Media clips
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Since the Great Recession, reports of rising income inequality in the U.S. have pretty much followed the same basic storyline: The rich are getting richer. The poor are getting poorer. So on, so forth.
It’s easy to associate the economic downturn with the 1 percent’s seemingly meteoric rise in wealth leading up to the recession, but it was hardly an overnight occurrence. The rich have been on an unprecedented tear for decades, as illustrated in a new analysis of IRS income data by the new report by the Economic Policy Institute, a left-leaning think tank. Indeed, the widening income disparity has become so acute that President Obama called it the “defining challenge of our time’ in his recent state of the union address.
Since 1979, the average income of the bottom 99 percent of U.S. taxpayers grew by 19%, while the average income of the top 1 percent grew more than 10 times as much—by 200.5%.Yahoo Finance February 21, 2014 -
But some liberal economists argue that the bursting of the dotcom bubble and later the great recession laid bare the legacy of NAFTA. According to a 2006report from the left-leaning Economic Policy Institute, the treaty led to the loss of an estimated one million American jobs in its first decade. A 2012 poll found that 53 percent of Americans wanted the government to “do whatever is necessary” to amend or leave NAFTA, while only 15 percent wanted to remain in NAFTA as-is.
The Atlantic February 21, 2014 -
The minimum wage has potent implications for our national discussion of inequality and upward mobility. Republicans have been paying lip service to the idea of reducing inequality and increasing upward mobility, but so far policy proposals have been sparse. The minimum wage is a perfect solution. It requires little government spending and is unlikely to have any significant effect on the deficit. It certainly doesn’t violate the “no new taxes” pledge. So a minimum wage hike would be the perfect conservative solution to inequality: targeted at working people (rather than the unemployed), minimal bureaucracy and no new revenue for the government. And studies show it would work. Larry Mishel of the Economic Policy Institute finds that the declining value of the minimum wage has been a major driver of increased inequality. Citing the work of David Autor, he finds that more than half of the growing divide between workers at the median and workers at the lowest 10% of the income distribution can be explained by a declining minimum wage.
Salon February 21, 2014 -
Sure, Davidoff is right that sky-high CEO pay deserves a broader look across the board. After all, it’s a big driver of income inequality. As the Economic Policy Institute has found, “Executives, and workers in finance, accounted for 58 percent of the expansion of income for the top 1 percent and 67 percent of the increase in income for the top 0.1 percent from 1979 to 2005.” Not only that, but taxpayers are subsidizing these big pay packages thanks to a loophole allowing corporations to write off CEO pay that is “performance based.” (Rep. Lloyd Doggett, D-Texas, has introduced legislation to fix that particular problem, but given what the Republican-held House is interested in these days, I wouldn’t expect it to come up for a vote anytime soon.)
US News and World Report February 21, 2014 -
Since then, according to Doug Hall, director of the Economic Analysis and Research Network at the Economic Policy Institute, other economists have done similar studies at the state and county level when a minimum wage change makes labor more expensive in one jurisdiction than in a neighboring one.
The chart above shows the results of more than 1,400 different studies. The x-axis shows the size of the employment effect, and the y-axis shows that statistical power of the analysis.
The Fiscal Times February 21, 2014 -
Economist at the Economic Policy Institute Heidi Shierholz says that despite projecting job loss, the CBO’s latest report on the minimum wage hike also shows how lower wage workers will
The Hill February 21, 2014 -
On Thursday afternoon, the faculty senate will review this proposal to tie the president’s salary to that of the school’s lowest-paid employees. Such workers at the public liberal arts college currently make$24,500 a year, which would translate into a $245,000 salary cap for the president — roughly $80,000 less than Ian Newbould, the college’s interim president, presently makes.
The move comes at a time of budget difficulties for the college, which lost roughly $3.5 million in expected tuition this academic year when it failed to fill enrollment numbers for its freshman class. It also comes at a time when higher-ed costs are ballooning across the United States and when executive pay is under increased scrutiny. This fall, the Securities and Exchange Commission voted to propose a rule requiring companies to disclose the ratio of CEO pay compared to their median worker’s. In 2012, according to the Economic Policy Institute, that ratio was 273-1.
The Washington Post February 21, 2014 -
The United Auto Workers’ failure to organize the employees at Volkswagen’s plant in Chattanooga, Tenn., has been greeted with predictable hosannas from the sworn enemies of American unions. Survey their celebratory columns, though, and you won’t find the slightest consideration of most Americans’ primary economic problem: How do workers get a raise in today’s economy? With the rate of unionization so low that even unionized employees have trouble winning good contracts, how can workers profit from the gains in their productivity? What will it take for workers to regain the power to reap what they sow?
In recent decades, they’ve reaped precious little. Between 1947 and 1973 — roughly the one period of union strength in U.S. history — productivity increased by 97 percent and workers’ compensation (that’s wages plus benefits) by 95 percent. Since 1973, however, as unions have weakened, productivity has increased by 80 percent and compensation by just 11 percent, according to the Economic Policy Institute.
The Washington Post February 21, 2014 -
But that’s all water under the bridge. The important point is that U.S. fiscal policy went completely in the wrong direction after 2010. With the stimulus perceived as a failure, job creation almost disappeared from inside-the-Beltway discourse, replaced with obsessive concern over budget deficits. Government spending, which had been temporarily boosted both by the Recovery Act and by safety-net programs like food stamps and unemployment benefits, began falling, with public investment hit worst. And this anti-stimulus has destroyed millions of jobs.
The New York Times February 21, 2014 -
A new non-partisan report has set off a storm of dueling arguments over the perennially testy question of raising the minimum hourly wage.
The proposal, by Democrats, to raise the minimum wage to $10.10 per hour would bring some 900,000 families above the poverty line and boost the income of an additional 16.5 million workers, but any such pay increase could also cost the jobs of as many as 500,000 workers, an analysis by the Congressional Budget Office found.
Almost as soon as the report was released Tuesday, opponents began to cite the report in an effort to torpedo any Congressional vote to hike the federal minimum from $7.25 per hour to $10.10 by 2016.
CNNMoney February 21, 2014