Talk of the Town: The Low-Wage Recovery

According to a report from the National Employment Law Project released this week, most of the jobs added during the recovery from the Great Recession have been low-wage jobs, even though the majority of those lost were middle-wage jobs.

According to the report, the fastest growing occupations between the first quarter of 2010 and the first quarter of this year were retail sales and food preparation. While the average hourly wage for retail is $10.97, and the average hourly wage for food prep is $9.04, the Housing Wage- the amount a household must earn, working full time, to afford rent and utilities on a modest 2-bedroom apartment- is $18.25. As our report, Out of Reach 2012: America’s Forgotten Housing Crisis, demonstrated, those low wages are simply not enough to cover the cost of housing without scrimping on basic necessities like food and medicine.

The New York Times story on the report also mentions the ongoing polarization of the U.S. labor market, wherein job growth happens in both highly specialized-and high-paying- technical fields, and in low-paying, low-skilled jobs like the low-wage jobs cited in the NELP study. If this trend continues, it will mean an ever-growing gap between those who can easily afford housing, and those who can barely keep a roof overhead.

How do you think we can solve the housing problems of these low-wage workers? Is there a way to put a stop to the polarization of the labor market? What have you heard the presidential candidates, or other candidates for elected office in your community, say about these issues? Let’s talk about it in the comments.

Talk of the Town: The Long Slog

Oh, the jobs report. The first Friday of every month is a day of anticipation and anxiety as we await the release of the Department of Labors’ monthly employment situation summary. Will the unemployment rate finally drop? Will the U.S. create more jobs? Will the “long slog” towards economic recovery finally speed up a little?

No, some, seems unlikely. The July unemployment rate increased to 8.3% from 8.2% in June (which at least three newspapers referred to as just a “ticking up,” though deeper analysis reveals that a broader unemployment measure actually shows a 15% increase in total unemployment), and the number of jobs increased by 163,000.

The “jobless recovery” rears its ugly head. According to the New York Times,

the economy now produces as many goods and services — more, in fact — than it did before the downturn officially began in December 2007. But it does so with almost five million fewer jobs.

This is a lot of American workers doing the work of more than one person, and it could be a sign that employers are still too uncertain about the economy to invest in hiring more workers. Even still, the Dow Jones surged 2% after the jobs report was released, so at least Wall Street found something to like. And since it’s an election year, there’s plenty of talk about what this means for the electoral prospects of President Obama and Governor Romney.

So what’s going on? Matthew Yglesias at Slate is among those who think the Federal Reserve is not helping improve matters. While they noted earlier this week that the economy is not looking so great now, it’s not going to improve dramatically in the near future, and inflation is going to stay pretty low, the Fed isn’t going to move to loosen monetary policy (i.e., make more money and credit available in the market) right away. The European Central Bank isn’t making big moves, either.

Another frequent target of scorn is the Federal Housing Finance Agency, whose acting director decided this week not to implement debt forgiveness for underwater homeowners (NLIHC takes no position on this matter). Writing in the New York Times, Paul Krugman says that “reducing the burden on Americans in financial trouble would mean more jobs and improved opportunities for everyone,” so some principle reduction scheme should be implemented.

What’s your take on this month’s jobs report? Do you have hope for the economy turning around? What do you think elected leaders and federal agencies should do about it? How about the private sector? Let’s talk about it the in comments.

News Round-Up: Doubling Up

This week’s news round-up shows the affects our nation’s high rental costs have on families and communities.

According to the Coalition, Maryland is the 4th most expensive state for rental housing in the country. The Sentinel reports that many Maryland households are “doubling up” in response, putting a strain on households and putting more families at risk of homelessness.

Both the New York Times editorial page editor’s blog and the MSNBC Lean Forward blog posted NLIHC’s popular minimum wage map last week. Andrew Rosenthal of the Times  points out that “there are plenty of single-parent households as well as families where, for various reasons, only one member is able to work,” making the comparison between two-bedroom apartment rents and what minimum wage earners can afford relevant to the policy debate, and the presidential election.

It is easy to predict the result of this disparity between wages and rents: low income Americans are desperate for rental housing they can afford. In Sacramento, the county housing authority plans to open its Housing Choice Voucher waiting list this week. The housing authority has just 3,000 spaces open on its waiting list, and while housing authority staff have no way of predicting how many applications they will receive, they expect many individuals and families will be interested. The last time the list opened up, 35,000 applications were received.

Long-term un- and underemployment lead to cost burden among renters, but even an improving economy can put stress on the rental market. In inland California, the rental occupancy rate is up, as are rents. An economist quoted in this article suggests that as the job market improves, people who have doubled up are starting to use their new income to move into the rental market on their own, making affordable apartments even more scarce.