Jobs and The Cost of Living

By George Lorenzo

 

You can obtain an informative indication of where low-wage job opportunities are relatively plentiful in combination with where the cost of living is reasonable by looking at immigration statistics and migration trends. The October 28, 2013  Time magazine cover story, “The United States of Texas: Why the Lone Star State is America’s Future,” provides a very clear example of where low-income populations tend to settle and thrive, and, with some luck along with strong self-discipline and passion, have the opportunity to excel beyond the ordinary. 

In addition to the cover story, written by Tyler Cowen, the cover illustration of this issue of Time is an interesting, attention-grabbing sidebar. Berlin-based illustrator Sarah Illenberger managed to very creatively juxtapose all 50 states into the outline of the state of Texas  (see http://content.time.com/time/magazine/article/0,9171,2154995,00.html) for an interesting graphic image to accompany this article.

Cowen provided lots of information concerning our modern-day struggle to survive in a rapidly changing social infrastructure and American workforce.  He starts by noting that the five fastest growing cities in America are located in the state of Texas. This migration to the Lone Star State is not an accident, he wrote, it’s our destiny. Why? 

First off, Texas does not have state income taxes. Secondly, housing is more affordable and jobs are more plentiful, with a current unemployment rate of 6.4% compared to our national average of 7.3% at the time of this writing in late 2013. Third, according to the Time article, gas and produce are cheaper in Texas than most other places in the country. It was also noted that the website MoneyRates showed Texas as having the third highest average income in the U.S. (New York was ranked 36^th). 

Cowen noted that as middle America stagnates (he is also author of a popular book titled “The Great Stagnation” and most recently “Average is Over”), U.S. citizens, in general, are increasingly seeking out a cheaper cost of living. 

The places in the U.S. seeing significant in-migration are largely in relatively inexpensive parts of the Sun Belt. These are, by and large, affordable states with decent records for job creation – often with subpar public services and low taxes. Texas is just the most striking example. But Oklahoma, Colorado, the Carolinas and other parts of the South are benefitting from the same trends – namely that California, New York and other high-tax, high-cost states are no longer such good deals for much of the U.S.’s middle and lower classes. [i]

All this begs the question of what anyone can possibly do to increase their odds for finding decent work, getting a worthwhile education, and keeping overall living expenses down.

Obviously, there is no perfect solution, and every individual’s criteria and circumstances in life for happiness and contentment are unique and different.  For example, if it’s important for you to live in an exciting major metropolis, such as New York, Los Angeles, Chicago, Houston, or Philadelphia, you’ll have to be prepared to accept public transportation as your primary means of getting around in order to cut expenses such as extraordinarily high parking fees, in addition to the typical expenses that come with automobile ownership. There are some new automobile-related services being launched in many cities, such as car sharing arrangements (see ZipCar for instance), that also, over time, are less expensive than owning a car and still allow you to enjoy driving yourself to your important destinations. 

Personally, I could not accept living someplace where I would have to take public transportation every day. I must drive, walk or bike everywhere I go. That’s just the way I am. Millions of other people utilize that time on a subway reading, taking care of business, etc. So, while I am wasting time driving around, getting stressed, and cursing at inconsiderate drivers, the smart people taking public transportation systems are using their time in a much more productive manner, not to mention doing their part in lessening the carbon footprint as well.  

Getting back to the subject at hand, when choosing a place to find decent work, continually improve yourself through lifelong education, and live comfortably without destroying your bank account, a good number of factors need to be taken into account, beginning with whether or not you choose to pursue a low-wage or high-wage career, whether you choose to settle in or excel.

More to come --- comments welcome.

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[i] Tyler Cowen (October 28, 2013). The United States of Texas: Why the Lone Star State is America’s future. Time Magazine.

Poverty and Plutocrats

by George Lorenzo

The American workforce is changing rapidly at a speed that is very difficult to define and keep pace with. We are in the midst of a new age driven by new technologies. The world of education and training is going through a revolutionary re-adjustment. The common jobs of yesterday that provided more than adequate sustenance are gone forever, and today’s average citizen is unable to come up with a solid game plan to pull out and excel.

The millions of unemployed and under-employed are facing unprecedented challenges. Jobs that pay enough to cover basic necessities have decreased dramatically in number. People who grew accustomed to earning a livable wage at jobs that they tolerated or actually enjoyed going to every day are being forced into low-paying jobs that they loathe. 

The minimum wage has stagnated and fallen way behind inflation. Millions of people can’t afford health insurance, let alone pay their increased rental cost. The middle class is shrinking as the vast gap between the haves and have-nots grows wider. It is commonly noted today that more than 100 million people in the U.S. are either poor or classified as low-income workers.

For a good many eye-opening points of view on American poverty, read “The Rich and the Rest of Us: A Poverty Manifesto” co-authored by Tavis Smiley, popular PBS talk show host and liberal commentator, and Cornell West, notable activist and Princeton University Professor. In an interview on Democracy Now!, a national, daily, independent, award-winning news program hosted by journalists Amy Goodman and Juan Gonzalez, Smiley and West explain how we are experiencing a societal crisis as one percent of our population now have 42 percent of the wealth, amounting to a greed-at-the-top phenomenon that West referred to as “an ethical abomination.”[1]

In Chrystia Freeland’s book “Plutocrats,” we are introduced to a rapidly growing modern repeat of the Gilded Age that is producing people of unprecedented wealth. “In the 1970s, the top one percent of earners captured about 10 percent of the national income. Thirty-five years later, their share had risen to nearly a third of the national income,” Freeland writes.

Meanwhile, the vast majority of American workers, who may be superbly skilled at their jobs and work at them doggedly, have not only missed these windfalls  — many have found their professions, companies, and life savings destroyed by the same forces that have enriched and empowered the plutocrats. Both globalization and technology have led to the rapid obsolescence of many jobs in the West; they’ve put Western workers in direct competition with low-paid workers in poorer countries; and they have generally had a punishing impact on those without the intellect, education, luck, or chutzpah to profit from them: median wages have stagnated, as machines and developing world workers have pushed down the value of middle-class labor in the West. [2]

The U.S. is no longer what it used to be and is going through an unsuccessful restructuring of itself, at least for now. New York Times journalist Thomas Friedman and foreign policy professor Michael Mandelbaum explain in  their book “That Used to be Us”  how the U.S. has fallen into a complacency and that over the past two decades “we as a country have failed to address our biggest problems —particularly education, deficits and debt, and energy and climate change — and now they have all worsened to a point where they cannot be ignored but they cannot be effectively addressed without collective action and collective sacrifice.” [3]

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1. Democracy Now. (April 12, 2012). Tavis Smiley & Cornel West on "The Rich and the Rest of Us: A Poverty Manifesto." http://www.democracynow.org/2012/4/19/tavis_smiley_cornel_west_on_the.

2. Chrysta Freeland. (2012). Plutocrats: The Rise of The New Global Super-Rich and the Fall of Everyone Else. The Penguin Press.

3. Thomas L. Friedman and Michael Mandelbaum. (2011). That Used to Be Us: How America Fell Behind in the World It Invented and How We Can Come Back. Picador.

A Sorry State of Affairs

I just read some startling facts in a short piece written by Mandi Woodruff, editor of an online publication called Business Insider. Headlined “The Real Reason So Many Americans Are Poor,” (see http://www.businessinsider.com/fixed-costs-drive-americans-to-poverty-2013-11), Woodruff referred to an interesting book published in December 2012, "Pound Foolish: Exposing the Dark Side of the Personal Finance Industry," by Helaine Olen.

Consider this: 

• Housing, health care, and education cost the average family 75% of their discretionary income in the 2000s, compared to 50% in 1973.
• The price of health insurance doubled in the period between 2001 and 2011.
• The cost of raising a child increased by 40% over the last decade.
• The median income for families in the 35 to 44 age bracket fell by 14% between 2001 and 2010, from $63,000 to $53,900. In addition, median income for Americans ages 45 to 54 fell from $66,800 to $61,000 in 2010.

     These kinds of figures confirm what I am trying to get at with this book, that it’s more difficult than ever for a young adult today of independent means, without any outside support, to get an education and simultaneously cover basic living and survival expenses.

It’s not impossible, however. Nothing worth anything has ever been easy to obtain. As my father used to say to me all the time, “you get nothing for doing nothing.” Still, when looking back at the cost of living and college tuition, it’s shameful that we as a society have come to this sad state of affairs. Who is to blame? What strategies can be implemented by prospective college students of any age today to earn a degree that has a return on investment, regardless of discipline, without going overly deep into serious debt? 

These are hard questions to answer. When we look into many of the real stories out there, we see numerous students saddled with extreme debt, being forced to drop out before completing. Then, to make matters worse, we hear politicians calling for reductions in federal student aid and increases in student loan interest rates.

Story of a Baby Boomer continued. . .

Thirty-six  percent of the total annual earnings from a minimum wage job in 1974 would have covered two full-time semesters of tuition, room, and board at a 2-year public institution. In 2010, it would have required 50 percent of total annual earnings from a minimum wage job to cover two full-time semesters of tuition, room, and board at a 2-year public institution.

Mark was able to find a low cost living arrangement by renting a room with kitchen privileges in a large suburban home owned by a married senior aged couple. While not an ideal living arrangement, it did provide a comfortable place to sleep and eat. He worked evenings as a waiter at a gourmet restaurant, earning about 10 percent more, with tips, than working a flat-rate minimum-wage job. The job also gave him daily cash for food and travel expenses. He drove a used car that was paid for, and the cost of gasoline was much cheaper in 74 than in 2010. The cost of living, in general, was less expensive as well. One hundred dollars in 1974 would get you the equivalent of $437 dollars in goods and services in 2010.

However, like many young adult males, Mark did not apply himself to academics. At around mid-point through his second semester at the local community college, he dropped out, still not mature enough to pursue a productive education and career advancement pathway. Instead, he continued to sew wild oats, travelling around the country to places that had better climate conditions than the Northeast, working at various low-paying jobs, mostly in the restaurant and hospitality industry, and occasionally collecting unemployment. He lived liked this until he was 27.

It was the early 1980s when Mark enrolled in a public, 4-year institution as a non-matriculated student. His first class was English 101, a course that he enjoyed because he had a penchant for writing and had always been an avid reader.  Mark was now mature enough to vigorously pursue a higher education. If you look at statistics regarding male versus female college completion rates, Mark really was not an unusual individual. In 2000 to 2008, about 19 to 22 percent of first-time male full-time degree/certificate-seeking students completed a credential within 150 percent of normal time at public 2-year institutions. For females, that percentage for the same time period was 20 to 25 percent.

From an economic standpoint, the early 1980s were similar to the early 2010s. The U.S. was dealing with a strong recession and high unemployment rates. In comparison to the early and middle 70s, when Mark first attended and dropped out of community college, the cost of college became dramatically worse. In 1974, 36 percent of an individual’s annual full-time minimum wage earnings would go for tuition, room, and board at a public 2-year institution. In 1981-82, that percentage essentially doubled to 72 percent. One hundred dollars in 1981 would get you the equivalent of $236 dollars in goods and services in 2010, compared to $437 in 1974. So, the cost of living was also dramatically worse and things were not getting any better for college students.  

Since Mark was older and had some experience under his belt in the hospitality industry, he was able to find a full-time job at a much higher rate than minimum wage. He was able to find an inexpensive apartment that he shared with a roommate that was located within walking or easy bicycling distance of both his job and the campus. He also qualified for a Pell grant and federally subsidized student loans.

Story of a Baby Boomer’s work and education pursuits: How much similar and different are the issues and challenges today?

Here is Mark, born at midpoint of the post World War II baby boom to working-class parents in a typical city neighborhood located in the Northeastern U.S. Mark is a middle child with three siblings. He attended a Catholic elementary school within walking distance of his home and a Catholic high school that was a relatively short bus ride to another typical city neighborhood nearby. 

After graduating from high school, his parents, both of whom earned their high school diplomas through GED and never attended college, advised Mark to seek work anywhere he could possibly find it, stressing, in particular, that good jobs could be found at the automobile manufacturing plants, on the railroad, or with one of the largest steel plants in the world - all of which were located relatively close to where they lived. 

Strong work ethics were already instilled in Mark’s mind by the time he was 10 or 11 years old. His older brother had a newspaper route, and he became his brother’s helper at the pay scale of one dollar and 25 cents per week. Later he took over the route when his brother got a regular job as a young adult. During the winters, Mark would go out with a shovel and offer to remove snow from his neighbors’ driveways for whatever they would pay him. During the summers, with a bucket and squeegee in tow, he would solicit the businesses located on the main street of his neighborhood to wash their windows. Every Sunday he shined his father’s shoes for a small amount of pocket change. 

This was a world vastly different from today. The family telephone was a party line shared with other families. They had only black and white television for a good number of years. Transistor radios were considered high technology. There were no computers or smart phones, no Internet.

Mark learned quickly that working hard was the key to success. Getting a higher education was not stressed by his parents, however, because they were not familiar with colleges and did not have any means whatsoever to fund any kind of higher education pursuit. Mark was pretty much on his own to find an independent pathway that could sustain his adult life with adequate food, clothing and shelter. 

After high school, trying to find a decent-paying job was a challenge, primarily because he and his family did not have any solid connections with people who could perhaps help get his foot in the door with some of the larger industries. Consequently Mark struggled with low-paying jobs, working as a waiter, low-level construction worker, and a wide variety of other low-skilled jobs that really had no future prospects for meaningful career advancement.  When he reached his early twenties, Mark came to the realization that he had to get a college education if there were any chance of moving upward. So, he enrolled in the local community college. For independent living quarters, he rented a room in a house owned by some senior citizens. For work, he tended bar and waited tables at a local restaurant. For transportation, he had managed to buy a beat-up used car that was difficult to maintain, especially during the harsh winter months. 

The Cost of Living and Higher Education Today

While Mark was pursuing his education during a much different time, the issues and challenges he experienced are not much different than what many low-income, first-generation students are facing today. Meeting tuition and cost of living expenses, however, is more challenging than it was when Mark was just starting college back in the mid 1970s.

(More coming soon. Got an interesting story? Send it over.)