Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.
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December 12, 2013 at 10:22 AM
King and Snohomish counties are among the higher ranks of household income for 2012, according to new data from the Census Bureau. Even so, they’re below the richest counties, which are clustered around the other Washington. This map shows the stark differences nationwide with lower income prevailing.
December 11, 2013 at 10:17 AM
The Volcker Rule, named after the cigar-chomping former chairman of the Federal Reserve Board who championed it, is finally in place. It aims to prevent banks from risky speculation, known as proprietary trading. The fact that Wall Street and the big banks fought it so hard shows it’s a good policy. But it is only a start.
December 10, 2013 at 10:11 AM
As Bill Ayer prepares to retire as chairman of Alaska Air Group at the end of the year, one of the greatest achievements of his 31-year career has been to keep the company independent as the industry has consolidated into a handful of giants. The latest came Monday, as US Airways merged into American Airlines.
December 9, 2013 at 10:16 AM
The graph above is a rough estimate of household wealth, and the latest data just released show that overall Americans continue to dig out of the losses caused by the Great Recession. One caveat: Adjusted for inflation, net worth is about 1.4 percent below its peak.
The third-quarter increase was 2.6 percent compared with the same quarter in 2012, bringing household wealth to $77.3 trillion. So much for the austerian hysteria that “we’re broke!”
The data also require a big asterisk: This is the wealth of everybody, Bill Gates, the minimum-wage person behind the counter at McDonald’s. Wealthier Americans have benefited from a huge rally on the stock market, along with other trading gains. These have been especially beneficial for those who make their living from investments.
Those who depend on wages are still struggling, with the average household making less than it did in 1989.
Another Monday metric: November retail hiring of 471,000 is down 4.7 percent from last year, according to the outplacement firm Challenger, Gray & Christmas.
Even so, it is the second-highest gain for the industry on record (the best showing was 2012). This tells us as much about the changing composition of job opportunities — three job seekers for every opening — as it does about what is happening in retail.
And Don’t Miss: By George, Britain’s austerity experiment didn’t work | The New Yorker
Today’s Econ Haiku:
A jet at our heads
We’ll all shell out the freebies
So much for state rights
December 6, 2013 at 10:35 AM
One of the most interesting things I learned in Dominic Gates’ story today in the Seattle Times is that the most number of jobs Boeing is promising prospective 777X sites is about 8,500 direct jobs.
Also, the factories for the new airliner and its advanced wing will require an investment of $10 billion (assuming, I assume, they don’t use Everett, where many facilities and much infrastructure already exists). And from the states that want this prize, Boeing wants…a lot to lower its costs.
Machinists here refused the company’s hurry-up-and-say-yes proposal. Yet Washington has approved $8.7 billion in tax breaks. Would Boeing come back with another offer for the union, or is it done — even though the Puget Sound region offers the best place to build the plane?
My question for you: Based on the information we have now…
Read on for some of the best business stories of the week and the Econ Haiku.
December 5, 2013 at 10:19 AM
The Washington Post’s Ezra Klein is surely correct in writing that Wednesday President Obama gave “perhaps the best single economic speech of his presidency.” The president said, “I believe this is the defining challenge of our time: Making sure our economy works for every working American.”
But changing the trajectory of policy and change that has caused the worst inequality since the Gilded Age is a different matter.
Technology has played a role, at the very least in widening the rewards the market gives different actors, in making it even harder on people with only a high-school education or less. Many anti-immigration critics say this is a big problem, and there is some truth to this inasmuch as immigration has been at very high levels over the past 20 years.
But policy is responsible for most of the problem.
Policy made it easier to bust unions and more difficult for workers to unionize. Court decisions have tilted the balance away from worker rights and protections.
December 4, 2013 at 10:55 AM
A reader writes, under the heading: “Care to explain the reasons for the dramatic rise in the stock market indices since 1/01/13?:
Low federal minimum wage? Low minimum wage affects only a very, very small segment of all people employed in this country, and even smaller portion of the number of people casting votes for president in 2012.
Leftist’s goal is something close to equality of outcomes. Not mathematical equality, but something closer to equality of outcomes.
Are you aware of any instances where machines are being yarded-out in order to make room for more employees? Higher minimum wage advocates are complaining about symptoms, paying no attention to causes of inequality. The pickle that the (so-called) machinists are in vividly demonstrates what higher wage costs do; drive employment away. The desire for higher profits on the part of shareholders is a given, and not easily satisfied.
The pickle that the City of Detroit is in can be attributed to a few things, higher employment costs being one of them, street gangs and unbelievable violent crime rates being others. “Rent-seeking” in Detroit was and probably still is rampant. Want to be elected in Detroit? Promise a fat pension, then face no consequences when unable to deliver 30 years down the road.
The Pension Benefit Guarantee Corporation will not be required to help.
How do you like long dead liberal politicians now?
The assembly line, improved upon by Henry Ford, cut unit labor required to build an automobile by about 90%.
Cutting recruitment and training costs more than made up for increases in hourly labor rates. H. Ford was not a shining example of an altruist.
December 3, 2013 at 10:56 AM
When Heritage Financial of Olympia merged with Washington Banking, parent of Whidbey Island Bank in October, the deal was part of a much larger trend. According to an analysis of FDIC data by the Wall Street Journal, the number of banking institutions in the United States has fallen to its lowest level since at least the Great Depression.
The well-known story of the Great Recession is that the Too Big To Fail banks that did so much to cause it (and got away with it) grew larger still. Now we can see the other side of the
The number of banks peaked at more than 18,000 in the late 1980s. As of Sept. 30, there were 6,891.
According to the Journal, “The consolidation could help alleviate concerns that the abundance of U.S. banks leads to difficulties in oversight or a less-efficient financial system. Meanwhile, overall bank deposits and assets have grown, despite the drop in institutions.”
December 2, 2013 at 10:42 AM
It is too early to know how the holiday retail season turns out, but some early indicators are not good. According to the National Retail Federation, sales through the entire Black Friday weekend actually declined by 3.9 percent compared with the same period last year.
The data will be noisy until after the first of next year, but some metrics are clear.
The average American family makes less, adjusted for inflation, than it did in 1989. Although productivity has risen, wages have largely stagnated. Nearly 40 percent of workers made less than $20,000 in 2012. Older workers are increasingly left to work in the low-wage fast-food sector.
The lowest-income households have barely seen any growth in recent decades. Economic mobility, once a cornerstone of a growing middle class, has become more difficult. Even before the devastating Great Recession, the top 1 percent (and the top one-hundredth of 1 percent) had seen their share of income skyrocket.
November 29, 2013 at 10:31 AM
People who want to be citizens instead of “consumers” face a conundrum during the hyper-commercialized holiday shopping season. America consumes more than it produces, adding to greenhouse gasses through the 10,000-mile supply chain and killing jobs through the trade deficit. The temptation is to drop out.
But we want to give gifts. Not only that, but the economy is heavily dependent on consumer spending (although not, technically, 70 percent, because that includes health care expenditures).
In other words, your spending helps pay for my job and likely vice versa. Performance during the holidays can make the difference whether your favorite stores stay open or not.
Still, people can choose responsibly where their spending goes. They can shop at locally owned small businesses, or chains that pay decent wages and offer real benefits to their employees. Get on “the tubes” and do some research.