It ain’t rocket science! The media has done a lousy job of telling the story of what has happened to wages versus buying power and houses over the last decades. Wages have stagnated for over 40 years! Reporters here are too concerned about the newest brew house opening and other trash news. They moan, “There’s no affordable housing here.” None have done researched pieces on the facts!
Most workers have no clue as to what has happened to their buying power.
Adjusted for inflation, the federal minimum wage peaked in 1968 at $8.68 (in 2016 dollars). Since it was last raised in 2009, to the current $7.25 per hour, the federal minimum has lost about 9.6 percent of its purchasing power to inflation.
What cost a $1 in 1989 cost $2.03 in 2018 — double in 30 years while wages went up 14 percent! The U.S. cost of a house in 1989 vs. 2019 is an increase of 150 percent. A house costing $100,000 in 1975 would be $550,000 now. One dollar in 1975 would need about $4.50 today to buy the same thing.
Santa Barbara is even worse than the national average, and this is why most of the people working here will never be able to afford a house in Santa Barbara or other coastal areas of California. Their wages have gone down in relation to costs of anything they want to buy!
Illegal immigration holds down wages and inflation — government and business love it! The same working people, Mexican and white, who are advocating for softer border control and restrictions, are shooting themselves in the head, economically speaking.
Wages are being held down because of the number of workers available in many menial jobs. As an example, the building trades, carpenters, roofers, drywall, etc., used to be high paying and in many cases unionized. Now the entire industry is Hispanics. Salvadorans rule drywall in Southern California. I just had a new roof put on — all except one roofer were illegal immigrants from Mexico. The one was Mexican-American and born here. The government and big business have busted the union movement. Benefits have evaporated. In many businesses, part-time workers are the norm. Home Depot has all part-time workers with no benefits, lousy hours, and low wages. Most of the new jobs are lousy paid jobs with no benefits and many are part-time! Restaurants, retail, etc. Many businesses use contract workers to skirt labor laws. The ride-hailing companies don’t count their drivers as employees. That is in the courts now!
A 14 percent increase in wages in the last 30 years during the height of illegal immigration and importation of B1B workers from places like India. Look at the increases in cost of living: 100-plus percent!
The problem is not housing costs. It is income vs. housing costs!