyone goes broke when your try and control exploitation, money doesn’t vanish if it doesn’t go in the riches pockets, that’s just scare tactics with no grounds. Now if it does go in their pockets as it does now there is a very real chance that it will stay there or with close friends while the poor suffer.

    Gas factors into cost but it seems pretty insignificant given that cost of just everything simply rises with the cost of gas.

    Governments “wasteful spending” is opinionated and really I don’t believe it factors into this subject greatly. It doesn’t effect the amount of taxes taken away, it just changes the way it’s spent and how much they are really doing for the people with the money they are collecting. When you have campaigns funded by big corporations, lobbyist bought into office, and bailouts when owners make bad investments and poor business decisions I really question who’s getting screwed there.

    Regulations seem necessary to me, I like to not be killed, injured, or poisoned from businesses. I like that they are held somewhat accountable for major disasters they cause to the environment and are watched to ensure they don’t run amuck. There might be some unnecessary ones in there I don’t know of but for the most part they seem to be put in place because they are needed as we know most business only care about profit and that can be dangerous for everyone.

  • jschlue2

    Seems like you’re the one in the fantasy world Paul. While we’re redistributing the wealth, why don’t we start by taking some off the top of your income? Why would anyone want to work hard to succeed when the fruits of their success are going to be taken from them and given to someone else? Sounds like one heck of an incentive to work to me. And who’s to decide how much wealth is “grotesque” – you? In most people’s minds, “too much” usually starts where theirs stops. A person is not driven to poverty simply because someone else has more. They tried that experiment in Russia and their economy still hasn’t fully recovered.
    And talk about being deluded? If you seriously believe that those who are wealthy and successful are that way mostly due to luck you are sadly mistaken. Sure, there are those who are born into wealth, but the vast majority of wealthy people are there due to a lot of hard work and a drive for success.
    Excessive government regulation increases the cost of doing business and therefore affects jobs and wages. Wasteful government spending requires increased taxes which also affects the amount the average worker takes home on payday. I also never said that hard work and ambition are all that are required for “opportunity”, but a person will be further ahead with those qualities than without, and will be further ahead than some poor slob who just sits on his hands whining about how unlucky he is.
    As far as your assertion goes that I’m taking “homelessness and poverty as signs of moral failure” and “being hilariously out of touch with the reality of the working poor” you couldn’t be more wrong. My wife and I both lost our jobs within the last year and we and our kids have been living in a motel for the last five months. According to the government we make too much money (even on unemployment) to qualify for Food Stamps or rental assistance. My unemployment has run out so right now we’re barely getting by. I also know what it’s like to try to find another job that will pay enough. But there’s always something you can do to make your life better if you don’t just decide to sit back with your feet up and your hand out. Two of my kids are paying their own way through college using only financial aid and working part-time jobs. Our youngest is a senior and next fall will be doing the same. My wife has gone back to school online to finish the degree she started many years ago, paying for it only with financial aid. There are things a person can do to improve their situation if they want to apply themselves and do what it takes. I know that won’t work for every last poor person out there, but it will work for enough to make a difference.

  • Paul Merritt

    Hey, give me universal healthcare and European standards of services or Universal Basic Income and I’d gladly give up half or more of my salary. I live in the South Bay, work in Silicon Valley and I happily vote for every bond initiative and tax increase that comes along because the reality is that I want services that cost money, and I want those services for everyone.

    As far as “grotesque” being subjective, fair enough. I tend to characterize a system where the top 1% posses more than double the wealth of the bottom 80% as being monstrous, but your mileage may vary. I would much rather we return to a society closer to the one we created in the wake of the Great Depression, where the rich were comfortable but not totally removed from everyday life. Of course, since marginal tax rates peaked at 90%+ until JFK, the country was obviously devoid of productivity and the Value Creators had all fled to the moon or something so I must be remembering that incorrectly.

    Glad to hear that we’re jumping straight to red-baiting. Why not just call me a commie? In any case, you haven’t addressed any of the modern examples of Socialism in practice. How to you explain the continued success of Norway? Sweden? Finland? Are *all* of those countries merely anomalies who have merely so far escaped the economic collapse that inevitably follows high taxes and accompanied high redistribution? When can we expect their collapse?

    It must be terrible to live with the idea that everyone who has not succeeded or even failed simply didn’t try hard enough. That’s the only reasonable inference one can make if you attribute success or wealth primarily to hard work. I suppose you could argue that your incoherent “drive for success” is doing a lot of heavy lifting: in that case, I guess the children born into destitution merely need to attend more seminars on how to think like a winner. Every person that has accumulated immense wealth stands on the shoulders of the tens of thousands that put in as much or more work but guessed the wrong industry, timed their launch incorrectly, knew the wrong people, or simply were unlucky. Every single one. These wealthy aren’t superhuman, they aren’t Randian paragons, and they aren’t unique: for all their dedication and commitment to the job, what sets them apart is being lucky. Hard work isn’t exactly a rare trait, after all: we as a country put in more hours at work than we did even 10 years ago, and we work *far* longer hours than most of the rest of the world. Despite that, the average American is worse off in many ways than the average French or German person. Unless you want to make the argument that the rich are typically working 48 hour days your ideas about the difference between the wealthy and the poor just aren’t credible.

    Regulation is too complicated a topic to really get into, but suffice it to say that there are highly regulated countries and states that are very successful. California is very tightly regulated relative to Texas, but only one is a third world country, for instance. I’d much rather be average or poor in California than be rich but have to live in Shanghai. There are definitely bad regulations and regulators, but if the Bush and Reagan years taught us nothing else it is that deregulation isn’t a sure thing.

    I’m sorry to hear that you and your family are going through hard times. I’m glad that you’re keeping a positive attitude and working to try and better your position, but I’d encourage you to think about how many calamities, runs of misfortune, or just raw deals separate the guy on the street with his hand out from you or people like you. Most of us are just a few disasters away from serious financial trouble, even if we do everything right. You’re lucky (or, if you prefer, not unlucky) enough to still be in a position where your wife and children can go to school: many of my friends had to drop out in order to support themselves or their families during the hard times. I absolutely resent the implication that they are morally compromised because they aren’t “bettering” themselves due to being too tired to code an app or attend classes after putting in their 60-80 hours a week.

    Finally, the terrible reality is that we are moving into a future where the norm is going to be increasingly high unemployment. As automation becomes more and more sophisticated, the number of jobs that can be done by machines (either physically or through Big Data) will skyrocket. So far this trend has punished people in blue collar professions, but it won’t be long before many, many professionals begin experiencing the negative consequences of technological progress. There won’t be enough jobs to go around: the classic answers of “repair the machine that took your job” or “retrain for a new industry” won’t be a credible response. At that point, we can either resign ourselves to having a lot or even most people living in squalor and/or desperation while the ultra rich essentially exist in their own world, or we can look seriously at how to make things a bit more civilized in a future where wealth generation is even more skewed toward capital.

  • jschlue2

    The countries you speak of are not entirely socialist but rather have mixed economies, kind of like a capitalist/socialist hybrid. They have smaller, homogeneous populations and strict immigration standards, all of which contribute to low corruption and abuse of the system. They are also some of the largest debtor nations. Their systems would not work here because the US is too large and too diverse, with too many people willing to play the system rather than contribute to it. Even in those countries and in Europe, the cracks are beginning to show. In fact, no socialist government has managed to last more than about 80 years. Socialism is unsustainable in the long run.
    “Red Baiting”? Really? I was simply using Russia as an example. You seem to like to respond to what you think I’m implying rather than to what I am actually saying – lots of straw men being set up here. I never said that all poor people are where they are through their own fault or that all of them can pull themselves out of their predicament, a lot can. The typical response though, is to blame someone else for one’s problems. We have families in this country where several generations have lived off of welfare – that cycle needs to be broken, but throwing more money at it won’t help.
    As far as you and your friends, if you like socialism so much you should gather up them and a bunch of other folks and form your own little co-op so you can redistribute the wealth and make sure everyone has enough…

  • Anonymous

    Should city governments just gonna start sending poor and working class people in from the coasts to the interior? Kinda like ‘Orphan Trains’ for the 21st century.

    What are we gonna do when we get there and what are you gonna do when we are gone? Who will walk your dog,do your laundry,take care of your children/parents,drive your cabs? Recently, in a NYT story on housing a professor at Columbia U. was profiled the only reason she has manageable rent is she lives in university housing. She makes north of 100k a year. She is not part of the ‘undeserving poor’,she is not someone who anyone would see as responsible for her difficulties. There is something wrong structurally if it impossible for economically diverse cities to exist on either coast.

  • Anonymous

    Did you read the first response? Ozzaffer shares a house w/5 others and that is not unusual at least not in NYC. There are folks living communally,there are people renting rooms and couch surfing. You only see the tip of the iceberg…

  • Anonymous

    Yep. As someone who was born in one of the most expensive housing markets in the nation, that comment is incredibly insulting. Most of my family and friends are here. I’m supposed to leave so some developer can turn my apartment into a condo? Why don’t THOSE people go back to the suburbs and leave the transit-accesible apts for those of us who can’t afford a car? How on gods green earth am i supposed to be a subsistence farmer? Farming requires skills I haven’t learned, and land I can’t afford (land thats not mountain-top-removed or fracked or otherwise polluted). And if I needed to supplement my cultivated foods with hunting/gathering, how much fish / game / edible plants are left out there at this point? Capitalism has “proven” itself necessary by stamping out every viable alternative

  • Anonymous

    If the rich had less the rest of us would have more. PROVE thats a fallacy. You can’t, because its true. The stock market and corporate profits have totally rebounded from the recession while payroll and unemployment have not. Working class America is more and more productive but our income is flat and all the gains are being gobbled up by the very tippity top of the economic pyramid. That trend is born out by actual data. Regarding tax credits- The working poor spend their tax credits in the local community, while tax credits given to highly profitable corporations enables off-shoring/automation of jobs and destabilizing speculative boom-and-bust investments. Again that trend is born out by actual data. Taxing some of that rich people money could pay social wages to the rest of us- social services, transit, healthcare, education, low interest loans and grants to start small businesses and buy modest primary residences. Govt spending doesn’t always have to build bombs and prisons

  • Anonymous

    “If you don’t like it, go work someplace else”

    …or ask for a raise.

    If all the cashiers at Shop&Drop somehow managed to get engineering degrees on a cashier’s wage with a cashier’s schedule, what would really happen next? Acme Engineering starts laying off most of their high paid engineers, keeping just a few on to supervise the former cashiers. The former cashiers work for less, because ANYTHING is better than the Shop&Save. Acme’s laid-off engineers start ringing up groceries ‘for now, until the economy picks up’. They (mistakenly) see the cashier jobs as temporary, so they don’t bother trying to bargain or negotiate with Shop&Drop for better working conditions. And Shop&Drop couldn’t afford it now anyways- plummeting salaries in the engineering field has caused a drop consumer demand. Maybe if the cashiers had asked a few years ago when the Stop&Drop was doing better…

  • jschlue2

    Ok, Wiser, if that’s true, then how does the extra money wind up in your pocket? Suppose we pass a law tomorrow that all CEOs and management types need to take a 75% pay cut. How does that give anyone else more? Suppose we legislate that Bill Gates and all others like him can only keep, say, half a million of their billions. How does the excess get to you and me? Who decides how much is too much?
    Maybe we should just tax the heck out of them. Sure, that’s the answer! That would work out just great because the government handles money so wisely as we all know.

  • Anonymous

    Raising the minimum wage has been shown to cause some inflation, its true. But not enough inflation to render the wage increases completely ineffective. When minimum wage goes up, minimum wage workers actually go out and spend that money at other businesses that employ people for minimum wage. Basically, the profit margin per hamburger goes down, but Burgerworld makes up for that by selling more hamburgers. Burgerworld CAN’T lay people off, because so many min wage workers have decided they can afford a hamburger instead of spaghettios and those burgers aren’t gonna flip themselves. Generally, this is the scenario that plays out when minimum wage is increased- this is supported by actual data gathered in the real world.

    And raising the minimum wage is actually a rising tide that lifts all boats- if the minimum wage is raised to 15$/hr, then everyone who is currently working for 15$/hr can now threaten to quit their current job and just pay their bills flipping burgers. If their current boss wants to keep them, they’ll probably need to give them a raise. This ripple effect in wages/salaries actually cascades across the economic spectrum.

    The exec salary cap is not a dollar amount, btw, its a ratio. So there would still be no limit to how much these execs can pay themselves. They always want more, and they can still get more. They just would be required by law to also give more to their lowest paid employees. This law wouldn’t actually stop any tide from rising, it would just require the rising tide to lift all the boats.

    Taking from the rich and giving to the poor actually strengthens the middle class- small business owners now have more customers who can afford their service/product, people who own a two family house can charge a little more rent, etc. Demand side economics is logical and born out by real world data. Supply side is an affront to logic and there is 30 years of real data that shows exactly what any sane person would predict- if people can’t afford widgets or don’t want widgets, making a warehouse full of widgets doesn’t induce anyone to buy a widget.

    Really, how do you propose to lower the cost of living without redistributing wealth, without having the govt choose winners and losers? How are different sources of energy going to compete freely for market share if the Govt is subsidizing energy? You know, Germany now gets half their energy from solar panels. They actually eliminated the subsidies for solar energy and the market didn’t collapse. BOOOM. Labor action, bad publicity, regulation/enforcement, taxes- this stuff is PART OF THE MARKET. Working people negotiate contracts and govt enforces them, thats just the way it has to be. The alternative is slavery enforced at the barrel of a gun.

  • jschlue2

    Wiser – my daughter is a cashier/deli worker at a local grocery store and she’s graduating from college next month. She paid for it entirely on her own with only her part-time earnings and financial aid. My son is a part-time cook at Applebee’s and he’s doing the same thing. My youngest is a senior and will start college in the fall, doing the same thing. We all live in a motel right now, living off of my wife’s unemployment and guess what? She is going to school online to finish the degree she started many years ago and paying for it with – drumroll – financial aid! So it is possible to better yourself and to at least try to give yourself a shot at a better life. The problem is that too many otherwise capable people are just sitting around crying in their beer about how unfair life is.

  • Anonymous

    yup. Its supply side economics applied to the labor market, and supply side economics is idiotic. We can see plain as day that inputing more educated workers into the labor force has not increased the demand for them. College graduation rates are up, but most of the employment growth is in the service industry, corrections- jobs that don’t require a college education. 60% of the workforce has a college degree but only 40% of the jobs require a degree. If 100% of the workforce had a college degree, it would only increase competition for the same supply of jobs, driving down salaries, reducing consumer demand, hurting businesses, causing execs to look for ways to save on payroll, further reducing consumer demand, lather rinse repeat til we are completely screwed

  • Anonymous

    There ARE less “good jobs” nowadays and more competition for them. Admitting that aloud doesn’t mean I have my feet up and my hand out. Totally false equivalency. Plenty of people out there who are working their hardest to get themself ahead AND working hard to improve the situation for everyone as well

  • Anonymous

    Oh we can’t do that because brown people! thats not racist at all! “…homogeneous populations and strict immigration standards … which contribute to low corruption and abuse of the system.”

    Welfare-to-work has been the law of the land for nearly 20 years, putting a 2 year limit on income assistance. But still people say stuff like “We have families in this country where several generations have lived off of welfare – that cycle needs to be broken”. SMH

  • jschlue2

    The minimum wage is higher now than it was 10 years ago – how has that helped? To pay some high school kid $15/hour to ask, “Would you like fries with that?” is grossly unfair, considering there are a lot of hard working people out there with much more education and experience who have not come close to making $15/hr their entire lives. Minimum wage was never meant to be a living wage. And there wouldn’t be just a little inflation as you suppose. If you double the wage a burger flipper earns, then everyone else will want more (and rightly so) and you’ll be right back to where we are now in no time.

  • jschlue2

    Who said anything about “brown people”? “Homogeneous populations” in this case means that everyone shares the same basic ideals and philosophy of life – it has very little to do with race. When the population is smaller and like-minded, corruption and abuse are much lower than when the population is larger and more diverse – regardless of race. There are too many people in this country, of ALL colors, who would rather sit back and collect a check every month than contribute to the common good – that’s why the so-called “Nordic Model” of economics won’t work here. I have many good friends who are black, so you can’t rightly call me a racist.

    “Welfare-to-work has been the law of the land for nearly 20 years, putting a 2 year limit on income assistance.” That only applies to the Temporary Aid for Needy Families (TANF) grants that the Federal government gives to the states. The individual states also fund and administer their own welfare programs. According to a recent CATO Institute study, there are 11 states that pay welfare rates that are greater than the starting wage for a teacher, and 39 states that pay welfare rates greater than the starting wage for a secretary.

  • Carol Morgan

    Save money? That’s your solution. Darling…you can’t save money for a rainy day, when it’s ALWAYS raining.

  • Carol Morgan

    “Behind every vast fortune, there is always a crime.” Honore de Balzac (that’s why, Hon) True in 19th century France, truer today in America.

  • Carol Morgan

    Hard work brings success is a myth. If that were true, every woman in Africa would be a millionaire.

  • Carol Morgan

    When America was at its most productive in 1952-53, the rich were taxed at 91%. We had money for infrastructure and education.

  • jschlue2

    And Santa Claus comes at Christmas.

  • jschlue2

    And the stork brings babies.

  • jschlue2

    That was the marginal tax rate. The marginal tax rate is the top rate of income tax charged to individuals on their last dollar of earnings. On average, a person making, say, $500,000 would pay substantially less than 91 percent of their income in federal taxes. In fact, someone would have had to make $2.3 million or so to get to 91%. You might want to get your information from someplace other than a Michael Moore film.

  • GregoryC

    Yet nearly 2/3 of the new jobs created in this economy are low-wage, no-benefit service sector jobs in retail, restaurants, ‘leisure and hospitality.’ When the majority of jobs created pay minimum wage (or lower if you’re a server in a restaurant), minimum wage jobs have become the new normal. Minimum wage peaked in buying power in 1968 and according to Robert Reich and Sen. Elizabeth Warren should exceed $10 to over $20 hour if adjusted for inflation, cost of living and productivity gains.

  • jschlue2

    Wages in general have not kept pace with inflation. When I lost my last job I was making a couple of grand less per year than I made at a job I had 10 years earlier doing similar work. You can’t raise minimum wage to $15/hr without raising all wages at a similar rate. So, unless you want to pay $10 for a Happy Meal, you’d better figure something else out.

  • jschlue2

    And you must know you are an amoral union apologist. Unions cause more harm than good. My daughter is a case in point. She works at a grocery store that is part of a chain. When she started there it was unionized – one of only a couple in the chain that were. The employees hated it, and the first chance they had they voted it out. The working conditions and benefits under the union were worse than at the non-union stores in the chain. The union offered my minimum wage earning daughter absolutely nothing except junk mail every month and a lower take home pay because they deducted union dues after she turned 18. The only people that benefitted were the union leadership.
    And spare me the sob story of how the Waltons have made “billions off the backs of minimum wage workers who work pretty damn hard.” Walk into your average WalMart and see if you can find one, let alone watch them work hard. Until recently my wife had been a General Manager in fast food for over 10 years, and the majority of the minimum wagers she supervised were adept at getting by with doing as little work as possible.

  • http://www.deathbycoldsteelreport.com/ Seattle206723

    Since you work 3 part time jobs I’m going to share with you something that will help you out if your willing.

    Go to The Truckers Report dot com. Look for Oilfield Trucking Make a Post:
    “Looking to Work in Odessa Oilfields”.
    I’m willing to help you get a good job if your willing to move and capable of doing the work.

    In 3 years from when you start; if you got the drive like I believe you do. You will be glad you followed these couple steps. If your an ideal log and wont work for BIG OIl then fine. Its up to you.

  • Anonymous

    What is it with people telling me to move to flipping Texas? I live in northern Indiana. I don’t HAVE the money to move to another state, let alone one that’s over 1000 miles away.

  • http://www.deathbycoldsteelreport.com/ Seattle206723

    What you don’t know is this; all you got to do is get there. Most of the Big Service Companies will give you a hotel for a month or two. I showed up in 2011 with my just a few hundred dollars.

  • http://www.deathbycoldsteelreport.com/ Seattle206723

    PS to be honest I stayed in the hotel for 4 months before I had the money to move the whole family down. So as long as you come to work they take care of you.

  • Anonymous

    You’re basically saying that some people in this country could have a safety net but diversity and immigration means other people will abuse it. There ARE racist implications there, regardless of your status as a racist/non-racist, regardless of how many black friends you have. Who is “some people” and who is “other people” exactly? You say welfare can only work when “everyone shares the same basic ideals and philosophy of life”? According to you, sooooomebody has a fundamentally different way of thinking that makes them abuse the welfare system. Thats an enormous claim to make, perhaps you have a sociological study to back it up? Who exactly are we talking about here? Who would you say has this different way of thinking?

  • BrokeInAmerica

    I’ve been on the affordable housing waiting list for two years now. In my case it’s for an apartment. The manager did call me a few weeks ago and informed me that I was now number ten on the list. That was the first time I’d heard from them in almost a year.

    The thing is this. I’m on social security disability and that is my only income. If I were forced to rent a house or apartment without any help financially my rent would be over two-thirds of my monthly income. Groceries alone would take the rest.

    This is the America we live in.

  • jschlue2

    The only racist implications are in your own mind. If you really read what I wrote you would see that I’m not implying anything. You’re awfully close to race-baiting here. We’re not talking about welfare in as much as we’re talking about the “Nordic Model” of economics. I’m not going to repeat myself, so if you want more information, Google “Nordic Model”.
    You’d have to be living under a rock or in complete denial to not know that abuse happens in the welfare system. I know it happens because I have witnessed it personally, and for your information, all of the people I’ve known who have played the system were WHITE. The abusers come in all shapes, sizes, sexes and races.

  • Anonymous

    If all different types of people abuse welfare, then why would a homogenous native-born population curb abuse? I’ve posed some very explicit questions to you and you haven’t really responded directly to most of them. You should realize your post had most of the GOP’s southern strategy contained in it.

  • jschlue2

    It seems you’re just itching to find a racist motive here, no matter how much I’ve explained myself. The answers to your “explicit questions” are plainly seen in what I’ve already written and the things online I suggested you look up. You seem to think that I have a particular race in mind and that I’m just hedging and not wanting to say who I’m really thinking about. I’m thinking that you are non-white and that you think I’m directing my comments toward whatever ethnic group you’re a part of. It really seems like you’re calling me a racist, but it’s becoming more and more obvious that you are the one with the race problems. It’s really quite sad to see someone so seemingly hard-wired to find racism in everything.

    .

  • Anonymous

    still wondering – “If all different types of people abuse welfare, then why would a homogenous native-born population curb abuse?”

    If you really can’t answer this question directly, you’ll have to find a new race-based smear to deflect it with. I’m actually white. Maybe you could avoid my question by saying something about paternalism and white guilt?

  • Anonymous

    Military veteran who lost my active duty career in 2012, thanks to Congress. With a 50% pay cut since coming off active duty, rent and child support (for children I could afford when on active duty) will force me onto the streets once my current lease expires at the end of March.

    Shameful what is being done to folks in this country, especially to those who have served. Also shameful the punitive child support men are forced to pay by the “family court” system.

    Folks have no idea how bad things really are in this country… Rent prices are absurd, and it is hardly possible to find safe places that are affordable.

  • Arsh

    Good luck finding affordable rent in this economy. a 1 bedroom apt is $740 a month here and rising (doesn’t include electricity or internet which is now required for bill paying). Bringing home 40k a year puts “affordable” rent at $600 a month. We’re in dark times, and I no longer look down on people for living at home. I’m shocked it hasn’t turned into everything from grandparents to grandchildren crammed in 1 house.

  • Athos

    This is because wages have been flat for decades, in some cases shrinking. I had wanted to sell my condo because of abusive association treatment and discovered there were no affordable rentals in the area. I am unemployed and set to receive early retirement in November. Restricted income. I break even at best. I’m stuck.
    Related, same condo: I just got an estimate for painting the whole unit: $1875. One guy did it 10 years ago for $800. Did the hourly labor rate for painters increase at the same percentage?
    I assume a lot of renters put it on their credit cards. That’s just getting in deeper over their heads. I refuse to do that. Zero debt. I don’t do interest. To be fair, some people have no choice.
    Property management companies want to charge $1400 for a 2BR unit, people need to be making a wage where that amount does not exceed the 30% rule.
    To afford that you need 4 adults (2 sharing a BR and bath) working full-time at, where else, Walmart type jobs and they would squeak by.