Why Your Rent Is So High and Your Pay Is So Low

[n2doc]

by Tom Streithorst

IN THE 1950s, the average New York City apartment rented for $60 a month — around $530 in today’s money. With the US median wage at $5,000 a year, New Yorkers spent 1/10 of their salaries on rent. After World War II, apartments were so cheap and available that Manhattanites would regularly move every September just to get the landlord to repaint their new home. In those days, an apartment was a place to live. Now it is as much an investment as shelter.

Imagine trying to find an apartment in Manhattan for $530 now. It is almost inconceivable. These days a depressing number of young New Yorkers spend over half their income on housing. Rent hikes have transformed a once-democratic city into a playground for the privileged. Hardly anyone can afford to move to New York on an entry-level wage. It sometimes seems that the only twentysomethings that come to New York today have parents who help pay the rent.

During the boom years after World War II, Americans’ real wages more than doubled. A 30-year-old earned twice as much by the time he or she hit 50. This broad-based prosperity transformed the nation. In 1939, 25 percent of Americans didn’t have running water, only 65 percent had indoor toilets, none had television. By 1970, almost all had cars and dishwashers. The luxuries of an earlier age had become necessities. Between 1945 and 1973, the United States and the world experienced the greatest economic growth in history, not replicated before or since. Economic historians call those postwar years the Golden Age.

This explosion of affluence did not extend to New York City landlords. Rent control kept rent increases lower than inflation. Apartment prices remained stagnant. In 1976, you could buy a classic four-bedroom Park Avenue apartment in a doorman building for $36,000. Owning a building back then didn’t make you rich. Instead it was a drain on capital. The fires that devastated huge swaths of New York in the 1970s were generally set by landlords who saw insurance fraud as the only way to profit from their properties. The average rent that decade was just $335. You could rent a two-bedroom apartment in Greenwich Village for $250 a month.

much more

https://lareviewofbooks.org/essay/why-your-rent-is-so-high-and-your-pay-is-so-low-tom-streithorst

[abelenkpe]

1. k&r

[Yavin4]

2. The author omitted the role of Communism

In the 1950s, a good portion of the world, Eastern Europe, China, Cuba, parts of Africa, lived under Communism. Western governments and businesses had a strong incentive to increase the standard of living of the working class in order to sway them away from even considering Communism as an alternative, and it worked. Along with massive propaganda, the working classes reviled Communism and boasted about their higher standard of living. Even though their higher standard of living was loosely based on Socialist/Communist ideology, worker collectives (unions), government spending, pensions, social security, public healthcare, and higher taxes on the wealthy.

For thirty years, the American working class believed that their higher standard of living was based on Capitalism, so when Reagan came along, they thought that his economic agenda would increase their standard of living. Reagan preyed on this naivety, and his plan was confirmed when he crushed PATCO, a worker collective that had endorsed him in 1980. Reagan also used simmering resentment among White working class voters over the social movements of the 1960s, the Civil Rights and Feminist movements in particular to bolster his popularity.

The ultimate collapse of Communism in 1990s cemented the fate of the American worker. Without it, American governments and corporations no longer had any fear that their populations would turn to Communism as an alternative for generations to come. As a result, they were free to take back ALL of the programs, rights, and benefits of workers. For 40 years, corporations have decimated the American worker, rob them of their wages, bankrupted them, and push them into more and more debt as a way of making up for lost wages.

[Gregorian]

7. I would really like to see you post this as a topic.

You've just pointed out something that is so basic, and so very much lost to nearly every American. We're in denial. And on top of it, we have no media; no feedback loop.

We need information like this. I've been working on getting some of this out, and getting fewer replies than I feel comfortable with. Bernie Sanders is our rare opportunity to have some real progress in America, and I don't want to see this one slip by.

I had not realized it until you posted this. I'm stilll learning too.

[erronis]

11. And this is why Bernie won't be allowed to win

They'll link the Democratic Socialism to communism and convince the people that are too tired to think for themselves that we'll be slip-sliding back to the reds.

Labels are so easy to attach and so hard to defend against.

Hang in there, Bernie - we need you and your message.

[Fairgo]

16. Yes please

This is a thesis worth exploring.

[SusanCalvin]

14. OMG

I never thought of it that way, but you are right. I lived through it, and I contend you are 100% RIGHT.

Please make this an OP.

[Sunlei]

3. The property tax alone excludes low income people from many areas across America.

[yeoman6987]

6. I don't mind the property taxes being high

That is one of the great things about democratic politicians. They will tax for good schools and other necessities. Republicans want to cut them. We cannot start thinking that way or it will be both parties agreeing on cutting taxes. If it were up to republicans, we wouldn't have property taxes at all. Let the schools fend for themselves would be GOP motto....practically that way now in republican areas. You can live in a GOP area and hardly pay taxes but everything sucks. The liberal cities have high taxes but are better all around.

[n2doc]

9. I've lived in Texas and Georgia

In both places the taxes are high. First, high sales taxes. Second, property taxes are high for most, but have loopholes designed to let the wealthy escape paying. In Texas, if you have a 'ranch', your taxes are much much lower.

The thing that has always gotten me riled up about property taxes isn't paying them. It is the very corrupt way in which assessments are made. Know the right people and your property gets assessed at a very low below market rate. Otherwise, you pay more to cover for them.

[yeoman6987]

10. Yeah I see your point. Lots of ways to get out of paying taxes

That must be stopped.

[passiveporcupine]

4. Good article

[Spitfire of ATJ]

5. "During the Golden Age, productivity increases almost immediately translated into wage increases."

Right Wingers claim that's still true today.

They claim the harder you work; the more you get paid.

These days the harder you work; the more the shareholders make.

[n2doc]

8. And, the harder you work, the more co-workers get laid off

See how that operates? Efficiency and productvity!

[Spitfire of ATJ]

12. They have one worker doing the work of six in the 70s....

So if you work two jobs you're doing the work of a dozen people for the pay of two.

[awoke_in_2003]

13. He tried to warn us

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[n2doc]

15. He was a bit too damn late for that! n/t

[awoke_in_2003]

17. Yep

[Igel]

18. Somebody looked at London rents/property values back in the '00s.

It was a funny study, but it stood out because the results were so neat and clean.

London has high rents/values. The further away you go the cheaper the cost of housing. The researchers collected this data and looked at transportation routes.

Turned out there was a very nice, very linear correlation for most of the data: The closer to the city (I think that was with a lower-case 'c'), the more expensive. The further away, the more expensive.

The correlation wasn't very neat and clean when you looked at distance. But when you plotted time v price, there it was. The longer the travel time to work, the cheaper the housing. You pay in pounds, you pay in minutes. Either way, you pay. Landlords and sellers could raise prices until people decided they'd pay in time, not cash.

[Recursion]

19. "By 1970, almost all had cars and dishwashers"

We often say that back in the 1960s it was possible for a single high school graduate to support a family on his wages, and that that is impossible anymore. But real incomes are higher than in 1960. This point gets to the fact that you still can support a family on a single high school graduate's wages, at a 1962 standard of living. Except that there's no option to "rent down", so you can't do so in a large city.

Between 1945 and 1973, the United States and the world experienced the greatest economic growth in history, not replicated before or since.

This is wrong. The economic growth and decrease in inequality on a global scale was larger between 1978 and 2008 than any other period in history. That's mostly because China went from being a < $2/day country to a > $2/day country.