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Massachusetts Democrant

The stupidest animal alive is a "Poor Republican". See my archived posts here.
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The Cape Economy- More than Gas Prices

I'm pretty well satisfied that the gas price differential in the summer was best summed up by an economist - they do it  "because they can". Certainly no one has offered any other credible reason why there is such a large gap in the summer, that diminishes as we head towards another winter.

It's just another example of how the Cape Cod economy is well, different than the rest of the state, and by different I mean bad, unsustainable. It really isn't too difficult to figure out, let's take a couple of basic numbers from May '07 (Bureau of Labor Statistics) and you'll see what I mean:

  • Barnstable Average Hourly Wage - $19.62
  • MA Average Hourly Wage - $23.59
  • Barnstable Average Annual Wage - $40,820
  • MA Average Annual Wage - $49,070

You can pretty much go job to job, and find that most get paid less on our sandbar than the state average. From there it is simple math in determining why people cannot afford to stay here. In 2006, you needed a family income of just over $100,000 to afford the median family home on the Cape. Actual median family income at the same time was $66,800. Extend the simple math out a bit.... higher prices minus lower wages (and probably benefits also, but that's a guess) and you have the few making out well on the backs of the many. It's not atypical to what is happening in terms of wage disparity between executives and workers. That gap has increased under George Bush.

If, given the current economic times, you don't see that trickle down economics never works, then you never will. Our more immediate concern is the sustainability of Cape Cod in those conditions, and adding in an increasingly older median age. Younger people continue to leave due to cost and limited opportunities.

39 comments
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10/14/08 @ 10:50 am
Opinionator [Member] writes:
Our impoverished situation down here has something to do with this: "I've got mine. To hell with you."
10/14/08 @ 6:57 pm
kapekodda [Member] writes:
Maybe if there weren't so many illegals working for cheap and living with more than is legally allowed in houses, wages would go up.
10/14/08 @ 7:37 pm
Democrant [Member] writes:
I always enjoy a well thought out and documented response. Next?
10/14/08 @ 8:16 pm
Andy Buckley [Member] writes:
Okay, how's this:

As previously covered in my blog, the Mass. state office that collects economic and labor statistics confirmed in a conversation to me that the wages of low and middle range workers had been stagnating, especially on the Cape, and that the importation of labor, especially of H2B, played no small part in this.

They also did not agree that the wages required to be paid under the H2B programs were not, despite the federal definition within the program, the "prevailing wage."

These were economists talking.

Further, tightening of the housing market is inevitable if an employer is switches from locally-available labor to transient seasonal labor. The former requires pay commensurate with the cost of living locally. The former will put up with dorm/flophouse conditions if that means going back to a country with a lower standard of living with enough to support his family.

Just like those guys who worked on the Alaska pipeline. They only did it because they were making "Crazy Money."

As for illegal labor, well, that's just moving down the scale a step or two.
10/14/08 @ 8:47 pm
Democrant [Member] writes:
Well Andy, with the difficulty in getting H2B now, shouldn't that begin to alleviate the issue? The stats I had were only as recent as 5/07; anecdotally I don't see much has changed. Perhaps over a longer term?

Actually, here is a story indicating that many foreigners are leaving the Cape- http://www.capecodonline.com/apps/pbcs.dll/article?AID=/20071226/NEWS/712260324
10/14/08 @ 9:45 pm
christy at christy's [Member] writes:
Illegal Immigration will cost the Commonwealth $1 billion in fiscal 2009. ICE stats. The Rs won't do anything about it because they want the lower wages the Ds won't either as they want the votes some day down the line. we all pay for this mess. Again, a bi-partisan FUBAR
10/14/08 @ 11:20 pm
Democrant [Member] writes:
I went to the ice.gov website and couldn't find those stats, so if you have a link for that, I'd appreciate it.

I did find on the website workingimmigrants.com a reference to a study done that says yes illegals depress wages by 8% among workers with less than a HS education and increases wages among more educated by 1%. But the thrust of this is not about illegals, it is about the general issue of depressed wages on Cape Cod, by a significant amount in comparison to the state average. Illegal immigrants have very little to do with that consistent difference.

But for those interested, this article - http://www.southcoasttoday.com/apps/pbcs.dll/article?AID=/20080702/NEWS/807020304 speaks about how difficult it is to measure the total impact, and mentions that they could not find an impact study for Massachusetts.
10/15/08 @ 6:27 am
kapekodda [Member] writes:
I think if you look back over time you will see it has been that way for many years. When applicants outnumber the jobs you can pay less for employees.
10/15/08 @ 7:17 am
bittersweet [Member] writes:
Wow...this is really sad. No one at my job makes near $23.00 an hour, even those of us who have been there for many years.
And it is true, all we have to do is wait, and workers will come. Because they are here to work, they are provided housing, and they can work two or thee jobs if they want to. They don't have families to worry about. They are here to work....$7 an hour or whatever.And when they get home, the money doubles in value. So, in actuality, they make twice as much as us Americans with none of the responsabilities to this country.
I love them, but it's really a skin game for the owners and the foreign workers. The American worker is left out in the cold. Shafted.
10/15/08 @ 7:47 am
murrbuck [Member] writes:
Many people on the forums are confusing the label "illegal alien" for all foreigners living and working here. They are not all illegal aliens. However, when an illegal alien is busted- isn't (or shouldn't) it be first priority to ship them back to where they came from?
The problem with the economy on Cape Cod as I see it, is that the cost of living down here outweighs the wages. Most of the businesses down here are too small to sustain a good number of employees year-round. And the people who live here need steady long term employment set at higher than min. wage to survive. The minimum wage and national poverty levels are way off base for the reality of residing on Cape Cod. Payroll alone can knock out a small business really fast, never mind all the other costs of doing business.(like the .20 cents hikes per case bridge fees, etc. etc. etc.??) Until something changes in the way Cape Cod allows bigger businesses to open down here, we are always going to see the empty trashed out buildings along 28 and rte 132 and families moving away.
10/15/08 @ 8:21 am
Democrant [Member] writes:
kapekodda- just to go anecdote to anecdote, weren't a good number of employers this past summer and the one before, bemoaning the fact that they could not hire people, especially with the H2B limitations?

When affordable housing is created under Chapter 40B, the income guidelines state the person should be making no more than 80% if the Average Median Income. In Barnstable County that would be the following:
1 person- 40150
2 people- 45900
3 people- 53600
4 people- 57350

By that token, just about any single new teacher would qualify for affordable housing.

murrbuck- yeah, that was my point with the post. But I don't see it as a big business issue, isn't most job creation in this country due to small businesses? And in a chicken and egg type of thing, given the demographics here, what incentive is there for a large company to be here? Is there a workforce that could sustain it?
10/15/08 @ 9:18 am
murrbuck [Member] writes:
Democrant- I actually do think that there is a workforce here that will sustain it. Look at how long that line of people applying to the movie production company in Plymouth was.
The problem though with the median income levels is that it's out of touch with reality: A family of 4 living under 62k a year on Cape Cod is barely making it.(make no mistake: this is GROSS income.) A house here large enough for a family of 4 would give them a monthly mortgage payment of around $2500.00 a month. (nice affordable housing- eh?)Add: gas,car payments, food, clothing, heating, electricity, daycare or pre-school, general home maintenance costs; i.e: trash, yard, misc. repairs and that family barely has anything left for Christmas, birthdays or any extra-curricular activities for their kids.
To do this down here they need more than one job each, because these little businesses can't give them a full 40 hr week to make anything that will actually count. And Savings? down here? not on your life! The kids in those families had better get scholarship awards if they want to go to college!
10/15/08 @ 9:55 am
Democrant [Member] writes:
murrbuck, yeah I know, the original point of my post was the affordability gap because of the issue of wages here. I'm not sure I agree about there being a workforce available, let me share some more number from 2007-
Educational Attainment- bachelor's degree or higher
25-34
Barnstable County 40.3%
Massachusetts 46.2%

35-44
Barnstable County 39.8%
Massachusetts 42.7%

It's the older demographics that we have a higher percentage, not exactly the enticement needed.

And getting back to wages, the same 2007 census numbers show that the county is pretty close to the state average in median earning for those with a HS diploma or less. It's those with some college and above that get hit with the over the bridge difference:
first number is Barnstable County, second number is state median
Some college or associate's degree 31,384 37,165
Bachelor's degree 40,241 51,090
Graduate or professional degree 52,475 64,384


10/15/08 @ 11:34 am
murrbuck [Member] writes:
Thanks for the info. :)
10/15/08 @ 8:07 pm
Andy Buckley [Member] writes:
I can't believe that an intelligent conversation has continued so long on CCToday (this comment notwithstanding).
10/15/08 @ 8:25 pm
Democrant [Member] writes:
Sorry Andy ;)

The thing is, when you pull out numbers like that, the sustainability of the Cape is really called into question. How you diversify this economy, and how you bring the wages up, are significant challenges. It's not a news flash, but it no one has really come up with anything.
10/17/08 @ 9:36 am
Andy Buckley [Member] writes:
Not anything that will actually work. Just life-support proposals for one particular outdated industry at the cost of the rest of the community.
10/17/08 @ 1:47 pm
maverick [Member] writes:
Dem..."Younger people continue to leave due to cost and limited opportunities."

The Cape has a tourist economy with a resident ageing retired population.

How do you create opportunity on a tourist sandbar? And most of the hard working foreign folks are here due to a shortage of workers during the crunch.

My niece from Arizona was here last summer on an internship for CVS. They pay for room and board in towns throughout the Cape to have enough employees in their pharmacies during the summer season.

The Cape is what it is. And thats why we all love it. Are you suggesting IBM or Exxon move their corporate headquarters here? Or that we build a steel mill or auto factory in Chatham?

What opportunities are you suggesting? Or is this another Obama feels good story?
10/17/08 @ 2:00 pm
Democrant [Member] writes:
Mav, you asked good questions til you go off on this Obama feel good thing. Frankly, whatever it's called, if people want to be cynical about everything, nothing gets done. Of course that's been the playbook for the last 8 years anyway, fear and cynicism. That's hardly the stuff that made this nation great.

It's a chicken and egg story. Are there categories of the economy that are, for lack of a better term, "geographically neutral", things that could exist anywhere? I think so, especially in technology. However, you then have to determine how you get the infrastructure for this, and by infrastructure, I mean both people and resources.

Unless there is an effort, I don't think the Cape economy is sustainable. There are reasons why younger people, younger families could be attracted to the sandbar, but the cost of housing is the killer. Nice quality of life, pretty good schools in a lot of places are bona fide plusses. Anyone group on the Cape ever market this place to young families, or to business fairs?If all people do are wring their hands about it, then yes, self-fulfilling prophecy and I believe it simply is not sustainable.
10/17/08 @ 2:45 pm
maverick [Member] writes:
Dem...I am not going off nor am I cynical.

I always believe the glass is half full.

But...we have little control over the cost of Cape real estate. And what would a business fair market?

As I suggested the Cape economy is what it is. What's wrong with that?
10/17/08 @ 2:50 pm
Democrant [Member] writes:
The what's wrong is what I said, I don't believe it is a sustainable model, based on the demographics.
10/17/08 @ 3:00 pm
maverick [Member] writes:
Dem..."sustainable model"?

Please tell me what you suggest vs "the sandbar is all messed up due to the last 8 years of Bush".

I know you want to destroy Nantucket Sound with an economic and environmental disaster known as Cape Wind. What else is on the Deval/Dem agenda besides higher taxes and higher electric bills?

What other tricks do you have up your sleeve?
10/17/08 @ 3:02 pm
Buzz [Member] writes:
I agree with Mav. The Cape "is" what it is and always has been. The late great Paul Larusso tried bringing light industry here years ago and was denied at every turn. There was once promise of the Cape being the "Silicone Sandbar", didn't last long.

We have two things working against us, the Sagamore and the Bourne. We are a pennisular. That's what makes the Cape great and what causes the housing crunch. It's a very desirable place to live. It's also expensive.

Solution? Fill in the Bay and build affordable housing. Then, it's no longer "the Cape" it might as well be Marshfield or Natick.

Get over it, it will never change.
10/17/08 @ 3:12 pm
Democrant [Member] writes:
Sustainable model.... the population continues to get older, there are not enough people to perform the work necessary for the current economy.

If only I was blaming Bush and the GOP for the sandbar, I meant they have cut a far wider swath. One reason why McCain is losing, is by running exactly the same type of campaign and turning off the very independents that once supported him in stronger numbers.

And don't make assumptions about me and Cape Wind. I have on this site argued against the current project. I am not philosophically opposed to, in some way, using wind power there, but I have not been satisfied with the process, nor with Cape Wind itself.

Buzz... I'm not even going to guess what a "pennisular" is. I'll let people work on that themselves ;).
10/17/08 @ 3:18 pm
Buzz [Member] writes:
"peninsula" Golly gee teacher, get out your red marker.
10/17/08 @ 3:20 pm
Democrant [Member] writes:
I know, but it looked so much better the other way
10/17/08 @ 3:53 pm
Buzz [Member] writes:
Dem,

Yeah, it kind of sounded like Sarah Speak:)
10/17/08 @ 4:19 pm
maverick [Member] writes:
Dem...thanks for your thoughts on Cape Wind. Came in from offshore last night and thousands of birds and ducks were everywhere. Should they be slaughtered so that we can pay higher electric bills?

So that we can say how green we are? This sandbar is not green. If there is a spigot of land left they will put a house on it. Good for them. Please leave the Sound alone and let nature take it's course.

What swath have the Repub's cut on the Cape? I thought this was a Demo state? And a Demo congress.

"there are not enough people to perform the work necessary for the current economy." Thanks. That is the reason hard working foreign help is filling the void.
10/17/08 @ 4:48 pm
murrbuck [Member] writes:
The way I see it is that if one is willing to get their hands dirty and use their muscles, they can make it here- but they also have to be creative in their choices and roll with the seasons. My parents, their friends and the parents before them, have all done it and made it work. People around here need to learn trades- Everyone here can't expect to have a Boston job on Cape Cod. (Although now the Cape has Boston housing pricing with NO Boston pay....GO FIGURE!)And the only void the foreign help filling is them working at all of the small businesses on the cape for a lot less money than the residents here can work for.
10/17/08 @ 4:55 pm
maverick [Member] writes:
murrbuck..."And the only void the foreign help filling is them working at all of the small businesses on the cape for a lot less money than the residents here can work for."

What residents? What Cape workers? You have to be joking. No one on Cape is willing to do the jobs that the foreigners do.
10/17/08 @ 5:21 pm
Ned [Member] writes:
tuna not biting?
10/17/08 @ 5:44 pm
maverick [Member] writes:
Ned....No. Home for the weekend while the wind blows. Back at it next week.

Where is Ubiq? Or was that you in disguise?
10/17/08 @ 6:12 pm
ubiquitous [Member] writes:
I am not in disguise-
It's innuendoes I despise-
10/17/08 @ 6:20 pm
ubiquitous [Member] writes:
By the way.. should know-
Number one is home from the row-
Arrived yesterday safe and sound-
End of November we are bound-
Called me today after 8 months away-
To say your new grandson awaits you today-
10/17/08 @ 6:45 pm
maverick [Member] writes:
Neddy...Thanks for all your help.

Ubiq is my new hero. If I need info on the Cape economy or gas prices I know who to call.

Not Dem. No answers. Just rhetoric.

Christy...thanks for the lower gas prices. You are a true American.

10/17/08 @ 7:31 pm
ubiquitous [Member] writes:
There lives an old salt named maverick-
who irritates some bloggers to sea sick-
Solon and buzzman-
agree more than harrass him-

neddy's his fodder-
crusader's his admirer-

amused by the constant barrage-
of Demos eutopian collage-

maverick likes Sarah-
to others shes a pariah-

to me it's all a mirage-
10/17/08 @ 9:59 pm
murrbuck [Member] writes:
Maverick, I'm sure that the first sentence within my post says exactly what you wrote to me. :)
10/18/08 @ 8:06 am
christy at christy's [Member] writes:
$2.79 if you pay cash--- $2.89 for cash at the exxons. price was up 8cents last night. nice of OPEC to consider a 1,000 barrel production cut/day. with friends like that, who needs enemies. Its the cost of doing business on the cape that makes it so difficult. the process, the agencies. they have to justify their existense.
10/18/08 @ 12:15 pm
Democrant [Member] writes:
Christy, as I said, props on your current pricing.In Orleans last night, Mobil and Cumby's were 3.15. Everyone has expenses, no matter where they are. Cape gas prices tend to become more in line, the further from Labor Day we get, I've watched it over and over, and not just anecdotally. If you could do something about the dire state of Chinese food down here, I'd put a sign on my car for you.
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Democrant DonkeyThis blog will feature thoughts, commentary and humor focusing on the Democratic Party. Being a Massachusetts native, some of the focus will be local, some on the big picture. Aside from my own contributions, I'll try and make note of interesting articles and resources that you'll find useful. The archives are here.

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