Home ownership getting tough for working class
A study done by the Center for Housing Policy, released in March, found out that the percentage of working class families who own homes has gone down since 1978. In 2003, the percentage of working class families who own a home, those with incomes from $10,700 a year to 120% of the median income in their area, was 59.6%, down from 1978 at 62.5%. This trend can be attributed to many different factors. In the forefront would be the fact that the cost of homes has increased at a faster rate than that of the wage rates. A family making close to a minimum wage income has no chance of owning a home let alone supporting a large family.
So whose fault is it? Those who are providing the wages for these families or those who are selling the homes and hiking up the prices? It's tough to determine why there is such a divergence in the markets. One must look at many outside factors, such as increasing costs of other family necessities like health care, gas, and education. The study cited a combination of these reasons as well as the rise of single parenting. But shouldn't inflation take care of all of these factors? Apparently so since the overall home ownership in America has actually risen, up to 68.3%. This is probably one of the leading arguments for Congress to raise the minimum wage rate. It's time to ask ourselves, "What's more important, a competative market or homes for all working class families?"
1 comment:
It's curious that you use the word "fault" in describing the drop in home ownership rates among low income families. It's as if someone did something wrong and, therefore, someone ought to correct the mistake. From an economic point of view we are interested in "cause and effect" relationiships--fault implies some normative value.
I'm also unclear what you mean by "shouldn't inflation take care of all these factors"? Inflation is a measure of the rise in the general price level. Wages, housing prices, and gas prices are all parts of the general price level and there is nothing writ in stone that says they all must move in the same direction at the same time.
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