U.S. homeownership in 2015 (in a global context)

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Statistics and analysis compiled for and by The Globalist Research Center.

In the second quarter of 2015, the homeownership rate among U.S. households reached a new recent low of 63.4%, according to the U.S. Census Bureau. This was the lowest reported rate since 1967!

Homeownership in the United States had reached an all-time high of 69.2% in 2005, two years before the housing bubble burst in late 2007. Following the recession, prospective buyers shifted instead into renting. Growth in the rental market — approaching record occupancy levels in many areas of the country — is one of the factors driving down the share of homeowners in the overall pool of households.

At the same time, U.S. home buying and home prices have actually increased recently. But that demand has largely come from institutional investors, speculators, and foreign buyers. This makes it harder for ordinary homebuyers, especially in the youngest generation of would-be first-time buyers, to break into the market.

For comparison to some other major economies’ homeownership rates, about 53% of German households own their homes, 73% of Italian households own their homes, and 90% of Chinese households own their homes. The global average, however, is slightly below the latest U.S. homeownership rate.

But not all homeowners are created equal. In Romania, 95.6% of households own their own homes as of 2013 — the highest ownership rate of any EU country. And eight of the ten EU member countries with the highest rates of homeownership are all former Warsaw Pact or Soviet states. (Another is ex-Yugoslavian.) The ownership level is similar in Russia itself, where 84% of housing was owner-occupied as of 2010. All of this is at least partially related to rapid housing privatizations in the early 1990s. However, there are concerns that many of the homes in those countries, constructed in the suburbs and countryside during the Communist era, might not hold up much longer. Little new construction occurred in the decade after 1991. This could potentially put much of the housing stock in jeopardy and add major stress to those already relatively poor European nations.

Homeownership promotion has long been a goal of U.S. public policy — maybe because of its cultural association with early American colonists, homesteading pioneers, and the American Dream. Today its promoters seek to encourage building up equity and to ensure a steady need for jobs in the construction industry. The George W. Bush Administration, for example, promoted what it called an “ownership society.”

The general idea (in theory, at least) is that when people living in a home-owning household reach retirement age, the equity they have in their residence can provide a major source of funds to finance their retirement.

Home-owning households are generally wealthier, as least on paper, because a residence is often their largest asset. However, that asset is usually not a readily accessible source of cash.

Moreover, more than two-thirds of American homeowners in 2014 had mortgages on their homes. Homeownership is far less associated with debt in China, for example, than it is in the United States. Taking out a mortgage to buy a property is very uncommon in that country, barely reaching double-digits as a percentage share of homeowners in 2010.

The origin story of minimum wage laws, part 1

Part 1: New Zealand, Australia, Massachusetts, the New Deal, and China: How governments took an active role initially, and how they balance economic variability now. || This original research was produced for The Globalist Research Center and Arsenal For Democracy.

More than 150 countries have set minimum wages by law, whether nationwide or by sector. Other countries have no legal minimum, or governments play a different role in wage setting processes.

Where in the world did government-set minimum wages originate?

In 1894, over 120 years ago, New Zealand became home to the first national law creating a government role for setting a minimum wage floor – although this may not have been the initial intention.

The Industrial Conciliation and Arbitration Act established an arbitration court made up of both workers and employers. It was intended to resolve various industrial-labor relations disputes in a binding manner. The goal was to avoid all labor strikes.

The court was empowered to set wages for entire classifications of workers as part of these resolutions. It did not take long for this to evolve into a patchwork of rulings that effectively covered all workers.

Today, New Zealand’s hourly minimum wage is about equivalent in purchasing power parity (PPP-adjusted) terms to US$9.40.

Which country first adopted a living wage?

In the 1890s, neighboring Australia was still a loose collection of self-governing British colonies, rather than one country. One colony, Victoria, was inspired by New Zealand to adopt a similar board with wage-setting powers. This occurred shortly before the Australian colonies federated together in 1901 to become one country.

In 1907, Australia pioneered what is now known as a “living” wage when the country’s new national arbitration court issued a ruling in favor of a nationwide minimum wage.

That court specified that it had to be high enough to fund a worker’s “cost of living as a civilised being.” While the ruling soon ran into legal trouble from the federation’s Supreme Court, it remained a crucial precedent in future labor cases.

To this day, Australia has a generous minimum wage. The current rate is about equal to US$11.20 in PPP-adjusted terms. This represents about 55% of median pay. However, New Zealand’s minimum wage is actually proportionally higher, at 60% of median pay.

N.B. Purchasing-power currency conversions are from 2012 local currency to 2012 international dollars rounded from UN data.

Which U.S. state had the first minimum wage?

In the United States, a minimum wage mechanism was first introduced in 1912 at the state level — but specifically for female workers (and some child laborers) — in Massachusetts.

The state passed a law to create a “Minimum Wage Commission” empowered to research women’s labor conditions and pay rates, and then to set living wages by decree. For any occupation, the Commission could set up a “wage board” comprising representatives of female workers (or child workers), employers, and the public to recommend fair pay levels.

The Commission’s decreed wage had to “supply the necessary cost of living and to maintain the worker in health.”

1912, the year Massachusetts passed the law creating the commission, was part of a period of major reforms in the United States, which had become the world’s largest economy.

These changes gave government a more active legal role in economic policy. In 1913, the country adopted the Sixteenth Amendment to the U.S. constitution, which made possible a federal progressive income tax. Also in 1913, the Federal Reserve System was created.

More than a dozen U.S. states followed Massachusetts within less than a decade. However, they had to contend with frequent battles before the U.S. Supreme Court on the constitutionality of government-set minimums. Read more

6 very bold corruption excuses from Chinese officials

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For the Wall Street Journal’s China Realtime blog, Russell Leigh Moses of the Beijing Center for Chinese Studies, recently compiled various quotations published in Chinese state media from public officials convicted of corruption or embezzlement trying to explain and justify their actions, often pretty audaciously. Here are some of them…

Good Manners

A former vice-mayor in the city of Meishan in China’s southwest Sichuan province:

Declining to go with the flow, according to this official, “wouldn’t have been good for my work, and it would have rendered further promotion out of the question.”

 
Tan Xinsheng, former deputy mayor of Tongnan in the megacity of Chongqing:

“My motive wasn’t for the money itself, but because it’s normal job behavior to accept gifts and payments when offered them…”

 

For the Good of the Nation

A former deputy governor in Shandong province:

… the official declared that nearly all of the money he accepted [5.6 million yuan] had simply been set aside – and that he was in principle saving money for the country.

 

What Else Are Best Friends For?

A vice mayor from Shanxi province:

…accepted 2 million yuan because he thought the person bribing him merely wanted to be close friends and that the money was a reflection of the two of them “hitting it off,”

 

Study Abroad

Xu Jing, teacher, Beijing University for Industry:

She embezzled more than 9 million yuan, and used a third of that amount to fund her daughter studying abroad. […] Xu maintained that using the money to send her daughter overseas to study was compatible with “the national program to nurture talent for the country” and therefore shouldn’t be considered corruption.

Retirement Plan

Liu Tienan, former deputy director of the National Development and Reform Commission:

…Liu said that he accepted bribes because he had anxiety about old age and was worried about where he would end up after he retired.

 

Fencing in Chinese nomads (to get the coal under them?)

You have to read this New York Times article pretty closely to catch that China’s destruction of its Inner Mongolian nomad cultures is probably about getting to the coal under their grazing lands:

In Xilinhot, a coal-rich swath of Inner Mongolia, resettled nomads, many illiterate, say they were deceived into signing contracts they barely understood. Among them is Tsokhochir, 63, whose wife and three daughters were among the first 100 families to move into Xin Kang village, a collection of forlorn brick houses in the shadow of two power plants and a belching steel factory that blankets them in soot.
[…]
Not everyone is dissatisfied. Bater, 34, a sheep merchant raised on the grasslands, lives in one of the new high-rises that line downtown Xilinhot’s broad avenues. Every month or so he drives 380 miles to see customers in Beijing, on smooth highways that have replaced pitted roads. “It used to take a day to travel between my hometown and Xilinhot, and you might get stuck in a ditch,” he said. “Now it takes 40 minutes.” Talkative, college-educated and fluent in Mandarin, Bater criticized neighbors who he said want government subsidies but refuse to embrace the new economy, much of it centered on open-pit coal mines.

 
Here’s the cultural cost:

In what amounts to one of the most ambitious attempts made at social engineering, the Chinese government is in the final stages of a 15-year-old campaign to settle the millions of pastoralists who once roamed China’s vast borderlands. By year’s end, Beijing claims it will have moved the remaining 1.2 million herders into towns that provide access to schools, electricity and modern health care.
[…]
But the policies, based partly on the official view that grazing harms grasslands, are increasingly contentious. Ecologists in China and abroad say the scientific foundations of nomad resettlement are dubious. Anthropologists who have studied government-built relocation centers have documented chronic unemployment, alcoholism and the fraying of millenniums-old traditions.
[…]
Nicholas Bequelin, the director of the East Asia division of Amnesty International, said the struggle between farmers and pastoralists is not new, but that the Chinese government had taken it to a new level. “These relocation campaigns are almost Stalinist in their range and ambition, without any regard for what the people in these communities want,” he said. “In a matter of years, the government is wiping out entire indigenous cultures.”

 

Inner Mongolia Autonomous Region of China (Credit: Wikimedia)

Inner Mongolia Autonomous Region of China (Credit: Wikimedia)


Similar Topics from Arsenal For Democracy:

“The Battle for Xinjiang (and its energy riches)”

The malnutrition paradox: Obesity and hunger crises

In China, in 2009, nearly 100 million people were obese, but around the same time (in 2008), more than 200 million were suffering from undernourishment. While the latter figure has declined since then, this data highlights a seeming paradox of modern life. Hunger and obesity can now exist in the same countries side by side – and both reach a large scale.

Today, in Nigeria, to give another example, 37% of children under 5 are stunted from undernutrition, even as 25% of women age 15-49 are overweight or obese.

In advanced economies, side-by-side obesity and undernutrition generally reflects income inequality, weak social safety nets, and poor access to high-quality nutrition instead of junk food.

In many low-income and middle-income developing nations, however, this apparent contradiction – where a country’s malnutrition challenges simultaneously include both extremes of chronic hunger and obesity – is usually experienced as part of a “nutrition transition.”

In that transition, a combination of urbanization, changes in dietary intake and a growing middle class combines to produce this phenomenon. It becomes easier for many people to obtain unhealthy foods (or suppliers find it easier to reach them), even as some areas of the country or some economic strata of the population continue struggling to access any food at all.

Eventually, this crossover phase ends, as famines become infrequent, agriculture becomes more efficient and more people cross into a stable middle class.

June 17, 2015 – Arsenal For Democracy 131

Posted by Bill on behalf of the team.

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Topics: Voter registration reform and mandatory voting; China and India in a Multipolar World; 21st century Colbertism and political cliches. People: Bill and Nate. Produced: June 15th, 2015.

Discussion Points:

– Voting Reform: Should voter registration be automatic? Should voting be mandatory?
– Multipolarism: What does the military rise of China, India, and other “poles” mean for the United States?
– Cultural Austerity: Why is it now commonplace to assert there’s less money to go around, when it’s really just more concentrated than before?

Episode 131 (54 min):
AFD 131

Related Links

ThinkProgress: Congressman Asks, Why Aren’t People Automatically Registered To Vote?
Bill’s new op-ed: India’s Zero Dark Thirty Moment
Wikipedia: Colbertism

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