Middle Class Struggles to Pay Rent

Although America’s recent Recession has come to an end, America’s economy has not fully recovered. It is common to say that lower classes in America receive the most burden from the economy such as struggling to pay rent. However, because of America’s current economic status, struggling to pay rent is not only a struggle for the lower class, but it has also become a daily struggle for the middle class, too.

One out of every five households in American who rent make between $45,000 and $75,000 a year and spend about 30% of their income on just rent. These households are considered to be “cost-burdened”. Almost half of these cost burdened renters are living in America’s most expensive cities and are paying ridiculously high rent payments. Rent prices are said to be rising much faster than the income received amongst the middle class.

But what is the reason for high payment rent checks? The number of renting Americans and the amount of rent are rising twice as fast as the overall inflation. Also, as mentioned earlier, Americans are choosing to reside in America’s most expensive cities. As a result, renting has become nearly unaffordable. Renters from every class are having to spend more and more of the majority of their income on just rent alone.

This however, has not been the worst case struggling rent payers in America have seen. In 2013, 50% of American household renters were considered to be “cost burdened.” Of these renters, 25% were even said to have experienced severe burdens. Severe burdens, meaning that 50% of their income was used to cover just their rents. Compared to this statistic, American renters’ current position does not seem as harsh, but however, the current position has not recovered.

The average income for renters in America nationwide is $33,000 a year. While on the other hand, the average rent nationwide is $900 a month. Because of these conditions, these middle class renters are left with the only option of spending less and less money on food, savings, and healthcare.

More and more Americans are preferring to rent homes and preferring to write monthly rent checks rather than just making mortgage payments. Families and people over 55 are said to make up 40% of renters nationwide. To them, it may be seen as an easier alternative to making such a huge commitment, but they are just being hurt in the long run. 

http://money.cnn.com/2015/06/24/real_estate/housing-middle-class-rent-affordability/index

Solid and Steady US Economy (2015)

The United States has recently added 215,000 jobs to the American economy in July of 2015. Economists predict that the United States economy will eventually add 216,000 before the year is over. Anything over 200,000 is said to be considered healthy for an economy. On the other hand, the United States economy added 240,000 jobs a month last year for each month between January and July. America’s economy seems to be doing pretty fine, however, it is not doing the its best compared to prior years. There are still some issues in the American economy.

The unemployment rate remains the same as it was in 2008. According to the Labor Department, our current 5.3% unemployment rate is considered to be near full unemployment.

Wage growth is said to be the key to fixing America’s economy. However, there is scarcely any wage growth in America’s economic progress. Hourly wages have risen only about 2.1% since 2014. Because of this slight change, many Americans are hardly feeling the benefits of the economy’s recovery. As a result of all of this, the Federal Reserve plans to raise wage rates to 3.5% to help the economy.

What does the Federal Reserve plan to do? The Federal Reserve plans to raise its key interest rate for the first time in nine years. Raising the key interest rate will increase the Federal Reserve’s ability to raise wages for jobs. Although the Federal Reserve wants to see better wage growth before raisings rates, wage growth is not a requirement. Many experts say that the recent jobs report is enough justification for the Federal Reserve to be allowed to increase interest rates.

However, besides the unemployment rate remaining the same, there have also been some encouraging unemployment signs in July of 2015. The number of involuntary part-time workers has dropped. More and more numbers of workers who are working part time jobs but want to work full time jobs fell to 6.3 million people. What does this mean? This means that more and more people are actually finding full time and better paying jobs.

Another encouraging unemployment sign found in July of 2015 has been that the African American unemployment rate went down as well. It has fallen to its lowest point since 2008, 9.1%. Studies show that African Americans have been subjected to the highest rates on unemployment in America. Since evidence now shows that they are gaining job growth, so is the rest of the job market. 


http://money.cnn.com/2015/08/07/news/economy/july-jobs-report-215000-gains/index.html

America's Stock Market is Shrinking (2015)

It is 2015 and believe it or not, the American stock market is shrinking. More and more companies are disappearing from the stock market and hardly any companies are entering the stock market. As of right now, the blame is on the companies. Back during the summer of 1998, the number of publicly listed U.S. stocks were at a record breaking 7,562 and now they are at just only 3,812.

How did this happen? There are five main causes for the shrinkage of the stock market according to experts: the internet businesses, rising M&A, failing IPO, more companies leaving the stock market, and fewer younger companies entering the stock market.

Since 1998, companies new and old believed that if you made a business public on the World Wide Web you could instantly become rich. This caused a rise in stock markets that year, but it also caused a rise in market capital options to this day.

Right now the M&A market is booming. A record $1.1 trillion of U.S. deals were made in just the first half of 2015. IPOs simply can’t keep up. One reason for failing IPOs is the presence of other new sources of capital, including venture capital and private-equity firms. Companies are choosing the new sources of capital and as a result, the appeal of taking the IPO route for starting companies has become less and less favorable. In addition, there are also less young starter companies. These starter companies are said to provide many jobs for American people.  

Boohoo, the stock market is shrinking. Why should anyone care and how does this impact Americans? Americans should care because it is impacting American jobs. Jobs are being generated at lower rates than they normally should. So what is the solution? Besides creating a lot more startup companies and a lot more IPOs, the solution is to cater to these younger companies and allow them to expand so that they may join the stock market. These exchanges would help the economy by giving startups access to capital that they are not getting from the current market structure.

“We have created a market structure in the United States that has really undermined our future. If you shut down your ability to start small companies, you also inhibit your ability to create large ones.” –David Weild, former vice chairman at NASDAQ who has testified in Congress about capital 

http://money.cnn.com/2015/07/09/investing/stock-market-shrinking/index.html