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JDPriestly

(57,936 posts)
Tue Mar 22, 2016, 01:00 PM Mar 2016

That income disparity that Bernie talks about. Where is it? What is it?

I will start the discussion with this post I posted in response to a post about median prices and incomes across the country.

Here is the situation in Los Angeles:

How much money do you have to earn to rent a house in Los Angeles? These are 2014 numbers ( and remember, our population is about $110,116,000.):


As you can imagine, the numbers for Los Angeles are staggering. It would take an annual household income of $97,160 just to get the keys to a median-priced rental home in this market, Zillow says.
Keep in mind that this kind of income would nearly put you in the top one-fifth of income earners in the country.

In L.A, however, it would get you a smack-dab-in-the-middle, $2,429-a-month home.

Zillow's median-rent calculations skew toward single-family homes, its representatives have told us in the past. So this doesn't necessarily apply to average apartments, which tend to run about $1,000 or so less.

. . . .

Put another way, Zillow says, each person in a two-earner family in L.A. would have to make $24.50 an hour, 40 hours a week, in order to afford the rent on a median home in this market.


http://www.laweekly.com/news/it-takes-nearly-100-000-a-year-in-income-to-rent-an-average-la-house-5289964

Remember, a lot of people (like us) move to Los Angeles because this is where the job is, the one we can't do or find anywhere else, and not because we have the money or can even earn enough money to afford to live here in the style in which we might live in some other city or town in America.

I don't think you could find a house anywhere in Los Angeles, and certainly not in Silicon Valley for $270,000. Nor could you buy gasoline for $2.57 or $2.38 in Los Angeles or Silicon Valley or San Francisco, maybe nowhere in California. Milk is also more expensive here.

The median income in Los Angeles varies widely from area (ghetto you could call it because our city is so divided into housing regions by income and to some extent ethnicity and/or race -- we have Koreatown, Little Tokyo, Chinatown, etc. as well as Bel Air and Beverly Hills) of our city to area (ghetto). In downtown, the median income is $15,003 per year but in Bel Air it is $207,938 per year. Assuming a 40 hour week, 52 weeks of the year, that is 2080 hours a year and in downtown that amounts to $7.47 per hour and in Bel Air that amounts to about $100 per hour. That's median income.

Note that this list does not include the many, many homeless people in Los Angeles. Our city is trying to house all the homeless, but it is a nearly impossible job. So we see tents or carts with sleeping gear stationed under bridges and in other areas of the city. Beggars, and I have even encountered them IN grocery stores. The poverty in Los Angeles is easy to see. Yet look at the list of median wages from which I have drawn the following information.

So there is the rub. Let's look at some areas of Los Angeles and the median income:

Bel-Air, $207,938

Pacific Palisades, $168,008

Brentwood, $112,927

Beverlywood, $105,253

Northridge, $67,906 (There is a University of California there.)

East Los Angeles, $38,621

Koreatown, $30,558

Watts, $25,161

Chinatown, $22,754

http://maps.latimes.com/neighborhoods/income/median/neighborhood/list/

People who know Los Angeles will know what these areas are. You can tell why I use the word "ghettos" about some areas of Los Angeles if you look at the names of some of these areas.

This list is just a sampling of the kind of disparity of wealth that we in big cities are aware of. If you look at this and realize that so many but not all of the middle income areas, the areas that have a median income that is represented as median for the nation as a whole in the OP are further away from the center of town. They are suburbs or out and require that people who work in the centers of the city (and there are several) have to drive to get to work -- drive on very crowded freeways. It is very difficult to live in Los Angeles without a car.

I'd like to add that the prices on food also vary according to the neighborhood in Los Angeles. They can vary greatly. That I suppose is due to the differences in the rents on the spaces of the stores. I live in a less expensive area, and the food here is cheaper in our grocery than it is in the Wilshire/Fairfax area even.

Everything about life and the quality of everything is different from community to community in Los Angeles.

We are a huge city. You can take a bus from downtown to Santa Monica on the coast, but there is no metro-rail at this time, no train. The West side tends to be the expensive side of town, and even the transportation to get there is impractical and time-consuming.

So the numbers in the OP represent the medians and averages across the country, but they do not represent the fundamental truth about our country that IS REPRESENTED by the numbers in Los Angeles. We have tremendous differences according to your class with regard to where you live, what you earn, and what your opportunities are in life if you are a young child.

It's called income disparity. We see it very clearly in cities like Los Angeles and in areas like Silicon Valley. And it is what Bernie Sanders is responding to. It is rather understandable that his message did not resound so well in the Midwest where I think these disparities in wealth are not so extreme and so obvious. But here on the West Coast where the jobs are and the weather is enticing, boy, is it obvious.

What is the story where you live?

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radical noodle

(7,990 posts)
1. I moved from southern Indiana in 2012
Tue Mar 22, 2016, 01:19 PM
Mar 2016

At that time (and I suspect it hasn't changed much since) you could buy a nice house for well around $100,000. When we sold our mother-in-law's house last year (and it was a lovely, big home) we sold it for under $100,000. I'm not certain about rents there since most own their homes and there are few apartments, but I would guess $250 or $300 a month would be tops.

In central Florida, where I live today, rents in a gated community are around $1000 per month, but property can be purchased or rented outside those places for much less. Other costs here are even lower than in Indiana. The weather here vs the weather there affects that greatly due to the expenses for heating, and fresh food is cheaper here although not significantly.

The vast differences in cost of living is one reason why I think that there should be a reasonable federal minimum wage and an adjustment by local areas to fit the needs. It would also be incentive to get folks out to vote for local and state races which we desperately need. As you've pointed out, even Sander's $15.00 minimum wage isn't enough for some areas, while it is too high for the area I come from in Indiana, where a 40 year teacher with a master's degree would make only about $40,000 a year.

JDPriestly

(57,936 posts)
5. Yes. Heating costs are lower in Southern California as are, in my opinion, cooling costs in ths
Tue Mar 22, 2016, 01:40 PM
Mar 2016

summer most of the time because the air cools off in the evenings on most nights here. We do not have air conditioning. But the cost saving due to the climate does not make up for the incredibly high cost of housing.

And of course New York may be worse than Los Angeles.

Interesting contrast between Indiana and Florida.

Los Angeles is increasing the minimum wage here. It will go up to $15.00 per hour in a few years.

Seattle and San Francisco and other cities are also increasing their minimum wages.

upaloopa

(11,417 posts)
2. I am having a hard time understanding what your point is.
Tue Mar 22, 2016, 01:20 PM
Mar 2016

When we talk about income disparity I think we are talking about the highest income groups compared to the rest of us as a whole. I don't think we are talking about disparity in a local community.

I moved to Los Amgeles in 1982. I was making $20,000 per year and could live on that. In the 34 years since then the cost of living went out of site while wages stagnated.

I was lucky in that I could increase my income by changing jobs. I have a skill that was in demand.

Other than losing equity in my house the recession hasn't hurt me much. I have been steadily employed through it.

I also benefited by understanding what was going on during the housing bubble. Many of us saw what the sub prime scam was well before it dawned on most people.

Taking out equity loans to buy SUV's and F 350's was the dumbest thing people could do. Also relying on mortgage companies to tell you the truth about your loan was what we were use to but that went out the window.

We just are not smart enough to understand the rigged game we are forced to play in.


 

cosmicone

(11,014 posts)
3. It has always been that way and it will remain that way
Tue Mar 22, 2016, 01:21 PM
Mar 2016

People with marketable skills and/or capital make more money in a free enterprise system. Every year, thousands migrate between strata - either by acquiring new skills or by making bad economic decisions leading to business failure and bankruptcy.

One day Mark Zuckerberg was begging for $1000 and another day he is worth $24 billion. There is nothing nefarious or hideous about that. It is called "the American way" or "fulfilling the American dream."

Only Lenin and Marx would want everyone's income to be exactly the same. That philosophy has failed miserably all around the globe.

JDPriestly

(57,936 posts)
8. The challenge is making sure that things like education and health care are available to all
Tue Mar 22, 2016, 01:58 PM
Mar 2016

in a society in which we have different strata.

Opportunity and encouraging ingenuity and hard work by making a reasonable living standard possible for everyone should be our goal. We are in this together.

Mark Zuckerberg needs to pay much more of his income in taxes to make sure that people struggling in the areas in the United States in which not just housing is extremely expensive but also people are forced to live in very crowded conditions and people cannot afford healthcare or computer internet services can have the things they need to compete in our society.

We want a society of opportunity, and when the disparity in wealth is so great that the poor are huddled in their own areas of town and living in tiny apartments with families, opportunity is not what it should be.

I recall visiting the apartment of a woman I knew. She had a family of at least four children and her apartment was lined with two bunk beds to the right of the entry door with a small kitchen on the other side of the room. I suspect that more people were living in that apartment than her immediate family. That was in my area of Los Angeles.

Also in my area of Los Angeles, when I first moved here, my neighbors were immigrants. There were many people living in the house, and some of them slept on the floor in the living room on sort of mattresses that they spread out at night.

This is why we have so many homeless people. I think that if you live in certain areas of the country like the Midwest, it is hard to imagine what it is like for some of the people who live in the very large cities.

The disparity in wealth is great all over the country, but it is more easily quantified in a city like Los Angeles when you look at the map and the reality of incomes in different areas of the city. If I lived in a small town in the Midwest, the numbers of people earning over a million a year would be very low. Here in Los Angeles or in Silicon Valley or San Francisco there are far more people in those income ranges. But there are also far more people in low income wages so the contrasts are evident in the housing patterns.

This disparity in wealth represents disparity in availability of educational opportunity for our children and leads over time to a society in which classes are rigidly determined at birth. This has happened in history. The goal in America is to provide opportunities, economic and cultural to our citizens and to live as equals. Jefferson opened up the Indiana territories and we continued to move West because we wanted to make land available to those who wished to own property and to farm and live decently.

We no longer have great quantities of land to open up to people who want to live good lives and raise their standards of living. So the challenge to us is to find ways within our reality to achieve the advantages and opportunities we enjoyed as a people when we entered the new territories and divided the land.

My ancestors entered the Indiana territory very, very early on and moved across the country until they found land they loved. They were farmers and worked hard, but property ownership was made possible for them by our generous system of land grants.

We need, today, to find a way in our time to replicate the opportunities that the land grants gave our ancestors. I think that is what Bernie Sanders' ideas are about.

That is why this is relevant. We are a country that values private property ownership, but we are living at a time in which owning a meaningful amount of property is very difficult. It is unlikely to become easier. What value will we substitute for the ability to own property in a time in which people are unable to buy or own property? What do you think?

What do we do about wages and pay in a time in which human labor is being replaced by machines and electronic gear?

These are the questions -- a few of them anyway -- that we should begin to answer in this year's primary and election. I don't think we are. Bernie Sanders is touching on these issues, but I don't personally think that Hillary gets it at all. This reality, the reality of the person who will never own a home or be needed to fill a good job, that is not a reality that she recognizes in my opinion. And that is the reality we have to deal with now. The disparity in housing prices in neighborhoods in Los Angeles and the high rents in urban areas place the economic strain in our society into a concrete model.

JDPriestly

(57,936 posts)
9. If Bernie is considered wealthy, I have a bridge to sell.
Tue Mar 22, 2016, 02:19 PM
Mar 2016

Welcome to Los Angeles, Beverly Hills and Bel Air.

panader0

(25,816 posts)
11. Seriously? Bernie is wealthy? And it's funny when you can't pay the rent?
Tue Mar 22, 2016, 02:31 PM
Mar 2016

I'm making it on $804 a month Social Security. Luckily I own my house and property and have only
taxes and utilities to worry about. There are many that I know that are not as "well off" as I am.
Bernie is definitely the candidate of the poor and the middle class. The wealthy will vote for HRC.

 

MadDAsHell

(2,067 posts)
7. I admittedly struggle with feeling sorry for people who CHOOSE to move to LA/New York/etc.
Tue Mar 22, 2016, 01:54 PM
Mar 2016
"Remember, a lot of people (like us) move to Los Angeles because this is where the job is, the one we can't do or find anywhere else, and not because we have the money or can even earn enough money to afford to live here in the style in which we might live in some other city or town in America."

Obviously there are many people who were born or brought to the big city as youngsters, and I understand that it's not necessarily easy to uproot.

But for my high school/college classmates that felt like they had to live in New York or LA, I struggle to feel too sorry, even if they had the misguided perception that "that's where the jobs are."

There are plenty of places around the country (like Des Moines here in Iowa) that are ranked as some of the best places to live in terms of jobs, income, etc., that don't have even a fraction of the crime or costs of living of the largest cities in the U.S. And unless you're doing something like drilling oil, yes, just about every kind of job is available here, including tons of tech jobs.

JDPriestly

(57,936 posts)
10. People come here because this is where the work is. That is why we moved here.
Tue Mar 22, 2016, 02:24 PM
Mar 2016

If you are an engineer, maybe you can live anywhere. But there are many jobs that are mostly available where you happen to get your job.

One of the things I wonder about is whether the jobs that are available in places like Silicon Valley (housing costs are much higher than in Los Angeles) could be somehow spread out across the country as you suggest, but I don't know how that could be done.

People move to where they can find work. And work can be found in Los Angeles and Silicon Valley so people move here. Same for the Washington, D.C. and New York areas. The more people there are in an area, the more likely it is that you can find a job.

The tech jobs in Des Moines may not be the same as the tech jobs in Silicon Valley. I'm not in tech, so I don't know.

We moved here for my husband's work.

 

MadDAsHell

(2,067 posts)
13. It's not a lack of sympathy. The whole country shouldn't adjust based on personal decisions.
Tue Mar 22, 2016, 04:41 PM
Mar 2016

Again, I'm not universally dismissing the fact that bigger cities are insanely expensive. THEY ARE.

But many, MANY people choose to move to such locations simply because they want to be in that area. And while some very rare jobs may only be done in one location in the country, the vast majority are not. And if you insist on being so specialized that your job can only be done in a single geographic location in the entire world, is it up to the rest of the world to cater to that decision and make it easier for you? Or should you as the decision-maker make your own adjustments to make it work? I'm simply saying you can't run a country by pivoting policy everytime someone makes a decision and doesn't like the consequences of that decision.

I got a law degree and considered the east coast, but chose to stay in Iowa realizing I didn't have the money for a big city. I had no right to assume I could make an unaffordable move and expect the world to adjust to make it work for me. I now work as a public defender in the Des Moines area (a growing, thriving area of the country), make pretty decent money, feel safe and secure, etc.

At the same time I decided to stay in Iowa, my best friend eschewed several lucrative offers in technology here in the Des Moines area and moved to Silicon Valley because that's where he felt he "had to be" (keep in mind that Des Moines has been ranked a top-ten city for tech jobs).

I'm perfectly happy for him, but if he now feels financial pressure because he chose to live in California, should we tax Iowans like me more to pay for more affordable public transportation and housing options for him in California?

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