How NYC Creates the Homeless- A real Case-Study on the Poor and the Economy

The well off and their political party have always said that if there is economic growth there would be less poverty. Everyone’s income will rise and so everyone’s standard of living.

This is so silly I am amazed than when politicians say this the media doesn’t laugh them out of their shows. The media doesn’t because guess on which side those in the media fall?

There is people living very well and “If they lived better everyone else will live better”.  Not true they already live better than anybody else. Maybe if you work 7 days a week and your partner too. Even then is to hold your living standard, not to get you wealthy.

If everyone would be tax in a fair way according to what they make and have, maybe when the economy grows then everyone grows (the wealthy not as much but still will get mor e). When people are left way behind  even when the economy improves it does not help them. Having the interest rates lower does not makes it easier for the poor to buy a car or move to a better apartment. They need cash to do either. Even on credit you have to make the payments and pay the insurance for those things 

Getting no raise or unemployment or no unemployment or no COLA for retirees and disabled or COLA’s not really attached to how the economy is doing and what you can buy with the dollar makes people dependent on those things fall further deeper in the hole. Those things bring every one down economically. Even when times get better, people are loaded with debt or collection whitch will keep them from getting a better apartment or a second hand car. A credit score is now taken for everything., From getting an apartment to non emergency medical care. Once you go down once, you will stay down.  

I’ll give you a recent (real) example I know.  This individual we will call Mr. Pink.

Mr. Pink, disabled person worked all his live ,even with a disability. Have had an apartment for 12 years. Every year the rent went up.  He was able to manage it by working partime and getting his pension. He gets sick as the work load got to be too much and by that time SSDI did not pay their COLA for two consecutive years. But the rent went up the maximum allowed by law an average of 5% every year regardless.  No work and solely dependent on SSDI eventually the rent caught up with him. Now paying about 75% in rent without electric.

The government  in NY announces new apartments and condos for well off families being constructed but a percentage of the apartments would be affordable apartments commensurate with income.

Finally Mr. Pink finds the one that falls within his SSDI income: Applies and qualifies . They have an apartment for him at less than half of his current apartment rent. What happiness! Can not be believe it!

Now comes a background check for crime and to see wether he pays his rent. All ok.

Now comes a credit report. He is disqualified 10 days before moving because he got behind on bills when he got sick and stop working. Real case. 

Now the question is, do we have a homeless now in this person?. Clearly he can not go another year with another rent increase and can’t move out because landlords take credit reports and use them to disqualify otherwise good tenants. 

Do you see that when they say things are stock up against the poor no matter what the new mayor says or the old mayor said or the new governor is been saying. We create new homeless without helping out the current homeless population. This is a real case that just happened in the City of New York.

Coming back to the science of the economy and actual economic growth with the past eight years of being in the dumps.  

Eight years of low growth have marginalized the lower base of society, economic growth is not the only factor that reduces poverty, experts now say.

However, they added, poverty alleviation is impossible without robust economic growth.

“According to international research, as growth increases the income of the lowest 40 percent earners rises by the same proportion in developed countries and by 25 percent in developing economies,” said senior economist Naveed Anwar Khan.

“Income inequality might also increase in such cases. However, income itself is an indicator of welfare as it increases the purchasing power of the poor people and addresses their educational and health concerns.” He added that with low or stagnant growth, the poor people are affected more than the affluent.

“The underprivileged are forced to reduce their living standards, which leads to a rise in poverty,” Khan said, adding that equitable growth does not seem achievable in the near future.

He said that inequality would decline if the poor people’s income rises by a high percentage than the affluent.

“Income inequality will widen even if the economy grows by seven percent and the incomes of rich and poor also increase by the same percentage.”

(The following is an International example to be applied to the economies connected to each others economic growth) 

He added that in such a scenario, the income of a daily wager would increase from 10,000 a month to 10,700, while a rich person drawing 100,000 per month would increase by 7,000. (you can substitute the money figures for dollars or pounds, or even rubes)

 Incomes would not rise with no economic growth.  The lower middle class has come down to the level of the poor due to a considerable decline in economic growth in the US and other countries. In some cases, we may see countries registering high growth but the trickle-down effect on the poor may be nominal or not at all.  

Economic planners should see the reasons that have denied the poor even a reasonable share in high growth. Financial openness, policies that trigger inflation and disturb the budget balance affect the poor people’s share in growth.

The state will have to play its due role to ensure that overall prosperity is shared. The poor need taxation and policies that improve the quality of their lives. “A level-playing field through competent state institutions will accelerate prosperity among the poor.”

Market analyst Dr Shahid Zia said the state should create opportunities for the poor people to reduce the widening income gap.

“Policies and an overall environment that promotes investment, growth and create jobs with the institutional support of the state will reduce inequalities,” he said.

Adam Gonzalez

Source of economic figures taken from sources on the net.

Pic credit to wday.com on report complaining about beggars allowed on the streets again