The Census Bureau today released state population totals as of July 1. Washington clocked in at 6.97 million, up 229,150 from 2010. It continues to be the second most populous state in the West after California. Arizona, No. 3, added 217,834 to reach 6.63 million.More
Four years after the official end of the recession, the average American household has recovered only 62.8 percent of the wealth it lost in the crash. The findings come from a new report by William Emmons and Bryan Noeth at the Federal Reserve Bank of St. Louis. That’s in real dollars. All household net wealth has rebounded 114.3 percent from the trough to a record high, but it doesn’t account for inflation or increased population. Adjusted for these factors, the number is well below where it stood in 2006. And the recovery is highly uneven, mostly benefiting the better off with the stock-market boom and saving the big banks.
According to the Fed’s Survey of Consumer Finances, household finances were “severely” affected by the downturn. Median household wealth dropped 39 percent. Among those worst hurt were the young, those with less than a college education, minorities and those carrying heavy debt. With wages largely stagnant, wealth was increasingly dependent on housing, which was in a bubble. In a separate essay by Emmons and Ray Boshara, the importance of household balance sheets to the larger economy is explained. This element was largely discounted by many macroeconomists before the collapse.
It has come as somewhat of a surprise, therefore, that many economists now are calling the Great Recession of 2007-09 a “balance-sheet recession” and that balance-sheet failures of the type described above are seen as important contributors to the downturn and weak recovery.
Declining economic mobility in America has been an issue for so long that the Economist, hardly a commie mouthpiece, worried about the end of meritocracy here back in supposedly booming 2004. The Great Recession and its aftermath have done ever more damage. A Pew study found that while 84 percent of respondents claim higher family incomes than their parents did, Americans born “at the top and bottom of the income ladder are likely to stay there as adults. More than 40 percent of Americans raised in the bottom quintile of the family income ladder remain stuck there as adults, and 70 percent remain below the middle.”
Among the casualties is the black middle class and the ability to ascend into it, which was a significant achievement of the last three decades of the 20th century. The Pew report found that African Americans were most likely to fall out of the middle class across a generation and much more likely to be stuck at the bottom. Black unemployment is also extremely high. And, black families are more likely to lack inter-generational wealth, in part because of the institutionalized racism over much of American history (the notorious Tulsa race riot in 1921 involved a white mob burning down the segregated but self-made and affluent “Negro Wall Street” in the Greenwood district).
Black families were more likely to be steered into subprime mortgages, even if they had credit scores would have allowed them to get standard mortgages. And like Americans of all ethnic backgrounds, they often didn’t understand the loans and/or the loans involved outright fraud.More
The Pew Hispanic Center’s report that the historic wave of immigration from Mexico has reversed is a profound turning point, not least for the economy. One small/big element: Millions of illegal immigrants paid into Social Security with no hope of ever seeing benefits, but helping fund the system.
The American economy had grown an insatiable appetite for cheap immigrant labor, especially in construction, which became the nation’s last, big low-skilled factory. This destroyed most of the old, often unionized construction trades in the Sun Belt, with jobs held by citizens, and pushed wages very low. Hotels, restaurants, meat packing and, of course, landscaping, were another big draw. The tradeoff: Cheaper housing, food, etc. What was once confined to the southwest became a nationwide phenomenon in the 1990s and 2000s.
Hundreds died every year in the Arizona desert, the survivors paying their life savings to coyotes to be smuggled across to El Norte. Unscrupulous smugglers would hold the immigrants in drop houses for additional ransom from their families in Mexico, helpfully wired by Western Union. Some employers paid on this end, too, for coyotes to bring workers. Once here, they were exploited and often robbed, fearing the police and lacking any protections. Such were the human costs of our appetites. People railed against the illegals even as they enjoyed the benefits of their work.More
A new study by the Manhattan Institute finds that all-white enclaves are “effectively extinct.” The New York Times found a bevy of experts to second the motion, albeit with some caveats. Yet this is highly misleading.
Consider Columbia, S.C. The city is 52 percent white and 42 percent black, with a median household income of $38,272. Yet the city is highly segregated, with whites living in older gentrified neighborhoods of grand old houses and some new subdivisions, and blacks living in poor areas. Meanwhile, once-rural Lexington County next door has seen a huge influx of affluent whites. It’s 79 percent white and 14 percent black with a median household income of $52,205.
Dayton, Ohio, once named one of America’s most segregated cities, is another example. The west side remains nearly all black. White flight has shrunk the city while once-rural counties nearby have ballooned with mostly white, better-off populations. Phoenix’s once all-white, middle-class automobile suburb of Maryvale is now mostly poor and Hispanic. New suburban Gilbert is pretty close to an all-white enclave. Sprawl has been a great enabler of the new segregation, which is not only heavily determined by race but especially by economic means. Poverty has spread to older suburbia, engulfing all ethnic groups caught in its trap.More
The Brookings Institution has released a study of poverty in America’s 100 largest metros, and as you can guess the data aren’t pretty. More Americans are living in extremely high poverty areas. “After declining in the 1990′s, the population living in very poor areas increased by one-third between 2000 and the time period of 2005-09,” the report states. “The suburbs saw a rise in that number more than twice as fast as in the cities. The jump in poverty brought on by the recession suggests that more than 14 percent of poor people lived in extreme-poverty neighborhoods in 2010.”
The country saw the poor population grow by 12.3 million over the first decade of the 2000s. That pushed the total number of Americans in poverty to a historic high of 46.2 million. By 2009, more than 15 percent of the population lived below the federal poverty line, which was $22,314 for a family of four in 2010. Poverty rose twice as fast in the suburbs as in core cities.
Poverty increased in Seattle, although compared with most metros its not highly concentrated. The metro area ranked 93rd in neighborhood poverty rates from 2005 to 2009; the city ranked 89th and the suburbs 65th. More than 17,000 people are living in extreme poverty tracts. Metro Portland ranked 97th. Boise ranked 92nd. By comparison, for example, metro Phoenix ranked 43rd and 32nd in the suburbs. El Paso ranked No 2 while McAllen, Texas, came in at No. 1.More
The big news out of the Census this week was the 25-percent drop in Detroit’s population, stunning by even Motown standards. But the more important lesson from the decade ought to be puncturing the conceit that population growth in itself equals economic power.
Consider the fastest-growing states of the ’00s: Nevada (35 percent) and Arizona 24.6 percent. Both are depression zones, and not only from the collapse of the housing bubble. Nevada ranks 31st in per-capita personal income and Arizona ranks 40th, both below the national average. Neither have many corporate headquarters or major research facilities. The gambling industry makes for economic diversity in Nevada, which has the highest rate of unemployment in the nation. Arizona has a smattering of call centers and a few technology operations, but nowhere near what one would expect in a state with a city the size of Phoenix. The Amazon.com distribution center jobs in Phoenix are considered high-end pay.
Washington, by comparison, is 10th in the nation in per-capita personal income, with a diverse economy, major trade engine and the talent-and-capital magnet of the Puget Sound region. State population growth was 14.2 percent from 2000 to 2010, strong to be sure. King County grew by 11.2 percent in the decade, Bellevue by 11.7 percent and Seattle by 8 percent. But population growth wasn’t the goal of economic development, but the result of it.More
Here’s your lost decade. Median household income in the Seattle-Tacoma-Bellevue metro area rose to $66,995 in 2008 from $66,881 in 2000, according to the latest Brookings Institution State of Metropolitan America report. Among blacks, income actually dropped to $39,748 vs. $46,738 in 2000. Hispanics also lost ground. High-tech workers far outpaced other occupations in earnings power. And all this was before the Great Recession hit.
And this is relative strong performance compared with other American metros. For example, Phoenix, a metro area slightly larger than ours, saw its median income fall to $56,389 from $57,889. “The typical American household saw its inflation-adjusted income decline by more than $2,000 between 1999 and 2008 — and probably even further by 2009 when the economy his bottom,” the report states.
The report, an exhaustive analysis of Census data, sees income polarization as one of the five new realities facing American metropolitan areas, where 66 percent of the population live and most of the nation’s economic power is concentrated. Others: growing and outward expansion; aging population; uneven educational attainment and a much more diverse population. Another interesting finding: Younger, educated people are choosing to live in cities, leaving suburbs more likely to have aging and with rising minority and poor populations.More
Top of the News: It wasn’t too long ago that housing economists thought that the collapse of the bubble would merely “return the market to normal.” I’m not making this up. Now we know that the economy is going to redefine normal in a host of ways, especially for real estate. As the S&P/Case-Shiller house-price index showed record price drops in January, Seattle was one of 14 of 20 metropolitan areas suffering a year-over-year decline of more than 10 percent.
Seattle came in at a 15-percent decline. Phoenix was worst, again, with a nosedive of 35 percent, while Denver and Dallas did best, with prices falling “only” around 5 percent. Portland saw its house prices drop 14 percent. Admittedly this is a trailing indicator — showing January activity. We don’t know if this is bottom, and if efforts to free up mortgage money will begin a recovery. Working against this scenario are continued high debt levels and job losses, as well as the spiral caused when people get underwater — owing more on their mortgages than the value of the house.
As for Seattle, we’re definitely no longer Teflon — the metro area ranked in the middle of the 20 areas surveyed. The big question is whether the price spiral will get worse.More