
THE *DON* JONES INDEX…	GAINS POSTED in GREEN LOSSES POSTED in RED
	4/9/14… 15,123.48
	4/2/14… 15,119.20


	6/27/13… 15,000.00

((THE DOW JONES INDEX: 4/2… 16,573.00; 3/26… 16,294.23; 11/19/12… 12,592.22)

LESSON for APRIL 2, 2014

As it seems like Mssrs. Putin and Obama are choosing to spend the week in diplomatic tango rather than blitzkrieg and bloviation, let’s leave them be for the time being and return to another of those issues upon which the president offers much advice but little solace… the disappearing middle class.

Citing unspecified “research” by the census bureau, Department of Labor and several universities, AP economics writer Josh Boak concluded that the disappearance of jobs once seen as gateways to the middle class and their replacement by minimum-wage work in the restaurant and retail sector (which has grown from 16.5% to 17.1% since 2007) is responsible for a 9% decline in the inflation-adjusted wage rate of the bottom 40% of U.S. households.

Last week was one of the best in a long time for Don Jones, because the average American’s hourly pay increased from $10.31 to $10.34 according to tradingeconomics.com (the category we’ve placed at the summit of the DJI). And yet, Don’s hourly wage is only up by a penny since the first of the year… it’s bounced around some and, at least, isn’t still going down, but the gain is less than a tenth of a percentage point. Extrapolated to a year, Don’s income is rising only a third of a percent… and remember, the DJI tracks all Americans, including the top 1% (not to mention all those Professors and Economists doing the research) so it is likely that the real wages of Don 99% are continuing to fall. What good news that does exist is that it’s getting easier for the heads of households who used to be steelworkers and executive secretaries to get jobs at Wal-mart and Taco Bell, which reality led Mr. Boak to the following conclusion…

“Fewer teenagers are staffing cash registers, prepping meals or stocking shelves, according to government data. Replacing them are adults, many of whom are struggling with the burdens of college debt or child rearing. Some are on the verge of what was once envisioned as retirement years.

Is Don Jones’ yearly 0.3% raise keeping pace with inflation? Not according to the National Low Income Housing Coalition, which noted that… while housing prices still remain flat or are even still declining slightly… rents continue to rise.

More than 40 million Americans rent, or about 35% of American households. 25% of renters have extremely low income. According to Sheila Crowley, the president of the NLIHC, "Three out of four extremely low income households have to spend more than half of their income on housing costs."

Why? The “Out of Reach” report, using a different and more liberal methodology than tradingeconomics.com, ups the average hourly wage of Don Jones to $14.64 per hour (a rate that many can only dream of). And yet…

“An individual needs to earn $18.92 an hour to afford a two-bedroom rental at Fair Market Rent. This figure is referred to as the “Housing Wage.” Today’s national average Housing Wage is more than two-and-a-half times the federal minimum wage, and 52% higher than it was in 2000.”

There are, of course, variations across the country and, unfortunately, those states that tend to have higher wages also have higher housing and rental costs. NLIHC determined that Hawaii had the nation’s highest Housing Wage of $31.54 an hour, followed by the District of Columbia, California, Maryland and New Jersey. The most expensive metropolitan area was San Francisco, where an individual needs to earn $37.62 an hour to afford a two-bedroom apartment.

But the NLIHC also found that there was no place in America where a minimum-wage earner could afford even a one-bedroom apartment. Even if the national minimum wage were increased to Obama’s stated goal of $10.10 an hour, minimum-wagers would only be able to afford one-bedroom slums in Arkansas, Kentucky and Puerto Rico.

I guess that’s good news for the Clintons should they blow all their money on a failed 2016 run and the victorious Republicans dredge (drudge?) up the Lewinsky hearings to revoke Slick Willie’s pension and send the couple slinking back to Little Rock. Or, they can move in with Roger – and Bill can earn a few tips playing saxophone on his baby bro’s North Korean gigs.

There are a lot of Don and Dawn Joneses living in squalid one bedroom apartments or cheap hotel rooms… some of them with three, four, five kids. Many of these families used to have good jobs – now gone. Many more were homeowners upon whom the banks foreclosed.

"Many of those individuals, who may have been home owners or first time buyers before in past years, are now flooding the rental market, making supplies tight," Claudia Coulton of the Center on Urban Poverty and Community Development told Nora Morrison of The Street newspaper . "Rental property owners are taking advantage of the situation to get increased rents. For low income households, this problem is unlikely to change much in the short run unless there is an increase in housing subsidy or low income rental housing programs."

And now for the good news. Low-wage Americans may not be able to rent housing in the United States, but they can buy it… according to Jerry Kronenberg of mainstreet.com. Is there a catch? Yes… several. The first is that homeownership can be achieved by families with two minimum wage earners – a husband and wife, daughter and father, mother and son, grandmother and grandson or just a couple of cohabitors. It’s a rather touching scenario… Don, the fry guy at McGobble and Dawn, the cashier at Dollar Devaluations pooling their incomes, leaving their kids to be raised by the streets. The American dream. And… oh yeah… there’s a catch. Try to find a bank that’ll write mortgages on minimum-wage proles! And another… there are only a limited number of places, Kronenberg notes, where $14.50 per hour will buy you a home, even with 20% down.

Places like dying or dead towns in the Midwest's "Rust Belt," he cites Daren Blomquist of the think tank RealtyTrac, who says they're affordable because they generally have iffy job opportunities, declining populations and a "brain drain" of skilled workers. "There are fewer people in these markets than there were 10 or 15 years ago, and especially fewer people with kind of skills that garner high-paying jobs that allow them to afford higher-priced properties," Blomquist says.

And just what are those places?

Well, there’s Flint, Michigan. Left-wing intellectuals might know the place through Michael Moore’s documentary “Roger and Me” about the strangulation of the American auto industry. Flint has lost some 40% of its population since the 70’s. The tough times have made Genesee County one of America's most affordable counties, Kronenberg notes, with a median three-bedroom home there selling for just $21,932.

Problem is, there’s just no jobs left in Flint, even paying the minimum wage. Nor is much of the state of Michigan doing any better… Muskegon, north of Grand Rapids, and Bay City also made Realty Trac’s list. (Bay City was the imaginary hometown of England’s Bay City Rollers, and the real birthplace of Madonna… who called it “a little, smelly town”. Hard to vogue when the (official) unemployment rate is 9%.

Or take Trumbull County, just north of Youngstown, Ohio. Please… as Rodney Dangerfield might have appealed. Since the auto industry went south (or, mostly, to the Far East), steelmaking communities like Youngstown have suffered too. In fact, one of the two towns (formerly cities) in America that have lost the most population in the last half-century… locked in a downward spiraling duel with Cairo, IL… is Braddock, PA, which George Romero used in making movies about vampires and zombies. There, the mostly black population elected a white, punk-rock mayor who put Realty Trac’s statisticians to shame by selling off empty houses for $1. I’ve expected to hear something miraculous about Braddock for a while, now, but nothing yet.

Maybe you could declare yourself an Indian and move to a reservation (there seem to be plenty of rather dubious Native Americans around when it comes to doling out casino licenses). A different mainsreet.com article noted that four of the ten poorest counties in America were in South Dakota, to where the high rollers do not flock. Unemployment, in some areas, tops 60%. But rents are cheap, or you can haul in an old trailer and squat that American Dream.

Finally, a little more good news. Last week, five Republican Senators agreed to join the 55 Democrats to make a filibuster-proof majority to (finally!) pass an extension of benefits for the long-term unemployed. It sort of boggles the mind to attempt to assess the character of any human being who would not only oppose, but filibuster granting these victims of the recession the benefits they paid for while they were working, but the mean-spiritedness of the Republican Party never ceases to amaze, and can only avoid total obscurity by the craven machinations of surrender-monkey Democrats. The bad news is that the deal… financed by raising tariffs on some imports (the word “tax” never uttered and by excluding those whose income was over one million dollars during the previous year)… must also pass the Republican-controlled House, where Speaker John Boehner has been of two minds and two mouths about the legislation.

As has been Don Jones. Now and again, someone rails against welfare queens and the politics of envy, but others are sending petitions to the Speaker, urging him to go along to get along. “Come November I know who the real enemy is,” one petitioner writes, “and it's not over seas (sic).”

“If this doesn't pass the house then republicans can kiss their jobs goodbye in November,” blogs another. “They have already damaged their crediblity beyond repair by screwing millions of people for no reason. Do they really think that there will no consequences for this heartless act? They need to keep in mind that it is not just the unemployed who will vote in November it is also the friends and families of the unemployed who will also support the ouster of these heartless clowns.”

And this week? Don did alright… not nearly as well as the Dow which, after a few uncertain weeks, soared to yet another record high. In fact, the gains in stocks, IRAs and other securities proved the difference between a weak advance and a weak decline. All around, portents of Apocalypse are rising… earthquakes, mudslides, a shooting war in Korea… Don needs do no more than smile, raise a beer, and root for his favorite team. Many will be out of the playoff hunt by May, many more by summer but… at least for opening week… everybody’s a contender.

________

THE DON JONES INDEX

CHART of CATEGORIES w/ VALUE ADDED to EQUAL BASELINE of 15,000.00

(REFLECTING… approximately… DOW JONES INDEX of June 27, 2013)

See a further explanation of categories here…

Simply recording gains or losses is deceptive, because some of the indices here represent GOOD things (like incomes and life expectancy) while others represent BAD things (unemployment, terror). So, increases in good things and decreases in bad things are considered GOOD (and are depicted in GREEN) – decreases in good things and increases in the bad are considered BAD (and are depicted in RED).