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The Oligarch Recovery – Low Income Americans Can’t Afford to Live in Any Metro Area
The Oligarch Recovery – Low Income Americans Can’t Afford to Live in Any Metro Area
We were told we needed to bail out Wall Street in order to save Main Street. Well the results are in…
Wall Street has never done better, and Main Street has never done worse.
From the Huffington Post:
Low-income workers and their families do not earn enough to live in even the least expensive metropolitan American communities, according to a new analysis of families’ living costs published Wednesday.
The analysis, released by the left-leaning Economic Policy Institute, is an annual update of the think tank’s Family Budget Calculator that reflects new 2014 data. The Family Budget Calculator is a formula designed to determine the income “required for families to attain a secure yet modest standard of living” in 618 different communities across the country that the U.S. Census Bureau defines as metropolitan areas. The formula uses data collected by the government and some nonprofit groups to measure costs of housing, food, child care, transportation, health care, “other necessities” like clothing, and taxes for families of 10 different compositions in these specific locales.
The updated Family Budget Calculator shows that even the most affordable metropolitan areas in the country are beyond the reach of millions of American families with incomes above the official federal poverty level. The official federal poverty level for a family of two parents and two children in 2014 was $24,008, according to the EPI. But the least expensive metropolitan area in the country for this family type is Morristown, Tennessee, where a family needs an income of $49,114, according to the Economic Policy Institute’s budget calculator.
The Economic Policy Institute also estimates that minimum-wage workers — who almost universally earn less than the federal poverty level — lack the income needed to make an adequate living in any of the communities surveyed, even if they are single and childless. The think tank notes that this includes minimum-wage workers living in cities or states with a higher minimum wage than the federal minimum of $7.25 an hour, or $15,080 a year for a full-time worker.
…click on the above link to read the rest of the article…
How Soaring Housing Costs Maul the Real Economy
How Soaring Housing Costs Maul the Real Economy
How many years would it take first-time homebuyers, earning a median household income, to save enough money for the standard 20% down payment on a median home? Are you sitting down?
In many cities an impossibly long time, Lindsay David of LF Economics (and a contributor on WOLF STREET) found. His report on mortgage stress looked at 30 large US cities, using their local median incomes and median home prices. It assumed that young households could accomplish the tough feat of saving 5% of their income, year after year, through bouts of unemployment, illness, shopping sprees, family expansions, or extended vacations.
The results are stunning – if just a tad discouraging for first-time buyers.
In my beloved and crazy boom-and-bust town of San Francisco, where a median home (for example, a two-bedroom no-view apartment in a so-so neighborhood) costs $1 million, it would take – are you ready? – 37 effing years.
Given its higher median income, San Francisco is only in second place. The winner by a few months is another Bay Area city, San Jose. In San Diego, it would take 33 years. In Los Angeles, 32 years. First-time buyers might be retired before they scrape their theoretical down payment together. Theoretical, because in reality, too many things change, and they’re chasing after a moving target.
So lower your expectations and step down to buy a below-median home? Here is whatTwistedPolitix found on the market in that price category:
Yes folks, step right up and get your 700 sq. ft. home in Redwood City, California, heart of the Silicon Valley, for just $649,000! The American Dream! 1 bedroom, 1 bath for just $3,154 per month on a mortgage with super low interest rates if you put down 20%.
If you pay the mortgage back according to the standard 30-year schedule, in April 2045 you will have paid $1,135,721 for a tiny little [bleep] shack. Brilliant!
…click on the above link to read the rest of the article…
