Friday, January 31, 2014

Basic Necessities Have Outpaced Income

Today's guest post comes from Derrick Figures an activist based in DC.

It’s that time again, when the woes of economic inequality gaps across the nation are highlighted in the media, coming off of the heels of President’s Obama’s State Of The Union Address.

These concerns will likely dissipate over the course of the first half of the year as we move into the midterm elections, but despite my enthusiasm, I join in with the countless commentaries that cite disparages, in hopes of an inkling of support for better conditions to come.

In the meantime, we should expect to read about topics such as: raising the minimum wage, extending unemployment benefits, renewing Supplemental Nutritional Assistance Program (SNAP) benefits, curing educational discrepancies and maybe something along the lines of workforce development solutions and other various patches to temporarily alleviate poverty for all “50 million” designates.

Rarely, do we dig deeper however, into what I consider to be some of the more stark realities of economic inequality.  Realities, which often keep the majority of Americans off of the road to prosperity. More specifically, as we talk about economic prosperity as a whole, we tend to focus on housing and income but seldom do we connect the two in terms of their respective trends.

For instance, according to the National Association of Realtors, housing prices rose by 11% to a median price of $197,100 over the course of 2012, while the U.S. Census annual report on poverty and income reported that median household incomes steadily declined 9% over 13 years (or $56,080 in 1999 to $51,017 in 2012). And note, this decline occurred for all but the most highly educated and affluent Americans.

Simultaneously, in some cases, the cost of rental housing increased as well, at an annual rate of 3.9% in 25 of the largest markets in the United States. To make that worse, a 2012 report from the National Low Income Housing Coalition suggests that while the Fair Market Rent for a two-bedroom rental unit in the U.S. is $949 per month, a family earning the federal minimum wage must work a minimum of 80 hours per week to afford that two-bedroom unit at the Fair Market Rent.   This assumes that the family has only one income producing adult and is renting a home in one of the top 25 rental markets mentioned above. 

But, if a household earns the equivalent of one job paying the minimum wage of $7.25 per hour, it only earns approximately $1000 gross monthly (if we assume one works 40-hrs per week for about 4 weeks).  This poverty-level wage leaves millions of workers unable to afford basic necessities such as food, clothing and housing which should be considered the bedrock for building a sustainable life in this country.

Now check this out, with about 50 million people living in poverty in the US (defined as about $12,000 annual gross income for an individual and about $23,500 for a family of four), the federal minimum wage has been stagnant at just $7.25 per hour for five years.  In that same time, the cost of living has increased on so many levels, which make it extraordinarily difficult for a person to struggle against these factors to sustain some resemblance of a safe and happy life. 

Let’s coin the phrase, “a living wage should be considered the bedrock for a sustainable life for all people.”  But, that may not work because that spin has been used too many times already in some form or another.

Ok, let’s say “family sustaining wages should be given serious consideration by Congress in order to balance the assault on the very supplements (such as “SNAP” benefits) millions depend on to survive in our country?”

Nope, still a fail.  Maybe “life sustaining wages help empower those of us in the lowest income bracket to better ourselves?”

Who knows, the point is Congress and state legislatures should acknowledge that far too many hard-working families are being forced to depend on poverty-level wages where their ability to live a dignified life is compromised.

Just on the very basis of this country being as wealthy as it is, millions of low-paid workers deserve a raise in the minimum wage so that more Americans are able to afford basic necessities; which generate more spending, benefits local businesses, and ultimately supports economic growth.

I’m no economist, but this is simple math. 
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