Remember When: Gas 29.9cents, Sales Tax 4%, Homes $52,000
June 12, 2014
By Neil Rubenstein
Were your toes tingling when you heard home prices in the Los Angeles metropolitan area went up 18-20% from February 2013 through February 2014? My tootsies were jumping up and down so much I almost called everyone’s friend, Fire Chief Chris Sellers, to send the paramedics. We bought our condo in 1977 from the builder for $52,000 and soon thereafter Prop. 13 was voted in. I hope you remember the “good old days” when prices and taxes were not low in relationship to wages but were reasonable. Our condo would fetch half a million today.
Maria “aka the wild gypsy lady” reminded me that gasoline was 29.9 cents a gallon, that sales tax was once 4% and a half gallon of ice cream was 64 ounces and not the 48 we have today.
My, my, my, have things changed for the disappearing middle class. There are so many examples you and I could start with but housing is a mess. Do you realize only 60% are homes owned here in the West, the rental vacancy rate throughout our country stayed near record lows at 8.3% and rent nationwide (you guessed it) hit an all time high of $766 a month.
My financial advisor, E. F. Huttonstein, cited a number of factors: tight credit, higher home prices, student debt, soft job market and a new wrinkle – large companies buying thousands of houses, fixing them up and renting them out.
The economic forecast, in my opinion, is so bad for the quickly disappearing middle class that I am calling and requesting help from the Royal Canadian Mounties, Lassie and the 411 telephone operator. NO ONE gives a hootenanny about us!!! Do you really believe City Hall, the Board of Education, the grocery store, the water and electric companies or the cable and telephone companies truly care that most of us are on the economic edge? And if a car problem or a dental situation pops up, our limited resources will be bent out of shape.
Can you honestly remember when your employer gave a decent raise or when Social Security’s monthly check would last past the 20th?
Once again, former Mayor Cooper gleefully told us City Hall coffers were in the best shape in years. The reason Mr. Mayor is happy is because of the taxes and fees collected to pay salaries (some are getting over $300,000 and many city hall retirees are pulling in over $125,000 per year with a yearly increase of 2.5%).
Then there are the American companies with subsidiaries overseas. It’s hard to imagine that the tax code allows them to keep all that money without paying taxes. Did you hear how much the new General Motors boss is getting? Don’t worry; she will not be stopping at the Dollar Tree on the way to Costco.
Jobs – what jobs??? The Los Angeles Metro area is the very worst economically. Why do you think Toyota is leaving Torrance with 3,000 jobs and going to Texas? Could it just be costs are 39% lower than in California? You could bet your bottom dollar, if my job was going to the Lone Star State I would be at the Auto Club getting the maps to bigger homes at cheaper prices. I could just see Governor Perry, after he read about the odor coming from the plant in Irwindale, grabbing the first flight out of Austin headed west.
Maria reminded me of the many, many, many middle class jobs that are gone in aircraft, aerospace, tires, auto assembly, shipbuilding, military and housing, just to name a few.
Perhaps you remember the Mexican companies along the border in the free trade areas. We made the parts in the United States; they assembled and sent them back. On the face of it, one thought it was a good idea – until Mexico priced itself out of the market and the work went to China and Korea. South Korea’s minimum wage is 28 cents per hour and so, once again, jobs are on the move – this time, India. And when their labor costs get too high, maybe Africa in the years to come.
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