living Archives - Real Time News

April 24, 2023

High living costs solidify California’s two-tier economy

In summary

Gov. Gavin Newsom’s crusade against the oil industry over gas prices missed the larger point that the cost of nearly everything in California is very high.

Why California is what it is – a state with an immense economy but equally immense socioeconomic divisions – is the topic of perpetual academic, media and political debates.

There is one factor, both a cause and an effect, that cannot be debated: California is an enormously expensive place in which to live and work. And if anything, the relatively high inflation that has plagued the national economy in recent years has exacerbated the angst that Californians were already feeling as they struggled to make ends meet.

Gov. Gavin Newsom’s crusade against gasoline refiners, accusing them of price-gouging, exploits that angst by virtue signaling to his constituents that he’s sympathetic to pain in their wallets. However, the state’s high fuel prices are just a tiny fragment of the state’s high cost of living and its corrosive effects.

How high? Insure.com, a website that analyzes insurance costs, recently updated its comprehensive, state-by-state guide to living costs of all kinds, and revealed that it costs 46.8{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} more to live in California than the national average – the third highest behind Hawaii’s 85.5{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} and 54{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} in the District of Columbia.

Its high cost of living is the single most important reason why California, despite its world class economy, has the nation’s highest rate of functional poverty, as measured by the U.S. Census Bureau. Its supplemental poverty index is weighted for the cost of living and California’s high costs, especially for housing, drive the state’s ranking.

Moreover, when the near-poor are added, well over a quarter of Californians are suffering from serious economic stress, according to the Public Policy Institute of California.

High living costs, again particularly for housing, are also a major factor in California’s outflow of population to other states and thus its recent loss of population.

“Since 2015, California has experienced net losses of over 500,000 adults who cite housing as the primary reason, according to the Current Population Survey,” PPIC fellows Hans Johnson and Eric McGhee noted in a recent report. “About half of those who leave the state buy a house in their new state, whereas only one-third of those moving to California buy a house.”

California is several million housing units – the exact number is often debated – short of what it needs to house its people, even despite recent population drops. Despite much ballyhooed efforts at the state level to increase production, the gap between supply and demand remains largely unchanged, thus putting upward pressure on rents and home prices.

According to the World Population Review, California’s average rent, $1,586 a month, is the third highest in the nation, topped only by Hawaii and the District of Columbia, and also third highest behind those two markets in median home price at $538,500.

High home prices make ownership an impossible dream for millions of California families, thus explaining why the state has the nation’s second lowest level of families living in homes that they or their families own, 54.6{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502}. New York is the lowest at 53.6{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502}, thanks to New York City’s rental-dominated housing market.

A new study by Moneywise, a website devoted to consumer finance, reveals that first-time home buyers in California would have to cough up the nation’s second highest average down payment, $98,904, topped only by Hawaii’s $110,360.

California’s extremely high housing hurdles not only explain why so many residents are fleeing to other states, but why it’s so difficult for working-class families to build generational wealth via home ownership. It solidifies the state’s two-tier economy – white and Asian Californian majorities in its overclass and Black and Latino Californians dominating the underclass.

Political pontificating about gas prices really misses the point.

February 12, 2023

UK economy avoids decline but cost of living pains many

LONDON — The compact observe pinned to a wall at Union Chapel in north London is a indicator of despair for charity employees dealing with the fallout from Britain’s charge-of-residing disaster.

The showers, it suggests, are reserved for the homeless. In other text, people who continue to have a roof around their heads but simply cannot manage to warmth drinking water for bathing are in essence requested to chorus.

Amanuel Woldesus, who operates the Margins Venture charity centered at the church for folks in crisis, is discouraged that he’s getting forced to ration a services this way.

“We are the sixth-richest nation in the environment, and who is earning these selections? Me! Not the authorities,” he explained with a combination of anger and incredulity. “It’s just totally improper.’’

The pressures are possible to get worse as Britain faces a extended financial slowdown activated by soaring food items and energy price ranges and compounded by tax will increase and greater interest charges that authorities have unleashed as they fight the disaster.

That gloomy outlook was underscored Friday when the Business office for Nationwide Stats mentioned the British overall economy stagnated in the closing a few months of past calendar year. Every month estimates suggest that economic action slowed additional at the conclusion of the yr, with gross domestic merchandise shrinking .5{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} in December.

Although Britain prevented a 2nd consecutive quarter of declining economic output — a person definition of a economic downturn — the information available very little relief for challenging-pressed families and organizations. The rising cost of residing has driven months of strikes by nurses, ambulance staff, teach motorists and other general public-sector employees looking for bigger spend.

Middle-class families will see their disposable incomes slide by as substantially as 13{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502}, or 4,000 pounds ($4,840), above the subsequent financial calendar year, in accordance to evaluation by the National Institute for Economic and Social Analysis. About 25{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} of households will not be able to pay out their meals and electricity bills out of their consider-dwelling profits, up from 20{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} past calendar year, the independent think tank estimates.

“The U.K. will probably keep away from a protracted economic downturn in 2023, but GDP advancement is established to continue to be close to zero,” the institute said. “However, with the price-of-dwelling crisis acquiring a long lasting influence on homes, for at least 7 million it will undoubtedly feel like a economic downturn.”

For people today across the U.K., that means turning down the warmth and skipping showers to help save income on fuel and electrical energy payments following strength selling prices soared following Russia’s invasion of Ukraine.

It also indicates continuously searching for bargains or resorting to meals banks just after foodstuff selling prices jumped 16.9{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} very last yr.

Carlton Peters, 57, a chef for the Margins Project’s 2 times-a-7 days totally free lunch software, said he now purchases all of his have food in the lowered-price tag area of the grocery store and has minimize out butter since it is much too expensive.

The govt is not accomplishing ample to deal with the disaster for the reason that politicians don’t have an understanding of what common individuals are heading by way of, Peters mentioned.

“They really don’t know what it’s like to reside with your fastened earnings and you have to shell out it and shuffle it all over with all your bits and items,” he mentioned. “And when anything goes up, they never complain. We complain. We say the price of milk has gone up by 20{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} and eggs 40{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502}. That just cannot be ideal.”

The govt claims its guidelines, which include a cap on gas and electrical power charges that is built to restrict common domestic electrical power expenses to 2,500 kilos ($3,027) a year, have reduced the severity of Britain’s economic downturn.

Even though a economic downturn is normally described as an prolonged interval of financial decrease, gurus disagree on precisely how to identify when a economic downturn commences.

The U.S. and European Union have unbiased bodies that search at a vast variety of indicators, which include unemployment, buyer and business spending, right before determining no matter if their economies are in recession. Britain does not.

That still left commentators anxiously awaiting the fourth-quarter report to see regardless of whether Britain experienced met the specialized definition of a recession, often described as two consecutive quarters of declining output. The U.K. economy shrank by .2{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} in the third quarter.

On Friday, Treasury main Jeremy Hunt targeted on the actuality that GDP expanded 4{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} for all of 2022, extra than any other Group of Seven highly developed economy. But that advancement occurred in the early element of the yr, ahead of inflation spiked.

“The actuality that the U.K. was the quickest-developing financial state in the G-7 very last calendar year, as very well as keeping away from a economic downturn, exhibits our economy is much more resilient than a lot of men and women feared,” he said. “However, we are not out the woods nevertheless, significantly when it will come to inflation.”

Irrespective of the technicalities, the world-wide financial slowdown is hitting Britain harder than other significant economies.

Inflation in the U.K. stays at ranges last observed in the early 1980s. Customer rates rose 10.5{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} in December from a calendar year earlier soon after peaking at 11.1{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} in Oct. By contrast, U.S. inflation slowed to 6.5{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} in December.

Britain also is experiencing a drop in trade with the European Union as a consequence of its departure from the bloc and increasing taxes for people and enterprises as the federal government attempts to stability the funds and lower personal debt.

Extra troubling for financial forecasters is an improve in the range of individuals aged 50 to 65 who are leaving the workforce prematurely, decreasing productivity.

All of that is lowering consumer spending and organization investment decision.

Britain’s economy is likely to shrink .6{515baef3fee8ea94d67a98a2b336e0215adf67d225b0e21a4f5c9b13e8fbd502} this calendar year, the only highly developed country anticipated to decline, the International Financial Fund said previous month.

The Bank of England expects the slowdown to last all over 2024, even while it claims the recession will be shallower than earlier forecast. The central bank has elevated curiosity charges 10 moments due to the fact December 2021 in an effort and hard work to sluggish inflation.

At Union Chapel, it pains Woldesus to observe the battle of households unfold before him each and every day. The no cost meals he serves on Mondays and Wednesdays may perhaps be the only serious food items his friends get every 7 days.

“The problem is so dire,” he explained. “I can see it moving in front of me.”

January 2, 2023

Despite a cost of living crisis and other challenges, Australia’s economic future is bright

I won an award in 2022.

No, it wasn’t a Walkley.

It was an in-house award from The Drum presented at the Christmas party: Patron Saint of Doomsday – for always reminding us that a financial crisis is nigh.

All jokes aside, we do live in a troubled world.

Last year saw an escalation of the climate change crisis, a war in Ukraine, soaring inflation, further phases of a global pandemic, the Bank of England rescue Britain from a major financial crisis, and the death of Queen Elizabeth II – to name but a few moments.

A woman standing in the crowd holds a portrait of the queen with RIP My Queen written on it. — A turbulent year saw a number of major events occur, such as Queen Elizabeth II’s death. (Reuters: Tom Nicholson )

Aside from the pandemic, the inflation (or “cost of living”) crisis also troubled just about every single Australian.

They exposed our weaknesses, too.

We’re miles behind on the transition to renewable energy power generation, the federal government’s books will take over a decade to be brought back under control, too many Australians can’t afford a home or put food on the table, and women, particularly in the care sectors, are given a raw deal in terms of pay and working conditions.

But let’s take a breath here – a deep breath.

We also need to remember that Australia, as a country, does really well – relatively speaking.

We can still be proud of where we are as a nation. Here’s why.

Australia has a strong economy

Australia is one of the world’s best-performing developed economies.

As at the time of writing, the nation’s economy was growing at 5.9 per cent, supporting an unemployment rate of 3.4 per cent and enjoying a relatively stable currency.

Play Video. Duration: 5 minutes 8 seconds — Australia’s unemployment rate holds steady at 3.4 per cent

As of 2021, Australia had the second-highest amount of wealth per adult after Luxembourg, and the 13th-highest financial assets per capita.

At the onset of the pandemic, the government was able to use funds it had collected from taxpayers over the years to support households and businesses, and it did just that.

Fast forward to 2022 and households have amassed roughly $260 billion in savings.

Record low interest rates and booming property and share markets left middle- and upper-income families with unusually high levels of personal wealth.

Australians, by and large, are healthy and wealthy, especially when compared internationally

The United Nations has data to prove it.

Australia is ranked eighth in its Human Development Index, which is a measure of a nation’s longevity, education, and income.

Australia plays a key role on the global stage

Prime Minister Anthony Albanese has been keen to make his mark on the international political scene and, in turn, promote Australia’s interests.

He travelled to the US, Tokyo, Indonesia, Spain, France, Ukraine, Fiji, and Britain – to name a handful of destinations.

He reinforced Australia’s “friendships” with key trading and strategic allies.

Kishida Fumio and Anthony Albanese shake hands during a leaders' meeting in Perth. They are dressed in suits — Anthony Albanese has met with a number of world leaders including Prime Minister of Japan Fumio Kishida.(Richard Wainwright: AAP)

Crucially, he had the attentive ears of all major global leaders. Other prime ministers who have gone before him enjoyed similar welcomes.

Why? Australia is a geographically large and strategically positioned nation in the Asia-Pacific.

Our natural wealth, developed economy, and stable political system makes us a credible and trustworthy economic and political partner on the world stage.

We can be proud of that.

But the gap is widening

Of course, there are key areas which need addressing.

For decades, governments have tried – and largely failed – to improve outcomes for Indigenous people.

In 2023 Australia will hold a referendum on a constitutionally-enshrined Indigenous Voice to Parliament.

Play Video. Duration: 3 minutes 1 second — Minister for Indigenous Affairs applauded in Parliament

There will be resistance.

The federal National Party says it will oppose a constitutionally-enshrined Indigenous Voice to Parliament because it will not “genuinely close the gap”.

The gap between economic and health outcomes for Indigenous and non-Indigenous Australians needs to be closed, but in fact it’s widening.

The data shows the gap is worsening across adult imprisonment rates, deaths by suicide, out of home care rates, and children being developmentally ready once they reach school age.

More broadly, according to the Australian Council of Social Service, the poverty rate of Australia exceeds 13 per cent of the population.

It means over 3 million Australians suffer through poverty every single day.

Play Video. Duration: 3 minutes 45 seconds — Rates, Russia and recession fears: 2022 in business news(Rachel Pupazzoni)

It also estimates that roughly 17 per cent of children under the age of 15 live in relative poverty.

Australians can dare to aspire

I’m as guilty as the next journalist for focusing on the “negatives”.

But there’s method behind the madness: the truth can often be inconvenient or uncomfortable to hear or read.

But there’s always hope, and on the road to hope you’ll find aspiration.

Former prime minister Paul Keating touched on this point in October, in the wake of Queen Elizabeth II’s death, during an online event hosted by La Trobe University.

“Who in their right mind could believe that the monarch of Great Britain could represent our aspirations here?

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