Posted: Feb 27, 2017
Interpreting the Unemployment data in the greater San Francisco Bay Area
The unemployment rate in the Bay Area is at the lowest rate it has been since May 2001, finishing 2016 at around 4% (The Mercury News, 2016). On top of that, wages in the area are increasing at a rate far higher than the majority of the country. Over the last five years, wages in the Bay Area have risen 30%, and the average household wage rests between $50,000 to $99,999 (East Bay Times, 2016). These statistics viewed together in isolation illustrate an optimistic landscape for the Bay Area where everyone can obtain well-paid jobs and achieve financial security. All is well, right?
Not exactly. What these numbers fail to communicate is the fact that the astronomical cost of living in the Bay Area keeps outpacing the rise in wages and working people continue to struggle to get ahead. The Council for Community and Economic Research calculates that the total cost of living in the Bay Area is 62.6% higher than the U.S average (SmartAsset, 2016). This means that even if the rate of unemployment further decreases and wages increase, there will still be a severe shortage of affordable housing for hard working families trying to achieve financial independence.
Sendhil Mullainathan, a Harvard educated economist and Eldar Shafir, a Princeton educated psychologist have collaborated to explore the impact of scarcity as a human condition. Their studies show that anyone experiencing scarcity will focus all of their resources on the necessity at hand, but fail to understand the bigger picture and long-term consequences of their actions. This provides evidence as to why pay day loans are so popular in the current economic climate, as people identify them as a method of meeting a short term need, without fully understanding the long term consequences (The Guardian, 2013). The authors believe that such obsessive concentration on basic necessities hinder decision making capabilities and can lower flexible intelligence, regardless of natural intellect.
If you're just starting out and trying to make a name for yourself, or attempting to get by each month and provide the bare necessities, how will you ever break the cycle? This is often referred to as the scarcity trap. East Bay Revitalization Inc. exists to combat these issues. Employing advanced construction techniques, it is possible to create durable, cost efficient accommodations for hard working families in the Bay Area. Once someone has a stable home with roof and warmth, they can turn their attentions to using additional income to provide nutritious food for themselves and their families and things like preventative medical care. With better nutrition and less psychological stress and not having to worry about the health of their family, they can turn their full attention to their work and increase performance/output. In turn, this can not only have a positive impact on their mental well-being, as they feel they are closer to achieving their potential, but it can also lead to additional pay rises and promotions. A stable home and a secure job can do wonders for an individual's well-being as they start to realize their dreams.