Housing News

Recession Means No Job, No House But Not Necessarily No Future

Here’s a good look at how unemployment can mean getting out of the house or in another’s.

Douglas McIntyre of Time Magazine made a short but interesting article entitled “When Joblessness Becomes Homelessness”. McIntyre commented on the possible effects of the prolonged recessionary effects in the labor market. He writes, “The estimates of the number of homeless people in America vary widely. That may be because some surveys consider people who have no home for a night to fall into the category, while others only consider those who live in a chronic state of being without their own shelter… Most people who have no income will not live in shelters or on the streets. They will move in with friends or relatives. They will only be homeless to the extent that they no long have a place of their own to live and cannot afford one. It is a form of displacement that has not been seen in America since The Depression and one which replaces the government’s assistance for the individual back with the social network of the community, whether that is the community of the family or some other close knit network.”

The unemployment level has reached 8.5 percent in March. Based on the Bureau of Labor Statistics, the worst metropolitan area hit by unemployment is El Centro, CA with 24.5 percent. Ten cities in California have unemployment rates above 15 percent. There’s a higher risk that these people, if unable to still find jobs that can match their old incomes, will find other homes given they’ve taken mortgages or in McIntyre’s words, “displacement”.

Another correlation found with unemployment is skills of the labor force (which turns out to be obvious though). In a report by CNNMoney.com, Edward Glaeser, a Harvard economics professor, concludes that “some places are able to weather an economic downturn better because of specific characteristics of their local area. (His) research finds a strong correlation between a skilled workforce and lower unemployment. Currently, 15.1% of high school dropouts are unemployed while just 4.2% of college graduates are out of work. For people with a high school diploma, unemployment is around 9%. The higher the educational level of a metropolitan area, the lower the unemployment rate.”

So here’s what we can conclude from these findings. If unemployment persists in an area, the laid off should find the means to learn new skills and have an easy transition from one industry to another. In this way, they can save their homes and their future.

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