Whatever President Obama proposes in tonight’s State of the Union address will go nowhere in the Republican-controlled Congress. But he will attempt to use the bully pulpit to acknowledge and, to some degree, propose a way out of the worst inequality since the Gilded Age. Two years of free community college can’t hurt. Falling educational attainment…More
More evidence of growing inequality among Americans comes today from the Census Bureau, which looked at five groups, each representing 20 percent of the population (quintiles) from 2000 through 2011. Overall, median net household worth declined by $5,046, or 6.8 percent. But inequality widened. The top two quintiles saw their worth increase. The lower three saw…More
While the world is watching Ferguson, Mo., it is useful to examine how this inner-ring suburb is emblematic of many unfortunate economic trends in America. In 2010, the town was more than 67 percent African-American, a demographic particularly hit hard not only by the Great Recession but by disruptions with a longer arc. The homeownership rate…More
A study arguing this might at first glance seem like research that shows the common cold makes sufferers sneeze. But a new report from Standard & Poor’s, “How Income Inequality is Dampening U.S. Economic Growth and Possible Ways to Change the Tide,” is important nonetheless. A powerful segment of political and business leaders deny…More
It has been well documented that wages adjusted for inflation for most workers have been stagnant since the mid-1970s. The one exception: from the late 1990s until 2002. This is a key driver of rising inequality. But researchers at the Levy Economics Institute of Bard College have added a new twist. The labor force is…More
The Harry Bridges Center for Labor Studies at the University of Washington will host an event Friday that will take an in-depth look at rising inequality. It is aimed at connecting major scholars with activists, but promises to offer plenty of perspective for the general public. Professor George Lovell said, “We aim to take a step…More
If advocates of a higher minimum wage in the city of Seattle succeed, it might look something like what has happened in the District of Columbia. There, the city council has voted to raise it to $11.50 an hour and has the votes to override a veto from Mayor Vincent Gray.More
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.More
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.More
If you haven’t already read the wonkishly titled Aggregate Supply in the United States: Recent Developments and Implications for the Conduct of Monetary Policy, it is definitely worth your time.
Written by David Wilcox, the head of research at the Federal Reserve, and two other Fed economists, this paper argues that the Great Recession and the years of weak recovery have done long-term damage to the American economy.
It’s not just sustained high unemployment, weak output and continued stagnant wages. The consequences are a negative feedback loop of lost productive capacity. They use the term “hysteresis” to describe the phenomenon, in this case the ecosystem of the economy being dependent on past conditions, not merely those of the present.
Most important, their research shows that the crisis and its aftermath “shaved” almost 7 percent off potential output based on the trend up to 2006. That’s almost $1.2 trillion.More