Housing wealth

There has been lots of discussion recently about how much more the ‘1%’ earn than everyone else. There has been less attention paid to how much more they own.

In fact, wealth (what people own) is more unequally distributed than income.

 

This chart gives you an idea of just how unequally distributed wealth is in the UK.

Wealth includes things like pensions and stocks. If we just concentrate on housing wealth (Total housing wealth in the UK stands at something like £3,375 billion) we see a similar picture. Here is how housing wealth is distributed.

 

House prices have increased significantly, even adjusting for inflation, since the 1970s as this chart shows.

 

However, this has not uniformly benefited all homeowners.

 

But has hugely benefitted those who own expensive houses.

 

Many of whom are not born in the UK.

Relationships at work

The left wing British pressure group Compass have an interesting essay competition. They want to get 1,000 articles on “the most important elephant in the room for the left.”

I am going to write something about the need to make people’s workplaces more empowering (especially low and middle income people’s workplaces).

I would love to hear anyone’s thoughts on this topic.

Broadly, I think it is an elephant in the room for the left because Labour (and the Democrats in the US) are scared of being called socialists or anti-business.

However, more empowering workplaces (i.e. workplaces where workers feel in control) are better for workers and for businesses. Currently, there are far too many workplaces which are arranged so that workers feel disempowered.

Anyway, in preparation for writing the article I have put together some facts, that may be of interest, on the topic. Again, do let me know what you think.

1. % of people who say their supervisor treats them like he/she is your partner: UK 42.1%/USA 55.8%

2. Good workplace means less worry, more likely to say you are “thriving”, less stress

3. UK has poor management by international standards

4. According to Gallup 24% of UK workers are ‘engaged’ while 25% are ‘disengaged’. The rest are ‘neutral’.

5. Engaged workers are more productive, in better health, are immune to stress from commuting, and are more likely to be thriving in their overall lives.

6. Improving worker engagement correlates with improving performance

7. A quote from Professor Julian Birkinshaw of the London Business School: “employee  engagement is the sine qua non of innovation. In my experience you can have engaged employees who invest their time in multiple directions (such as servicing clients, creating quality products) but you cannot foster true innovation without engaged employees.”

8. “Engaged employees in the UK take an average of 2.69 sick days per year; the disengaged take 6.19”

9. The Corporate Leadership Council (CLC) report that the highest scoring companies record 23.8 per cent of their people in the high engaged category; in the lowest scoring companies only 2.9 per cent of their people are in the highly engaged category.

10. Towers Perrin reported in 2007 that only 29 per cent of UK employees believed their senior managers were sincerely interested in their well-being; only 31 per cent thought their senior managers communicated openly and honestly; only three per cent thought their managers treated them as key parts of the organisation and no fewer than 60 per cent felt their senior managers treated them as just another organisational asset to be managed.

11. A government white paper identified a “joint and consequential failure of leadership and management” as “the main cause of poor employee engagement”

12. This is not a high political priority but the government is doing something. David Cameron set up an independent Employee Engagement Task Force.

13. 46% say they do not have a say about how their work is organized (same in public and private sector) (majority for sales/customer services and for low paid workers)

14. A quarter of personal wellbeing relates to workplace

15. Of 1091 managers surveyed in large companies, only 40% said their relationship with their team was ‘trusting’

16. When asked to describe their managers management style, the most common answers were bureaucratic, reactive or authoritarian. In ‘growth firms’ far more likely to say accessible, empowering, trusting and consensual.

17. There is a very strong correlation between employee engagement and customer loyalty metrics, productivity, employee turnover, safety, absenteeism, patient safety, and quality.

 

Has U Street been ‘swagger-jacked’?

There has been quite a debate about this article which claims that the neighborhood I live in (U Street) has ‘swagger jacked’ Washington’s African-American culture.

The most thoughtful response I have read has been in The Atlantic. You can find that piece here.

I will write my own contribution to this debate but first here are some charts showing the dramatic changes that have occurred in the area.

CRIME IS DOWN

There are fewer people in poverty and more in employment and with a high school diploma

The average household income is dramatically higher

There are fewer people receiving the TANF benefit but a steady number on food stamps

There are fewer empty properties to rent and more people own their homes

There are more occupied housing units

House prices have risen dramatically

The total number of people living in the area had been declining but is now increasing

The area has gone from being a predominately black neighborhood to being a majority white neighborhood

There are far fewer households with children than there used to be. Those that do have children are much more likely to be living in poverty than previously

American exceptionalism

Here are a few stereotypes about Americans that are commonly held amongst Brits (and also quite a few Americans)

• Religious Americans are right wing
• Poorer Americans vote against their own interests
• Americans are ignorant or goofy
• Americans’ political views are heavily influenced by FOX news
• Americans are very socially conservative

What do these views have in common? I would say at least three things;

• They are wrong
• The implication that Britain and British society is in some way superior is wrong, and worryingly complacent
• There is a distinctively un-democratic undercurrent to these views.

Lets look at each point in a bit more detail.

1. American church goers are right wing

America is certainly a very Christian country, in the sense that lots of people identify as Christian, believe in God, attend Church and pray on a regular basis.

However, most Americans think that there are too many expressions of faith by politicians and that the Churches should keep out of politics.

More importantly, because America is such a christian country saying that the religious Americans are right wing is way too broad a pronouncement. In fact there is enormous variation amongst difference denominations.

White Protestants (especially Evangelicals) heavily identify with the Republican party. However, White Catholics are roughly evenly split between identifying with the Democrats and Republicans and Black Protestants overwhelmingly think of themselves as Democrats.

In fact, this is not so very different from the UK, where people in the Church of England are more likely to vote Tory but all other religious affiliations actually show a tendency to vote Labour.

2. Poorer Americans vote against their own interest

A bizarely common view amongst Brits is that poorer people vote (against their interest) for the Republicans. I will not get into whether it is in lower income people’s interests to vote Republican. However, the evidence on how they vote is clear.

Here is a recent opinion poll. It shows Obama with a 15 point lead over Romney in households earning less than $36,000 per year.

Here is a graph showing how household income relates to which party people voted for in 2004. It shows that the lower the income the more likely you are to vote Democrat.

Finally, here is a map of what the 2008 election would have looked like if the only people to vote had incomes of between $20,000 and $40,000. It is very blue.

Actually, just like in the UK, lower income Americans tend to vote for left wing parties.

3. Americans are ignorant or goofy

The slack jawed yokel stereotype of Americans is very common amongst Brits, and many Americans.

Of course, people who live in cities have made fun of the manners of people who live in the countryside for hundreds of years and there is certainly an element of this in the stereotype. But I think it goes further and that many Brits really believe that they are smarter than Americans. There is not much truth in this.

In fact both the UK and the US’s education systems are not particularly impressive. They were recently ranked 14th and 20th in the world. The US was ahead of the UK. Both were well behind South Korea, Finland and Japan.

4. Americans’ political views are heavily influenced by FOX news

Brits seem to imagine that huge numbers of Americans are watching FOX news every night and uncritically accepting whatever political views it gives out.

It is true that FOX news is the most watched news channel in the US, but it is not true that it is particularly widely watched. Around 1.7 million people watch FOX news in a typical week, in a country of some 300 million people. In fact, most Americans like watching talent shows, procedural dramas, sitcoms and big sporting events.

And does it influence the views of those people who watch it?

A massive study of the media and politics in the US found “no evidence that partisan newspapers affect party vote shares, with confidence intervals that rule out even moderate-sized effects”. Even people who argue that FOX news is somehow able to brain wash its viewers in a way that other news channels are unable to, estimate the actual impact of the channel on voting preferences to be very small. It’s much more likely that FOX news is giving people what they want than it is that FOX news is changing people’s minds. Would you change your mind if a newspaper or tv station told you to?

Compare this with the UK. Remember, under 2 million people a day watch FOX news in America. In the UK, over 2.5 million people a day buy The Sun newspaper. Obviously a far larger number of people read the paper every day because each copy gets passed around.

5. Americans are very socially conservative

The idea that Americans are more likely than Brits to vote on social issues and are more conservative on social issues is also common in the UK. The idea that guns and abortions are the biggest political issues for Americans trips off the tongue very easily for the English.

In fact, in common with the UK and all countries, Americans are most concerned about the economy, with a sizable number exercised by the deficit and healthcare.

How many Americans do you think say abortion should be illegal?

The answer is about 20%, and that number has been stable for the last decade.

How many Brits think abortion should be illegal?

The last survey I can see found that “35% supported the status quo, 48% supported a reduction in the legal time limit to 20 weeks and 8% supported a total ban on abortion.”

***

So, in fact,

• Just like in the UK there is enormous variation in the political views of religious Americans
• Poorer Americans are more likely to vote Democrat than richer Americans
• Americans are slightly better educated than Brits
• Hardly any Americans watch FOX news (fewer than read The Sun) and those who do are not that influenced by it (although they are probably already quite conservative)
• Americans’ chose who to vote for because of their views on the economy, not social issues and while more Americans than Brits want abortion to be illegal, massive majorities in both countries are happy for abortion to be legal

Of course, if you did believe any or most of these stereotypes you would probably be tempted to think that;

• Progressives should not work with religious people
• Poorer people are a barrier to progressive causes
• Progressives will always be unpopular because of their stance on social issues such as abortion and because of the power of FOX news

In fact, the opposite is true, both in the UK and the US.

Affordable housing in Washington DC

Here is a short briefing document I wrote explaining the current proposal for the piece of land known as “Parcel 42” by the DC City government.

DC Returning Citizens facts

1. Federal statutes prohibit employment of ex-offenders with certain criminal convictions in certain jobs including certain airport jobs, armored car crew members, and any jobs in employee benefit plans.

2. In DC employers and occupational licensing agencies can ask about arrests that never led to conviction unless the record has been sealed, and can refuse to hire or license anyone with a criminal record no matter their qualifications.  There are no opportunities for people with criminal records to obtain restoration of civil rights or certificates of rehabilitation for employment purposes.  Records are available on the Internet.

3. Employers can be held liable for the criminal actions of their employees under the theory of negligent hiring which states that “..employers who know, or should have known, that an employee has had a history of criminal behavior may be liable for the employee’s criminal or tortuous acts.”

4. Many employers do not want to hire returning citizens. In surveys only about 40% said they were willing to even consider hiring a returning citizen. In 2002 an academic sent employers in Milwaukee applications from four groups of imaginery male job applicants with virtually identical educational and work experience credentials. They were split into white and black citizens and returning citizens. Returning citizens were said to have been incarcerated for 18 months for a non-violent drug sale. White citizens received offers from 34% of employers, white returning citizens received offers from 17%, black citizens received offers from 14% and black returning citizens received offers from just 5% of employers.

5. Returning citizens often do not have academic qualifications. One study found that 70% of returning citizens do not have a high school diploma.

6. Returning citizens have gaps in their work experience as a result of being in prison and often had limited work experience prior to detention.

7. Returning citizens are more likely to live in stigmatised areas.

8. Returning citizens are more likely to be a member of a race that is discriminated against by employers.
References

Connerley, M (2001) Criminal background checks for prospective and current employees: Current practices among municipal agencies Public Personnel Management, Vol 30(2)

Holzer, H. (2003) Employment Dimensions of Reentry: Understanding the Nexus between Prisoner Reentry and Work New York University Law School

Hirsch, A. et al (2002) Every Door Closed: Barriers Facing Parents With Criminal Records Center for Law and Social Policy and Community Legal Service

Legal Action Center (2009) After Prison: Roadblock to Reentry http://www.lac.org/roadblocks-to-reentry/upload/reportcards/58_Image_DC%20Report%20Card%20alf.pdf

Pager, D (2002) The Mark of a Criminal Record U.S. Department of Justice https://www.ncjrs.gov/pdffiles1/nij/grants/198320.pdf

Travis, J et al (2001) From Prison to Home: The Dimensions and Consequences of Prisoner Reentry The Urban Institute

DC displacement facts

The White population of DC is growing, from 217,000 in 2007 to 244,000 in 2010.  The black population is declining, from 326,000 to 314,000
Black households usually earn less than White households. More than one in four Black DC residents lived in poverty in 2010 (8.5 percent for non-Hispanic White residents)
Black residents are less likely to be in work than White residents. The unemployment rate for Black DC residents has doubled since 2007, from 10 percent in 2007 to 20.6 percent in third quarter 2011. From 2007 to third quarter 2011, the unemployment rate for White (non-Hispanic) DC residents rose from 1.9 percent to 3.7 percent.  
The number of households earning over $75,000 per year has increased, the number of families earning less than $50,000 per year has decreased.

Percentage change between 2000 and 2009

Household incomes	Renters	Homeowners	Overall
Less than $50,000	-24 percent	-32 percent	-26 percent
$50,000 to $75,000	Unchanged	Unchanged	Unchanged
More than $75,000	+81 percent	+58 percent	+63 percent

The number of low cost rental properties has decreased. The stock of low-cost rental stock has shrunk by more than one-third since 2000. The number of rental units with rent and utility costs of $750 or less fell from 69,000 in 2000 to 45,000 in 2007.  (all figures are adjusted for inflation to equal 2007 dollars.)

Low-cost homeownership options also shriveled, the number of DC homes valued at $250,000 or less fell from 58,000 to 15,000 between 2000 and 2007.

There is a shortage of housing that people on less than 50% of the Area Median Income can afford.

Certain neighbourhoods are becoming less black and more white.

A growing number of DC households are finding it difficult to afford housing. Nearly 100,000 DC households — or two of five — spent more than 30 percent of their income on housing in 2007 (20,000 more than in 2000)

Four of five DC households with incomes below 30 percent of the Area Median Income (about $28,000 for a family four) spent more than 30% of their income on housing. 62 percent of this group spent half or more of their income on housing in 2007 — up from 50 percent who had housing costs this high in 2000.

In 2009, 24.8 percent of District renter households (34,140 households) had severe housing costs (spending 50 percent or more of their income on housing)

In 2006 the National Low Income Housing Coalition estimated that a full-time worker would have to earn an hourly wage of $24.73 — three and a half times the minimum wage — to afford the rent for a modest two-bedroom house or apartment. The minimum wage is $8.25 per hour in DC. A person making that much would have to work 153 hours a week to afford to rent a two bedroom apartment in the open market.

Funding for all of DC’s major housing programs has been cut in recent years, however, which means that the city is unlikely to have made much progress on the affordable housing problems highlighted in this report.  The budget for core housing programs in FY 2010 is $64 million, a nearly 50 percent cut from 2008 and the lowest level since 2004.  The Housing Production Trust Fund will receive $18 million in 2010, compared with $62 million in 2008.

The 160 unit Columbia Heights Village development 14th Street and Columbia Road Northwest recently started accepting applicants. It is a project-based Section 8 development that bases tenant rents on their income level. People waited in line for over 4 hours for a chance to put their name down on the list for these properties. One woman in line said

“They are pushing us out! … Average people deserve to live in the city.”

Another said

“I was born and raised here I’m not moving. I will find affordable housing.”

D.C.’s old Capitol Gateway housing project during demolition in 2005

Capitol Gateway today.

Capper/Carrollsburg site in 2006

The unfinished site in 2008

Partially completed in 2010 with properties going “from $781,300”