The New York Times’s jeremiad last week about AI’s impact on entry-level jobs — particularly in tech — merely underscores trends that have been clear for well over a year. Silicon Valley firms have been slashing jobs despite record profits, and since 2022 California has actually shed positions in the information sector. An astonishing 82% of millennials fear AI will drive down their compensation. They have every reason to be concerned.
This is the second of a two-part series on the global housing crisis. Read the first part here.
The affordable housing crisis in America and many other advanced countries keeps getting worse because it is largely dominated by the wrong voices talking about the wrong places.
Next to inflation, Americans ranked housing as their top financial worry in a Gallup survey last May. It’s only gotten worse. January home sales were down 5% from last year’s dismal numbers. Record numbers of first-time buyers are stuck on the sidelines as housing affordability stands at the lowest level ever recorded, while one in three Americans now spend over 30% of their income on mortgage or rent.
The housing crisis is not just an American problem, but a global phenomenon that hits the middle and working classes the hardest. Studies of the Canadian, British, European, and East Asian markets have also found that housing prices have risen far faster than household incomes and inflation. A report from the Organisation for Economic Co-operation and Development concluded that “housing has been the main driver of rising middle-class expenditure.” In prosperous and communitarian Switzerland, Zurich studios sell for well over $1 million, and small houses even more, making downpayments unaffordable to affluent people despite the overwhelming financial advantages to homeowners.
Underlying the plight of home buyers worldwide is a sometimes overlooked but profound influence – the spread of restrictive land-use regulations. It’s reshaping political and economic alignments in ways that may further destabilize the social order. Home ownership is strongly correlated with positive social indicators, and as renting grows twice as quickly as buying, this trend poses a threat to Western democracy by deepening economic inequality, depressing demographic vitality, and undermining the upward mobility that has driven Western progress for the past century.
The price increase may seem surprising because there has not been a huge spike in fundamental demand. In California, and most of the United States, as well as Europe and East Asia, population growth is tepid, if not declining. Today’s higher interest rates are below those that prevailed from 1970 to 1995, when housing costs were considerably lower relative to incomes. Nor is this predominantly a technical problem; the rise of remote work, which is connected to migration to smaller metros, as well as new technologies for building, including using 3D printers, actually offers the chance to build more cheaply.
And yet, the principal cause for housing shortages and rising prices stems from the failure to build enough new housing units, particularly the single-family homes consumers most desire. Homebuilders built 1 million fewer homes (including rental units) in 2024 than in 1972, when there were 130 million fewer Americans. One estimate puts the U.S. housing market shortage at an estimated 4.5 million homes, according to Commerce Department data.
The rapid inflation of housing costs stems primarily from ever more constricting land-use regulations. Inflated prices are particularly rife in countries and states with strict regulations like California, where high-income households now utterly dominate the housing market, and more than a third of all real estate transactions in recent years topped $1 million.
Read the rest of this piece at: Real Clear Investigations.
Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and and directs the Center for Demographics and Policy there. He is Senior Research Fellow at the Civitas Institute at the University of Texas in Austin. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.
Wendell Cox is principal of Demographia, an international public policy firm located in the St. Louis metropolitan area. He is a Senior Fellow with Unleash Prosperity in Washington and the Frontier Centre for Public Policy in Winnipeg and a member of the Advisory Board of the Center for Demographics and Policy at Chapman University in Orange, California. He has served as a visiting professor at the Conservatoire National des Arts et Metiers in Paris. His principal interests are economics, poverty alleviation, demographics, urban policy and transport. He is author of the annual Demographia International Housing Affordability Survey and author of Demographia World Urban Areas.
Homepage photo: Travis Saylor via Pexels.
By his supreme idiocy, U.S. President Donald Trump has stirred up anti-American sentiment, but largely to the benefit of America’s archrival, China. Read more
Never one to miss a reason to crow, Gavin Newsom, the governor of California, was out in front of the media at the weekend, bragging about how his state now boasts the world’s fourth largest GDP, surpassing Japan. This is a natural posture for a potential presidential candidate, a chance to show how under his leadership California has thrived. Read more
I thought crack-smoking had lost its appeal, but perhaps it is still a regular pastime among journalists determined to take down Trump’s America. The Economist, for example, has suggested that “the land of the free” has moved across the Atlantic, from America to Europe. Read more
As with many political movements, MAGA represents a fragile coalition of groups that often have little in common — and, at the extremes, may even detest one another.
This tension has been brought into clearer focus by Trump’s recent exemption of tech products from tariffs, a decision likely influenced by the oligarchs in the President’s corner. After all, firms like Apple depend largely on Chinese manufacturers, while Wall Street investors still see the Middle Kingdom as a potential source of future profits. In contrast, smaller firms — such as those who import toys or furniture —enjoy no such protection.
Clearly, the tariff proposals are far less popular than Trump’s moves on such things as the border, gender and the crackdown on universities. Indeed, tariffs are opposed by most Americans and are clearly eroding his support base even as many back protecting US manufacturing.
It is too early to see the impact of tariffs on ordinary people, but it’s not hard to see that higher prices for household utensils, clothing and even food are likely to affect them. Perhaps most disruptive will be the cost of imported cars — a mainstay of many families — which could rise several thousand dollars. Inflation did much to undermine Biden’s Administration, and Trump could suffer a similar fate.
Of course, these exemptions might be mitigated over time as companies adjust to domestic manufacturing or even break their dependency on China. Some companies — such as Nvidia — are already responding by promising to build up to $500 billion worth of artificial intelligence infrastructure in the US over the next four years. The problem, though, may be timing; it takes three to five years to build a new semiconductor plant, and the results may not be felt for several more.
Nevertheless, with these exemptions, Trump risks appearing as though he is giving preferential treatment to his wealthy donors. In theory, this should provide an opening for Democrats. Trump’s great achievement over the last decade has been to win over working-class voters; for the first time in decades, Americans are more likely to identify the GOP with the people than the Democrats. But Trump’s polling on his handling of the economy — a proxy for tariffs — is now underwater, and the Democrats have an opportunity to reassert themselves as the party of common sense.
Read the rest of this piece: UnHerd.
Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and and directs the Center for Demographics and Policy there. He is Senior Research Fellow at the Civitas Institute at the University of Texas in Austin. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.
Photo: White House, Public Domain.
It’s easy to dismiss Donald Trump’s haphazard tariff barrage as silly and self-defeating, especially after so many days of global market turmoil. But critics among liberal Democrats and Republican free traders still need to address the overriding goal behind the seeming madness. The key strategic objective of Trump’s approach is simple: restoring American industrial power. Opponents of the US president ignore this at their peril.
It is true that the American economy continues to outperform those of Europe and the UK, especially in terms of tech, communications and finance. Yet the situation for blue-collar professions and working-class communities has not improved with the pace of globalisation. Between 2004 and 2017, the US share of world manufacturing shrank from 15 to 10 per cent. Since 2000, notes an Economic Policy Institute study, China’s export barrage has cost as many as 3.7million US jobs.
The ‘China shock’ is not just an American but a global phenomenon. Today, China boasts nearly as many factory exports as the US, Japan and Germany combined. Overall, Europe’s industrial sector continues to decline, losing 850,000 manufacturing jobs between 2019 and 2024. Germany could lose around half of its 800,000 auto jobs to Chinese competition by 2030.
To be sure, the early stages of globalisation reaped enormous benefits, both for Western consumers and for developing countries. But China’s admission into the World Trade Organisation in 2000 changed the dynamic. Here was a huge country, with enormous human capital, which adopted a highly mercantilist drive to dominate industries, first at the lower end of manufacturing and then, increasingly, in the most sophisticated sectors.
Wall Street bankers and tech oligarchs may be untroubled by the consequences of Beijing’s mercantilism, as they have little contact with America’s working and middle classes. The poorest have increasingly been forced to subsist on expanding welfare benefits which, in turn, subsidise the affluent for whom they work for a pittance as nannies, gardeners and day labourers.
For the working classes, manufacturing and related fields, like energy and logistics, represent an escape from economic marginalisation. Overall, manufacturing jobs pay $54,000 annually on average, well above the $47,000 average in services. These jobs also come with health insurance and steady employment.
Geography plays a role here. Apologists for the outgoing trade regime often ignore that its impact was felt most acutely in particular regions, like the American Midwest. Researchers John Russo and Sherry Linkon describe how the closure of a steel mill in Youngstown, Ohio – the first of a wave of closures in the region – undermined the sense of worth and optimism among residents. Many can still recall better days, when employment was high, jobs paid well, workers were protected by strong unions and industrial labour provided a source of pride – not only because it produced tangible goods, but also because it was recognised as challenging, dangerous and important.
Similar tragedies have occurred all over the West, away from the elite college towns, leafy suburbs and urban haunts of the upper classes. You can see this in places like England’s Midlands. The UK, the birthplace of the Industrial Revolution, now produces less wealth from manufacturing than countries like Mexico, Russia and Taiwan. Deindustrialisation has also blighted much of the former East Germany and Japan’s Kansai region.
Read the rest of this piece: Spiked.
Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and and directs the Center for Demographics and Policy there. He is Senior Research Fellow at the Civitas Institute at the University of Texas in Austin. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.
Photo: Official White House Photo by Joyce N. Boghosian, via Flickr, in Public Domain.
U.S. President Donald Trump’s imbecilic and unnecessary suggestion that Canada should become the 51st state has led some of my own family members — on my wife’s side, who are Canadian — not to travel to the United States, even in the midst of winter. Now this is personal.
In his farewell address, mere days before leaving the White House, Joe Biden made a dramatic intervention. Warning about how an oligarchy of “extreme wealth, power and influence” risked the basic rights of every citizen, he even suggested it could threaten American democracy itself. Given how late Biden’s intervention came, to say nothing of his typically stumbling delivery, it’s tempting to dismiss his comments as the rantings of a tired old man.
In truth, though, I think the speech matters. For in its populist appeal to Main Street over Wall Street, it reflects the revival of something we haven’t seen in years: class politics. Rather than appealing to racial subgroups, or sex or gender identity, Biden instead spoke, however fleetingly, to those many millions of Americans who care more about their paychecks than the colour of their skin.
Nor, of course, is the 46th president alone. Increasingly, both main parties realise that to win at the ballot box, they must appeal to the middle- and working classes, as proven by Trump’s roughly 10-point lead among those two-thirds of Americans without a college degree. Yet, if that speaks vividly to radical shifts across US socioeconomic makeup, it remains unclear if politicians on either side of the aisle are truly willing to back blue-collar workers — especially when the oligarchs continue to have such a grip over them all.
For all Biden’s warnings about oligarchy, the elite did very well during his tenure. Consider the numbers, with the wealthiest Americans increasing their collective net worth by a remarkable one trillion dollars over his time in office. The monopolists, for their part, have been generous in their turn. In 2020, to give one example, Biden received 25 times as much funding from tech companies than Trump, and over three times as much from Wall Street. Among electronics manufacturing firms, many of whom build their products outside the country, the margin was a remarkable $68 million to $4 million.
All the while, American business continued to consolidate, just as it has for a generation. The Review of Finance notes that three quarters of industry has become more concentrated since the late Nineties. This has been most notable across finance, where big banks have doubled their market share since 2000. The same is true elsewhere: a coterie of tech firms now account for a record 35% of market cap. No wonder only 22% of Americans were optimistic about the economy by the end of Biden’s term, even as confidence in his economic leadership had fallen to just 40%.
Taken together, then, Biden’s fall stemmed from an enormous miscalculation. Elected as a moderate, he ignored polls that suggested most Americans were more concerned with their economic prospects than issues like climate change and foreign affairs, let alone social justice manias around trans rights. Nonetheless, the Democrats followed the lead of their oligarchic funders, many of whose biggest contributions have been focused on exactly these side issues.
When the election came, no wonder so many blue collar Americans tried their luck with Trump: including a remarkable number of minority voters. Once again, the statistics here are clear, with 40% of Asians voting for him, well above the 30% in 2020, even as some African Americans headed to the GOP as well. Blue-collar Latinos went heavily for Trump too. The point is that this realignment largely happened on economic grounds, with minorities ignoring Trump’s past litany of racist comments because he offered them a more expansive economy, particularly in blue collar professions. All the while, they saw little promise in the tsunami of promises offered by Harris and her bozo vice-presidential partner Tim Walz. Knowing a winner when they see one, America’s billionaires duly came out for the Republicans too. That included Elon Musk, of course, but also prominent investment bankers like Bill Ackman.
Taken together, what does this revolution show? That class and economics now play a greater role in American politics than skin colour or national origin. If you want to secure minority voters, the new President clearly understands, you appeal to them not as identity groups but as individual people, and families, looking out for their own self-interest. Nor is this really revelatory. America’s working-class remains more aspirational than those in other Western countries. That’s equally true of non-white voters, many of whom appreciate that the politics of race is an impediment to the American Dream. Most of the middle-income people who lately lost their homes to fire, in the minority LA suburb of Altadena, hardly benefited from a city government more obsessed with race and gender than protecting property. No less telling, Democratic policies on water and climate have created what attorney Jennifer Hernandez calls a “green Jim Crow” — where working-class minorities face increasing headwinds in terms of jobs and housing.
“Class and economics now play a greater role in American politics than skin colour or national origin.”
Read the rest of this piece at Unherd.
Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and and directs the Center for Demographics and Policy there. He is Senior Research Fellow at the Civitas Institute at the University of Texas in Austin. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.
Photo: Jagz Mario, under CC 2.0 License.
Join the conversation at Twitter
or Facebook. Visit our YouTube
channel or subscribe to RSS
to read our latest articles.
