Tag Archives: The Great Receession

The Weeklies

In the Denver suburbs, as in much of the U.S., the Great Recession turned formerly stable families into the new homeless—and left many living in budget hotels.

At any given time, roughly 20 to 40 guests are staying long term. Since they pay by the week, they call themselves “weeklies.” To score the cheap rates, $210 for individuals and slightly more for families, they must pay in advance. Residents sign a form that lists the activities that could get them kicked out (mostly involving drugs) and warns that they won’t get reimbursed if they leave early, no exceptions. Some families stay only for a few weeks, some for months, giving the hotel the feeling of a dormitory. A rotating cast of front-desk clerks sells candy and rations towels and washcloths. Though some of the clerks are kind and helpful, the guests think of them as enforcers, and the clerks tend to treat the weeklies less as customers than as undergraduates stealing toilet paper and sneaking in hot plates.

With its 121 rooms, cleaning service, and keycards, the place is not a fleabag. But it is also not the kind of hotel where the coffee pots and hair dryers reliably work or the comforters match the drapes. A traveler stopping here to avoid bad weather might notice the difference: a clerk who takes a little too long to offer grudging help, an absence of name tags for the staff, an empty spot on the placard that is supposed to provide the manager’s name, a stained lobby carpet, a guest or two with a slightly illicit aura.

Hotels have always served people who need an off-the-record place to live—sex workers, drug dealers—and the Ramada has its share of people who are hiding out. (Bounty hunters come to the hotel so often that the weeklies know their names and say hi.) But in the aftermath of the Great Recession, the Ramada’s clientele shifted away from such regulars to include suburban families who had been used to staying in hotels only on vacations. Many of the families still had incomes. Some had long been struggling members of the working class, fighting to stay better than broke; others had fallen suddenly out of the middle class.

Across the country, suburban poverty rose by more than half in the first decade of the new century. Families now find themselves navigating landscapes that were built around wealth: single-family houses that are sold, not rented; too few apartment buildings; and government agencies hidden at the far edge of the suburban ring, more responsive to trash-pickup complaints than rising hunger rates.

I think this article actually made me experience and emotion and cry.  Read the entire story and it will break your heart.

Can Spain be saved?

Spain is done.  This is bad.

Spain is in a great depression, and it is one of the most terrifying things I have ever seen.

Five years after its housing boom turned to bust, Spanish unemployment hit a record high of 27.2 percent in the first quarter of 2013. It’s almost too horrible to comprehend, but 19.5 percent of the total workforce has not had a job in the past six months; 15.3 percent have not in the past year; and 9.2 percent have not in the past two years.

Here is why it is so bad

Spain is in a great depression, and it is one of the most terrifying things I have ever seen.

Five years after its housing boom turned to bust, Spanish unemployment hit a record high of 27.2 percent in the first quarter of 2013. It’s almost too horrible to comprehend, but 19.5 percent of the total workforce has not had a job in the past six months; 15.3 percent have not in the past year; and 9.2 percent have not in the past two years.

In other words, unemployment is a trap people fall into, but can’t fall out of. Indeed, the rate of new unemployment has stabilized at a terrible, but not quite-as-terrible, level, as you can see with the flat blue, red, and green lines. But the steadily rising purple line shows us that the rate of job-finding for the jobless has collapsed.

That is what a permanent underclass looks like.

What happened?

Why has Spain’s jobs depression been so great? After all, its GDP is “only” 4.1 percent below its 2007 level, compared to 5.8 percent below for Portugal, 7 percent below for Italy, and 20 percent below for Greece. But despite this better (negative) growth, unemployment is higher in Spain than the others. In other words, Spanish unemployment isn’t just about inadequate demand. Part of it is structural.

Spain’s labor market problems fall into two big buckets: too much regulation, and not enough education. It’s almost impossible for companies to get rid of older workers, which creates a horribly bifurcated labor market. There are permanent workers who can’t be fired, and temporary ones who can — and are. Indeed, as Clive Crook points out, about a third of Spain’s workforce are temporary workers who enjoy few protections and fewer opportunities. Companies go through these younger workers without bothering to invest much in their human capital, because why would they? These temporary workers will be let go at the first sign of economic trouble. Young people get stuck in a never-ending cycle of under-and-unemployment since firms are always hesitant to hire permanent workers who will always be on their books.

But it gets worse. The housing bust hasn’t just cast a shadow over household and bank balance sheets; it’s cast one over young people’s educations too. At its peak, building made up a whopping 19 percent of Spain’s economy, which, as Tobias Buck of the Financial Times points out, lured many young men into dropping out of school for well-paying construction gigs. But now that building has gone into hibernation, all of those young men are left with no work and no education to fall back on. And, again, even if they can find temporary jobs, it’s not as if the companies will spend money to develop their skills.