Baltimore Inner-city Homes Unsafe for Young Children, Hopkins Study Finds

Infants and young children living in Baltimore’s inner-city homes are at risk for serious perils, including fires, falls and poisoning, according to a small but revealing study from the Johns Hopkins Children’s Center. A survey of 32 urban homes and their residents found that many lacked functioning fire alarms, staircase gates and safe storage for medications, researchers report in the August issue of Pediatrics. Fires, falls and poisonings are the top causes of childhood home injuries in Baltimore.

The study found that:
• 97 percent of homes had smoke detectors but only half had a working one on each level of the home.
• None of the homes had staircases blocked correctly.
• Only 17 percent of homes had adult medications stored safely in a locked place.
• Nearly two-thirds of the homes had staircases too narrow and banister design that wouldn’t allow a gate to be fitted across the top of the stairs; one-third would not accommodate a gate at the bottom of the stairs.
• Nearly 20 percent had recognized environmental hazards such as using a gas stove to heat the home.
• Two of the 32 homes had exposed wires in the walls.
• Two homes had broken banisters or railings.

Not using home-safety devices such as stair-blocking gates, fire detectors and medicine-cabinet locks makes these homes dangerous for youngsters, researchers say. Barriers include poverty and the structural design of older urban homes that often doesn’t allow for proper installation of such devices, they point out.

“There are many factors that come into play here, and parental knowledge and financial situation are just part of the problem,” says study lead author Kimberly Stone, M.D., M.P.H., a pediatrician at the Johns Hopkins Children’s Center. “Clearly, the design of older urban homes and the lack of uniform measures to ensure home safety also play a role.”

Study participants—32 low-income, mostly unemployed pregnant women or mothers of children younger than 1 year from inner-city Baltimore—received information on safety products and practices and were given coupons to buy fire alarms, stair gates and medicine-cabinet locks. Researchers then interviewed the mothers about their home-safety practices and visited their homes to observe first-hand the use of safety products. Researchers found that parents tended to over-report their use of fire and smoke alarms, stair gates and cabinet locks, and many failed to use or install these products correctly. The study, albeit small, probably reflects patterns typical of Baltimore City’s impoverished urban pockets, researchers suspect.

“The take-home message for us as primary-care pediatricians is that we can’t simply ask parents if their homes are child-proof,” Stone says. “We need to be probing and ask specific questions about stair gates, fire alarms, medication storage, as well as about the state of repair and design of the home.”

The problem should be addressed on a macro level as well.

“We need to do more than hand out a free fire alarm and a pamphlet,” Stone adds. “We need legislators, housing authorities, landlords and manufacturers of safety products to step up to the plate and help ensure compliance.”

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Conference Board: U.S. Economy Will Benefit from Higher Bond Yields, Wage Increases, Rise in Short-Term Interest Rates

The Conference Board says that after a very long wait, long-term Treasury bond yields have begun to reflect a better outlook for the U.S. economy and the prospect that the next move in the federal funds rate will be up.

The forecast also shows a rise in short-term interest rates by 50 basis points in the second half of this year.

Manufacturing production is rising at about a 2% annual rate. Nondefense capital goods orders, a key investment indicator, have risen 20% in real terms since January. Much of the rest of the gain is in machinery orders. Although the pickup in orders is fairly broad-based, high-tech orders are somewhat lagging. High-tech orders, which should recover in the second quarter, are so closely related to the overall level of investment that it would be surprising if this sector didn't begin to rebound soon as well.

"The picture is a little less encouraging on the housing front," says Gail Fosler, executive vice president and chief economist of The Conference Board. Her analysis appears in StraightTalk, a newsletter designed exclusively for members of The Conference Board's global business network. "But progress is underway. Demand is slowly coming back to the market. Mortgage applications are up about 17% since the low point last August. And the drop in housing starts has been so sudden and dramatic that it has taken inventories down to close to historic averages-though still far above the levels common during the past 10 years."

But housing is a sector in which long-term forces are shaping the outlook as well as short-term cyclical events. The housing market has enjoyed a decade of strong (booming since 2000) conditions. The strength in housing received not inconsequential help from a long-term trend to lower mortgage rates, which have helped to offset higher housing prices to a great degree.

As a result, the "housing affordability index" has remained high and within a remarkably narrow range of about 120 to 140 since 1993. (An index reading of 100 means that a family earning the median income has enough money to qualify for a mortgage on a median-priced home assuming a down payment of 20%). Beginning in 2004, housing affordability began to plummet as both mortgage rates and house prices rose. The current reading is about 110, which given the definition of the index would not seem to be that low. But the reading is one of the lowest since 1990.

"This weakness in the U.S. housing market is not just a cyclical phenomenon but a response to some very important long-term trends," says Fosler. "Home prices outpaced average incomes, so there would be a downward bias in any event. As mortgage rates rise, the downward pressure on prices will persist. A surge in wages could solve this problem, but rapid
increases in wages would create other problems like inflation that the Federal Reserve would have to address with higher interest rates. While housing is not likely to be a drag on the U.S. economy in the second half of 2007 and 2008, it is also unlikely to make much of a positive
contribution for the foreseeable future."

Consumer spending has certainly been buffeted by slower housing prices and higher gasoline prices. The stabilizing force has been the tight labor market and rising wages. Earnings have slowed, but as in the last cycle, wages will begin to pick up again as growth accelerates and the unemployment rate remains low. Real wage and salary income has been growing at a 2% to 4% annual rate -- with ups and downs due largely to the ebb and flow of gasoline prices. The inflation-adjusted growth of consumer spending has remained generally in the 3% to 4% range since 2003. But retail activity has been hard hit by the housing slowdown. These trends explain why the retail sector and particularly the home-improvement retailers have been under so much pressure.

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Home Prices Drop and Housing Markets Cool

Global Insight, a company for economic and financial analysis and forecasting, has released the first-quarter 2007 update of its study, House Prices in America. The updated U.S. housing valuation analysis shows a widely dispersed drop in single-family home prices, resulting in a continued decline in the incidence of overvaluation in the nation's housing market.

The overall number of single-family housing units deemed to be overvalued fell from 17% in the fourth-quarter 2006 to 14% (revised). Meanwhile, in terms of single-family asset value, the percent deemed to be overvalued fell to 25% from 33% (revised) in the prior quarter.

Nationally, single-family home prices increased in the first quarter at an annualized rate of 2.2%. On a year-over-year comparison, however, prices are up only 3.0%, further normalizing the market with the weakest gain in a decade. Nearly 50% or 157 of the 317 metro areas in the study experienced price declines in the first quarter, accounting for 38% of all single-family units and half of all single-family real estate assets in the nation.

The most highly concentrated declines, while widely dispersed, occurred in areas that had experienced the most dramatic run-up in overvaluation, including California, Florida, New York, and New England. The industrial Midwest was hit hard by the cutbacks in automobile manufacturing. The most dramatic declines among the nation's large metro areas were seen in California's Central Valley. Sacramento Calif., where prices fell by 8.2% inthe past year and 10.0% since 2005, experienced the greatest decline among the nation's large metro areas.

Prices were most resilient in the Pacific and Mountain Northwest, most of Texas, and the Carolinas.

Markets identified in the study as overvalued decreased to 54 metroareas in the first quarter, down from 62 metro area markets (revised) in fourth- quarter 2006. The nation's most overvalued markets are now Bend, Ore., and Prescott, Ariz., highlighting the precarious nature of the price resiliency in the interior West. Meanwhile, the most undervalued markets continued to be in Texas, specifically Dallas (24.9%) and Houston (22.1%).

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Higher Minimum Wage Would Help 13 Million U.S. Workers

Since 1997, the federal minimum wage has been stuck at $5.15. A bill moving through the new Congress would raise the minimum wage to $7.25—an increase that is long overdue, according to the left-leaning Center for American Progress, a Washington think tank.

This minimum wage increase would boost earnings for 13 million American workers—9.8 percent of the workforce, the think tank says.

The U.S. House of Representatives passed a federal minimum wage increase, and now it is up to the U.S. Senate to consider the bill.

• Twelve million adult wage-earners, 80 percent of the minimum wage-earning population, will directly benefit from a minimum wage increase.
• Seven million families with children—46 percent of the total low wage-earning families with children—currently receive all of their earnings from minimum wage jobs.
• Nine million women (59 percent of minimum wage earners) and six million people of color (40 percent of minimum wage earners) will directly benefit from a minimum wage increase.
• Raising the minimum wage will increase annual earnings to $15,000 from $10,700. Without this increase, a family of three supported by one minimum wage earner will live roughly $5,400 below the federal poverty line.
• At the 350 largest public companies, the average CEO total direct compensation was $11.6 million in 2005. At this rate of compensation, it takes the average CEO only one hour and 55 minutes to earn the annual pay of a minimum wage worker.

The minimum wage increase will not harm our economy, the think tank says:

• The minimum wage increase will not cause price inflation. In Arizona, for example, the total cost of the wage increases is equal to 0.08 percent of total sales. The average business can fully cover the cost of the minimum wage by increasing revenue by less than 0.1 percent.
• The minimum wage increase will not destroy job growth. Between 1997 and 2003, small business employment increased by 9.4 percent in higher minimum wage states, compared to 6.6 percent in states at the federal level.
• The minimum wage increase will not shut down small businesses. Between 1998 and 2003, the number of small businesses increased by 5.5 percent in higher minimum wage states, compared to 4.2 percent in states at the federal minimum wage level.

Raising the minimum wage is a progressive issue that resonates with the American public and bridges the partisan divide, the center adds.

• A 2006 opinion poll found that 83 percent of Americans support an increase in the federal minimum wage.
• A decade of federal inaction has prompted 29 states (including D.C.) to raise the minimum wage above $5.15.
• The minimum wage is an opportunity for bipartisanship. In 2006, the governors and state legislatures of California, Michigan, and Pennsylvania worked across party lines to raise the minimum wage.
• In 2006, the minimum wage ballot initiatives had a “6-0” winning record in six states that voted for President Bush in 2000 and 2004. The minimum wage presents an issue that can unite, rather than divide, America.


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