Since 1980, incomes in expensive areas like Washington D.C., Boston, and San Francisco have risen rapidly, but rents have increased roughly twice as fast. In Houston, Detroit and Indianapolis, incomes have actually fallen in real terms, while rents have risen by 15-25 percent. The only urban areas where incomes kept pace with rising rents were Austin, Las Vegas and Phoenix.
A lot of middle class anger can be traced back to income stagnation. We need policies that help people get better jobs and make more money. There is no use to keep repeating “if only we could build more…”. Yeah, if only.
There over 5m open jobs. We need to bridge the skills gap. I’m not sure how we convince more young adults that picking the right major matters. I’m not sure how we convince more people skilled trades are a good career. I think that’s the biggest error policy makers make. They think everyone should go to college even if the degree has no employment prospects and leaves them in a mountain of debt.
I am puzzled myself why people keep flocking to majors with dismal employment prospects. Maybe we should start educating kids about basic personal finance and that will help?
As adults we need to bring up the topic of money more. Many treat it as a dirty word. For example, how many kids know how much their parents make? Kids should know things are not free and everything has a price.
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The rent thing is a cruel joke on the the bears and Shiller followers. …they all said renting was cheaper than buying, safer, less risky, less stressful. …what a lie…The chickens have come to roost…investors soaked up all the potential starter homes that will be double what they were in 2009 when these folks start to buy…
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Also, the chart is based on constant 1980 dollar. In nominal dollar the chart will look even more scary…
Policy makers? No. The gullible public egged on by the sales and marketing of higher education.
There is a reason college costs have soared along with enrollment and failed graduates. The only role the “policy makers” have played is by throwing more money at it. That has allowed the runaway costs.
Bernie campaigned on free college for all. Elizabeth Warren has similar goals. Hillary talks about college affordability.
College is free in Finland, but they only beat us by a few percentage points for how many are college educated. The fact is not everyone is qualified to go to college. Making it free won’t erase poverty, because most poor people could never gain admission. CSU and UC schools are already free if your family makes under $80k/yr. California still has poverty rates on par with Pakistan.
Our poor would be considered rich in Pakistan. .the seeds of class envy sown by extremes on the left and right do a disservice to us all…free college tuition should be earned and valued…it should only be free to deserving under privleged hard working students taking subjects in fields where there are worker shortages…we dont need more liberal arts Phds working at Starbucks…
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Or government.
You are correct, Sir…
Renting makes sense for those who relocate every few years. Every 2-4 years, tenants relocate.