Wages stick to the floor
Today, mortgages fly through the roof
While I strongly sympathize with the difficulty that middle-class people have buying homes in King County, subsidizing middle-income housing just makes no sense [”Home prices slip in October as inventory swells,” Times, Business & Technology, Nov. 6, and “Costs hit us where we live,” Nicole Brodeur column, Oct. 26].
Washington state has one of the most regressive tax/revenue systems in the nation. We have no income tax, and a flat tax rate for most tax income, like sales tax, car taxes, etc. And there is no sign of a graduated income tax in sight.
As a result, the tax burden for subsidizing middle-class housing would be borne mostly by the middle class.
In addition, subsidizing middle-class housing will not help the market readjust. The fact is, if middle-class people cannot afford middle-class homes, [it’s because] they are overpriced. This is the result of deregulation of the mortgage industry, which allowed people to pay more for homes than they could actually afford.
If we subsidize the cost of homes, this will mean that the value of homes will never readjust, and the portion of the cost of the home that is subsidized will be invisible to the market. (This is what happened to the cost of college when students could borrow unlimited money.)
Finally, subsidizing middle-class homes will not force wages to adjust to the real needs of working-class people. This is the real issue. Working-class people need to earn a decent living to afford a home, health care, saving for retirement and college for their kids.
In the global economy, wages and benefits have been cut, making decent wages harder for middle-class people to earn. Unfortunately, in a free market, there is nothing but government regulation to keep working wages from falling through the floor when the worker pool grows - and that is what is happening now.
Workers need more power to demand reasonable wages. The government needs to increase minimum wages and benefits. The government needs to regulate banks and industries, to protect people from large corporations and the accumulation of wealth by the few.
People need to stop thinking of $100,000 a year as rich. And unfortunately, the housing market needs time to adjust to the reality of what people make and can afford.
Maggie Orth is a Seattle resident and business owner.