Looking at those two factors, there’s a strong argument that the Fed stands behind growth in inequality, particularly when it comes to wealth. But the picture is murkier when it comes to income. And experts sounded a note of caution about trying to work out the distributional effect that the central bank’s policies might be having more generally.
“I don’t think we know that much about it,” said Josh Bivens, an economist at the left-of-center Economic Policy Institute, a Washington-based research group. “It would be interesting to have a really determined academic look at the effect on all these asset groups and try to figure it out from there.”
Even if the Fed had stoked some wealth inequality through the stock and housing markets, he said, that would not be the full picture. How much did the Fed’s policies account for the housing turnaround, or the stock-price rebound? That would be hard to say. In the case of the stock markets, corporate earnings seemed the main factor, Mr. Bivens said.
Moreover, the fuller picture would need to take into account how the Federal Reserve might have eased earnings inequality by reducing unemployment. “High unemployment is much more destructive to wage growth for low-income workers than for high-income workers,” Mr. Bivens said. “The Fed might have done quite a bit to keep wages from falling even further at the low end.”
The New York Times
June 6, 2013
Moreover, the quality of the jobs available to recent college graduates today is much lower than in the past. In a new analysis, the Economic Policy Institute found that real wages for young college graduates have declined by 8.5 percent since 2000, and the share of young college graduates receiving employer-provided health insurance or pensions has also dropped in recent years.
Center for American Progress
June 6, 2013
Apple and Google are among the many corporations to have argued that America’shigh corporate tax rates discourage companies from bringing offshore profits — and hence jobs — back home to the United States. Yet after considering several decades of historical data on the U.S. corporate tax rate and economic growth, a new policy brief contends that there is no statistical relationship between the two factors.
The brief, by the Economic Policy Institute, a left-leaning think tank, finds that lowering the U.S. corporate income tax rate would not increase the country’s economic growth. Indeed, EPI goes as far as to say there is no evidence to support that the tax rate and economic growth are correlated at all.
The Huffington Post
June 6, 2013
Cutting corporate taxes won’t spur economic growth, according to a research report by issued today by the Economic Policy Institute.
The institute’s director of budget research, Tom Hungerford, found no proof that high corporate taxes negatively affect the economy — and no correlation at all between corporate tax rates and economic growth. He analyzed corporate tax rates and economic growth since 1947.
Corporate taxes have been in the headlines after last month’s outrage that the world’s most valuable tech company Apple Inc. shifted profits to a low-tax offshore tax haven and created offshore entities to avoid paying billions of dollars in U.S. taxes, according to congressional investigators.
Dallas Morning News
June 6, 2013
Just as ACT launched, the progressive Economic Policy Institute released a report showing “no evidence that high corporate tax rates have a negative impact on economic growth.” The report examined the statutory and effective tax rates since 1947, finding that reductions in rates did not produce an accelerating Gross Domestic Product.
The Fiscal Times
June 6, 2013
And we have a pretty good idea, based on careful statistical studies, of where that optimal top rate lies; 73 percent, say Diamond and Saez, maybe 80 percent, say Romer and Romer.
The New York Times
June 6, 2013
Even today, there are good reasons for economic pessimism. Unemployment is still at 7.5 percent. Wages have barely grown at all when you adjust for inflation. And Josh Bivens of the Economic Policy Institute says that, with 2.5 percent economic growth, the country is not exactly rocketing out of its hole.
“We have not seen really rapid job creation,” he says. “We’ve been averaging roughly 175,000 jobs per month. At that pace of growth, you’re looking at sort of a full employment economy not till somewhere around 2020.”
NPR
June 6, 2013
The Economic Policy Institute published an informative paper several weeks ago that broke down a lot of the myths around the STEM shortage.
First, let’s look at basic economics. When there’s a shortage — when demand exceeds supply — the price of a good increases. If there were truly a supply shortage, then, why hasn’t the compensation for tech workers increased dramatically?
Business Insider
June 4, 2013
What’s more, almost half of Americans, 47 percent of us according to an analysis by the Economic Policy Institute, had no assets at all in 2009.
Washington Monthly
June 4, 2013
Even today, there are good reasons for economic pessimism. Unemployment is still at 7.5 percent. Wages have barely grown at all when you adjust for inflation. And Josh Bivens of the Economic Policy Institute says that, with 2.5 percent economic growth, the country is not exactly rocketing out of its hole.
“We have not seen really rapid job creation,” he says. “We’ve been averaging roughly 175,000 jobs per month. At that pace of growth, you’re looking at sort of a full employment economy not till somewhere around 2020.”
NPR
June 4, 2013