[Puffer Fish]

Man explains why a combination of high rent and miserly hourly wage is the downfall of society
by Abhiram Sajai, Scoop Upworthy - Cloud Tiger Media, February 6, 2024

Man shares his insights into the dark reality of wages failing to keep up with abnormally high rent, pushing people into a circle of poverty.

Wages failing to meet the rising cost of living has become a significant problem that no one can turn a blind eye to. The bare minimum people want these days is to afford basic housing with their hard-earned money, but even that seems challenging. Lucas -- who goes by @LucasBrownEyes on X (previously Twitter) -- shared an elaborate post detailing how the average rent and hourly pay in the US does not compute. The post has become quite popular on the platform, with 781.6K views, 23K likes and over 7K retweets.

>>The median US rent is $1967. Which means the median US hourly pay which would be considered livable (1/3 of rent) should be $35.40 The current US median hourly pay is… $17.02 Society will never be "okay" until this is fixed. It'll always feel like a bad economy because of this
Feb 3, 2024​

He provides a hypothetical scenario of an individual being paid $17 an hour. It would mean that they made $34,040 in a year. If one takes into account a one-bedroom space that was rented out at $1496 a month, the total cost in a year would be $17,952. So, the individual would end up paying an astounding 53% of their salary towards rent, leaving very little for expenses and savings.

But as he points out how there were families that only had a single source of income and needed living spaces that had more than one bedroom. He states how the one-third budget rule came about as a solution for single-income households, but that was not relevant anymore. Even before the 1960s, when a large majority of households survived on a single source of income, the rule of thumb was to allocate only one-fourth of the monthly income to housing costs.

Even for an individual to afford a one-bedroom house complying with the one-third rule, they would have to make at least $26.93 an hour. But accounting for taxes would push the average individual to spend 44% of their income on housing.

As he points out,
>> In real life -- median 1 bedroom is about 64% of a median income
​
Things in the U.S. are becoming more difficult, even for those solidly in the middle class, especially for the younger generation just starting off in life.
But for lower income people, those in the working lower middle class, people are increasingly finding themselves squeezed between a rock and a hard place, as the idiom goes -- between high rent prices and low wages.


other related threads:
The Australian Dream Has Died, Housing Too Expensive
Rising rent costs force some Canadians to take on additional part-time jobs

[Puffer Fish]

to get some idea of what it's like living on minimum wage in the U.S., even in a state where the minimum wage is much higher

Woman left homeless after her motorhome stolen (posted in Minor & Human Interest Stories, 9 Feb 2024)

[Potemkin]

Communism, @Puffer Fish. It’s the only answer. You’ll see that some day.

[Puffer Fish]

Communism, @Puffer Fish. It’s the only answer. You’ll see that some day.

It does seem like a last resort.

Wouldn't it just be easier to cut off migration and hopefully give things a rest to allow economic growth to outpace population growth? Lower competition would probably also help push up wages.

Look at how inexpensive home prices in Japan have become compared to the U.S. now (for comparable areas). The difference is Japan has far lower rates of immigration. Not saying that is great, but shows what declining population will do for housing prices.


I've also posted numerous examples in this forum about how immigration has been the fuel behind big corporate takeovers of what used to be smaller businesses.
Because before, when opportunities were better, it was harder to find people willing to put up with those conditions.

[Pants-of-dog]

It does seem like a last resort.

Wouldn't it just be easier to cut off migration and hopefully give things a rest to allow economic growth to outpace population growth? Lower competition would probably also help push up wages.

Since undocumented immigrants are the main labour force for housing, their absence would undoubtedly drive up the cost of housing significantly.

If you reduce supply of labour while keeping demand stable, labour becomes more expensive.

Look at how inexpensive home prices in Japan have become compared to the U.S. now (for comparable areas). The difference is Japan has far lower rates of immigration. Not saying that is great, but shows what declining population will do for housing prices.

Please provide a study showing that Japan has reduced housing costs because of less immigration.

[Puffer Fish]

Since undocumented immigrants are the main labour force for housing, their absence would undoubtedly drive up the cost of housing significantly.

But more housing would not be needed if it were not for more migrants.

The total U.S. population would not be growing at all right now if it were not for foreign immigration.

And if you always say "Things are too expensive so we need to bring in more cheap foreign workers", it's going to be a race towards the bottom in wages.

I also find it ironic because usually the Left is the one who focuses on demand-side economics while conservatives focus on supply-side. But here you attempt to be arguing the opposite.

Your beliefs are situational, isn't it?

What if I said fast-food is becoming too expensive for many Americans to afford, so we need to lower wages?
You'd be outraged.

[Puffer Fish]

Please provide a study showing that Japan has reduced housing costs because of less immigration.

You already know that it's not possible to "prove" economic effects.

What you ask is like asking for some sort of study proving that printing more money causes inflation.

But it is kind of logic and basic common sense that if you add too many people and there is a housing shortage, it will push prices up. And likewise it is common sense that the many abandoned homes in Japan are due to demographic population decline.

I can certainly prove to you that the cost of space, in many American cities, now costs as much or more than the cost of the building. If you think that would help me prove the argument.

[Puffer Fish]

I can also point out to you that, if you have a bunch of older homes, new homes will not start being built until the home prices go above a certain threshold.

So even assuming unlimited building space, construction of new homes will not prevent the prices from increasing if you add more people, until the prices reach up to a certain high enough level.

Not to mention that newer homes are always going to have a small premium in their price because they are new.

It costs money in an economy to build lots of new homes, and someone ends up paying for that additional cost. If you do a basic economic analysis, you can see that all home prices go up in this situation, even for the older homes.

[Pants-of-dog]

But more housing would not be needed if it were not for more migrants.

The total U.S. population would not be growing at all right now if it were not for foreign immigration.

I am not sure that is accurate.

It would depend on several factors.

[Pants-of-dog]

You already know that it's not possible to "prove" economic effects.

I did not ask for proof.

Proof is not the same as evidence. I asked for evidence. It is possible to provide evidence for a causal relationship in economics.

Japan has invested heavily in publicly funded housing since 1948, and has national zoning laws that limit urban sprawl. These seem far more important than demographics.

[Puffer Fish]

Japan has invested heavily in publicly funded housing since 1948, and has national zoning laws that limit urban sprawl. These seem far more important than demographics.

You can't understand the reason Japan has less urban sprawl until you understand demographics.
If you know history, urban sprawl did not start becoming an issue in the U.S. until right after racial segregation policies were ended.

In 1951, 73 per cent of American households owned cars, and 59 per cent of workers used their cars to travel to work, but still urban sprawl was not a problem then.

Japan's subways are so safe it's not extremely unusual to see 9 year old girls travelling to and from school all by themselves. That's in Tokyo. Now try to imagine that happening in New York City. Guarantee the parents would be arrested for putting the child in imminent danger.

Might have something to do with why Japanese families are content to stay in the big cities.

[Unthinking Majority]

Since undocumented immigrants are the main labour force for housing, their absence would undoubtedly drive up the cost of housing significantly.

If you reduce supply of labour while keeping demand stable, labour becomes more expensive.

The US birth rate is below replacement levels so the US population and demand for housing (and housing prices) would shrink without immigration. Illegal immigrants of all kinds need homes too and it obviously is driving up demand and cost for housing.

Obviously the US needs some immigration. So if they need labour to build housing then they should focus on bringing in that labour legally.

Legal labourers built homes for a long time, illegal workers isn't a requirement for reasonable housing costs.

In Canada the housing/rental price crisis has been caused largely due to a massive increase in immigration and foreign students over the last decade and made worse by many people buying investment properties to profit on this rising cost
of housing. Government red tape slowing some housing builds has also contributed. Government mismanagement has totally failed homebuyers in Canada.

[Puffer Fish]

In Canada the housing/rental price crisis has been caused largely due to a massive increase in immigration and foreign students over the last decade and made worse by many people buying investment properties to profit on this rising cost of housing.

And why wouldn't wealthier investors buy housing? The price of housing and rents keeps going up due to so many people and the shortages of housing for them all. And with higher inflation levels, wealthier investors are looking for somewhere to park their money and protect it.

Asking whether housing prices are going up due to rapid population increase or wealthy investors is sort of the wrong question. The two feed into each other.

If home prices were much cheaper, like they were in the 80s, wealthy investors would have less incentive to buy up homes to charge big rents, because there would be so many cheaper older homes that people could always find somewhere cheaper to live, rather than having to pay high rents to a landlord.

But you can't just limit the rent prices either, because that would remove incentive to build more housing units, which is expensive to do. And more housing units need to be built for an increasing population.

[Pants-of-dog]

You can't understand the reason Japan has less urban sprawl until you understand demographics.
If you know history, urban sprawl did not start becoming an issue in the U.S. until right after racial segregation policies were ended.

In 1951, 73 per cent of American households owned cars, and 59 per cent of workers used their cars to travel to work, but still urban sprawl was not a problem then.

Japan's subways are so safe it's not extremely unusual to see 9 year old girls travelling to and from school all by themselves. That's in Tokyo. Now try to imagine that happening in New York City. Guarantee the parents would be arrested for putting the child in imminent danger.

Might have something to do with why Japanese families are content to stay in the big cities.

Again, the lack of sprawl is due to strict national (or federal, if you prefer) laws.

If demographics were the reason for low housing costs, you would see people migrating from urban to rural areas. Instead, we see the exact opposite.

[Pants-of-dog]

The US birth rate is below replacement levels so the US population and demand for housing (and housing prices) would shrink without immigration.

I understand why you and others believe this hypothesis.

It only is true if people die out more quickly than they are born, and housing density stays the same.

Neither of these assumptions are necessarily correct.

Illegal immigrants of all kinds need homes too and it obviously is driving up demand and cost for housing.

No. I doubt undocumented migrants paying for a small room in a bad neighbourhood is driving up prices.

Obviously the US needs some immigration. So if they need labour to build housing then they should focus on bringing in that labour legally.

Legal labourers built homes for a long time, illegal workers isn't a requirement for reasonable housing costs.

Undocumented workers are a significant part if the labour force. Getting rid of them will increase housing prices.

Simple supply and demand.

In Canada the housing/rental price crisis has been caused largely due to a massive increase in immigration and foreign students over the last decade ….

This seems wrong.

[late]

I understand why you and others believe this hypothesis.

It only is true if people die out more quickly than they are born, and housing density stays the same.

Neither of these assumptions are necessarily correct.

The Boomers were the biggest generation ever. Subsequent generations have been smaller. Now that the Boomers are retiring the result is that there are more jobs than people. Which is a deduction, not an assumption. It's also a fact...

[Puffer Fish]

The Boomers were the biggest generation ever. Subsequent generations have been smaller.

The total U.S. population in 2021 was 331.9 million. In 2016 it was 323.1 million. The population level has not been going down.

(The country's population level would be going down, but is increasing due to excess immigration from other parts of the world)

Now that the Boomers are retiring the result is that there are more jobs than people. Which is a deduction, not an assumption. It's also a fact...

There will always be "more jobs than people". Employers in the economy will always be willing to hire additional people if they can pay less.
The question is are those decent paying jobs?

You know, this sounds a lot like the mentality behind slavery. "We need someone to pick that cotton"

[Unthinking Majority]

I understand why you and others believe this hypothesis.

It only is true if people die out more quickly than they are born, and housing density stays the same.

Neither of these assumptions are necessarily correct.



No. I doubt undocumented migrants paying for a small room in a bad neighbourhood is driving up prices.



Undocumented workers are a significant part if the labour force. Getting rid of them will increase housing prices.

Simple supply and demand.

You say that illegal migrants lower prices due to their cheap labour, but reject the notion that them needing housing (rental or otherwise) increases demand and thus price for homes and rents.

We all know your personal biases come before logic and that you argue based on what you want to be true regardless of whether it is or not. We all know you will never admit that illegal immigration or any immigration could contribute to any social or economic problems whatsoever, so your opinions on the matter can't be taken seriously.

[Puffer Fish]

You say that illegal migrants lower prices due to their cheap labour, but reject the notion that them needing housing (rental or otherwise) increases demand and thus price for homes and rents.

Let's keep in mind illegal migrants also drastically reduce wages for workers in the construction sector. (It used to be that jobs in construction were good paying, lots of middle class jobs)

So that also has to hurt overall home affordability in the economy.

If the problem is that prices in the economy are too expensive because people can't afford things, it's not going to help to bring in low paid workers from other countries to take over all the jobs.


Where I live it's just become the norm and accepted that all the construction laborers are illegal migrants. That's just the way it is. There's no way a construction worker could ever afford any of the new homes they are building here. Not unless perhaps they are the head man on the project.
Not surprisingly, all the new homes have very shitty construction, even though they are ridiculously expensive. I'm talking about a 1.3 million dollar home that if you go up into the attic you can see it is built worse than a treehouse a father might build for his children.

[Unthinking Majority]

Let's keep in mind illegal migrants also drastically reduce wages for workers in the construction sector. (It used to be that jobs in construction were good paying, lots of middle class jobs)

So that also has to hurt overall home affordability in the economy.

If the problem is that prices in the economy are too expensive because people can't afford things, it's not going to help to bring in low paid workers from other countries to take over all the jobs.

You can't export construction and service jobs like you can manufacturing jobs. The only way to hollow out the middle class in those industries is to import the cheap labour by letting illegal migrants flow into the country and pay them pennies on the dollar and keep arguing while doing nothing meaningful about it. It's the new slave labour, baby.

It's not like the rich and corporations are stupid. The cost savings go into their pockets as profit, it doesn't increase our standard of living. It's not like the price of goods or homes have been getting cheaper. Everything that used to be made out of metal is now made out of cheap plastic and everything keeps shrinking in size. It's the American dream!