It’s Time To Move Beyond The Wrecking Ball
Readers suggested a topic on jobs. “I’d like some discussion on people that have lost their jobs that were making a lot of money (in banks as VPs, or corporations) suddenly realize that they are not in demand. My own view is that these people were all fluff and were employed due to the sham economy up to 2007. My feeling is that businesses purged these highly paid persons (more old than young) when they realized that these persons skills were only ‘talking’ and not doing. When the economy was going gangbusters, these people were hiding behind the productivity of their colleagues. Now that the tide has gone out…”
A reply, “They get promoted in good times to manager and then bad times come, and see ya later.”
And this, “I’ve known more than a few well-paid older folks who haven’t grasped the idea that computer literacy is no longer an option. It’s a necessity. Especially if you want to have a job.”
Another said, “Doesn’t that imply that if they’d done the right things to update their skills, they could get another job at the same or better salary? What if the truth is that there’s nothing they could have done, and they only made that much money due to a temporary market condition? It’s not like the graduating class is stealing those VP jobs from the guy who didn’t keep up his skills.”
One had this, “If anything, IMO they updated their skills too much. Lots of those VP’s started out as ME EE CE engineers, or similar STEM positions. The higher up they rose, the farther away from their original STEM jobs they got. They would have a better chance if they tried to go back to their STEM quals. However, actual STEM pays a lot less than management of STEM.”
The Gazette.net in Maryland. “Employment growth is expected to increase at a sluggish rate of 1 percent during the next three years, according to statistics in a report released by the Board of Revenue Estimates today. ‘There are three essential components to an economy that is powered primarily by consumer spending — jobs, housing and consumer confidence, and all three ‘legs of the stool’ need to be moving in the right direction for a sustained recovery,’ Comptroller Peter Franchot, who heads the board, said in a statement.”
US News & World Report. “‘It has become an urban legend that we’re not recovering because housing prices are low,’ says Peter Morici, an economics professor at the Robert H. Smith School of Business at the University of Maryland in College Park. ‘During the boom, we amassed a huge trade deficit. That creates a hole in demand. That’s what’s holding back the recovery this time.’”
The Motley Fool. “While testifying before Congress earlier this year, Federal Reserve Chairman Ben Bernanke was asked if there was precedent for the economy recovering from a recession while the housing market stayed weak. He looked puzzled, thought about it for a moment, and replied: ‘It’s normal for housing and construction to be an important part of the recovery.’ No, in other words.”
“The key to getting the economy back on track is deleveraging — paying off debt accumulated during the bubble years. For households, the vast majority of that debt is in the form of mortgages. In that sense, housing not only caused the recession, but it’s by far the biggest impediment to recovery.”
“But it goes beyond paying off debt. In a report released last week, the Fed asked a simple question: How many of the 8.7 million jobs lost during the recession were tied to the housing market? Its answer: about 40%. And that probably understates it. The reality is many housing-related jobs never should have existed in the first place. When thinking about housing-related job losses and the potential recovery, you have to make a distinction between jobs tied to the housing market and jobs tied to the housing bubble. Many fall into the latter group. According to economist Mark Zandi, 23% of all new jobs created from 2003-2006 were housing-related. Many won’t come back — nor should they.”
The Arizona Republic. “Conventional wisdom is that the Phoenix-area economy stinks and it won’t get better until the housing industry recovers. I think that’s a misdiagnosis of the current condition of the economy and its intermediate prospects. Employment in the Phoenix area peaked toward the end of 2007. Since then, the area has suffered severe job losses. Prior to the housing bubble, the Phoenix area consistently ranked at or near the top in job creation.”
“I’ve consumed much ink and digits over the years arguing that Phoenix doesn’t have an economy dependent on real estate, to no noticeable effect. Such an economy cannot exist. Real estate does not create its own demand. If it did, there wouldn’t be so many empty houses in the Valley. All economic relationships are interdependent, but for the most part, real estate is a dependent variable. It depends on some other factors driving the demand for its products.”
“If you are a place growing faster than other places, you will have an oversize real-estate sector compared with other places. But that doesn’t mean that real estate is driving the economic activity. Conventional wisdom has it backwards: A robust Phoenix economy doesn’t depend on recovery in the housing industry. Instead, recovery in the housing industry depends on an otherwise robust Phoenix economy.”
The Sun Gazette in Virginia. “Could a lack of housing options for those across the economic spectrum be the factor that pops Arlington’s economic balloon? ‘I’m scared. Really. It’s going to be frightening.’ That’s how Laura Van Syckle, director of recruitment at Virginia Hospital Center, reacted to the suggestion that the county’s current housing crunch is likely to get worse before, or if, it gets better.”
“As land in the county continues to escalate in price, longtime property owners and developers are cashing in by building top-of-the-line housing, and charging prices to match. It’s now not uncommon for upmarket apartments to rent for $3 per square foot per month, said Mark Silverwood, president of the development firm Silverwood Cos. By one calculation, it would take an annual household income of $103,500 a year to afford to live in a market-rate two-bedroom apartment in Arlington.”
The Washington Post. “Nancy Welsh is the founder of the Raleigh, N.C.-based nonprofit Builders of Hope, which works to change the face of affordable housing by rehabilitating abandoned houses slated for demolition: It’s no secret that the United States is in the midst of a housing crisis. Foreclosure notices were filed against a record-setting 2.9 million properties last year and 1.2 million in the first half of this year. Yet the price of many foreclosed homes remains unaffordable for a majority of Americans.”
“Policymakers are desperately searching for a solution to the housing crisis. They fantasize about tearing down 3 million homes – roughly 60,000 homes per state – all in an effort to jump-start the housing market and the economy. What they fail to realize is the opportunity these homes offer for creating the affordable housing that Americans so desperately need.”
“This affordable housing void has resulted in many of the working class being priced out of the cities where they work, unless they choose to live in at-risk communities and dilapidated buildings.”
“Others have been forced to move in with family members or friends to save money during these economically challenging times. There is also a growing trend among young people of waiting to leave the nest, which can further burden their potentially struggling parents. In 2010, 1.6 million more young adults ages 20 to 29 were living with their parents compared with 2005.”
“We have millions of people in need of permanent housing and millions of units of vacant housing available. Instead of demolishing these homes, the inventory should be reused to rebuild the stagnant housing market, as well as address the immediate need for affordable housing and job creation.”
“By recycling homes and revitalizing blighted neighborhoods, we can put the surplus of vacant and foreclosed houses to work creating a more sustainable future for our country. It’s time to move beyond the wrecking ball and start getting Americans back into homes.”
