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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

Category: Inequality
August 21, 2014 at 10:47 AM

Inequality grew from 2000 through 2011

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…

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Comments | More in Inequality | Topics: Household income

August 15, 2014 at 10:52 AM

The economics of Ferguson

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…

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Comments | More in Income/living standards, Inequality | Topics: Ferguson, Mo.

April 24, 2014 at 10:11 AM

UW event will take deeper look at inequality

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…

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December 5, 2013 at 10:19 AM

Tackling inequality: Easier said than done

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.

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December 2, 2013 at 10:42 AM

Wages, debt drag on holiday sales

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 2012Older 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.

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Comments | More in Inequality, Retail

November 12, 2013 at 10:32 AM

The recession and its aftermath: Bad baked in the cake

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.

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Comments | More in Great reset, Inequality

November 6, 2013 at 10:45 AM

Minimum wage: Today SeaTac, tomorrow the nation?

Well, no. If the trend holds and SeaTac voters approve a $15-per-hour minimum wage, it will be very hard to translate this victory into a national movement.

SeaTac is a tiny municipality with only 12,000 registered voters. It has a large number of low-wage restaurant and hotel businesses that are captive to their proximity to Seattle-Tacoma International Airport. They will have little choice but to pay the new wage.

For that same reason, SeaTac won’t likely be a useful laboratory to examine the unintended consequences that critics warned about, or the benefits that supporters claim.

Enacting the wage in a city such as Seattle would be much more difficult, even though Mayor-elect Ed Murray has paid lip service to it. Business community resistance would be fierce and potent. And businesses would have more options: Move, close, cut back hours and refuse to hire the least-skilled workers.

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Comments | More in Inequality, Jobs/Unemployment | Topics: minimum wage, SeaTac vote

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