econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 06 April 2016

Could Raising The Minimum Wage Bring Down Real Estate Prices?

Written by , Money Strong

Article of the Week from Money Strong

Pensions' prospects have somehow deteriorated further in the small space of just one week. The news that a hedge fund billionaire is to depart New Jersey for Florida's fetching shores has NJ state officials scrambling. Less than one percent of the Garden State's taxpayers account for one-third of its personal income taxes, which in turn comprise 40 percent of the state's revenues. Bloomberg's estimates suggest a one-percent forecasting error can equate to a $140 million gap. That's saying something considering New Jersey's pension is the most underfunded in the nation.

falling.real.estate.prices

Is it any wonder those fences at which pension managers are batting just keep getting taller? Lucky for them, so too do the buildings backed by private equity real estate funds to which they are flocking hoping to cover those widening gaps. Or at least that's the working assumption guiding portfolio allocators whose challenges continue to mount.

Consider the fact that, on a non-seasonally-adjusted basis, the city of Seattle has seen its jobless rate increase by more than one percentage point since imposing a $15 minimum wage last April. That experience suggests that, all good intentions aside, the laws of economics cannot be repealed. It follows that entire states that impose higher minimum wages should be prepared for the future shrinkage of their own tax bases as not just billionaires, but entire companies, flee for less expensive states in which to conduct business.

Managers tasked with finding uncorrelated asset classes to protect pensions could well be forgetting one of the first things they learned back in business school - that an asset class flooded by the masses loses its ability to diversify a portfolio. It happened in commodities. Who is to say the same fate doesn't await real estate?

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical Opinion Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.



You can also comment using Facebook directly using he comment block below.





Econintersect Opinion


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
The Expected Effects of Petitions to Improve the Monetary System
Energy and Falling Productivity
News Blog
What is Democracy, Anyway?
Transcript Of Elizabeth Warren Questioning Wells Fargo CEO John Stumpf
Documentary Of The Week: Elizabeth Warren Indictment Of Wells Fargo
Clinton Wins Round One
Why Alzheimer's Research Is Failing To Hit Treatment Targets
Voters Still Distrust Both Presidential Candidates
What We Read Today 27 September 2016
How To Get People To Exercise
September 2016 Conference Board Consumer Confidence Now At Highest Level Since the Great Recession
Richmond Fed Manufacturing Survey Remains In Contraction In September 2016.
September 2016 Chemical Activity Barometer Continues to Signal Improving Economic Growth
Case-Shiller Home Price Index July 2016 Year-over-Year Rate of Growth Decelerates
Between Geopolitics And Technology
Investing Blog
Banks Of Absurdity
Investing.com Technical Summary 27 September 2016
Opinion Blog
Trump Stumped In First Debate With Clinton - Will It Cost Him?
Why All Banks Should Be Federally Owned
Precious Metals Blog
War On Cash Turns To $20, $50, And $100 Bills
Live Markets
27Sep2016 Market Close: US Major Indexes Closed Higher As Commodities Fell, WTI Crude Slipped Three Percent
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government



Crowdfunding ....






























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved