Last month, a couple days after former Vice President Joe Biden selected California Senator Kamala Harris as his running mate, Chetty briefed the pair over video, presenting data that demonstrated lower-income workers were bearing the brunt of the Covid recession. His chart showed that by April, the bottom quarter of wage earners, those making less than $27,000 a year, had lost almost 11 million jobs, more than three times the number lost by the top quarter, which earn more than $60,000 annually. By late June the gap had widened further, even though many businesses had reopened. In fact, the segment of Americans who are paid best had recovered almost all the jobs lost since the start of the pandemic. “The recession has essentially ended for high-income individuals,” Chetty told Biden and Harris. Meanwhile, the bottom half of American workers represented almost 80% of the jobs still missing.
In Canada we are getting warnings of increasing wealth gaps as reported September 9, 2020 by NationalPost.com:
SNIPPETS: Experts say the pandemic could widen the poverty gap this year, and that overall poverty rates are also rising, despite a massive influx of government benefits meant to replace earnings for those whose incomes disappeared from lost jobs, hours or business.
As I noted in a June 20, 2020 post "Household Net Worth", The middle 40% of Canadian Households have less than $100,000 of net worth and the bottom 40% have less than $50,000! These people are not going to be reliable buyers of housing as the current FOMO 2.0 rages in the hot metros.
And this from the Canadian Centre for Policy Alternatives (May 1, 2020):
A 2019 study by David Macdonald for the Canadian Centre for Policy Alternatives, titled Unaccommodating: Rental Wages in Canada, put the affordability crisis into a context everyone can understand. Macdonald set out to determine the minimum hourly wage a person would have to make in order to comfortably afford to rent (using no more than 30% of their income) a one- or two-bedroom apartment in nearly 800 neighbourhoods within Canada’s major cities. The answer: $22.40 an hour for a two-bedroom apartment and just over $20 an hour for an average one-bedroom unit.
“The public model has been far from perfect, but that’s not because its public—it’s because we’ve starved it” said Shauna Mackinnon, associate professor and chair of urban and inner-city studies at the University of Winnipeg and former director of the CCPA-Manitoba said.
From my charts of Annual Demographia (Price / Income) Ranks of 50 Canadian Cities
Affordability is the ability for any urban household to be able to rent a dwelling for less than a 25% of its monthly income, or to buy one for less than about three time its yearly income. The mobility and affordability objectives are tightly related. A residential location that only allows access to only a small segment of the job market in less than an hour commuting time has not much value to households, even if it is theoretically affordable.
And from the OECD, May 2019:
Under Pressure: The Squeezed Middle Class
Saskia Sassen, philosopher, sociologist, with a Ph.D. in Political Science author of Expulsions: Brutality and Complexity in the Global Economy in a September 24, 2020 interview responds to an interviewer's following remark: "What the pandemic cries out for is solidarity, a state that focuses on the weakest and is concerned for the most fragile. But the system favours the exact opposite."
It’s the consequence of entering a new era, and that has its own price. I said it, and I insist on it, the expansion of sectors with economic capacity is not small. They may not be the richest, but there is a lot of money. On the other hand, the traditional middle classes have lost ground. We’re witnessing a different middle class from the one we saw thirty years ago. It’s good to see it because poor families have children who acquire greater solvency, earn high salaries, and obtain real possibilities for individual and collective development. Yes, there’s a kind of new modality that, on the one hand, generates a more prosperous middle class, but on the other hand, an impoverishment of the more modest middle class. The neighborhood’s business, the lawyer who helps people's causes, who are also modest, are all experiencing a process of pauperization.
Ending Global Poverty Begins with Women's Rights
History, Charts & Curated Readings
"History, real solemn history, I cannot be interested in.... I read it a little as a duty; but it tells me nothing that does not either vex or weary me. The quarrels of popes and kings, with wars and pestilences in every page; the men all so good for nothing, and hardly any women at all - it is very tiresome." Jane Austen spoken by Catherine Morland in 'Northanger Abbey'
"Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement; and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it." George Santayana Vol. I, Reason in Common Sense