STONY BROOK, NY September 29, 2008 -- As the financial crisis on Wall Street unfolds and more than a million families across the United States will face foreclosure in the next six months, as the last of the sub-prime mortgages contracted in 2006 and early 2007 reset, today a new groundbreaking study from the Center for Study of Working Class Life at Stony Brook University (the Center) reveals that an astonishing number of households are in economic distress, and proposes economic policies that will improve their lives while strengthening the overall economy in the long run.
The report looks at the twelve largest metropolitan markets of the country, ranging from New York City and Los Angeles to Boston and Detroit. It finds that there are 22.9 million economically distressed households with over 60 million individuals. It also looks at Long Island where 28.7% of households are distressed. The report’s findings are based on data drawn from the annual American Community Survey of the U.S. Census Bureau for 2006. It defines economic distress as meaning that a household cannot get above the lowest one-quarter of their housing market without spending more than 30% of their total income to do so - the federal standard for what households should spend on housing to allow enough money for other necessities. The just released 2007 Census Bureau data supports these findings.
“As Congress prepares to bail out the financial institutions and corporate ‘Masters of the Universe’ who have led us to the brink of financial catastrophe, we think its time to consider the sixty million people in nearly twenty-three million households with eighteen million kids who can't afford to pay for the basic necessities of housing, food, medical care, and transportation,” said Professor Michael Zweig, the report’s author and director of the Center. He added, “We’re talking about cashiers and salespeople, secretaries and truck drivers; people whom we see and rely on every day to help keep our economy running. We need to be thinking and talking about a bailout for them.”
Long Island Congressman Steven Israel, who represents the western part of Suffolk County, New York, welcomed the report and said: “I commend Stony Brook University and Dr. Michael Zweig for conducting this important study. Dr. Zweig’s findings show us that Long Island families are struggling to stay ahead. With today’s turbulent economy, it’s more important than ever for us to find ways to ensure families can achieve the success they desire.”
Congressman Tim Bishop from the neighboring Congressional District that includes
Stony Brook University said: “After eight years of failed economic policies, there is no question that our nation’s finances are in trouble. The findings of this report are a stark reminder of the widespread economic distress felt by so many families across the country. We clearly need a new direction that will address the root causes of the economic troubles on Main Street as well as Wall Street.”
For Copies of the full report and statistical tables, please visit the Center’s website at www.workingclass.sunysb.edu