When Sarah Norman got married two and a half years ago, she and her husband, an engineer, started to look for a home with a bit of green space where they could start a family. They quickly realized that wasn’t possible in Vancouver.

“While you can find that in Vancouver, we certainly could not afford that in Vancouver,” said Norman, a 30-year-old public relations professional. “We homed in on Squamish because of A) the lifestyle and B) it was way more affordable for what we were looking for.”

Much has been written about Metro Vancouver’s affordability crisis and its impact on the millennial generation, but a new report warns that high real estate prices coupled with stagnant wages could lead to an exodus of young workers and serious economic impacts for the region. Within a decade, only a few jobs identified by the B.C. government as in-demand – including senior business and construction managers – will pay enough for young workers to afford the typical mortgage in Metro Vancouver, according to a new Vancity report.

Housing prices across all types of real estate are expected to rise by 4.87 per cent each year, while wages creep up by between 0.6 and 3.2 per cent.

Wage growth has lagged behind real estate prices since at least the turn of the century. Average housing costs in Metro Vancouver increased by 63 per cent between 2001 and 2014, while hourly wage rates rose by just 36.2 per cent, according to the report. In Vancouver proper during the same time period, average home resale values have jumped by a whopping 211 per cent.

Norman and her husband ended up buying a four-bedroom house in the Garibaldi Highlands for about half of what a similar house would go for in Vancouver. They now have a one-year old son and have settled into a community of like-minded families in Squamish.

“We’ve met tons of other young people who have, for the same reasons, moved out of Vancouver because they can’t afford it anymore,” she said.

The couple still makes the tough daily commute into Vancouver, but Norman has arranged to work from home two days a week to make her life a bit easier.

Right now, the average household would need to make $123,000 to pay for the average monthly mortgage in Metro Vancouver. That will jump to an average household income of $197,965 by 2025, and even highly skilled young people starting off in careers as industrial electricians, family doctors and firefighters won’t make enough to cover that, according to the report.

“More and more, people are wanting to live in the communities where they work. If these communities are not affordable, workers will look elsewhere. It is important to our local economy that people in the labour force have access to stable and affordable housing,” said Andy Broderick, Vancity’s vice-president of community investment.

The average real estate prices quoted in the report cover a broad range of housing types – from sprawling single-family homes to tiny condos – with an even broader range of resale values, and Broderick acknowledged that there are still cheaper options for young people who have their hearts set on buying.

More and more, people are wanting to live in the communities where they work. If these communities are not affordable, workers will look elsewhere. It is important to our local economy that people in the labour force have access to stable and affordable housing

“We’re just trying to point out that the trends are making things increasingly difficult,” he said. “The trends are significant and they’ve been long-term.”

Young people are already leaving the city. Vancouver lost a net 1,571 people between the ages of 20 and 30 in 2013, and 770 the year before.

Meanwhile, predictions from a B.C. labour market outlook suggest that 640,000 new workers will be needed in the Lower Mainland by 2022.

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I really enjoy Slam Poetry, this is by far one of my favourites. 

The underground economy is more attractive when the above ground economy isn’t built for you.
— 

City Councilman of Baltimore, Bill Henry, speaking on the increase in violence in West Baltimore since the death of Freddie Gray.

This month has been the deadliest May since 1999. 35 people have been killed this month, including 9 which died within the memorial weekend. 

Bernie Sanders: Why does there have to be so many different kinds of deodorant?

Bernie Sanders shows his economic illiteracy by decrying the fact that there are 23 different brands of deodorant while there are hungry children. Seriously.

From The Washington Free Beacon:

Self-proclaimed socialist and progressive favorite Sen. Bernie Sanders (I., Vt.) laments the idea that Americans can choose between “23 underarm spray deodorants” as children go hungry under President Obama’s economy.

“You don’t necessarily need a choice of 23 underarm spray deodorants when children are hungry in this country,” Sanders told John Harwood in an interview posted Tuesday.

Sanders will make his official campaign Democratic presidential announcement alongside the Ben and Jerry’s cofounders in Burlington on Tuesday.

Sanders said he would not condemn Hillary Clinton for bringing in millions of dollars in speaking fees but said it would be hard for her to separate fighting for the middle class and fighting against corporate interests. Sanders also said the Clintons have grown accustomed to a worldview that has led to them losing touch with the world around them.

Read the Rest

It would be a monumental task to combat all the fallacies in this line of “reasoning”, suffice it to say that, quite simply, the reason there are 23 different kinds of deodorant is because that’s what the market supports. If the market would support 24, there would be 24. And if the market would support 22, there would be 22. This is the market working perfectly. And it’s a good thing. Not a bad thing.

Furthermore, he insinuates that hungry children exist because there are so many kinds of deodorant (or, less sarcastically, because large, successful companies exist). But remember, Americans have spent $22 trillion on the “War on Poverty”, only to see the poverty rate remain constant since the ‘60s. How much should we have spent? $23 trillion? $50 trillion? $1 quadrillion? They’ll never say. They’ll never admit that socialism doesn’t work, they’ll just say “it wasn’t enough.”

His view of the economy is 180 degrees out of phase. The only thing that eliminates poverty on any lasting level is a job. And these deodorant companies create jobs. Lots of jobs. It’s shame that a major player in one of America’s large political parties doesn’t understand this basic concept.

Morning News Rundown

‘We will fight to the end’: One tribe’s battle against a $9.9 billion dam

Psychologist to take over Chicago jail, aid mentally ill inmates

China raises stakes with new projects in disputed waters

Opinion: America slouches toward plutocracy

Worker-owned co-ops gain ground in tech 

Bibi offers to discuss settlement boundaries

India-Greenpeace showdown heats up

Opinion: Free-market dogma jacks up bills

Trade pact foes warn on labor promises

Poor district seeks to secede from NOLA

At least 800 dead in India heat wave

Drone victim’s family to testify in Germany

Police: Kenyan officers killed in ambush

Iraqi, Syrian forces ramp up attacks on ISIL

Iran begins trial of US journalist

Report: Cleveland, DOJ reach settlement 

Opinion: America slouches toward plutocracy 

Deadly tornado rips through Mexican city

Fire kills 38 at rest home in China

At least four dead in severe Texas storm

Wolf volcano erupts on Galapagos island                                      

8

The World’s 25 Most Competitive Countries

In the global race to remain competitive, the U.S. emerges as the strongest contender. Each year, countries are evaluated against a host of criteria, including economic performance, government efficiency, business efficiency and infrastructure. At the top of the list for the second consecutive year is the United States, which earns its place at the the head of the line through robust business efficiency, a strong financial sector, innovation and efficient infrastructure.

Who could have possibly seen this coming? Obamacare premiums set to skyrocket

To the surprise of no one who pays attention, the premiums of those on Obamacare are about to go up…again.

From the WSJ:

Major insurers in some states are proposing hefty rate boosts for plans sold under the federal health law, setting the stage for an intense debate this summer over the law’s impact.

In New Mexico, market leader Health Care Service Corp. is asking for an average jump of 51.6% in premiums for 2016. The biggest insurer in Tennessee, BlueCross BlueShield of Tennessee, has requested an average 36.3% increase. In Maryland, market leader CareFirst BlueCross BlueShield wants to raise rates 30.4% across its products. Moda Health, the largest insurer on the Oregon health exchange, seeks an average boost of around 25%.

All of them cite high medical costs incurred by people newly enrolled under the Affordable Care Act.

Under that law, insurers file proposed rates to their local regulator and, in most cases, to the federal government. Some states have begun making the filings public, as they prepare to review the requests in coming weeks. The federal government is due to release its rate filings in early June.

Insurance regulators in many states can force carriers to scale back requests they can’t justify. The Obama administration can ask insurers seeking increases of 10% or more to explain themselves, but cannot force them to cut rates. Rates will become final by the fall.

Read the Rest

The feds can “ask” insurance companies not to raise rates but they can’t force price controls on them (apart from being wildly unconstitutional, that fails every time it’s tried). Notice it doesn’t say that the administration can’t bribe, blackmail or otherwise do some arm twisting to get private companies to do what they want. Sheesh.

Anyway, this should surprise exactly no one. While the economy as a whole is a complicated organism that is impossible to fully understand, there are certain general rules that everyone is capable of grasping. For instance, generally speaking, the price of an item will increase as the scarcity of that item increases. Similarly, the price of an item will increase as the demand for that item increases. And as competition increases, the price of an item tends to go down while the quality, variety and availability of it goes up, etc. These are not (or shouldn’t be) controversial concepts. They are axioms. They are realities that even children in grade school are capable of understanding. 

But for some reason, a large segment of the population suspends its understanding of these truths when it comes to government. They’ll tell you that adding layers of government bureaucracy to an industry will magically lower the price of that item or service – and people believe it! It’s truly amazing.

It’s one thing to understand the inevitable negative economic effects of mountains of government regulation but still be in favor of the regulations for other reasons, however misguided. It’s quite another to suspend economic understanding altogether and actually believe that government intervention is somehow going to actually lower prices. That is utter nonsense. It comes as a result of being blinded by pro-government (or anti-liberty) bias and it’s intellectually dishonest. You might love yourself some Obamacare and think it’s helping for reasons X, Y and Z, but don’t tell me that it’s going to lower costs. That’s like asking me to believe in magic.

Australia

Against the backdrop of low commodity prices and the downturn in traditional industries, a prudent approach to stimulating economic renewal is to invest in, not cut, wealth-generating activities like higher education, research and innovation.

via bloomberg

“It is estimated that Australian women born in 2012 will, on average, live for 94.4 years, and their male counterparts will live for 91.6 years. Over the next 15 years, the number of people aged 65 and older will increase by 85%, from 3.1 million in 2011 (14% of the population) to 5.7 million in 2031 (19% of the population); by 2050, it is expected that almost a quarter of the population will be aged 65 or over.

“While in 1901, there were 15 people of traditional “working age” (15–64 years) to support each Australian aged 65 and over, this potential support ratio dropped continuously over time to 7.5 in 1970, 5 in 2010, and it is projected to be 2.7 in 2050. These demographic developments will have a noticeable impact on the country’s society, economy, and government budgets over the next decades.”

From Work, Aging and Retirement in Australia: Introduction to the Special Issue. You can browse the freely available special issue for more articles on this topic.

Image: Australian Continent Aerial View. Public Domain via Pixabay.