High Housing and Transportation Costs and Wage Politics

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Your nominal wage is the number on your paycheck, but your real wage captures how far you can stretch that paycheck.

It’s not particularly helpful if your paycheck goes up, but the prices of the stuff you have to spend your money on goes up by even more.

This is why we need to be thinking about the finding that housing and transportation costs eat up 90% of people’s income in some Philly neighborhoods whenever we hear people talking about crappy service job wages and benefits.

It sucks for low skill workers that restaurant jobs and other service jobs on the low end of the pay scale don’t give out big paychecks.

But keep in mind why it sucks – they can’t buy as much stuff!

People end up spending most of the crappy paychecks on housing and transportation and then there’s nothing left over for other stuff they need/want to buy.

We shouldn’t treat the housing and transportation costs as an unalterable fact of life though. There are policies that can bring these costs down, and we should hold politicians accountable for doing that.

And not loser liberal stuff like targeted subsidies – we should be trying to make these things cheap for everyone.

Why not strive for a policy mix that promotes abundant cheap housing and punishes wasteful land speculation? Why not end fare-based financing for SEPTA and fund free transit out of land taxes on land adjacent to train stops?

Bringing down housing and transportation prices involve hard political trade-offs, but so do all policies that raise low-skill service job wages, like minimum wage hikes, paid sick days, liquor license reform, etc. It’s all hard, and we have to do all of it.

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