The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: shades who wrote (28817)	3/26/2005 6:48:27 PM
From: GraceZ	Read Replies (1) of 306849

In your nieghborhood of 150 houses where peoples income went up as their house value fell - how many lost thier job to india or china and either remained seriously underpaid or underemployed? Baltimore, during that time frame '87-'97 had a huge outflow in population and corporate entities, serious unemployment and job loss. I have no idea how serious it was in my neighborhood of houses. One neighbor was merged out of a job, I imagine there were others as well because it was neighborhood of professional workers. Since I do a great deal of work for corporations, I was acutely aware of the loss of corporate jobs. If I kept the client, I was constantly working with someone new as people were downsized out. It seemed that every year at least two or three corporate headquarters were either moved or merged with distant entities taking the local jobs with them. One manufacturing facility after another shut down. The only growth was in government and non-profit enterprise. There was some biotech and tech down towards DC but Baltimore City was largely in decline. The joke was that the last one there should turn out the lights. My income rose primarily because of the time in my life in which I bought a house, at the beginning of my peak earning years. Most people will experience a fairly predictable period in their working life where their income rises along with their experience and then their incomes will level off and decline. My husband's income has risen pretty predictable with inflation over the last 20 years (he's a construction worker) and has largely been unaffected by the influx of immigrants into his field. Mine has been less predictable simply because I'm self-employed and in a field which experienced great technological obsolescence. Technology both destroys and creates new jobs. I replaced my obsolete job with a new one created by the very technology that destroyed the old one. During the decline in the business environment in Baltimore (which has rebounded in the last eight years even with a contraction in the financial and insurance sector) I managed to expand my business by seeking out new clients in new sectors, largely the expanding medical services, educational and institutional. Back in 1989 I took a one year hit of 25% of revs when the housing boom of the 80s peaked because one of my largest clients was a large national home builder. Today that client would impact me maybe 2%. Advancing economies have to shed low productivity jobs in order to free up human capital for higher productivity jobs. It matters little whether they do that with advances in technology, investments in capital equipment or by sending those jobs to lower labor cost locations. Stop that process and you have a prescription for declining wealth and incomes. The direct investment in developed high wage nations dwarfs that of the direct investment in developing low wage countries.

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