September 4, 2013
Can the City of Austin defy gravity?
When you look around Austin, it is easy to be lulled into believing that we are invincible. Our housing market is so hot right now that sellers are getting multiple bids that are often higher than the asking price. Every other week a new magazine article places Austin at the top of somebody’s “Best Place To…” list.
Over the next several years, a Grand Vision Design Plan (officially known as a “charrette”) will transform Congress Avenue into something rivaling the Champs Elysees in Paris. Any woman who leaves her white gloves at home, or any guy who forgets where he parked his Lamborghini might still be able to head over to Hut’s Hamburgers, if it survives in its present form.
All of the Grand Visions for Austin assume that the huge bubble we now find ourselves in could never burst. They assume that we can defy gravity, in a way that no other city in the history of the world has ever been able to do. I guess time will tell and we will all find out, one way or the other.
In the meantime, there is an inescapable economic reality that faces the United States. It is the reality of “A Decade of Flat Wages.” The new report by the Economic Policy Institute is subtitled, “The Key Barrier to Shared Prosperity and a Rising Middle Class.” Here is an excerpt from that report, followed by a link to the full text:
A DECADE OF LOST WAGES (Excerpt) By LAWRENCE MISHEL AND HEIDI SHIERHOLZ
The nation’s economic discourse has finally shifted from talk of “grand bargain” budget deals to a focus on addressing the economic challenges of the middle class and those aspiring to join the middle class. Growing the economy from the “middle out” has become the new frame for discussing economic policy. This is long overdue; in our view, an economy that does not provide shared prosperity is, by definition, a poorly performing one. Further, such an economy will not provide sustainable growth without relying on consumption fueled by asset bubbles and escalating household debt. The collapse of the housing bubble and the ensuing Great Recession have laid bare the consequences of this model of unbalanced growth.
The revived discussion of strengthening the middle class, however, has so far failed to drill down to the central problem: The wage and benefit growth of the vast majority, including white-collar and blue-collar workers and those with and without a college degree, has stagnated, as the fruits of overall growth have accrued disproportionately to the richest households.
The full report is available at: www.epi.org/files/2013/BP365.pdf