Tag Archives: economic crisis

Frustration of Millennials in personal anecdotes and experiences; need sociological perspective

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Reading through these stories of Millennials regarding the tough economic times they face, I came to a realization: this is almost exclusively based on personal anecdotes and experiences. The comments are not much better were Millennials and Baby Boomers engage in unhelpful discourse about which generation did the worst things.

In these particular situations, a sociological perspective would be quite helpful. Yes, the economy is bad and Millennials face unique challenges. But, every generation has faced its own crises and challenges. Citing one’s own personal experience and perhaps those of friends and relatives can only go so far in illuminating the bigger picture. We need a broader, less emotional view of the whole situation: Millennials aren’t the only ones feeling the effects of a weak economy or a society that is adjusting to new globalized realities. Looking back, I suspect we will see this period as a fairly important moment in the United States and the world as economies, governments, and societies change their course.

It is interesting to read that some Millennials suggest that “society” suggested one path would be open (generally, the quick realization of the American Dream) but in reality, this path was much harder to walk or is impossible to even start on. This disconnect between expectations and outcomes is intriguing in itself.

One other thought: while there are just a few stories here, I see little mention of where Millennials turn in these times of difficulty. To families? To friends? To religion? Is a job/career really all there is?

Bonus coverage on the theme of generational conflict: a higher percentage of Baby Boomers than one might think plan to leave their children no inheritance.

Quick Review: ASA 2011 Las Vegas

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The 2011 American Sociological Association meetings are still going on in Las Vegas. While I was only out there for the first half of the meetings, here are a few thoughts on the annual convention:

1. Las Vegas presents a series of contradictions and this irony should not be lost on sociologists.

1a. When you fly in and out, you really see how the city rises right out of the desert.

1b. I stayed a little bit off of The Strip and this daily walk was interesting in that the landscape several blocks away was really empty, desert lots and more rundown facilities. The airport backs right up to the south end of The Strip.

1c. The opening plenary session on Friday night included discussions of different sociological traditions including feminism and Marxism. The reception afterwards included a greeting from a Las Vegas girl in a feathery costume and a Frank Sinatra and Sammy Davis, Jr. impersonator providing entertainment. Can one easily go from discussing inequality and oppression to enjoying the fruits of capitalistic success? The answer appeared to be yes.

2. Some of the main themes I heard at the sessions I attended: an interest in explaining the Tea Party; some nervousness (?) about the reelection prospects of President Obama; explanations that Democrats won the recent recall elections in Wisconsin (despite media reports to the contrary).

3. The conference is being held at Caesar’s Palace, just a gargantuan facility. The main conference hall must have been at least 1,500 feet long. Two downsides to the conference setting: a lack of nearby coffee shops (the closest one had ridiculous lines on both Saturday and Sunday mornings) and it was difficult to walk to other nearby attractions. One thing I noticed: while typical ASA meetings tend to tie up the facilities in one or perhaps even two big city hotels, we were just a drop in the bucket of Caesar’s Palace.

4. The Strip has to be one of the most fascinating streetscapes in the world. The combination of heat, casinos, people drinking while walking, families, the homeless, and more is a sight to behold. Of course, it is more interesting because it is all inauthentic: this isn’t a neighborhood where people live but it is an endless stream of visitors.

5. I know the country is experiencing economic difficulties but I don’t think you could tell this by simply looking at The Strip. There were plenty of people of all ages and backgrounds walking around and spending money. If you wanted to find a place to study consumption and/or tourism, this would be it.

6. One thing I just cannot understand: why is there not public transportation from the airport to The Strip? While there is a monorail that runs behind the hotels on the northern end of The Strip, one has to take a shuttle or a taxi from the airport. I don’t know if these private firms have a lot of political clout but it seems like the city would want to help people get from the airport to The Strip as quickly and cheaply as possible.

7. People say the heat is a “dry heat” – I do think it makes a difference. While it was roughly 103 degrees during the days I was there and it was still 94 degrees at 10 PM one night when I was out walking, I definitely felt the humidity in Chicago on Sunday night.

The rise of extended-family households in America

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New data shows that more Americans are now living with their families:

Almost 1.2 million of the [Washington D.C.] region’s 6 million residents were living with extended family members and friends last year, a 33?percent rise over the past decade. Nationwide, according to recently released 2010 Census statistics, at least 54 million people are in a similar spot.

The figures represent a significant reversal in American lifestyles after decades in which extended-family households fell into disfavor and the nuclear family flourished in the suburbs.

“We haven’t seen anything like this since the Depression,” said Frances Goldscheider, a Brown University sociologist who has studied families and living arrangements. “Overwhelmingly, it’s the recession’s effect on people’s ability to maintain a house. You have the foreclosures on one hand, and no jobs on the other. That’s a pretty double whammy.”…

Although the faltering economy is a major factor in the newfound togetherness, demographers and sociologists say the recession accelerated a shift that was already underway. Fueling the trend: baby boomers caring for aging parents, and the arrival of millions of Hispanic and Asian immigrants, who are more likely to live among several generations under one roof.

On one hand, the article suggests demographic shifts are responsible for this change: growing numbers of immigrants plus the Baby Boomers getting older. On the other hand, the recession has made it more difficult to set up independent households. I assume there has to be some research out there that separates out these different effects and could predict whether this trend will reverse when the American economy improves.

It would be interesting to ask these family members who are living together several questions:

  1. Is this what you had envisioned as family life?
  2. Is the current situation (living with family) good, bad, neutral, etc.?
  3. Would you like to continue living this way if the economy significantly improves?

And years into the future, how exactly will these family members remember these experiences?

Sort this out: poll of 39 economists suggests “30% chance of recession”

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Polling economists about whether the country is headed for a recession does not seem to be the best way to make predictions:

The 39 economists polled Aug. 3-11 put the chance of another downturn at 30% — twice as high as three months ago, according to their median estimates. That means another shock to the fragile economy — such as more stock market declines or a worsening of the European debt crisis — could push the nation over the edge.

Yet even if the USA avoids a recession, as economists still expect, they see economic growth muddling along at about 2.5% the next year, down from 3.1% in April’s survey. The economy must grow well above 3% to significantly cut unemployment…

The gloomier forecast is a stunning reversal. Just weeks ago, economists were calling for a strong rebound in the second half of the year, based on falling gasoline prices giving consumers more to spend on other things and car sales taking off as auto supply disruptions after Japan’s earthquake faded. In fact, July retail sales showed their best gain in four months.

But that was before European debt woes spread, the government cut its growth estimates for the first half of 2011 to less than 1%, and Standard & Poor’s lowered the USA’s credit rating after the showdown over the debt ceiling.

Here is what I find strange about this:

1. The headline meant to grab our attention focuses on the 30% statistic. Is this a good or bad figure? It is less than 50% (meaning there are less equal odds) but it is also double the prediction of predictions three months ago. Based on a 3 in 10 chance of a recession, how would the country and individual change their actions?

2. This comes from a poll of 39 economists. One, this isn’t that many. Two, how do we know that these economists know what they are talking about? How successful have their predictions been in the past? I see the advantages of “crowd-sourcing,” consulting a number of estimates to get an aggregate figure, but the sample could be larger and we don’t know whether these economists will be right. (Even if they are not right, perhaps it gives us some indication about what “leading economists” think and this could matter as well).

3. How much of this is based on real data versus perceptions of the economy? The article suggests this is a “stunning reversal” of earlier predictions and then cites some data that seems to be worse. These figures don’t determine everything. I wonder what it would take for economists to predict a recession – which numbers would have to be worse and how bad would they have to get?

4. Will anyone ever come back and look at whether these economists got it right?

In the end, I’m not sure this really tells us anything. I suspect it is these sorts of statistics and headlines that push people to throw up their hands altogether about statistics.

Determining which cities have a future

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SmartPlanet looks into an infographic that supposedly says whether “if your city has a future or it’s destined to turn into the U.S. version of a favela”:

Meanwhile, according to the chart from PPS (click on it for a larger version), Atlanta is easily the most massively dysfunctional metropolis ever to be un-designed by a conspiracy of developers and compliant local government. From comedian David Cross (”David Cross Doesn’t Like Atlanta” – NSFW) to peak oil theorist James Howard Kunstler (”The Horror of Downtown Atlanta“), everyone who has ever been forced to live in or visit Atlanta knows that it is a city as ill-equipped for walkability and sustainable transit as any in the U.S., with the possible exceptions of Dallas, Houston, San Antonio and pretty much every other city in Texas.

Many cities are teetering right on the edge of acceptability, by PPS’s measures. Austin, Texas may sound cool in theory, but in the past 20 or so years it has become a suppurating pustule of sprawl and the bane of commuters throughout its metro area. Similarly, university town Gainesville, Florida has a marvelously walkable historic core surrounded by a not-so-tasty shell of tract homes, McMansions and cul-de-sacs…

Ultimately, though, all these efforts are piddling when compared to what our resource and finance-starved future is going to require: shorter commutes, more walkability, and a relocalization of just about all the essentials of everyday life. Everything, in other words, that was present in Brooklyn about the time that the Brooklyn Bridge went up. And despite that city’s incorporation into New York City as a borough, it retains, to this day, the local character that made it such a high-functioning metropolis a century ago. I may be be biased, but when I think of cities that work, Brooklyn will always be at the top of my list.

The infographic seems to be based on New Urbanist-type principles: walkable cities with vibrant street life where the infrastructure serves people and not cars. More broadly, the infographic presents either a sprawl or anti-sprawl perspective.

The discussion hints that cities can change from being on one side of the ledger to the other. But large-scale changes (across an entire city or region) take time compared to neighborhood-by-neighborhood approaches. Particularly in this time of economic crisis and budget shortfalls, how many cities can even have a discussion about big New Urbanist-type changes?

Will anyone bother looking at this infographic in ten or twenty years to see if the predictions were correct?

From luxury item to throwaway good: cable TV

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Following up on Joel’s post from Wednesday, Figures from the last quarter suggest the cable TV industry continues to lose customers:

The phone companies kept adding subscribers in the second quarter, but Dish lost 135,000. DirecTV gained a small number, so combined, the U.S. satellite broadcasters lost subscribers in the quarter — a first for the industry…

Sanford Bernstein analyst Craig Moffett estimates that the subscription-TV industry, including the untallied cable companies, lost 380,000 subscribers in the quarter. That’s about one out of every 300 U.S. households, and more than twice the losses in the second quarter of last year. Ian Olgeirson at SNL Kagan puts the number even higher, at 425,000 to 450,000 lost subscribers.

The second quarter is always the year’s worst for cable and satellite companies, as students cancel service at the end of the spring semester. Last year, growth came back in the fourth quarter. But looking back over the past 12 months, the industry is still down, by Moffett’s estimate. That’s also a first.

The article goes on to mention a number of reasons for this: a bad economy so consumers are cutting back, younger people don’t see the necessity of cable, and there is a lot of content available through the Internet.

More interesting to me is the idea that cable TV is no longer the luxury good that it once was. Once the industry began in the 1970s and later consolidated, cable moved from being a rarity to being a necessity. As late as mid 2009, “11% of U.S. TV homes only have the capability to receive TV reception “over the air”.” Having cable simply became part of how Americans spend their disposable income. Cable became prism through which many Americans viewed the world. Certain channels arose, such as MTV which has been getting a lot of attention recently because of its 30th anniversary or ESPN which was the subject of an interesting book, and became part of the national consciousness. These channels, for better or worse, came to represent American culture and were exported around the world. I wonder if having cable at home signaled a middle-class lifestyle even if other traits don’t match this standing.

But now the world may have moved on. (At the same time, despite all the articles suggesting people stop paying for cable, bad economic times, and more competition, the drop in subscribers was only 0.2-0.3%.) How exactly will cable companies convince people that their product is a necessity, particularly among the younger generations? What will be the new narrative regarding cable that will push people to include this in their lives?

Looking for economic development in high-wire act

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A lot of communities are looking for ways to increase revenues in tough economic times. Not all of them can debate this option: whether to allow a high-wire act over Niagara Falls.

The pitch by international daredevil Nik Wallenda to traverse Niagara Falls on a tightrope has provoked some local angst over what the historic tourist attraction is all about these days.

On one side are those like the city’s mayor, Jim Diodati, who is in favour of bringing the seventh-generation member of the circus family the Great Wallendas to attempt the feat.

On the other, are officials from the Niagara Parks Commission, among others, who say death-defying deeds like this no longer fit the falls’ contemporary “brand” as a natural wonder.

Supporters of the high-wire act suggest such an act would help bring money into the city:

The area should embrace any opportunity that will increase the number of visitors, he said, because the tourism industry has been hit hard of late by the high Canadian dollar as well as such things as the new passport requirements for U.S. visitors and rising gasoline costs.

This sounds like a debate about character: is Niagara Falls about natural beauty or about daredevils and glamor? Niagara Falls is an entirely unique phenomenon within North America and the two sides want to utilize it to bring money into the city. I suspect we would not be having this debate if economic times were not tough but this decisions has the possibility of setting a particular course for a number of years.

If I had to guess about the outcome: this one act will be approved and officials will look at it closely to see if it could provide a foundation for long-term economic growth. Personally, I’m not sure how the Falls fit within a larger possible image as an entertainment center but I’m sure a rare high-wire act would attract attention.

Jump in usage of food stamps in the Chicago suburbs

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The effects of the American economic crisis are also being felt in the suburbs. In the Chicago area, usage of food stamps has increased dramatically since 2006:

Since 2006, the state’s Supplemental Nutrition Assistance Program, commonly called food stamps and administered via Link cards, has seen a rise in the number of people in the program in an average month by 46 percent in Cook County, 133 percent in DuPage County, 84 percent in Lake County, 96 percent in Kane County, 168 percent in McHenry County and 74 percent in Will County.

“It’s easy to assume hunger is an urban problem,” said Lake, whose food bank serves 13 counties. “But the fact of the matter is, hunger is everywhere.”

In the suburbs, the increase in food stamps use could be the result of previously middle-income families getting caught by a tough break, said Jennifer Yonan, a vice president of the United Way of Lake County…

To qualify for food stamps, a household has to meet certain income requirements. A family of four, for example, must have a gross monthly income of less than $2,389 to qualify.

The suburbs were once considered the bastion of the wealthy but this is changing as more suburbs encounter issues that were once thought to be big city problems.

The 133% rise in DuPage County is particularly interesting. In recent decades, DuPage County was transformed from more of a bedroom county, meaning that workers lived in DuPage but commuted elsewhere for work, to a job center. In figures from the early 2000s, DuPage County had more jobs than eligible workers, meaning that the county needed outside workers to fill all of its jobs. If you look at the unemployment rate for DuPage County (not seasonally adjusted), the rate was as low as 2.7% in October 2006, as high as 9.4% in January 2010, and is now at 8.6%.

It would be interesting to see more exact data to figure who exactly has started using food stamps since 2006.

This rise in food stamp usage is a similar phenomenon to reports about the black middle class or the increase in foreclosures: when an economic crisis hits, people living on or near the economic edge will have more difficulty.

Lenders pursue options for foreclosures: bulldoze them, donate them…

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While some people may be interested in obtaining foreclosures through “adverse possession,” lenders are pursuing other options to rid themselves of a glut of foreclosures:

The biggest U.S. mortgage servicer [Bank of America] will donate 100 foreclosed houses in the Cleveland area and in some cases contribute to their demolition in partnership with a local agency that manages blighted property. The bank has similar plans in Detroit and Chicago, with more cities to come, and Wells Fargo & Co. (WFC), Citigroup Inc. (C), JPMorgan Chase & Co. (JPM) and Fannie Mae are conducting or considering their own programs.

Disposing of repossessed homes is one of the biggest headaches for lenders in the U.S., where 1,679,125 houses, or one in every 77, were in some stage of foreclosure as of June, according to research firm RealtyTrac Inc. of Irvine, California. The prospect of those properties flooding the market has depressed prices and driven off buyers concerned that housing values will keep dropping…

Bank of America had 40,000 foreclosures in the first quarter, saddling the Charlotte, North Carolina-based lender with taxes and maintenance costs. The bank announced the Cleveland program last month, has committed as many as 100 properties in Detroit and 150 in Chicago, and may add as many as nine cities by the end of the year, said Rick Simon, a company spokesman.

The lender will pay as much as $7,500 for demolition or $3,500 in areas eligible to receive funds through the federal Neighborhood Stabilization Program. Uses for the land include development, open space and urban farming, according to the statement. Simon declined to say how many foreclosed properties Bank of America holds.

This article describes small efforts by these lenders. If there are indeed over 1.6 million homes in some stage of foreclosure and more likely to come, lenders would need to bulldoze or donate a lot more homes to really clear up the supply and help stabilize home prices.

I wonder if the lenders are pursuing these goals with these small moves:

1. Building goodwill within the community.

2. Getting rid of the worst of the worst properties and just cutting their losses.

Neither of these options are bad but it remains to be seen what lenders will do with the majority of foreclosed properties. I think we’re a ways from Warren Buffett’s suggestion that we simply “blow up a lot of houses.”

(h/t Instapundit)

Largest wealth gap in the United States

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The gap in wealth between whites and blacks in the United States has been well documented. New figures suggest that the gap is now wider between whites and both blacks and Latinos:

The wealth gaps between whites and minorities have grown to their widest levels since the U.S. government began tabulating them a quarter-century ago. The recession and uneven recovery have erased decades of minority gains, leaving whites on average with 20 times the net worth of blacks and 18 times that of Hispanics, according to an analysis of new Census data…

“I am afraid that this pushes us back to what the Kerner Commission characterized as `two societies, separate and unequal,'” said Roderick Harrison, a former chief of racial statistics at the Census Bureau, referring to the 1960s presidential commission that examined U.S. race relations. “The great difference is that the second society has now become both black and Hispanic.”

The median wealth of white U.S. households in 2009 was $113,149, compared to $6,325 for Hispanics and $5,677 for blacks, according to the analysis released Tuesday by the Pew Research Center. Those ratios, roughly 20 to 1 for blacks and 18 to 1 for Hispanics, far exceed the low mark of 7 to 1 for both groups reached in 1995, when the nation’s economic expansion lifted many low-income groups to the middle class…

Across all race and ethnic groups, the wealth gap between rich and poor widened. The share of wealth held by the top 10 percent of U.S. households increased from 49 percent in 2005 to 56 percent in 2009. The threshold for entry into the wealthiest top 10 percent, however, dipped lower: from $646,327 in 2005 to $598,435.

The American ideal, at least in theory, is that everyone has the chance to become at least middle-class through hard work and over the generations (though this new study in American Sociological Review suggests illegal immigrants may not experience this). This data suggests that this idea might have seemed more true in the boom periods of the 1990s and 2000s when a growing economy helped lift everyone’s boat. But, when an economic crisis hit, the numbers suggest all (or most) took a hit but some were hit more than others. All together, these boom periods helped obscure the inequalities in wealth that existed and were growing even though the big figures in the economy looked good.

I would think this should be of concern to all political parties.