Media clips
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Maybe it has led employers to add tens of thousands of jobs. Or perhaps it has caused the loss of 700,000 jobs. Maybe it has been “a bonanza for U.S. farmers and ranchers,” as the United States Caanhamber of Commerce has said. But perhaps it has depressed wages for millions of working families. Then again, maybe all sides are wrong: “Nafta brought neither the huge gains its proponents promised nor the dramatic losses its adversaries warned of,” wrote Jorge G. Castañeda in an essay for Foreign Affairs this winter. “Everything else is debatable.”
The New York Times April 3, 2014 -
Upworthy April 3, 2014
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For years, I’ve been making the same embarrassing mistake about U.S. economic inequality. Sorry.
I’ve written, over and over, that the most important divide in our wealth disparity was between the 1 percent and the 99 percent. For example, when I compared the evolution in investment income since the late 1970s, I often imagined a graph like this from the Economic Policy Institute, showing the 1 percent flying away from the rest of the country.
The Atlantic April 3, 2014 -
Who earns the minimum wage?
About 67,000 workers in Maryland earned the minimum wage or less in 2012, according to the U.S. Bureau of Labor Statistics. The vast majority work in businesses that employ 50 people or more.
A hike in the minimum wage would be likely to affect about 445,000 workers, according to an analysis by the Economic Policy Institute. That number includes people who are currently paid between $7.25 and $10.10 an hour, and those who are paid slightly more than $10.10 but would likely get raises if the minimum wage approached their pay grade.
The Washington Post April 3, 2014 -
As an aside, I think the same kind of policy machismo was an important reason so many people who really, really should have known better supported the Iraq war.
The deficit obsession has faded a bit; but we still have others. And this new EPI report is a useful reminder of the extent to which another doctrine that sounds serious retains a grip on discourse — namely, the notion that we have big problems because our work force lacks essential skills.
This is very much a zombie doctrine — that is, a doctrine that should be dead by now, having been repeatedly refuted by evidence, but just keeps on shambling along. EPI presents some very interesting evidence from a survey of manufacturing, but they’re hardly the first to show that the data don’t at all support the skills-shortage hypothesis. And it’s not just labor-associated think tanks or progressives who have rejected the skill shortage story based on the evidence. The Boston Consulting Group did its own study,and the only hints of a skills shortage it found were in unglamorous skilled blue-collar work:
By BCG’s definition, only five of the nation’s 50 largest manufacturing centers (Baton Rouge, Charlotte, Miami, San Antonio, and Wichita) appear to have significant or severe skills gaps. Occupations in shortest supply are welders, machinists, and industrial-machinery mechanics.
The New York Times April 3, 2014 -
Actually, in an ever-changing economy there are always some positions unfilled even while some workers are unemployed, and the current ratio of vacancies to unemployed workers is far below normal. Meanwhile, multiple careful studies have found no support for claims that inadequate worker skills explain high unemployment.
But the belief that America suffers from a severe “skills gap” is one of those things that everyone important knows must be true, because everyone they know says it’s true. It’s a prime example of a zombie idea — an idea that should have been killed by evidence, but refuses to die.
And it does a lot of harm. Before we get there, however, what do we actually know about skills and jobs?
Think about what we would expect to find if there really were a skills shortage. Above all, we should see workers with the right skills doing well, while only those without those skills are doing badly. We don’t.
The New York Times April 3, 2014 -
The charts aren’t merely illustrative: they are an essential part of Piketty’s contribution. Fifteen or twenty years ago, debates about inequality tended to be cast in terms of clever but complicated statistics, such as the Gini coefficient and the Theil entropy index, which attempted to reduce the entire income distribution to a single number. One thing that Piketty and his colleagues Emmanuel Saez and Anthony Atkinson have done is to popularize the use of simple charts that are easier to understand. In particular, they present pictures showing the shares of over-all income and wealth taken by various groups over time, including the top decile of the income distribution and the top percentile (respectively, the top ten per cent and those we call “the one per cent”).
The Piketty group didn’t invent this way of looking at things. Other economists, such as Ed Wolff, of New York University, and Jared Bernstein and Larry Mishel, the creators of the invaluable State of Working America series, have long used similar charts and tables in their publications. But partly by using new sources of data, such as individual tax records, and partly by expanding the research to other countries, Piketty and his colleagues have deployed their charts to reshape the entire inequality debate.
The New Yorker April 3, 2014 -
MICHAEL TANNER: Pleasure to be with you. MARTIN: Also back with us, Ross Eisenbrey. He is vice president of the Economic Policy Institute. That’s a think tank that advocates for low and middle-income workers. Welcome back to you as well. Thank you for joining us. ROSS EISENBREY: It’s a pleasure to be here. MARTIN: So could you just help me understand why there’s this difference between the minimum wage for tipped workers and for other workers? And I’m sure it’s more complicated than a simple answer, but if you could try to make it as simple as you can. EISENBREY: I’m going to make it simple and complicated. The federal government, when it covered workers like restaurant workers, right from the beginning said that the employer only had to pay directly half of the minimum wage and could rely on tips for the other half. And so that’s the simple question. Over time, it’s no longer half – it’s only $2.13 for a $7.25 minimum wage.
NPR March 28, 2014 -
In her first press conference this week, incoming U.S. Federal Reserve Chair Janet Yellen indicated the central bank would reduce its bond purchases at a slightly quicker pace but also continued to de-emphasize the importance of the previously announced threshold of a 6.5% unemployment rate for raising short-term interest rates. Her remarks initially rattled markets, but this is actually a very sensible stance and one that shouldn’t have been news to anyone following the Fed’s announcements in recent months; the fact that markets hiccuped after hearing this indicates only that short-term stock movements convey essentially zero useful information.
Normally, economists would tell you that the Fed’s job is to manage a delicate trade-off between the two prongs of its dual mandate: keeping inflation low while maximizing employment. But since the beginning of 2008, a majority of macroeconomists has agreed that this normally delicate trade-off no longer exists, and that the Fed should focus on economic activity and employment, period. Unfortunately, that consensus shows signs of prematurely fraying. Some observers have started arguing that the time has come for the Fed to ease off the accelerator and start worrying about excessive inflation again — despite strong evidence that there is still a great deal of slack in the labor market.
CNNMoney March 27, 2014 -
5. If you’re not officially poor, you’re doing okay. The federal poverty line for a family of two parents and two children in 2012 was $23,283. Basic needs cost at least twice that in 615 of America’s cities and regions.
Mother Jones March 27, 2014