Real Time Economics (WSJ) reports today:
In a presentation as part of its wider report on income, poverty and health insure, the Census Bureau noted a big jump in the number of individuals and families doubling up. ( See slide 18) The number of multifamily households jumped 11.6% from 2008 to 2010 compared to an increase of just 0.6% in the number of households.This strikes me as a horrendous statement about the current economic condition - that poverty is not just high, but largely hidden deep in the data. The WSJ goes on to suggest:
“If the poverty status of related subfamilies were determined by only their own income, their poverty rate would be 44.2%,” David Johnson chief of the Housing and Household Economic Statistics Division at the U.S. Census Bureau said. “When their poverty status is determined based on the resources of all related household members, it is about 17%.”
Fewer households means fewer consumers for businesses desperate for demand. At the same time, it continues to drag on a housing market that needs to burn off excess supply.So they obviously interpret these data in the common New Keynesian framework of demand and credit availability. My take is a little different.
- First, from an Austrian perspective, we have evidence of some pretty serious wealth descruction. Likely, the bulk of this is still coming from the Fed-enabled real estate malinvestment bubble. But as time goes on, if this continues, then we will also be seeing the destruction of that wealth which would have been created, had these "subfamilies" not been encouraged to avail themselves of the social welfare system.
- Second, from a philosophical perspective, what does it say about our society that people are moving back home, or never moving out. This has been common in Europe and Asia, for cultural reasons. North American culture, by contrast, has always valued the independent spirit, the man who would never move his family in with the parents, because that would compromise his independence.