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August 18th, 2020

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Lamp Effect


Standard postwar theories of class composition in the global north emphasized occupational differences between employers, blue collar, and white collar workers. But deindustrialization, and the army of underpaid service workers it generated, has increasingly muddied these categories.

In a 2018 article, MORITZ KUHN, MORITZ SCHULARICK, and ULRIKE STEINS redraw these distinctions for the era of asset ownership. Using household-level archival data from the Survey of Consumer Finances, they argue that portfolio composition and asset prices, rather than income or occupation, are the defining features of class in the contemporary economic landscape.

From the paper:

"A channel that has attracted little scrutiny so far has played a central role in the evolution of wealth inequality in postwar America: asset price changes induce shifts in the wealth distribution because the composition and leverage of household portfolios differ systematically along the wealth distribution. While the portfolios of rich households are dominated by corporate and noncorporate equity, the portfolio of a typical middle-class household is highly concentrated in residential real estate and, at the same time, highly leveraged. These portfolio differences are persistent over time.

An important upshot is that the top and the middle of the distribution are affected differentially by changes in equity and house prices. Housing booms lead to substantial wealth gains for leveraged middle-class households and tend to decrease wealth inequality, all else equal. Stock market booms primarily boost the wealth of households at the top of the wealth distribution as their portfolios are dominated by listed and unlisted business equity. Portfolio heterogeneity thus gives rise to a race between the housing market and the stock market in shaping the wealth distribution. A second consequence of pronounced portfolio heterogeneity is that asset price movements can introduce a wedge within the evolution of the income and wealth distribution. For instance, rising asset prices can mitigate the effects that low income growth and declining savings rates have on wealth accumulation."

Link to the piece.

  • "Of course, income from work remains vitally important for many people as a way to access subsistence goods, but by itself it is less and less able to serve as the basis of what most people would consider a middle-class lifestyle." In the LARB, an excerpt from Lisa Adkins, Melinda Cooper, and Martijn Konings' forthcoming book, The Asset Economy. Link.
  • "I discuss three clusters of class analyses, each associated with a different strand of sociological theory. The first identifies classes with the material life conditions of individuals; the second focuses on the ways in which social positions afford some people control over economic resources; the third considers how economic positions accord some people power over the lives of others." Erik Olin Wright in 2009. Link.
  • "Wright’s class scheme is based on the premise of a free market system and private production organizations under advanced capitalism; however, the mode of production in transitional China is a complex hybrid." Xin Liu on "Class structure and income inequality in transitional China." Link. And Alejandro Portes and Kelly Hoffman analyze changing social structures across Latin America. Link. And a brand new Göran Therborn article on the "Dreams and Nightmares of the World's Middle Classes." Link.
⤷ Full Article

November 25th, 2019

Political Sun


The history of public housing provision

In recent decades, policy approaches to housing provision have focused on increasing the incomes of subsidy recipients and, due to declining federal investment, promoting tenant mobility both between subsidized housing units and out of the public housing system altogether. But the discourse on housing seems to be shifting. Rather than promoting ever increasing incomes, recent proposals aim instead to control housing costs—both through increasing public housing stock and pegging rent to inflation.

In a 2012 paper, Lawrence J. Vale and Yonah Freemark offer a history of public housing in the United States. Their narrative considers how changing approaches to housing provision reveal changes in the government's definition of “deserving” welfare recipients.

From the paper:

"Public housing is too often conceptualized as a single failed program that tragically concentrated deeply impoverished single-parent minority households in ill-designed and publicly mismanaged slums. Such a viewpoint does little justice to the evolution and contingencies that motivated the growth and directions of the multiphased and multifaceted history of federally supported public housing and public-private housing. Taking a longer view, the concentrated poverty welfare phase of public housing may actually be seen as an aberration, a relatively brief interlude between about 1960 and 1990. This phase, we argue, was out of step with the larger pattern of policy preferences for housing the poor, both before and since.

Seen this way, American public housing consists of a 25-year series of efforts to accommodate the upwardly mobile working class between 1935 and 1960, a 30-year consolidation of the poorest into welfare housing between 1960 and the mid 1980s, coupled by efforts to introduce direct private-sector involvement in public housing and other programs; and a series of programs and policies since the mid 1980s to return more of public housing to a less-poor constituency, while furthering growth in other kinds of both deep and shallow subsidy programs through mixed-finance projects and tax-code intervention. After 75 years of experimentation, much of the rest of public housing operations has become completely privatized. In many cities, housing authorities are regularly turning over their conventional housing stock to private managers and often own nothing more than the land beneath their redevelopment endeavors. In this context, even the basic definitional reason for calling some housing 'public housing' now comes into question."

Link to the article.

  • From November of last year, Jack Y. Favilukis, Pierre Mabille, and Stijn Van Nieuwerburgh find that "Housing affordability policies create large net welfare gains." Link. See also J. W. Mason's recent public testimony on rent control, which offers an overview of empirical findings and concludes that "there is no evidence that rent regulations reduce the overall supply of housing." Link.
  • A report by Peter Gowan and Ryan Cooper at 3P compares housing policy in US metropolitan areas with those of Vienna, Helsinki, and Stockholm. Link. At the Urban Institute, Emily Peiffer discusses the history of housing policy in New York City. Link.
  • "Housing Affordability in the U.S.: Trends by Geography, Tenure, and Household Income." By Andrew Dumont at the Federal Reserve. Link.
  • Data for Progress maps the diversity of America's public housing communities, accounting for rates of unemployment, poverty, and population density. Link. Another map looks at flood risk, police stops, and segregation in NYCHA buildings. Link.
⤷ Full Article