In a study released on Tuesday by the Brookings Institution, it appears that there is more evidence of the income divide within the United States. The study looked at the decline of middle class neighborhoods in a number of American cities and found that these neighborhoods were actually declining faster than middle income families. Brookings indicated that more research would be needed to fully understand this disparity of information. Read the full article here.
INDIANAPOLIS -- Middle-class neighborhoods, long regarded as incubators for the American dream, are losing ground in cities across the country, shrinking at more than twice the rate of the middle class itself.
In their place, poor and rich neighborhoods are both on the rise, as cities and suburbs have become increasingly segregated by income, according to a Brookings Institution study released Thursday. It found that as a share of all urban and suburban neighborhoods, middle-income neighborhoods in the nation's 100 largest metro areas have declined from 58 percent in 1970 to 41 percent in 2000.
"It means that if you are not living in one of the well-off areas, you are not going to have access to the same amenities -- good schools and safe environment -- that you could find 30 years ago," he said.
Several urban scholars who had no role in the Brookings study said that its findings are consistent with what they have seen in cities from Los Angeles to Cleveland, as the middle class hollows out and as an economic chasm widens between rich and poor neighborhoods.
This type of data makes the tax cuts promoted by the Bush administration all the more troubling. The contention that such tax cuts create jobs has some merit but when the overall trending shows that the middle class is in decline, one must conclude that small business growth is being jeopardized...and it has long been known that small business growth is the engine that creates the lions share of employment opportunities. If we lose this benefit that results from a strong middle class, there will be an increasing concentration of employment in the hands of larger and larger corporations...a trend that has been seen to support lower wage positions that have led to increasing illegal immigration to fill those jobs.
"We are increasingly being bifurcated on an economic basis," said Paul Ong, a professor of public affairs at the University of California at Los Angeles. "It has taken a big chunk out of the middle."
The Brookings study says that increased residential segregation by income can remove a fundamental rung from the nation's ladder for social mobility: moderate-income neighborhoods with decent schools, nearby jobs, low crime and reliable services.
I would argue that the decline in middle class neighborhoods will ultimately drive up the costs for cities and communities as they struggle to collect the funds needed to provide services for declining neighborhoods. As wealth is relocated to outlying suburbs and counties, sales and property tax revenues are also shifted away from communities that will likely be dealing with increasing crime rates, the need for more social services, schools that are struggling to find teachers, and increasing levels of indigent health care.
The housing industry in the Midwest and the Northeast routinely floods local markets with new, ever-larger houses.
Such overbuilding is rampant across the Midwest and Northeast, where the number of new houses -- almost always at the edge of metro areas -- swamped the number of new households by more than 30 percent between 1980 and 2000, according to a study co-written by Thomas Bier, executive in residence at the Center for Housing Research and Policy at Cleveland State University.
"As upper-income Americans are drawn to the new houses, neighborhoods become more homogenous," he said. Echoing the Brookings study, he said: "The zoning is such that it prevents anything other than a certain income range from living there. It is our latest method of discrimination."
In a pattern that is the mirror opposite of what is happening in the Midwest and Northeast, there is a chronic undersupply of housing in many cities on the West Coast. But it, too, has contributed to a decline of middle-income neighborhoods, said Berube, the Brookings demographer.
That has pushed up the price of housing in mixed-income neighborhoods. Gentrification often pushes the poor away to less-desirable suburbs.
In the end, if the neighborhood divide becomes a mirror image of the income divide, the consequences will be amplified. The middle class has long been a key to societal cohesion as it offers the promise of mobility to the poor along with the revenues to fund many of the programs that keep cities and societies functional. Unless we begin to see a shift in these two trends, we will soon be confronted with problems that far exceed the economic considerations.
Daniel DiRito | June 22, 2006 | 7:53 AM |
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Amid growing concern about inflation and the economy, recent Labor Department figures show wages may be in a period of increasing decline. Read the full Bloomberg article here. See prior Thought Theater postings on the economy here, here, and here.
June 20 (Bloomberg) -- Americans' wage gains are evaporating as inflation accelerates, helping explain why confidence in the economy isn't soaring along with job growth.
Weekly wages adjusted for inflation fell 0.7 percent last month and are down 0.2 percent over the past year, according to a report last week by the Labor Department. Pay has been flat or declined in more than half of the 65 months since January 2001, when President George W. Bush took office.
Consumer prices rose 4.2 percent in the last 12 months, more than offsetting a 4 percent increase in weekly wages, according to the Labor Department's inflation report.
Adjusted for inflation, the median income for the top 10 percent of U.S. households rose 2.3 percent between 2001 and 2004, covering much of Bush's first term in office, according to the Federal Reserve's Survey of Consumer Finances, issued in February. For the other 90 percent of households -- which earned less than $184,800 in 2004 -- the median fell 0.5 percent over the same period.
These numbers add to the argument that the Bush administration's tax cuts have had little positive impact on the vast majority of Americans. The argument that the tax cuts were beneficial to the economy may have some merit but it has not translated into the expected positive public sentiment. These wage numbers may offer the best explanation of the lagging public perceptions about the economy. Falling wages coupled with rising inflation and high gas prices may make it difficult for the Republicans to tout the economy as part of a midterm election strategy.
Sixty percent of 1,003 adults surveyed in a June 5-7 Associated Press-Ipsos poll said they disapproved of Bush's handling of the economy, while 38 percent approved. Seventy percent said the country was on the wrong track.
The University of Michigan's consumer sentiment index registered a preliminary reading of 82.4 in June, according to a report last week. While up from May, the figure is below the index's average of 88.1 since monthly reports began in 1978. It reached a record of 112 in January 2000.
Few Americans hold out the hope that incomes will improve in coming months. The share of consumers expecting their incomes to rise in the next six months dropped to 16.6 percent in May from 18 percent a month earlier, according to a survey by the Conference Board, a New York research group. The reading is approaching the 15.3 percent who looked forward to income gains in March 1993, the lowest since records began in 1967.
"The most important economic indicator is what is going into our pocket and how much and how fast it's going right back out,'' said Ken Goldstein, an economist at the Conference Board in New York. "In terms of incomes, consumers feel like they've been in a slump and haven't come out.''
If the Federal Reserve continues to increase interest rates in order to keep inflation in check, it may put added downward pressure on consumer confidence as many homeowners are faced with increasing interest rates on adjustable rate mortgages. These types of mortgages have provided consumers with additional spending power but as interest rates rise, they may ultimately hasten economic decline as consumer spending may decline faster than anticipated. In my opinion, many of the fundamental elements of a recession are beginning to materialize.
Daniel DiRito | June 20, 2006 | 7:30 AM |
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Update:
President Bush signed into law a new bill that improves U.S. mine safety standards, however the law remains far short of the measures in place in Canada that have saved the lives of numerous miners that would have likely been fatalities under the older or current U.S. safety requirements. Read the full story here.
The new law, the first of its kind since 1977, requires miners to have two hours' worth of oxygen on hand while they work, rather than one.
Mine operators also must store additional oxygen supplies underground and must put new communications equipment and devices to track lost miners in mines within three years.
The new safety law includes a requirement that rescue teams be located within an hour of each mine, rather than two hours away.
The law also calls for the government to study whether mine rescue chambers ought to be built into underground coal mines. Such refuges are credited with saving the lives of 72 potash miners in Canada earlier this year.
In reality, this new legislation would likely have had little impact on the mining deaths recorded this year. Without the rescue chambers, which were responsible for the successful rescue of the Canadian miners, it is doubtful that any lives would have been saved under these new measures. The provision to study the rescue chambers is, in my opinion, simply a deferral of necessary and proven life saving improvements that would be the most costly element of meaningful mine safety reform.
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Original Posting:
Two recent mining disasters clearly demonstrate the differences in mine safety standards between the United States and Canada. Further, the two events illuminate the inadequacy of American safety measures. According to Randal McCloy, the lone survivor of the recent Sago mine disaster, in a letter written to the families of the deceased miners, four of the emergency oxygen devices failed to operate. Twelve miners died in that ordeal. In contrast, just this January, a Canadian mine disaster ended with the successful rescue of 70 miners. The following excerpts explain the Canadian safety procedures that prevented the loss of life.
On Sunday morning, at about 3 a.m., a fire broke out more than half a mile below the surface at a potash mine in eastern Saskatchewan owned by Mosaic Co., a US-based firm that extracts the mineral used in fertilizer production.
According to the Canadian press, the miners reported smoke and then went into “refuge stations" for protection until rescuers arrived. These safe rooms are sealed-off areas as large as 15 meters (49 feet) to 45 meters (148 feet) that have an internal supply of oxygen lasting up to 36 hours, along with food, water, chairs and beds.
Throughout the ordeal, rescuers were able to stay in regular communication with two groups of mine workers in separate safe rooms. A company spokesman said they were in phone contact with the miners, as well as family members, and were able to give them reports on the progress of rescuers.
In contrast, the miners in the Sago mine, following mining safey guidelines, found an area where they could take refuge behind a makeshift curtain that they put in place after the explosion. Absent a safe room with a supply of oxygen and with only a one hour supply of oxygen, it isn't difficult to calculate the odds of a successful U.S. mine rescue.
If such safe rooms, caches of oxygen and other basic safety equipment that are commonly used in Canada, Australia and other countries were mandated in the US, it is likely that most of the men killed at the Sago Mine and the Alma Mine would be alive today. However, US mining laws do not mandate these technologies and protections. Therefore, refuge stations, for example, exist only in a handful of the largest mines and have not been widely adopted by mine companies, especially smaller ones.
US miners are only required to wear Self-Contained Self-Rescuers (SCSR)—a breathing apparatus that provides just one hour’s worth of oxygen. Even this technology—which was developed 50 years ago—was sternly opposed by the coal bosses and their representatives in government. It took 13 years after the 1968 explosion that killed 78 miners in Farmington, West Virginia, which led to the passage of the Mine Act the following year, before the adoption of SCSR regulations in 1981.
In his recent testimony before a Senate hearing, Davitt McAteer, the former head of the Mine Safety and Health Administration (MSHA), admitted that mine safety methods and technology in the US were still in “the dark ages." He noted that the lack of equipment to track the location of miners trapped underground and communicate with them had contributed to the loss of precious hours during the attempted rescue at Sago.
Unfortunately, mine safety gets little attention except for brief periods following highly publicized disasters. Sadly, the mining companies often oppose any significant safety modifications and given their financial clout, they have been able to defeat any wholesale safety reform. In this particular industry, out of sight, out of mind seems an appropriate summation of the plight of the American mine worker.
Daniel DiRito | June 15, 2006 | 2:51 PM |
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Unfortunately, I had to make an unexpected trip out of town last evening and I will have limited access to a decent internet connection. Please feel free to explore the numerous postings contained within the genres in the right hand column. Hopefully, there will be something of interest to all. I will attempt to provide an update on my posting status later this morning. Thanks for your understanding.
Daniel
Daniel DiRito | June 10, 2006 | 7:30 AM |
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