Letter to the editor: Ignorance about how supply and demand works | SummitDaily.com

Letter to the editor: Ignorance about how supply and demand works

David Spray
Breckenridge and Houston

The title of Ted Konnerth’s recent column, “Wages, cost of living both contribute to housing dilemma,” reveals an ignorance of how supply and demand works. Might a more accurate title be, “Irrational economic choices of Summit County employees have predictable results.” According to CNBC, no more than 30% of your gross monthly income should be spent on housing.

If someone makes $15 an hour, that is $2,400 per month, and 30% of that is $720. I understand that monthly housing in the county for $720 does not exist. An economically rational person would decline that opportunity and look for a geographic area with a better wage-to-housing-cost ratio. Another approach would be to divide $1,200 (a more realistic cost) by 30%, which yields a minimum hourly rate of $25. Thus, the rational person would say, “I am not going to work in Summit County for less than $25 per hour.”

If every employee in the county would refuse to work for less than $25 an hour, the magic of supply and demand would result in wages rising to $25 an hour. Of course, that would also drive up the cost of goods and services in Summit County, but I would rather have the choice of paying $20 (for the former $10) hamburger than I would to have my tax dollars support a fundamentally flawed system of “affordable housing” that never works. If the government-sponsored, affordable-housing scheme actually worked, how is it that the situation is worse than it was five years ago despite spending millions of tax dollars?

Rather than trying to cushion employees from the consequences of their economically irrational choices, perhaps the county should shift the affordable housing budget to education and discourage people from moving to Summit County if they cannot earn at least $25 an hour.

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