In late February, Walmart announced it would be closing a batch of its US stores, including its two stores in Portland, OR at 4200 82nd Ave. SE and 1123 N Hayden Meadows on March 24, 2022. Dr. Multiple media have subsequently reported on the Portland closures, initially focusing on the loss of employee’s jobs and the company’s assertion that the closures were due to “several factors,” including profitability concerns.
The 82nd Ave. store will close to the public on 3/24/2023. All 379 employees at the facility will be terminated effective June 02, 2023. The Hayden Meadows store will close to the public on 3/24/2023. All 201 employees at the facility will be terminated effective June 02, 2023.
Fox said a Walmart spokesperson told Fox News Digital “…there is no single cause for why a store closes. We consider many factors, including current and projected financial performance, location, population, customer needs, and the proximity of other nearby stores when making these difficult decisions.”
But Fox chose to also highlight that the closure announcements for the Portland stores and multiple others across the countrycame “…just a few months after the Walmart CEO warned stores could close and prices could increase in light of sky-high retail crimes affecting stores across the country.”
“Theft is an issue. It’s higher than what it has historically been,” Walmart CEO Doug McMillon said in December on CNBC, Fox reported. “He added that “prices will be higher and/or stores will close” if authorities don’t crack down on prosecuting shoplifting crimes.”
Fox went on to note that Walmart’s announcement came after other Portland stores had closed, citing crime as a reason, including a Nike store that shut down following rampant shoplifting incidents and a Cracker Barrel that shut down with employees citing security issues. Fox reported one store that shut down in November 2022, Rains PDX, had posted a note on the shop’s doors after a string of break-ins saying, “Our city is in peril. Small businesses (and large) cannot sustain doing business, in our city’s current state. We have no protection, or recourse, against the criminal behavior that goes unpunished.”
The crime connection to the Portland Walmart closure was then also picked up on The NY Post. Yahoo and local TV stations affiliated with KPTV.
Next up was Texas Gov. Greg Abbot, no doubt stimulated by the crime connection, who jumped into the fray with a tweet: “All Portland Walmart stores to close in late March. This is what happens when cities refuse to enforce the rule of law. It allows the mob to take over…”
This spurred Portland Mayor Ted Wheeler to put in his two cents, Tweeting, “Governor Abbott, are the dozens of Walmart stores that have closed in Texas in recent years all communities that “refuse to enforce the rule of law?” The retail industry is changing and retail theft is a national issue.”
And of course. dozens of people responded to Wheeler’s Tweet.
What no media mentioned, however, is the diversity of Walmart’s workforce affected by the closures or the impact of the closures on Walmart’s customers, most of whom are the lower-income Portlanders progressive political leaders always claim to be so concerned about.
I don’t have a breakdown of the workforce at the two Portland stores, but a recent analysis of Walmart’s total workforce showed that56% were women, with 42% of those are part of management and 42% of the total workforce were people of color, with 31% of them part of management.
The only saving grace for these workers is that the hiring environment is strong. Weekly jobless claims have remained near or below the 2019 prepandemic average of about 220,000 for several months, even in the face of job cuts at larger employers in white-collar industries, particularly in technology, finance and real estate. In other words, it is still a tight labor market, so laid-off Walmart workers may have less difficulty finding work. That could change, however, as the Federal Reserve continues its aggressive effort to fight inflation and there are signs that the job market’s extreme tightness might be easing.
As for shoppers’ income, analyses by Business Insider, Kantar Media; and Statista show that, although more higher income Americans have been gravitating to Walmart groceries and other items in the current inflationary environment, more than a quarter of Walmart shoppers have an annual income of $25,000 or less and the next quarter have an annual income of just $25,000 – $49,900.
Walmart Shoppers by Income
$25,000 or less: 26.1%
$25,000 to 49,900: 26.8%
$50,000 to 74,900: 18.3%
$75,000 to 99,900: 11%
$100,000 or more: 17.4%
Why do lower income Americans shop at Walmart? Because generally they save more of their hard-earned dollars there, particularly on generics and Walmart’s store brands.
“…in general, most shoppers will find that groceries at Walmart can cost less overall, even for higher-end brands that will cost significantly more elsewhere, which means if you’re on a tighter budget, grocery shopping at Walmart can help you ensure your dollar goes further,” says Julie Ramhold, consumer analyst at DealNews.com.
And the savings can be significant.
A November 2022 Consumers’ Checkbook review of spending at Washington area grocery chains and stores concluded that a family that spends $250 per week at the supermarket, could save $2,080 per year by shopping at Walmart versus an all-store average.
In other words, the loss of these two Walmart stores is a bigger blow to Portland than the media has been saying. Politicians need to make note of that.
Love Oregon and want to celebrate it this holiday season with a gift made here? Go to a “Made in Oregon” store, right?
“We are proud to offer the highest quality products made by Oregon vendors since 1975,” the retailer proudly proclaims.
On its website, the company points proudly to how it opened its first store at Portland International Airport in 1975 and has since “…built a reputation as a purveyor of high-quality, local products made, designed, or grown in Oregon.”
But “made, designed, or grown in Oregon” leaves a lot of wiggle room and the company takes advantage, allowing companies with limited Oregon connections to sell their products at the Made in Oregon stores. It’s the word “designed” in Oregon that opens the door wide enough to drive a truck through, enabling “localwashing” to prosper.
Puffin Drinkwear, for example, sells quirky insulated beverage covers in the form of jackets , vests, parkas, sweaters and even mini-sleeping bags designed to keep 12 ounce cans and bottles cold or hot.
The Lumberjack from Puffin Drinkwear
The Bend-based company highlights its Bend, OR roots and has gotten a lot of media attention. The Colorado Sun, a widely read digital news outlet in Colorado, recently highlighted the company’s products because of its Bend ties. Uncommon Goods pitches Puffin products as “CREATED IN OREGON BY Tyrone Haze, born and raised in the Pacific Northwest.”
But claiming they are “Made in Oregon” is a stretch.
The FAQS section of its website says, “We work with a variety of manufacturers across the globe. We’ve thoroughly vetted each one to be ethical and good brand partners.”
I checked out the tags on Puffin Drinkwear products at the Washington Square mall’s Made in Oregon store and found they were “Designed in Bend” but “Made in” lots of other places, including China, Cambodia and Vietnam. None of the products on the shelves said they were “Made in America” or “Made in Oregon”.
A close look at multiple other products in the Made in Oregon store revealed the same deceit.
Take the Sasquatch-like plush bigfoot product made by Wishpets LLC of Beaverton, a “Leading designer and manufacturer of plush toys.” The bigfoot tag said “Product of China”. Elisa Martinez, a Marketing & Sales Assistant for Nature Planet | Wishpets®, said all of Wishpets’ products are made in China.
Plush bear from Wishpets
Other products on display that were clearly manufactured in other countries included a “Welcome to Oregon” bear also “Made in China”
and dozens of Hydro Flask bottles which, like Puffin Drinkwear, highlight that they are “Designed in Bend, Oregon”. The company’s website reinforces the message: “Our HQ is literally nestled into a Pacific Northwest wonderland– Bend, Oregon. We’re ridiculously lucky to have always been surrounded by mountains, rivers and lakes. It’s in our DNA.”
The website neglects to mention that Hydro Flask products are manufactured in China.
Then there were the organic cotton socks on display from “Replant Pairs”.
The socks are a product of Tabbisocks, which doesn’t even bother to say the socks are designed in Oregon. “Tabbisocks weaves Japanese craftsmanship from the East with big personality from the West,” it says. “Each sock is made with love in Nara ((Japan), a city steeped in tradition and advanced sock culture.”
Displayed on the apparel racks were Oregon-focused t-shirts by Graphletics. The company’s website says it was founded by Rick Gilbert in his garage in NW Portland in 2013 and has grown into a brand that’s sold across the U.S. and internationally. Its flagship retail location in SE Portland was even recently written up in the New York Times as one of five places to visit as “Sellwood-Moreland has become easier to reach, the working-class enclave has drawn creative entrepreneurs and a young, hip crowd.”
Sure, the store has an Oregon vibe, but its t-shirt at Made in Oregon was “Made in Nicaragua”.
No question. Portland is “The City That doesn’t Work”. But Ballot Measure 26-228, the charter reform proposal, isn’t the answer.
Driving support for the measure is a commonly held view that Portland’s government is an unwieldy mess that doesn’t serve citizens well.
A recent poll commissioned by the Portland Business Alliance validates that voters are up for change.
Presented with the text of the ballot measure, 63% of 420 respondents said they would vote for it and 21% said they would vote no.
The 63% figure makes it sound like approval is a slam dunk, but the devil may be in the details.
Of that 63%, only 26% were sure they’d vote for it; 36% were less certain, but leaned toward a yes vote and 16% were undecided. In my view, even though the vote is just weeks away, that means there are an awful lot of persuadables.
The task ahead for opponents is to raise enough awareness of the measure’s complexity and cost to raise doubt about the wisdom of the whole proposal.
For example, Portlanders may think more City Council members will mean better representation. But the proposal for four districts, each represented by three city counselors, won’t necessarily translate into that result.
One reason is because the ballot measure doesn’t specify the boundaries of the new districts. If the measure passes, a separate districting commission would be convened in January and assigned the task of drawing the boundaries. Nobody knows now where those lines will be drawn.
Things get more complicated and uncertain because the measure proposes that the councilors of each district be elected using a proportional method of ranked choice voting known as “single transferable vote” (STV).
In this system, voters rank the candidates and if a candidate gets more votes than needed be elected the extra, or surplus, votes get transferred to the voter’s next choices. The process is so convoluted the measure takes almost 300 words to explain how it would work.
Under this system, a candidate running for a seat in a multimember district could win a position on the Council with as little as 25% of the vote. One consequence could be a councilor able to remain in office by consistently satisfying just that small segment of eligible voters and ignoring those who are disenchanted with their performance because it would require 75% of voters to vote against the entrenched councilor to remove him or her.
As Tim Nesbit, a former chief of staff to Democratic Governor Ted Kulongoski and a critic of the ballot measure, wrote in the Portland Tribune, “This will be a ‘welcome to the Hotel California’ for candidates who seek office in the first council election to follow. It will be easy to check in to the council, but much harder to be forced to leave.”
And then there’s the potential cost of the new governance system proposed in the measure. Talk about buying a pig in a poke. Frankly, nobody’s really sure what the cost of the massive changes would be.
The City Budget Office estimates the cost of implementing the measure could be up to a whopping $8.7 million annually.
One unknown is transition costs. Then a Salary Commission that would need to set the salaries of all the newly elected officials. And all those new City Councilors will have staff. And the fact is, government tends to grow. As George Roche wrote in a booklet published by the Mackinac Center for Public policy, bureaucracies “tend to swell up like toadstools on a rotting log.”
Do Portlanders really want to spend MORE on their government? Charter reform proponents don’t tend to talk about this.
The key task ahead is to convince the “less certain” and “undecided” voters to move into the “No” column.
Proponents of Portland’s charter reform proposal (Measure 26-228) try to make it sound so simple and straightforward; just a good government initiative that will transform the city.
Not so. The proposed radical change in how city officials would be elected is a convoluted jumble that few probably comprehend.
The current system is simple: the person with the most votes wins.
Under the reform proposal, not one but two voting systems would be employed.
First, the Mayor and the Auditor would be elected at-large using a flawed method of ranked choice voting (RCV) known as instant runoff voting.
This is how the reform proposal describes the system:
“If no candidate receives a majority of the vote in the initial round, subsequent rounds are counted in which (i) candidates retain the number of votes counted for them in the first and any subsequent rounds that already occurred; and (ii) the candidates having the fewest votes are successively eliminated in rounds and their votes are counted as votes for the candidates who are ranked next on the ballots that had been counted for the eliminated candidates. The process of eliminating candidates and transferring their votes to the next-ranked candidate on ballots repeats until a candidate has a majority of the vote.”
In RCV, voters need to have a high level of information about all the candidates in order to choose preferences. You can’t just vote for the person and ideas you like. You must also educate yourself about all the other candidates in order to elevate, or dismiss, the ones you don’t.
If you only vote for the candidate you prefer and don’t rank all the rest, you are effectively disenfranchised if your candidate doesn’t come in first in the initial ballot count.
The fact is, the more people a voter ranks the longer a ballot works for the voter. If there are five people on a ballot, you vote for only one and that one is eliminated in the instant runoff, your ballot is exhausted and has no impact on the race. It simply won’t factor into the final outcome.
On the other hand, pressure to rank all the candidates can lead to support for somebody you really don’t like. In RCV, your vote for a candidate you dislike can actually help that candidate move up.
Jeff Jacoby, an award-winning columnist for the Boston Globe, calls the RCV process “democracy on the Rube Goldberg model”, where ideas that supposedly simplify people’s lives wreak havoc instead.
“Perversely, (ranked choice voting) enhances the influence of the candidate who comes in last when the ballots are first counted, by shifting that candidate’s voters to their second choice.,” Jacoby says. “Just as perversely, the system pushes voters to decide on who their third-, fourth-, and even fifth-favorite candidates are — or face the prospect of their vote being nullified if multiple rounds of tallying are required.”
Things get even weirder when you apply RCV to an election for multiple positions.
As noted earlier, not one but two voting systems would be employed under Portland’s charter reform proposal. In the races for mayor and auditor, there would be only one final winner in each. In the district council races, each of four districts would be electing three Councilors to create a 12-member city council, guaranteed to lead to gridlock at times because of the even number..
The Councilors of each district would be elected using a proportional method of RCV known as “single transferable vote” (STV). In this system, voters rank the candidates and if a candidate gets more votes than needed be elected the extra, or surplus, votes get transferred to he voter’s next choices. The charter reform proposal is so convoluted it takes almost 300 words to explain how it would work (See below for complete text)
Under this system, a candidate running for a seat in a multimember district could win a position on the Council with as little as 25% + 1 of the vote. One consequence could be a Councilor able to remain in office by consistently satisfying just that smaller segment of eligible voters.
Because STV is a complex system, understanding it demands a high degree of literacy and numeracy. It can also heighten the power of small minority coalitions and fragment political parties because it can cause members of a party to compete against each other as well as against their ideological opponents.
Although organizations such as the City Club of Portland, the League of Women Voters of Portland and the ACLU of Oregon have endorsed the reform proposal, it’s hard to understand why given that its complexity potentially endangers its legitimacy in the eyes of the general public.
Charter reform proponents cite a Portland Governance & Electoral Reform Survey conducted in March 2022 by Baltimore, MD-based GBAO, which does survey research and strategic consulting for Democratic and progressive campaigns, that showed strong support for RCV and multimember districts.
The polling questions did not, however, explain the intricacies of how RCV would work with multimember districts and application of the single transferable vote concept.
Probably realizing that all this is confusing as hell, the charter reform proposal calls for voter education. “The City must conduct periodic voter education campaigns to familiarize voters with the ranked choice voting methods described above,” the proposal says.
Try explaining all this in a 30-second tv spot, a tweet or a digital ad.
Good luck with that.
Charter reform’s explanation of how “single transferable vote” (STV) would work:
“Councilors of each district are elected using a proportional method of ranked choice voting known as single transferable vote. This method provides for the candidates to be elected on the basis of a threshold. The threshold is determined by the number of seats to be filled plus one, so that the threshold is the lowest number of votes a candidate must receive to win a seat such that no more candidates can win election than there are seats to be filled. In the initial round, the number of first rankings received by each candidate is the candidate’s vote count. Candidates whose vote counts are at least the threshold are declared elected. Votes that counted for elected candidates in excess of the threshold are called surplus. If fewer candidates are elected in the initial round than there are seats to be filled, the surplus percentage of all votes for the candidates who received a surplus are transferred to the next-highest ranked candidates in proportion to the total numbers of next-highest rankings they received on the ballots that counted for the elected candidate. If, after all surpluses have been counted in a round, no additional candidates have a vote count that is at least the threshold, the candidates with the lowest vote counts are successively eliminated in rounds and their votes are counted as votes for the candidates who are ranked next highest on the ballots that had been counted for the eliminated candidates, until another candidate has a vote count that is at least the threshold or until the number of candidates remaining equals the number of seats that have not yet been filled. The process of transferring surpluses of elected candidates and eliminating candidates continues until all positions are elected.”
UPDATE (Aug. 12, 2022): In a late move on Friday, Aug. 12, 2022, Gannett, the nation’s largest newspaper chain, executed layoffs at outlets across the country. While no official tally was available, journalists at the Salem Statesman Journal (Oregon), Athens (Georgia) Banner-Herald, (South Texas) Caller-Times, Columbia (Missouri) Daily Tribune, Ventura County Star, St. Cloud (Minnesota) Times, Monroe (Louisiana) News-Star, Billerica (Massachusetts) Minuteman, (Milwaukee) Journal Sentinel, Panama City (Florida) News-Herald, Gainesville Sun (Florida), The Athens Banner-Herald (Georgia) The Des Moines Register (Iowa), Burlington Free Press(Vermont), Beaver County Times (Iowa), MetroWest Daily News (Mass) and the (Kentucky) Courier Journal all reported layoffs at their publications. Friday’s layoffs also affected non-journalists. A reporter at the Pueblo (Colorado) Chieftain tweeted that the paper’s only customer service representative, who had been making less than a dollar above minimum wage, had been let go after working there for 16 years.
The decline of Oregon’s local newspapers is set to continue with cutbacks by Gannett Co.
Gannett, the owner of the Statesman Journal in Oregon’s capital, Salem, The Register-Guard in Eugene and the Daily Journal of Commerce in Portland, is planning a “significant cost reduction program” amid a “challenging economic backdrop marred by soaring inflation rates, labor shortages and price-sensitive consumers.”
A message to all of its employees on Thursday from Gannett’s president of news warned of “painful reductions to staffing, eliminating some open positions and roles that will impact valued colleagues.”
The Statesman Journal, the second-oldest newspaper in Oregon, was sold to Gannett in 1973. Currently listing 16 reporters on its website, it has been steadily shrinking in staff and as a reliable news source.
The Register-Guard, formed in a 1930 merger of two Eugene papers, the Eugene Daily Guard and the Morning Register, was acquired by GateHouse Media in 2018. At the time, the paper had 240 full-and part-time employees. The newspaper has been owned by Gannett since Gannett’s 2019 merger with Gatehouse. The paper’s current website lists just 8 reporters.
Founded in 1872, the Daily Journal of Commerce (DJC) provides comprehensive resources and reporting on the Portland, Oregon building and construction market. Owned by Gannett through its BridgeTower Media division, the paper has a circulation of 1,966.
Gannet, which owns over 100 daily newspapers and nearly 1,000 weekly newspapers in 43 U.S. states and six countries, reported on Thursday a net loss of $53.7 million in the second quarter, compared with a net income of $15.1 million the same period a year earlier. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) totaled $50.9 million, down 56% from the prior-year quarter, with declines driven by a decline in print revenue and inflationary pressures.
“We are not satisfied with our overall performance in the second quarter,” Gannett CEO and Chairman Michael Reed said in a release, noting the results reflect “industry-wide headwinds” in digital advertising and tightening across the economy.
Anticipated cutbacks at Gannett’s Oregon papers would track declines in locally focused daily newspapers across the United States.
The total combined print and digital circulation for locally focused U.S. daily newspapers in 2020 was 8.3 million for weekday (Monday-Friday) and 15.4 million for Sunday, among the lowest ever reported, according to the Pew Research Center. Total weekday circulation is down more than 40% and total Sunday circulation has fallen 45% in the past seven years. Local newspaper advertising and circulation revenue has also been dropping precipitously.
Portland’s current government is a mess, for a lot of reasons.
In November, Portland voters will have an opportunity to vote on one proposed solution, presented as the following question: “Should City Administrator, supervised by Mayor, manage Portland with twelve Councilors representing four districts making laws and voters ranking candidates?”
Portland’s City Council now consists of a mayor and four commissioners, all of them elected at-large, with all of Portland’s voters eligible to vote in the race for each seat.
The proposal from Portland’s Charter Commission would remove the mayor from the council and expand the council to 12 members, three each from four geographic districts of equal population, each of which would be elected using ranked choice voting. An independent commission would determine the four district boundaries after the vote on the ballot question.
With only 8% of Portland voters saying the city is headed in the right direction and 82% of Multnomah County residents being either somewhat or very worried about the future of their part of the state. there may be an inclination to support a radical change out of sheer frustration. But the commission’s solution isn’t the answer.
Expanding the City Council to 12 members is likely to make it more unwieldy, not less. Though, thankfully, the Charter Commission was somewhat restrained, not choosing an even bigger expansion, such as the 51-member City Council with which New York City is blessed.
The particular weakness of the commission’s proposal, though, is its reliance on a needlessly complex new system of ranked choice voting (RCV). In setting on this proposal, the Charter Commission shows itself to have been populated by naive zealots advocating change for change’s sake.
There are lot of ways to organize and count votes. Most of us are used to the simple proposition that the person with the most votes wins.
“This system is the norm from grade school elections for class president to congressional elections, “Jeff Gill and Jason wrote in a Statistical Science article about voting. “However, not only is this merely one of many possible “democratic” procedures. it is also not the only system currently used in political life in the United States and around the world.”
RCV is one of those voting options.
In RCV, voters rank candidates in order of preference. If there are a lot of candidates, as there might be under the Charter Commission’s proposal, voters need to have a high level of information about all of them in order to choose preferences. You can’t just vote for the person and ideas you like. You must also educate yourself about all the other candidates in order to elevate, or dismiss, the ones you don’t.
Voters in RCV can identify their first choice, the next best and so on as they work their way down the list. If one of the candidates gets more than 50% of the first-choice votes in the first count, that candidate wins. If nobody gets a majority, there’s an “instant runoff” where the candidate with the fewest votes is eliminated and voters who had chosen that candidate as their first choice have their second choice counted instead. This process continues until one of the candidates gets more than half of the vote.
Yep, it’s complicated. Too complicated. And prone to undesireable results.
For example, don’t assume RCV will always select a majority winner. In cases of what’s called “ballot exhaustion,” a voter’s preferences are eliminated so none of them are carried forward. In other words, the candidate who ends up with a majority of votes is elected with only the remaining ballots, rather than all the original ballots, meaning a winner can have fewer than half the votes of the original ballots.
The Center for Election Science says RCV’s weakness is particularly noticeable in competitive elections where more than two candidates have significant support.
The center cited a Louisiana election in which there were three candidates. The vote mainly split between the three candidates, but it led to the elimination of the more moderate candidate who would have won in a two-candidate race against either of the other two. That sent the two more controversial candidates to the second round.
“…with competitive elections there’s a tendency to squeeze out the center candidate,” the Center said, “which would favor more extreme candidates …”
There are even situations with RCV where ranking a candidate higher can hurt that candidate and ranking a candidate lower can help that candidate. This occurrence, happened in a 2009 election in Burlington, VT.
There, conservatives ranked their favorite candidate first and it got them their least favorite candidate as the winner. Had these conservative voters instead tactically placed their favorite candidate as second, then they would have gotten a much better outcome.
Bear with me as I explain.
In the 2009 Burlington mayoral race, there were five candidates. The counts resulted in the following:
3rd Round (Final)
Votes in Burlington, VT Mayoral election
According to the preferences stated by the voters on their ballots, however, if Democrat Montroll had gone head-to-head with either Progressive Kiss or Republican Wright (or anybody else) in a two-man race, he would be mayor.
Montroll would have been favored over Wright 56% to 44% (a 930-vote margin) and over Kiss 54% to 46% (590-vote margin), majorities in both cases.
In other words, in voting terminology, Montroll was a “beats-all winner”and a fairly convincing one. However, in this RCV election, Montroll came in third! And Kiss beat Wright in the final RCV round with 51.5% (252-vote official margin).
Confusing, yes, but real.
Another troublesome and risky situation can arise if a voter’s preferred candidate is neither a clear loser nor a clear winner. In such a case, ranking your favorite as first risks getting a bad candidate elected. And that bad candidate gets elected by RCV eliminating a superior compromise candidate too early.
Voters in this in-between state can either rank their favorite first and risk a bad candidate winning or not rank their favorite first, depriving that candidate of much-needed support. Both of these outcomes are bad.
RCV can also founder when voters, because they are unfamiliar with all the candidates or simply by choice, vote only for their preferred candidate, ignoring the opportunity to rank the rest.
The fact is, the more people a voter ranks the longer a ballot works for the voter. If there are five people on a ballot, you vote for only one and that one is eliminated in the instant runoff, your ballot is exhausted and has no impact on the race. It simply won’t factor into the final outcome.
On the other hand, pressure to rank all the candidates can lead to support for somebody the voter despises. In RCV, your vote for a candidate you hate can help that candidate move up.
The fact is RCV is a solution in search of a problem. It’s simply too complex and unwieldy for voters to be asked to vote it up or down as part of a wide-ranging rearrangement of Portland’s city government.
Vote “No” on the Charter Commission’s proposal on the November 8, 2022 ballot..
Sometimes when I read the Wall Street Journal’s special section on real estate, aptly named “”Mansion”, where ostentatious multimillion dollar homes and their over-the-top owners are featured, I find myself muttering, somewhat in jest, “Next, the revolution.”
Economic inequality, in America, whether measured through the gaps in income or wealth between richer and poorer households, is widening and too many Americans are living on the edge.
If you want to see part of where America is headed, visit Manhattan’s 1,550-foot-tall 131-story Central Park Tower.
With 179 luxury residences on so-called Billionaires Row, it’s “Above All Else – The Tallest Residential Tower in the world,” its promoters say.
The condominium building contains an outdoor swimming pool with poolside food and beverage service, a cabana deck, ,a private park, a Living Room where residents can lounge with billiards, a dramatic movie screening room, a double-height windowed sports court, an indoor pool and spa, a high-tech fitness center, a beauty lounge, the highest Grand Ballroom and private restaurant ever built in New York (no stranger to excess on the 100th floor, with menus created by a coterie of Michelin-starred talent, including Chefs Alfred Portale, Laurent Tourondel and Gabriel Kreuther, all overseen by lifestyle director Colin Cowie, a corner sky lounge featuring a wine cellar (how do you get a wine cellar in a sky lounge?) and cigar humidor (a potential Bill Clinton hangout?). To top, or bottom, it all off, there’s a retail partnership with a seven-floor 320,000 sq. ft. flagship Nordstrom store that sits at the building’s base. Whew!
And all this , according to StreetEasy, can be had for an average price of $21,888,000, based on currently active sales as of June 2022. That’s $6,752 per sq ft.
The team creating the building crafted “an Iconic Building and an Unmatched Living Experience” says its marketing site.
From a slightly different perspective, the complex can also be a veritable cocoon for its super-wealthy clientele. They can, if they choose, exist almost entirely within the shimmering icicle-shaped supertall structure, avoiding rubbing against the masses, the hoi polloi, on the streets of New York.
In its self-contained exclusiveness, the Central Park Tower and Billionaires Row in general are much like an increasing number of other American geographies where the rich gather and mix only among their own kind.
Take Malibu, CA, for example.
I rode through the coastal town a few years ago on a bicycle ride from Oregon to Mexico. It was a uniquely beautiful place.
The Wall Street Journal recently wrote about the shift in Malibu, once a village with a bohemian character.
“About three decades ago, Beverly Hills native Andy Stern moved to the nearby beach city of Malibu to raise his young family.,” the story noted. “He quickly came to know all his neighbors, he said, recalling block parties with children pouring onto the streets to play together. Now Mr. Stern…said he barely sees his neighbors in the Broad Beach area, because they are rarely there. The families that once lived in the neighborhood have largely been replaced by celebrities and billionaires…”
So many rich people now own prime property in Malibu as just one of their many properties, but don’t really live there, that the town’s full-time population has actually fallen in recent years.
As for families with young children, forget it. Public school enrollment has declined by more than half in the past 20 years.
And if you want to stay at a local hotel and mingle with the Malibu rich, the old low-key Casa Malibu Inn on a private beach has become the Japanese-inspired Nobu Ryokan Hotel, where rates start at $2,000 a night (BTW, I’ve stayed in ryokans in Japan and this is a faux ryokan).
Then there are other high-end US communities that serve as sanctuaries for the wealthy, such as Atherton, CA; Greenwich, CT; Highland Park, TX (a Dallas suburb); Jackson Hole, WY; and Paradise Valley, AZ.
But it is an illusion to think that only the filthy rich are isolating themselves into enclaves. The well-off-but-not-filthy-rich (WONFR) folks do, too. They live in places like Highland Park, Il, (Median family income: $147,067), Bow Mar, CO, Chevy Chase, MD and well-off but still far down the average median income list, Lake Oswego, OR (Median family income: $114,444).
But beneath this sheen of wealth are an awful lot of struggling Americans.
With periodic interruptions due to business cycle peaks and troughs, the incomes of American households overall have trended up since 1970, according to Pew Research, but the overall trend masks how the gains were distributed.
Most of the increase in household income was achieved from 1970 to 2000. when median income increased by 41%, to $70,800, at an annual average rate of 1.2%. From 2000 to 2018, the growth in household income slowed to an annual average rate of just 0.3%, Pew said. Not only that, the growth in income tilted to upper-income households while the U.S. middle class, which once comprised the clear majority of Americans, has been shrinking. In other words, a greater share of the nation’s aggregate income is now going to upper-income households while the share going to middle- and lower-income households is falling.
In recent years, the share of all income held by the top 1% has approached or surpassed historical highs. In 2015, The top 1% took home 21% of all the income in the United States. By 2021, the share held by the top 1%, about 1.3 million households, had risen to 27%
In 1980, households at the top had incomes about nine times the incomes of households at the bottom. The ratio increased in every decade since 1980, reaching 12.6 in 2018, an increase of 39%.
This isn’t exactly a new discovery.
In 2011, President Obama commented on the rise of inequality in a Osawatomie, KS speech. “…over the last few decades, the rungs on the ladder of opportunity have grown farther and farther apart, and the middle class has shrunk,” he said.
In Jan. 2012, Alan B. Krueger, Chairman of the Council of Economic Advisers, expanded on Obama’s remark in a speech to the Center for American Progress (CAP). Using a graph showing the annualized growth rate of real income for families in each fifth of the income distribution over two periods, he explained that all quintiles (fifths) of the income distribution grew together from the end of World War II to the late 1970s, but since the 1970s income grew more for families at the top of the income distribution than in the middle, and shrank for those at the bottom.
“We were growing together for the first three decades after World War II, but for the last three decades we have been growing apart,” he said.
Krueger outlined what he called the Great Gatsby Curve, the connection between concentration of wealth in one generation and the ability of those in the next generation to move up the economic ladder compared to their parents.
The curve shows that children from poor families are less likely to improve their economic status as adults in countries where income inequality was higher – meaning wealth was concentrated in fewer hands – around the time those children were growing up,” a White House post explained later.
Not only that, but the largest shares of adults in upper-income households are congregating in certain areas of the country, particularly metropolitan coastal areas of the Northeast and California. They tend to be in high-tech corridors, or in financial and commercial centers, such as Boston-Cambridge-Newton, MA-NH, Hartford-West Hartford-East Hartford, CT and San Jose-Sunnyvale-Santa Clara, CA.
The New York Times recently reported that residents are increasingly being buffeted by economic tides that push them into neighborhoods that are either much richer or much poorer than the regional norm. In other words, a smaller share of families are living in middle-class neighborhoods.
“In some ways, the pattern reflects how wealthy Americans are choosing to live near other wealthy people, and how poorer Americans are struggling to get by,” the paper reported. “But the pattern also indicates a broader trend of income inequality in the economy, as the population of families making more than $100,000 has grown much faster than other groups, even after adjusting for inflation, and the number of families earning less than $40,000 has increased at twice the rate as families in the middle.”
In Portland, OR, for example, the share of families living in middle-income neighborhoods changed from 70% to 56% from 1990 to 2020.
Even during the pandemic, when most Americans fared well financially, the rich saw most of the gain. According to the Federal Reserve, while American households overall saw about $13.5 trillion added to their wealth, the top 1% got a third of that and the top 20% 70% of it.
Meanwhile, some states are becoming pockets of poverty. According to the U.S. Census Bureau, states and territories with the highest percentages of poverty in the country in 2020 were: Mississippi, Louisiana, New Mexico, Kentucky, Arkansas, West Virginia, Alabama, the District of Columbia, South Carolina, and Georgia.
The new economic reality of reduced income – and even poverty – for many Americans is all too familiar in many parts of the United States. For decades, small towns and cities across the country have been devastated by deindustrialization and job losses. In these places, incomes are generally low, poverty rates are high, and many residents depend on government assistance, like SNAP (food stamps), to afford basic necessities.
A particular challenge facing well-off areas of the country is that the people who provide all the services can’t afford to live there.
I still remember a time early in my career, when I was working for a community development firm. A builder was planning a large-scale new town development in a largely rural area in the south, with shopping centers, restaurants and other amenities. When I noticed it included only high-end homes, I asked him where all the service workers were going to live. He’d never thought about that.
We are seeing the emergence of this problem in Bend, OR, which has seen skyrocketing growth in recent years. That has translated into skyrocketing home prices and rent increases, squeezing out those with modest incomes.
HUD defines affordable housing as total housing costs that are no more than 30% of a household’s total gross income. For rental housing, total housing costs include rent plus any tenant-paid utility costs. For homeowners, they include mortgage payments, utilities, property taxes, homeowners insurance, and any homeowners’ association fees.
The 2019 Needs Assessment showed that more than half of renters in Deschutes County spent more than 30% of their income on housing and just over a quarter spent more than 50%.
Meanwhile, young working families are finding it ever harder to buy a home in Central Oregon. “Central Oregon has seen significant in- migration of people from the Bay area, Seattle, Portland and elsewhere, who sell their house and are able to buy a house here with money left over, said Jon Stark, Senior Director of Redmond Economic Development, Inc. “However, younger people who are starting out earlier in their careers are having a harder time. The wages people earn and the price to buy a home or rent is out of balance.”
But why fret, say some. We’ve always had inequality in the United States, such as in the Gilded Age, in the late 1800s and early 1900s and we’ve always had people who flaunt their wealth in many ways.
“Back then, it was about masquerading as European nobility at lavish balls in elegant hotels like New York’s Waldorf-Astoria, locked down to forestall any unpleasantness from the street (where ordinary folk were in a surly mood trying to survive the savage depression of the 1890s),” Steve Fraser wrote in Salon. “Today’s “leisure class” is holed up in gated communities or houseoleums as gargantuan as the imported castles of their Gilded Age forerunners, ready to fly off — should the natives grow restless — to private islands aboard their private jets.”
But economist Gabriel Zucman, whose doctoral advisor was the historical economist Thomas Piketty, author of “Capital in the Twenty-First Century,” released data in 2021 arguing that things are worse today.
In 1913, at the end of the Gilded Age, the Rockefeller, Frick, Carnegie, and Baker families – names all tied to monopolistic power – held 0.85% of the country’s total wealth, Zucman said.
As of mid-2021, the top 0.00001% richest people in the U.S., composed of just 18 families, held 1.35% of the country’s total wealth. Wealth concentration at the very top exceeded the peak of the Gilded Age, he said.
The richest 0.01% — around 18,000 U.S. families — have also surpassed the wealth levels reached in the Gilded Age. These families hold 10% of the country’s wealth today, Zucman wrote. By comparison, in 1913, the top 0.01% held 9% of U.S. wealth, and a mere 2% in the late 1970s.
It’s too simplistic to say that the increasing share of income and wealth among the richest Americans is a threat to capitalism, but as David Autor, a professor at MIT put it in response to an Initiative on Global Markets survey, the widening split is a symptom of dysfunction. “It’s a threat to people’s belief in capitalism as an institution of economic governance. Absent shared belief, we are in trouble.”
Even moreso if the next generation of highly civilized, excessively woke philanthropy activists are hostile to capitalism itself when they take charge and forget that the money they are so gladly using came from capitalists.
How did the media and much of liberal Portland get to the point where people who slash tires, shatter car mirrors, rip out landscape lights, overturn trash and recycling bins, destroy landscaping and damage parking strip trees are simply described as “houseless,” as though that’s their defining characteristic?
How did we get to the point where people doing this:
are excused because they are “homeless” or “houseless” or some other insipid term? That’s just plain criminal.
Some would say calling some people bums is offensive, callous and unfeeling, that it’s not “fair” to lump people together for any reason.
Being homeless or houseless should not be a free pass to a different set of behavioral expectations. Being homeless doesn’t give somebody license to break into a small business, deface property with graffiti, shoot at each other and unsuspecting pedestrians, bury sidewalks and parkland under trash and garbage, pollute waterways , steal and chop up bicycles and cars, openly sell and buy drugs, assault random passers-by and litter private properties with discarded syringes.
On June 20, KGW8 television reported on incidents at a tent site on the corner of Southeast 33rd Avenue and Powell Blvd. in Portland next to Grover Cleveland High School’s track and sports field.
“We live in a war zone basically and there’s nothing I can do,” said Elias Giangos, who said he’s lived in the neighborhood for the past seven years. He and his wife plan to move out at the end of the month. Giangos said he was assaulted multiple times by those living at the campsite. Scars from the time he was stabbed by someone living at the campsite disfigure his left arm.
“Even when I was getting assaulted, we called the police, there’s no response,” he said.
Things recently got so bad with the so-called homeless around Multnomah County’s Gladys McCoy Building in Portland across from Union Station that the county hired a firm to assess the risks to county employees and recommend responses.
According to the Physical Security Vulnerability Assessment of the area in and around Multnomah County’s Gladys McCoy Building prepared by Eric Tonsfeldt / Operations Manager – Foresight Security Consulting, “The density of unsanctioned homeless camping immediately around the McCoy Building represents the most immediate, consistent, and palpable threat to the safety and security of the employees and contractors in the McCoy Building.”
“The building is currently surrounded by ongoing, frequent drug abuse and distribution, violence, and aggression within dense areas of unsanctioned houseless camping.,” the report said.
The report said the following crime occurred just within the 1/8-mile area centered on the McCoy Building between 7/19/2020 and 7/18/2021: 33 assaults, 79 instances of larceny, 7 instances of vandalism and 35 drug/narcotics offenses.
Those aren’t the to-be-ignored actions of “the homeless.” They’re the actions of vagrants, malcontents, addicts, crooks, criminals….bums.