Economy

10 Reasons Why Homelessness Is More Common Now Than Just 20 Years Ago

More Americans living in major cities are precariously close to homelessness.

Photo Credit: wrangler

Earlier this month, the National Alliance to End Homelessness released its report, “The State of Homelessness in America, 2016.” The report contained some slightly good news: according to the Alliance, “The national rate of homelessness in 2015 fell to 17.7 homeless people per 10,000 people in the general population from 18.3 in 2014.”

But there was troubling news in the report as well. The Alliance found that “many poor people are at risk of homelessness,” including the working poor. And in some major U.S. cities, homelessness has been increasing: a report released by the U.S. Conference of Mayors in December found that homelessness had increased by 28% in Washington, DC and that homelessness was also on the rise in Seattle and Los Angeles. This comes at a time when the nation’s 1% are enjoying record prosperity.

Below are 10 reasons why homelessness remains a vexing problem in the U.S. and why, in 2016, it is easier to become homeless than it was 20 years ago, let alone half a century back.

1. Jimmy McMillan Is Right: the Rent Is Too Damn High

Home ownership is one of the characteristics of a healthy economy. But the economic crash of September 2008 was followed by widespread foreclosures, turning countless homeowners into renters—and the increased demand for rental units has sent rents through the roof, especially in large cities. According to the U.S. Census Bureau, the cost of single-family rentals increased by 34% nationwide from 2006-2014. Financial planners, back in the 1980s and 1990s, used to say that Americans should spend on rent in a month what they earn in a week after taxes. But as the National Alliance to End Homelessness noted, America’s poor are often spending 50% of their income on housing.

It’s no secret that housing costs are exorbitant in New York City and San Francisco, but according to the Zumper National Rent Report, the average cost for one-bedroom apartments in 2015 also included prices like $1220 a month in Baltimore, $1250 a month in Atlanta, $1120 a month in Minneapolis and $1190 a month in Dallas. And when earnings aren’t keeping up with rents, that is easily a recipe for homelessness.

2. The Federal Minimum Wage Is Too Damn Low

Back in the 1950s and '60s, it was easier to survive on the minimum wage in many parts of the U.S. because the cost of living was much lower. Minimum-wage workers didn’t live in luxury, but on the whole, they were more likely to be able to afford essentials like housing, food and heat in the winter. According to the Pew Research Center, the purchasing power of the federal minimum wage peaked in 1968. But in recent years, it has hardly kept up with the cost of living. Pew asserted that since being raised to $7.25 an hour in 2009, the federal minimum wage has lost 8.1% of its purchasing power to inflation.

As the National Alliance to End Homelessness points out, “earnings from employment and from benefits have not kept pace with the cost of housing for low-income and poor people.” San Francisco, Seattle and Los Angeles are three cities that have decided to gradually raise their local minimum wages to $15 per hour. But far-right Republicans continue to make raising the minimum wage at the local, state or federal level an uphill battle.

3. Painfully Low Savings Rates

One way to avoid becoming homeless or to make it through a rough economic period is to have a nest egg. But putting aside rainy day money, let alone growing a nest egg, is much harder to do when housing costs are exorbitant, banks are paying record low interest rates, job security is a thing of the past, and wages are not keeping up with the cost of living. According to the Bureau of Economic Analysis, the average savings rate in the U.S. was less than 5% in 2015 compared to 17% in 1975. Most Americans are having a harder time saving for emergencies. And a survey released by Bankrate.com in January found that 63% of Americans are so squeezed financially that do not have enough savings to cover a $500 or $1000 emergency. In other words, more than half of Americans are one or two paychecks away from becoming homeless.

4. The Unraveling of the New Deal’s Anti-Homelessness Agenda

After the stock market crash of 1929, homelessness because so widespread in the U.S. under Republican President Herbert Hoover that shantytowns came to be called Hoovervilles. But President Franklin D. Roosevelt’s New Deal resulted in a robust economic recovery for the U.S., and while homelessness existed in the '50s, '60s and '70s, it wasn’t pandemic. As the National Alliance to End Homelessness asserts, “widespread homelessness did not emerge until the 1980s.” Under President Ronald Reagan, HUD’s budget plummeted from $74 billion in constant dollars to $19 billion in constant dollars. Fighting homelessness was a crucial element of the New Deal, which Reagan undermined, and even under centrist Democratic presidents Bill Clinton and Barack Obama, homelessness remained a persistent problem in U.S. cities. To adequately fight homelessness at the federal level, the U.S. needs an aggressive return to the anti-homelessness policies of the New Deal.

5. Republican Attacks on Food Stamps

No economist of any merit would disagree that the crash of September 2008 was the most devastating economic event in the U.S. since the crash of 1929 brought on the Great Depression. During bad economic times, food stamps should be readily available for those who need them. But Republicans in Congress have declared war on food stamps at every turn, and when Americans have to spend more on food thanks to GOP cuts, that is less money to spend on housing. The New Deal fought poverty and homelessness on multiple fronts: today, far-right Republicans—and sometimes, neoliberal Democrats as well—promote it on multiple fronts.

6. American’s Ongoing Health Insurance Nightmare

Shortcomings and all, the Affordable Care Act of 2010, a.k.a. Obamacare, has enabled 17.6 million Americans to gain health insurance. But for the ACA to become anywhere near as effective as the universal health care systems in Germany or Switzerland (where universal care is private but subject to strict government regulations), it will need to be seriously expanded. One of the ACA’s weaknesses is the fact that many of the plans offered on Healthcare.gov have painfully high annual deductibles: getting a bill for $3000 or $6000 after a health emergency is a serious hardship if one is living paycheck to paycheck and has little savings.

7. Privatization of Utilities

Republicans and neoliberal Democrats often claim that privatizing utilities is great for consumers because it brings more competition to the marketplace, but the problem with that argument is that giant corporations do everything they can to become monopolies and avoid free-market competition. So when it comes to essentials like heat, water and electricity, consumers are much better off with public utilities or government-owned operations that are strictly regulated. Unfortunately, attempts to privatize utilities are rampant. Philadelphia’s last mayor, Democrat Michael Nutter, unsuccessfully tried to privatize the city-owned Philadelphia Gas Works. And Republican efforts to privatize utilities have ranged from New Jersey’s so-called Water Infrastructure Protection Act (signed into law by Gov. Chris Christie in 2015) to Wisconsin’s Assembly Bill 554 (a GOP effort to fast-track water privatization in that state). Privatizing utilities inevitably results in higher bills: according to Food and Water Watch, privately owner water service typically costs 59% more than public water service. And higher utilities bills are the last thing people need when they are struggling to keep a roof over their heads.

8. Unions on the Decline

Social conservatives and the Christian right love to romanticize the 1950s America depicted in Father Knows Best, but one thing they fail to comprehend is that the U.S. under Republican president Dwight D. Eisenhower was much more socialistic than the U.S. of 2016. The workforce was heavily unionized and the rich paid much higher tax rates. That 1950s scenario—where a man with only a high school diploma could join a union and realistically expect to support a stay-at-home mom and two kids and pay a mortgage at 21 or 22—is long gone. The labor movement, in its heyday, certainly did its part to combat homelessness in America. But in 2015, private-sector unionization, according to the Bureau of Labor Staristics, was down to 11.1 % overall (6.7% in the private sector) compared to 20.1% in 1983 or 35% in the mid-1950s. The more unions decline, the worse things become for American workers on the whole—and the more likely they are to end up on the streets.

9. Republican Hatred of Social Security and Medicare

Social Security was one of the greatest achievements of FDR’s New Deal, which President Lyndon B. Johnson expanded with his Great Society and Medicare in the 1960s. But modern-day Republicans and the Tea Party have repeatedly shown their contempt for these programs by calling for their privatization. Vermont Sen. Bernie Sanders has the right idea: Social Security and Medicare should be expanded, not undermined. In the early 1990s, only 11% of the adult homeless population was 50 or older; now, half of them are. And the more Social Security and Medicare are attacked, the easier it becomes for older Americans to become homeless.

10. Outsourcing and Free Trade 

Although the Bill Clinton years were an economic success story in many respects, one of the more troubling developments of the 1990s was the growth of outsourcing. The North American Free Trade Agreement set a terrible precedent, encouraging U.S. companies to outsource American jobs to low-wage developing countries, and everything from manufacturing jobs to customer service and managerial jobs has been outsourced. Now, President Obama is supporting the Trans-Pacific Partnership, which would encourage more outsourcing and make things even worse for the U.S.’ embattled working class. The TPP would be a disaster for most Americans. Steady jobs with good pay and benefits reduce homelessness; outsourcing those jobs promotes it.

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Alex Henderson is a news writer at AlterNet and veteran political journalist. His work has also appeared in Salon, Raw Story, Truthdig, National Memo, Philadelphia Weekly, Democratic Underground, L.A. Weekly, MintPress News and many other publications. Follow him on Twitter @alexvhenderson.