KeNo's Housing and Economic Portal: Monday September 27 Housing and Economic stories

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We're $12.3 Trillion Poorer Than We Were Three Years Ago - (www.businessinsider.com) The Federal Reserve released the Q2 2010 Flow of Funds report yesterday: Flow of Funds. According to the Fed, household net worth is now off $12.3 Trillion from the peak in 2007, but up $4.7 trillion from the trough in Q1 2009. This is the Households and Nonprofit net worth as a percent of GDP. This includes real estate and financial assets (stocks, bonds, pension reserves, deposits, etc) net of liabilities (mostly mortgages). Note that this does NOT include public debt obligations. Note that this ratio was relatively stable for almost 50 years, and then we saw the stock market and housing bubbles. This graph shows homeowner percent equity since 1952. Household percent equity (as measured by the Fed) collapsed when house prices collapsed in 2007 and 2008.

Labor Tries to Organize Carwashes in Los Angeles - (www.nytimes.com) The carwashes of Los Angeles would appear to be an unlikely target for a unionization drive. Many of the estimated 10,000 workers in the business here are illegal immigrants, who are too scared to speak out or give their bosses any excuse to fire them. Many carwash companies have just two or three outlets, not 20 or 30, requiring scores of separate organizing efforts. And carwash owners, who invest a million dollars or more in each facility, are fiercely resisting the prospect of being tied down by collective bargaining and union rules. Nonetheless, labor organizers have set out to unionize this city’s carwash workers, hoping to improve their paltry pay and end widespread abuses. The unions, led by the United Steelworkers, acknowledge that it is a struggle, but they voice confidence that they can organize the first carwashes in the next few weeks or months, and that this will start a domino effect once other owners realize that unionized businesses can survive and even thrive. California officials have estimated that two-thirds of the 500 carwashes in Los Angeles violate workplace laws. Many workers say they are paid just $35 for a 10-hour workday — less than half the minimum wage — and some say they are not paid for time during which no cars go through the wash. Others complain that they are not given gloves or goggles even though they often use stinging acids to clean tire rims.

Legislators feeling sting of Illinois' deadbeat ways - (www.herald-review.com) State Sen. Dave Luechtefeld was in session in Springfield earlier this year when he got a call from the secretary in his district office. She was calling from her cell phone because the district office phones, which are paid for by the state of Illinois, had been disconnected for nonpayment. "That was the first time," recalled Luechtefeld, R-Okawville. His office phones were later cut off again, with the state still months behind in paying for the service. He's now getting renewed threats from the phone company of a third cutoff. "It's laughable," he said, "but it's not." It's the same story at the district offices of Illinois' elected legislators across the state: Phone, utilities, garbage and rent payments months behind, prompting a monthly flurry of terse late notices and cutoff threats to offices with the state emblem on the doors. Of course, in a state where teachers are getting laid off, hospitals are struggling and small businesses are failing because the state isn't paying its bills, the office budget plight of a relative handful of politicians isn't going to cause anyone to take to the streets. But the news of a northern Illinois legislator who was forced to shut down her district office because the state had stiffed her landlord for so long certainly drives home the depth of Illinois' $13 billion budget crisis

Teachers union has labor trouble of its own - (www.dispatch.com) Ohio's largest teachers union is having labor problems of its own. Labor-relations consultants, who help local teachers unions negotiate contracts with school districts, and other employees of the Ohio Education Association walked off the job this morning. Most of the 110 striking workers - all members of the OEA's Professional Staff Union - earn more than $100,000 a year, according to reports filed with the U.S. Department of Labor. For instance, labor-relations consultants - who make up about 80 percent of the striking workers - were paid an average salary of $111,350 in 2009. That is about $10,000 more than the average Ohio school-district superintendent made last school year, and more than double what the average teacher made, according to the state statistics.

Union-Led Group Halts Ads Attacking Whitman in California Race - (www.bloomberg.com) A union-funded group that spent almost $9 million on negative advertising targeting Meg Whitman, the Republican running for governor in California, has suspended its campaign, designed to help Democrat Jerry Brown. The ads were halted because Brown, the state attorney general, has kept competitive with Whitman, a billionaire who has dug into her personal fortune to finance her campaign, according to members of the group.
One ad accused Whitman of raising fees and creating “huge losses from failed mergers” while chief executive officer of EBay Inc. “It’s rock-solid proof that there is seamless coordination between what is essentially the same political organization: Jerry Brown and the government unions that control him,” Andrea Rivera, a Whitman campaign spokeswoman, said by e-mail.