socio-politics

According to the US census bureau, 15% of American homeowners with a mortgage spend at least half of their income on housing. 31.9% of people making between minimum wage (about $11,000 per year) and 120% of the median income spend at least 50% of their income on housing. These are also the people that have been unable to pay their mortgages.

The actual median earnings per household in the United States is presently between $45 and $46 thousand. A household that makes $45,000 year makes a little less than about $865 per week. If they spend about 50% of this money on housing, they have about $433 left for the week. Assume these households spend about $80 per month on utilities, $80 per week on food and $20 per week on transportation and that leaves the surplus money at $313 per week.

That total per week is for the median household income, so half of the population makes less. That total is also for the assumption that they’re spending exactly 50% of their income on housing. The weekly expenditures were also estimated on the low side, and only included a few of the basics though ignored things like medical costs, insurance and clothing.

A little over 12.5% of the population has a household income between $20 and $30 thousand. I’ll continue to look at the best possible scenario by evaluating those that make $30,000 per year. This comes out to about $288 per week in actual income, and $168 per week after those few necessary expenses.

Just one more - 13% of the population makes between $10 and $20 thousand. $20,000 per year translates to $71 per week in surplus money.

The average cost of child care is $7.75 per hour. If your household makes $45,000 per year or less and you spend at least half of you income on housing, you can not afford that.

Many people are blaming those that are unable to pay their mortgages for trying to live a life that their income can not support. The problem is that expenses have rapidly risen over the past ten years; from 1997 to 2005, the median home price rose by 86%, gas rose by 158% and the median income rose by 25%. Additionally, between 2003 and 2005, there was a 31% increase in the number of households spending at least 50% of their income on housing. 2005 is the last year available for such statistics on the census bureau’s site, though these numbers (with the exception of the wages earned) have only increased since then. The only definite statistic is that gas prices have risen by 55% since 2005 (all gas statistics are from the energy information administration)

While these changes are not likely to have greatly impacted those that live comfortably, it is devastating to those with lower incomes. For people that make $300 or less in “surplus” income per week, the extra $5-$10 that is being added to their expenses every week necessitates drastic changes to their household life, though there comes a point when these changes are no longer possible.

How can anybody look at these households and tell them that they’re at fault for the crisis and for not making enough of an income. There is a continual and drastic increase in the number of people willing to spend at least half of their income on their housing. They would only do this if they had no other alternative.

It is inhuman to say that  “bad behavior should not be rewarded” in this situation.  The “bad behavior” is families spending every cent that they can towards housing until they are forced to miss payments.

Even worse is that, for all the talk of the probable bailout,  there is very little talk about helping the shortage of affordable housing or of building more public housing.  This means that as the economic weakens (as it inevitably will for the foreseeable future), the situation for low income families will only worsen, and more families will be unable to pay their mortgages.