A new report by Sylvia Allegretto at IRLE and Lawrence Mishell at EPI finds that in 2015, public school teachers’ weekly wages were 17% lower than those of comparable workers (a gap that has widened from 1.8% in 1994).
There are many reasons for the pay gap between public school teachers and similarly-educated workers, including the same gender pay gap that affects workers throughout the public and private sectors. But there’s no doubt that the widening gap between teachers and other college educated workers is a direct consequence of our rapid disinvestment in public services, which has hit school districts harder than any other segment of the public workforce. I’d be interested to see a similar study of other public workers and their similarly-situated private counterparts.
More and more coverage of American inequality, but I’m curious about how it’s often framed as the disappearance, or decline of the middle class. This article paints an interesting picture of American middle class decline relative to its counterpart in other countries, and paints a picture of economic crisis fueling the relative decline of Americans below the top income percentiles. Stagnant wages (relative to corporate profits) and America’s lost grip on education superiority are mentioned, but the role of government in mediating income distribution is only hinted at. Is this a story of austerity, or economic restructuring, or both? How Americans respond to their growing sense of falling behind, and of their children inheriting lower economic possibilities, will be driven by how they see government’s role in this story.
The short answer is: a lot. And: probably more than you have if you live in the Bay Area.
To cover principal and interest alone on a median-priced home in the greater Bay Area $682,410, you would need $115,510 in annual income. The monthly payment would be $2,695.23. To also cover taxes and insurance, you would need more, but the study did not factor those in because they vary widely by city.
The report assumes a 20% down payment, which means you also need a cool $136,000 in cash saved up. Median household income in the Bay Area was $73,562 in 2011, so that means in order to by a median-priced home, you need to be making nearly 60% above the median income (and don’t forget the $136,000 in cash!).
In my neighborhood, $682,410 would probably get you a nice 1,200 square foot two-bedroom house. Maybe an extra half bath if you’re lucky.
I have been reading and thinking a lot about the resurgence in debate over gentrification and spiraling rents, especially in San Francisco but really across the country. These trends are inequality etched in space, come home to roost in neighborhoods. As a researcher and as a Bay Area renter, I keep fixating on the question: who can afford these prices? Isn’t there some limit to the number of people who can pay? What do these people do for a living? And what happens when people pay nearly $700,000 to move next to a family that struggles to pay the mortgage on a house they paid $200,000 for?
Mayor Bloomberg’s interesting framing of how rich people bring more money to the city’s budget, which helps the many poor people living in the city (yes, despite all the frenzy about hipsters in NY, 46% of New Yorkers’s live under 150% of the federal poverty threshold, or less than $35,775 for a family of four).
“Other cities have much lower inequality levels,” Mr. Bloomberg’s press secretary, Marc LaVorgna, said, citing Detroit and Camden, N.J. “Are those better places for low-income families to live? Or would they be better off if they had more wealthy people, and a larger income gap, to provide a larger tax base to support a police department that keeps low income communities safe, funds good public schools and pays for a vast social services network like we do in New York City?
New York City is one of a handful of major cities that levy a local income tax on money earned by city residents, but Bloomberg is also talking about the spending that wealthy people do in the city. The latter claim is arguably tenuous (much has been written about whether wealthy people spend more in a local economy than middle-class people, given the nature of consumption patterns). But the tax benefits of income taxes in particular are important, and Bloomberg is right to point out that the more money New Yorkers in (especially rich New Yorkers, since the more you earn the higher your tax rate). Income taxes are also more progressive then property taxes, and less subject to abrupt fluctuations in the property market. In New York for 2013, personal income taxes were the second highest source of tax revenue, after property taxes, and above sales taxes.
So…income inequality driven by the growth of income at the top can be spun as “good” for the city budget, but even a mayor like Bloomberg might want to think twice about using the words inequality and good too close to each other.
I’m too jet-lagged to write much about this, and am coming late to the lively discussion over Saez & Piketty’s latest piece about rising income inequality. The dramatic rise in earnings and wealth inequality between the 1% and the rest of the country is important, and as Krugman says, demoralizing for most Americans. But there’s another piece to this, which is that the economic recovery is only in the private sector.
Coming through the San Francisco airport yesterday, I waited for over an hour to pass through the border. The line for non-citizens was several hours long. It’s clear that the wealth of the U.S. is monopolized by individuals (and corporations), and little of it is evident in our infrastructure, public services, or public spaces. So not only are non-rich Americans seeing their earnings stagnate or shrink, they are surrounded by a country that spends less (after you account for inflation and population growth) on public goods year after year after year. Since rich people can often bypass public goods entirely (private schools, private security, the fast-track airport line), dwindling public investment in this country affects the poor and middle-class much more.
I’ve been thinking recently about how broadly I conceive the term “urban austerity.” Austerity conjures up not just scarcity, cutbacks, severity, but also the people who are outside that scarcity; the people who impose it, who argue for its necessity and who decide which parts of the city need to be well-funded, shored-up, and which can be jettisoned. The image of the austere city is one that matches this great reporting on inequality from Las Vegas:
“Notes on inequality and the screwing of the little guy in Las Vegas” Las Vegas City Life (June 2013)
Las Vegas is one of those American cities where intense inequalities of wealth and status aren’t just obvious, they are rubbed in your face. Wealth and power brings with it the luxury of $1,000 bottle service, stretch limos and the right to hire a private police force to roust the homeless out of your neighborhood.On the other side of the economic fence, and sometimes just a block or two away, are grinding poverty, failing schools and life on the margins. CityLife looks at five areas in which the little man, the one without the limos and the bottle service, fares here.