Featured Story: Are Low Homeownership Rates a Bad Thing?
Homeownership rates have reached a low that hasn’t been seen since the sixties according to a recent Census Bureau report, and depending on who you ask this comes as either good or bad news. In response, the New York Times asked five experts: Is the decline in homeownership a cause for concern?
Dean Baker, an economist and the co-director of the Center for Economic and Policy Research, says yes and no—but mostly yes. Because of the costs associated with buying and selling a home, Baker argues that homeownership “is not always good for everyone at all points in their lives.” Like those with unstable employment or family situations. However, wages for men have still reached their pre-recession levels and are only marginally better for women. This coupled with a lower employment levels means many people simply do not have the money necessary to purchase a home and that, more than a symptomatic decline in homeownership, is a problem.
William Spriggs, professor of economics at Howard University and chief economist of the AFL-CIO worries about the impact of this trend on America’s racial wealth divide. “Promoting homeownership will remain our nation's primary tool for addressing wealth inequality. If the decline in ownership from the more stringent credit requirements continues to hurt the recovery of Latino and black homeownership, it means that the substantial racial wealth gap will grow.”
Edward Glaeser, the Glimp professor of economics at Harvard University, argues that we should focus on housing affordability instead homeownership. Subsidizing mortgages pushes households out of economically productive and energy efficient urban centers and into the suburbs, Glaeser argues. In addition, “[home]owners are less mobile, which makes it harder for them to move from high unemployment places to high wage places.” Instead of pushing people to become homeowners by subsidizing the associated costs, Glaeser advocates for an approach that would make all housing—apartment, condo, single-family home, etcetera—more accessible for all.
The Washington Post’s Charles Lane agrees. “Our national return to Square One, homeownership-rate-wise, is thus an opportunity to rethink wealth-building strategies for people of modest means. We should de-emphasize house buying and explore alternatives that do not require people to bet on a single illiquid asset class — or make it harder to relocate in pursuit of opportunities, which is another drawback of home buying,” he writes.
News Highlights: A Vision for Black Lives, the Gig Economy and the Privatization of the Criminal Justice System
Dani McClain writes in the Nation, “One commonly asked question about this moment in black-led organizing—what some broadly refer to as the Black Lives Matter movement—is what its participants want. What are BLM’s goals and why, some critics ask, is the movement so reactive, only vocal and visible in response to police violence against black people?
Starting today, anyone with such questions can refer to the Vision for Black Lives, a document that lays out six demands and 40 corresponding policy recommendations to paint a picture of what today’s black activists are fighting for.”
The platform document includes policy proposals related to economic justice, political power, and reparations among other items. In the Atlantic, Vann Newkirk II writes, “But the development of the Movement for Black Lives platform and the increasing political organization of a range of black groups indicate that Black Lives Matter is not just another bit of disruptive political ephemera, but a movement that is learning and building as it expands. In a political moment crowded by violence, failed political revolutions, and the rise of white populism, Black Lives Matter not only endures, but advances.”
“What if millions of American workers were being denied health insurance, job security and the most basic legal protections, from overtime pay to workers compensation to the right to join a union,” asks Salon’s Julie Gutman Dickinson. It should come as no surprise that this is the reality of U.S. workers who are incorrectly classified as independent contractors. While such misclassification happens in all sectors of the economy, it is especially rampant within the growing gig economy. Dickinson argues that the practice hurts not only employees but also other employers and taxpayers because “law-abiding companies are forced to compete with low-road operators, creating an uneven playing field. Likewise, the cost to taxpayers in lost revenues from employers that illegally misclassify workers as independent contractors is enormous, cheating government out of resources that could and should be used for the common good.”
Instead of receiving cash back upon release, some arrestees receive a prepaid card loaded with the money they had on hand at the time of their arrest. The card comes with a leaflet explaining the terms and fees associated, but it’s wordy and difficult to understand (like most financial leaflets). Danica Brown received a card loaded with $30.97—the amount she had on hand at the time of her arrest—when she walked out of jail. “Over the next week Brown used the Numi card to purchase coffee and groceries. Five days later, she was charged $5.95 for a monthly service fee and then 95 cents for a declined service charge…. [A]ccording to transaction records, she lost 22 percent of her money to fees,” writes the Nation’s Arun Gupta. Now, Brown is part of a class-action lawsuit against the company behind the cards: Numi Financial. While the privatization of the criminal justice system is not news, the extent to which private firms have cornered a group when they’re arguably at their most vulnerable and made their already precarious financial situation even more unstable is deplorable.
News in Brief: Private Equity Firms, the Gender Pay Gap, Senior Homelessness and More
- “[T]he rising costs of childcare can be crippling. That’s why Sen. Angus King (I-Maine) says he partnered with Sen. Richard Burr (R-N.C.) to introduce the Promoting Affordable Childcare for Everyone (PACE) Act. The bill...would alter two major existing tax benefits—the Child and Dependent Care Tax Credit (CDCTC) and Dependent Care Flexible Spending Accounts (FSAs)—in an effort to make them more valuable for working families,” reports Tyler Bishop with Tax Credits for Working Families.
- Bloomberg’s Ben Steverman covers the rollout of ABLE accounts “which could help millions of disabled adults who worry about losing food stamps, cash benefits, or life-sustaining health insurance if they accumulate more than a couple thousand dollars.”
- Jennifer Daniel, Josh Williams, Ben Protess and Danielle Ivory put together an infographic depicting the unseen ways in which we interact with private equity firms in our everyday lives for the New York Times.
- The Washington Post’s Michelle Singletary interviews Consumer Financial Protection Bureau director Richard Cordray to mark the agency’s fifth birthday.
- The gender wage gap is real, but it affects women in various sectors differently. Vox’s Sarah Kliff explains.
- Massachusetts’ new equal pay law prohibits employers from asking for a salary history from potential employees writes Becca Andrews for Mother Jones’.
- ThinkProgress’s Bryce Covert documents the movement for paid sick leave in the U.S. over the past 10 years.
- The Atlantic’s Alana Semuels reports on a group in Oregon that have been living communally and the benefits it has in regards to childcare, schooling, and work.
- “5.1 percent of the households in the U.S. population have net wealth less than or equal to zero, while 14.0 percent have strictly negative wealth” says the Federal Reserve Bank of New York.
- The New York Times Editorial Board applauds the Department of Labor’s recent decision to award 674 workers in the cafeteria of the United States Senate back pay for missed wages, but calls on the Obama Administration to implement “model employer” for federal contractors.
- Writing for U.S. News and World Report, Mel Martinez and Allyson Schwartz report on the federal government's efforts to end senior homelessness.