America Is Booming and Americans Can’t Afford It. We know the good news; we’re experiencing the bad. As everyone has heard, the economy keeps roaring along; the recovery that began in late 2009 is the longest in modern memory; unemployment hovers around 4 percent; the sun rises in the East.
That’s the big picture. Closer to earth, at least here on the East Coast, it’s been raining on us so long we have to take news of the sunrises on faith.
Closer to earth, today’s Wall Street Journal reports, homes sales are declining, the boom notwithstanding. Though economists are predicting that the economy in the quarter just ended will have grown by 4 percent, home sales have declined for five of the past six months when compared to their totals one year ago.
A particular weakness in the home-buying market is millennials, whose rate of homeownership is well below that of previous generations when they were under 35. Apparently, when you saddle millennials with record levels of student debt and strip them of the kind of employment security their elders experienced, they don’t buy houses as their elders once did, either.
The decline in home sales is of a piece with the news that average hourly wages actually declined between June 2017 and June 2018—despite all the new jobs created, despite the unemployment rate continuing to fall.
What should be clear from all this—and this should have been clear for many years—is that low unemployment is a necessary but insufficient condition for broadly shared prosperity. To attain that kind of prosperity, where people start buying houses again, we need to make some fundamental changes to our economy—like changing labor law so workers can collectively bargain again, like raising the federal minimum wage, like raising taxes on capital and the rich so that the government can begin investing in public works that bring with them good-paying jobs, like raising the taxes on corporations that funnel all their profits to shareholders instead of paying their employees or investing in productive enterprises, like requiring corporations to give their employees a number of their board seats equal to that of shareholder representatives—like making our capitalism more social, and thereby more functional. Who knows? Maybe Americans will be able to buy homes again. ~ HAROLD MEYERSON
And, and recession is coming. The question is not if, but when.
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