Just as some of those first to suffer the consequences of Climate Change were those who had been subsisting on marginal lands; some of the first to suffer the consequences of the most recent round of inflation were those who had been subsisting on marginal incomes. This was a lot of Americans. Before inflation, they were barely making ends meet because too much of their too little income was going towards housing. In a more balanced economy, housing would cost about one-third of one’s income. Today, it is often one-half and more. Fair to say that too many Americans are not being paid enough; that their wages need to go up substantially. Also fair to say that, even if the minimum wage was doubled, housing would still be too high for many working class
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Just as some of those first to suffer the consequences of Climate Change were those who had been subsisting on marginal lands; some of the first to suffer the consequences of the most recent round of inflation were those who had been subsisting on marginal incomes. This was a lot of Americans. Before inflation, they were barely making ends meet because too much of their too little income was going towards housing. In a more balanced economy, housing would cost about one-third of one’s income. Today, it is often one-half and more. Fair to say that too many Americans are not being paid enough; that their wages need to go up substantially. Also fair to say that, even if the minimum wage was doubled, housing would still be too high for many working class Americans. Fair to say that too many retired Americans are paying twice as much and more for rent than they can afford.
‘Supply and demand’ is the explanation usually given for how the housing market works. Given today’s disparity between incomes and rents, for many renters, obviously, neither ‘supply and demand’, nor the ‘market, are ‘working’. ‘Supply and demand’, as per usual, at best, describes the after-the-fact; not the cause. The term itself implies a market solution is at hand when there is little evidence of markets ever being the solution to housing. If they were, it was by happenstance, and then, usually too late. There is a lot more evidence that housing is a necessity, and thus shouldn’t be a commodity. That housing is one of those basic necessities which an economy should provide.
Of late, the role of markets in rental housing is a highly manipulative one being manipulated by financialists like Stephen Schwarzman, et al, who buy up rental units (gain control of supply), then raise rents. For these financialists, the applicable market is one of getting the most for rentals. Hardly a market at all, it is more a game in which they, the financialists hold all the cards. They have no interest in providing renters a fair shake. There being no shortage of renters; they tell the renter; if you want to rent, you rent from me at my price. For the financialists, it is all about squeezing the last drop of blood from the turnips. Let’s don’t even call it a market; it isn’t. The buyer doesn’t get to choose between suppliers. First your money, then your clothes; first your housing, then your job. Many of America’s homeless are so because of this manipulation of the rental housing ‘market’ by very wealthy financialists.
This financialization of rental housing combined with the feudalistic economic model of the south that has now spread across the Nation has created a modern version of sharecropping. A combination that has become a nightmare for so many American workers. They were imprisoned in this endless cycle of poverty. Then, along came inflation. Exorbitantly high rents and low wages/incomes were the reason so many Americans are marginalized; the reason for their being so vulnerable to this round of inflation.
The financialization model for rental housing is now in the U.K., Ireland, Portugal, …. In these countries, as in America, millions of seniors are being evicted because they can’t afford the ‘new’ rents.
For many of America’s marginalized, this most recent round of inflation was the straw that broke their backs. Only in America would it be OK for the Oil Companies to rake in record profits while so many working people couldn’t afford gasoline for their cars so that they could get to work. Only in America would it be OK for the price of groceries to double, suppliers’ profits to soar, while people go without food because they can’t afford to eat after paying the rent. Only in America would it be OK for pharmaceuticals to rake in record profits while so many must decide between their prescription medicines, paying rent, and feeding their families. Only in America would it be OK for financialists like Stephen Schwarzman to make $billions off people who are struggling to make ends meet. Only in America could these things be happening and the media would only talk about inflation.
Hey media! What happened to both-sidism?
Rents Are Out Of Reach For Most Americans Earning Minimum Wage, A Study Says : NPR
https://www.theguardian.com/society/2021/aug/12/housing-renter-affordable-data-map
https://www.realestatewitch.com/rent-to-income-ratio-2022/
https://www.gobankingrates.com/money/economy/cities-where-rent-is-affordable-for-average-earner/
https://www.statista.com/statistics/186732/gross-rent-as-a-percent-of-household-income-in-the-us/