Media clips
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Last month, the Conference Board’s consumer confidence index rose to its highest reading since October 2007, two months before the Great Recession began. But a survey released last week by Rutgers University found that Americans are more anxious about the economy now than they were right after the recession ended.
Among the still negative signs:
— The number of people unemployed for 27 weeks or more remains elevated, accounting for nearly 33 percent of the 9.7 million jobless workers.
— Real hourly wages fell from the first half of 2013 to the first half of 2014 for all income groups, except for a small 2-cent increase for the lowest income level, according to the liberal Economic Policy Institute. That minor increase was attributed to minimum wage increases in states where 40 percent of workers live.
Both parties are seeking to exploit those weaknesses and draw contrasts for voters. Republicans argue that the long-term unemployed and the flat wages are the result of Obama administration policies, ranging from health care to the environment.
Obama and Democrats are pointing to the lack of wage growth as a reason to push for a higher federal minimum wage.
“Until we’ve got a Congress that cares about raising working folks’ wages, it’s up to the rest of us to make it happen,” Obama said in his radio and Internet address Saturday.
Politico September 3, 2014 -
Why it feels like the recession didn’t end: Christopher Ingraham reports on a new study from the Economic Policy Institute that finds limited wage growth for the average American since the financial crisis. (Washington Post)
Stories we’re watching:
Not much. Shaping up to be a pretty slow pre-Labor Day Friday.
At QED:
Amy Cohn, an expert on the airline industry, explains why airlines screw you over—and how to avoid it. And the Ninth Circuit Court of Appeals gave a big victory to some FedEx drivers Wednesday.
The New Republic September 3, 2014 -
Another report by the Economic Policy Institute, a Washington, D.C-based policy research group, issued in time for the Labor Day holiday found American workers haven’t had a pay raise in 35 years. A look at wages since 1947 found that, from 1947 to 1979, annual family incomes grew across the board between 2.2 percent and 2.5 percent.
Then, from 1979 to 2007, those in the bottom fifth of household income saw no change, adjusted for inflation. The second, third and fourth-fifths saw their income grow at less than 1 percent a year.
Meanwhile, those in the top fifth saw an increase of 1.5 percent, or more than twice that of people in the middle. Those at the top 5 percent experienced growth of more than 2 percent a year during that time.
But, from 2007 to 2012, every group lost income, except the top 5 percent, which experienced a slight increase. The poorest Americans lost ground at a rate of 2.7 percent a year, with almost everyone else losing a slower rate.
Carl Van Horn, one of the authors of the Rutgers study, said the two independently produced reports reinforce each other. “One is the economic reality as portrayed by wages and the other is how people feel,” he said.
McClatchy September 3, 2014 -
Also in The News Tribune, The Daily News Online, The Columbus Dispatch, abq journal
Gains are also reflected in cheerier (or less gloomy) popular attitudes, says public opinion expert Karlyn Bowman of the conservative American Enterprise Institute. A year ago, Gallup found that 29 percent of workers feared being laid off; that’s now 19 percent. (Millennials are exceptions; their unemployment fears rose slightly.) In March 2010, 85 percent of Americans judged jobs “difficult to find,” a Pew survey reported. In July this year, the figure was 62 percent. Although confidence hasn’t returned to pre-recession levels, there’s been a genuine improvement in mood, says Bowman.What’s missing are wage increases. Since late 2009, hourly earnings have risen at an annual rate of about 2 percent, but when corrected for inflation, “real” wage increases vanish, reports the Economic Policy Institute, a liberal think tank. The EPI says that median hourly wages were actually 0.4 percent lower in the first half of 2014 than in 2007. Using a different inflation adjustment (the “deflator” for personal consumption expenditures instead of the consumer price index) produces a 1.7 percent gain over the same period, says Scott Winship of the Manhattan Institute. Either way, wages are basically flat.
We should do better.
Washington Post September 3, 2014 -
When Jamaad Reed started his job as a cashier at a Walmart near Cincinnati, he made $8.15 an hour. That was two years ago. Since then, he has seen a couple of raises, which have meant his wage has kept up with inflation — but just barely. As of March of this year, Reed was making $9.05 an hour.
“I’m stuck,” he told me recently. “You know what I’m saying? I feel like I’m stuck in the same spot.”
“Stuck” is a pretty good word to describe wages for most American workers over the last few decades. Not just in the case of lower-wage workers like Reed, but all along most of the income spectrum, except for those at the very very top.
In fact, most American workers have seen little to no growth since the late 1970s, if you adjust for inflation, according to Elise Gould. She’s an economist with the Economic Policy Institute and author of a new study that analyzes wage data from census surveys over the last several decades.
That’s not to say that individual workers haven’t seen gains. But, says Gould, “as productivity has continued to rise, typical workers’ wages simply have not.”
That’s a very different economic picture from a half century ago. In the first few decades after World War II, as the nation’s productivity grew, so did wages. So what happened?
Marketplace September 3, 2014 -
Does your wallet feel lighter? You’re not alone.
American workers’ wages fell in the first half of 2014 compared to the first half of 2013 with few exceptions, according to a report released this week by the Economic Policy Institute.
The falling wage trend goes back even further. When compared to the first half of 2007, for instance, wages in the first half of this year were flat or falling. In fact, the depressed wages pattern holds fast even when you compare 2014 wages to those in 1979 (after accounting for inflation).
Productivity from 1979 to 2013 grew 64.9% while hourly compensation of production and nonsupervisory workers, who account for 80% of the private sector workforce, grew by just 8%.
Fortune September 3, 2014 -
For instance, new research from the Economic Policy Institute shows that from the first half of 2013 to the first half of 2014, hourly wages, adjusted for inflation, fell for nearly everyone. An exception was a small gain for the bottom 10 percent of wage earners, which was because of minimum-wage increases in 13 states this year.
That’s clear evidence that raising the federal minimum wage, while only a first step toward better pay, would have a powerful effect. A lift from the current $7.25 an hour to the modest $10.10 called for by President Obama and Democrats in Congress would put an estimated additional $35 billion in the pockets of affected workers over a three-year phase-in period.
Unionization is also associated with higher wages and benefits, especially for low-wage workers, which argues for greater legal enforcement of the right to organize without retaliation.
New York Times September 3, 2014 -
The White House is encouraging Democrats to draw attention to the recovery as they head into the November mid-term elections.
In an August memo to House and Senate Democrats, Obama’s top two economic advisers underscored the positive news: more than 200,000 jobs created per month for six consecutive months, a six-year high in auto sales, second-quarter economic growth that exceeded expectations and an expanding manufacturing sector.
The unemployment rate stands at 6.2 percent, dropping 1.1 points over the past year, and the stock market has nearly tripled in five years.
Even so, there is still significant weakness in the labor market, underscored by the long-term unemployed. Labor participation has dropped. As well, real hourly wages fell from the first half of 2013 to the first half of 2014 for all income groups, except for a 2-cent increase for the lowest income level, according to the liberal Economic Policy Institute.
Americans seem caught between confidence and worry.
In July, the Conference Board’s consumer confidence index rose to its highest reading since October 2007, two months before the Great Recession began. But a new survey by Rutgers University found that Americans are more anxious about the economy now than they were right after the recession ended.
Associated Press September 3, 2014 -
Veronique de Rugy and Lawrence Mishel talked about the state of the America worker and examined national trends in wages and productivity as well as the overall strength of the job market.
C-SPAN September 3, 2014 -
“That’s something that is really missing in today’s workforce,” says Judy Conti, federal advocacy coordinator for the National Employment Law Project. “People of all economic levels increasingly feel like cogs in the wheel, that they don’t matter, that they’re expendable.”
The sense of appreciation Market Basket offered its workers became threatened when one of the board members began siding with Arthur D. Demoulas’s side of the family, changing the balance of power. In June, Arthur T. was pushed out as president and his responsibilities were handed over to co-executives Felicia Thornton and James F. Gooch. The assumption was that Market Basket’s business model would be changed to allow more profits to flow to the top at the expense of its workers, upsetting not only low-level employees, but their mid-level bosses — managers of 68 stores at one point said they would work for no one but Arthur T. — and even customers who boycotted the chain in the last 10 weeks.
“The management was really looking out for the workers leading up to this battle, so when the fight happened, you had workers sticking up for management,” says David Cooper, an economic analyst at the liberal-leaning Economic Policy Institute.
US News and World Report August 29, 2014