AMERICA's housing crisis - declining rates of home ownership, especially among young families, an explosive increase in homelessness, and a countrywide shortage of apartments affordable to low- and moderate-income people - dramatically affects the wages and employment options of millions of American workers. Homelessness has become commonplace for the working poor. Many others are just ``one paycheck away'' from homelessness. Even for people with high-paying jobs, steep housing costs have cut into spendable earnings in every region of the country. Wage increases and the incomes of two-paycheck families are being lost to monthly rent and mortgage payments.
In 1973 the typical 30-year-old paid 21 percent of his or her income for payments on the average house. Today those payments by a 30-year-old employee are over 44 percent of income. For lower-wage workers, rent burdens have escalated even faster: Families with incomes under $10,000 experienced a 4 percent decline in real income from 1976 to 1986 and an increase in real rental costs from 48 percent of income to 58 percent.
The wage/housing cost squeeze for working people could be reduced by finding ways to link employment with programs that make housing near work sites more affordable.
Labor unions could play a major role in these efforts to enhance affordability by tying housing assistance to employee fringe benefits. Housing benefits, similar to health insurance, dental, optical, and legal-services plans, would have universal appeal, since they could be structured to benefit every employee at some point during his working life. Benefits could include mortgage guarantee and insurance programs, group mortgage discount plans, mortgage interest rate subsidies, down-payment loans, and shared-equity loans, as well as corporate construction subsidies for multifamily construction and donations to community development corporations.
Unions, in league with not-for-profit, community-based organizations and churches, could stimulate the flow of corporate dollars for investment in low- and moderate-income neighborhoods by using employer-funded benefit plans to subsidize nonprofit housing corporations, which, in turn, would agree to build or rehabilitate housing for employees.
Local 26 of the Hotel and Restaurant Workers Union, with 5,000 members in the Boston area, is the first union to take some steps in this direction. Its members recently voted overwhelmingly to include in negotiations coming up with Boston hotels a demand for contributions to a union housing trust fund.
The transition from a traditional manufacturing base to a service economy has had a significant effect on housing affordability for the average wage earner - especially in regions where the economy has expanded rapidly, such as in New England, metropolitan New York, and the San Francisco Bay Area. In these areas, lower-paid service workers are faced with rapidly escalating rents and home prices they cannot afford. Hospital and clerical workers, for example, often can no longer support rental or mortgage payments in many regions of the country. Labor shortages in retail and health-care industries exist in these areas. Workers that can be found often commute an hour or more to find more affordable homes.
Unions increasingly try to attract new members - primarily those traditionally not organized - by advocating strict health and safety regulations, child care, and restrictions against subcontracting with nonunion employers. By including housing benefits in contract negotiations, unions could have an important new organizing tool.
Public employees may have special reasons for seeking housing benefits from their employers. Many urban governments have residency requirements for teachers, firefighters, police, and other employees. As affordable housing becomes increasingly scarce, public employees will have good reason to explore what types of housing benefits could be appropriately negotiated.
The vast potential of an employer-assisted housing benefit for workers could comprehensively change the way low-income and moderate-income housing in the US is financed for working families.
Labor unions should support and encourage this new concept - for the benefit of workers and their communities alike.
David C. Schwartz is a professor of political science at Rutgers University and chairman of the board of the National Housing Institute. Richard Ferlauto is a community organizer.