Wednesday, July 26, 2006

Markets vs. parents

Firefighters who want to live in high-priced cities can work two jobs, said W. Michael Cox, chief economist for the Federal Reserve Bank of Dallas. “I think it’s great,” he said. “It gives you portfolio diversification in your income.” *

When I read this quote in a NY Times article about how rising real estate prices in major cities are squeezing out the middle class, I couldn't believe it. I had to read it again to make sure he actually said what what I thought he said.

He did.

Let's put aside for a second the nature of the job of firefighter, in terms of physical and psychological demands. Let's put aside for a moment the degree to which firefighting is a vital service for any community, including big cities.

Let's put aside my own belief that to be truly great, a city has to have the entire economic spectrum, especially including working and middle classes.

What really struck me is how this economist -- and not just any economist, but the chief economist of one of the Federal Reserve banks -- thinks working two jobs is "great." That you should have a second job as a kind of "portfolio diversification."

If you are single and without kids, working two jobs might be okay, and depending on the jobs and your own choices, even "great" -- though when I was single and kid-less I actually enjoyed having free time to pursue non-job related activities like going out, hanging with friends, exercising, reading, etc.

But think about what this attitude means for parents, either single parents or parents living with partners.

Imagine what it means to have to work two jobs, at least one of which is full time and as demanding as firefighting. I've never had to do that, but even trying to imagine it makes me exhausted.

And then imagine that you have a kid or two.

If you are working two jobs, it's really hard to even think about having time to spend with kids.

Maybe Mr. Cox sees kids are a luxury that should only be indulged by people who can make enough money to afford them. I don't know for sure, but that's my hunch about him, based on this statement and other things he's written or said. So he'd just say that this hypothetical firefighter just shouldn't have kids.

Mr. Cox's view represents one strand of conservative thinking in this country -- an influential one among elite conservative economists and policy makers -- that reduces everything to economics, and to a particular kind of sink-or-swim, kill or be killed, "let the market decide everything" view of how economies should work.

What they miss is that some things can't be reduced to economics. Some things are just too important to be left to the market.

It's important that parents be able to spend time with their kids, and not have to work two jobs just to make ends meet. It's important that parents be able to support their family financially while still having time and energy to devote to parenting.

It's so ironic that the political party that claims to be in favor of "family values" is at the same time pushing an extreme vision of our economy that makes it impossible to actually parent, that's actually weakening families.

What do we need? We need to understand that we're all in this together. We need to understand that we live not as isolated individuals, but in communities. We need to understand that the most important things we have are relationships with other human beings. It is these relationships that tie communities together.

Rather than telling the firefighter he or she should just work two jobs, our leaders should be asking how they could help to ensure affordable housing in every community.

They should be asking what steps could be taken to make sure that working and middle class people can afford to rent or buy homes in the communities where they work.

It's a tall order, for sure, and there are no easy answers. But one thing I do know is that the answer is not to tell people they should be happy to work two jobs.

*Source: "Cities Shed Middle Class, and Are Richer and Poorer for It," Janny Scott, New York Times, July 23, 2006

Cross posted at daddychip2


Granny said...

I can remember when housing expense was budgeted at 25% of income.

How times have changed.

Chip said...

granny, I think the lack of affordable housing is one of the biggest obstacles in much of the US. And the market doesn't help.

Anonymous said...

I skimmed that article and found it sad and horrifying. I must have missed that truly odious quite. Income portfolio diversification. What crap. Many of us are struggling to continue to live in cities, and it's really hard. Thanks for jumping on this.

Chip said...

Miriam, yes it is quite a statement isn't it.

I just ran across an article on Chicago's city council passing a requirement that all large retailers pay a living wage plus benefits: Council defies Daley, OKs 'living wage'. This is another example of pro-active steps large cities can take to ensure that working and middle class families can continue to afford to live in the city.

Granny said...

Out in the subdivision where my sons were living, the for sale signs have largely come down to be replaced by for rent signs. They're not selling.

Bursting bubble perhaps?

Anonymous said...

add to that many cities require public emloyees to live within them (Boston and teachers springs to mind, though I think some NY boroughs have similar requirements). The theory is that the public servant will care more about the city if they are also a resident. That would be repressive, but almost justifiable, if they paid a living wage for their markets. Many of the jobs with these requirements in many places do not. Add to that the delima of what a couple does if they each work for a different neighboring city with such requirements.