Source: L. Josh Bivens and John Irons, Economic Policy Institute, Briefing Paper #214, May 1, 2008
Evidence is mounting that the U.S. economy is in a recession. If this is the case, a complete business cycle from 2001 through the end of 2007 (or perhaps the start of 2008) is now on the books, and the economic performance of the current decade can be held up in comparison to that of past business cycles. By almost all measures, the most recent expansion was the worst since WWII.
A variety of recent economic data now show a pattern consistent with the start of a recession. Since 1951, three consecutive months of job declines have always been signals of a recession; the U.S. employment rate declined for the first three months of 2008. Furthermore, the unemployment rate rose from 4.4% in March 2007 to 5.1% in March 2008.
Source: John Irons, Economic Policy Institute, Briefing Paper #217, April 29, 2008
The Agenda for Shared Prosperity’s central aim is to articulate policy options that will spur growth, reduce economic insecurity, and provide broadly shared prosperity. A central component of achieving individual economic opportunity is ensuring that the economy is growing at a solid pace–both by smoothing the short-term dips and by promoting investments for long-term growth.
Public investments in the nation’s infrastructure, which lay the foundation for long-term growth, have been insufficient in recent years. Visible catastrophic failures are evident in the breach of the levies in New Orleans, the collapse of a major bridge in Minneapolis, and power blackouts that flowed from the Mid-West to New York City. Less visible failures are evident in the slow seepage of sewers into our waterways and in the slow deployment of broadband Internet access.
In a time of economic weakness, public investments in the nation’s infrastructure can provide short-term stimulus and build the foundation for long-term economic growth. Federal investments in infrastructure, including transportation, school buildings, and information networks, are required to address critical national needs and to create jobs and spur the economy.
Source: Robert Reed, National Tax journal, Vol. LXI, No. 1, March 2008
I estimate the relationship between taxes and income growth using data from 1970–1999 and the forty–eight continental U.S. states. I find that taxes used to fund general expenditures are associated with significant, negative effects on income growth. This finding is generally robust across alternative variable specifications, alternative estimation procedures, alternative ways of dividing the data into “five–year” periods, and across different time periods and Bureau of Economic Analysis (BEA) regions, though state–specific estimates vary widely. I also provide an explanation for why previous research has had difficulty identifying this “robust” relationship….
Source: Pew Research Center
From the press release:
This report on the attitudes and lives of the American middle class combines results of a new Pew Research Center national public opinion survey with the center’s analysis of relevant economic and demographic trend data from the Census Bureau. Among its key findings:
Fewer Americans now than at any time in the past half century believe they’re moving forward in life.
For decades, middle-income Americans had been making absolute progress while enduring relative decline. But since 1999, they have not made economic gains.
About half of all Americans think of themselves as middle class. They are a varied lot.
For the past two decades middle-income Americans have been spending more and borrowing more. Housing has been the key driver of both trends.
At a time when these borrow-and-spend habits have spread, Americans say it has become harder to sustain a middle-class lifestyle.
Economic, demographic, technological and sociological changes since 1970 have moved some groups up the income ladder and pushed others down.
Most middle class adults agree with the old saw that the Republican Party favors the rich while the Democratic Party favors the middle class and the poor.
Full Report (PDF; 732 KB)
Overview and Executive Summary (PDF; 158 KB)
Section I: A Self Portrait (PDF; 386 KB)
Section II: A Statistical Portrait (PDF; 293 KB)
Source: Jared Bernstein with research assistance from James Lin, Economic Policy Institute, Jobs Picture, March 7, 2008
In what is the most recessionary jobs report since the last official downturn in 2001, payrolls fell 63,000 last month and were down 101,000 in the private sector, according to today’s report from the Bureau of Labor Statistics. Unemployment actually ticked down slightly, from 4.9% to 4.8%, but this was wholly due to labor force withdrawal. Employment in the more volatile survey of households–the one from which the unemployment rate is drawn–fell over 250,000.
Americans Worried About Their Standard of Living
Source: Dennis Jacobe, Gallup, February 22, 2008
Source: Harry Holzer, Urban Institute, Submitted to Subcommittee on Labor, Health and Human Services, Education and Related Agencies, Committee on Appropriations, U.S. House of Representatives, February 26, 2008
From the abstract:
In testimony on the ramifications of inadequate investments in workforce development, Senior Fellow Harry Holzer told a House Appropriations subcommittee that the very low earnings and employment of millions of Americans generate high poverty rates and impose huge costs on the U.S. economy. The research evidence, while somewhat mixed, shows that many public investments in workforce development are cost-effective at raising the earnings of low-income workers.
Source: Helen Lachs Ginsburg and Gertrude Schaffner Goldberg, New Labor Forum, Vol. 17 no. 1, Spring 2008
With the 2008 election likely to lead to Democratic control of the legislative and executive branches, it is time for a bold new vision of the economy–one that will reduce the increased inequality that has grown in tandem with our national wealth. It is time to take a big step toward shared prosperity. … The National Jobs for All Coalition is proposing a major program called the Drive for Decent Work. It simultaneously attacks economic inequality and our often unacknowledged but crippling double deficits–the chronic shortfall of decent jobs and the gaping hole in public investment. The Drive for Decent Work is a win-win solution that could put the nation back on the path it started to take after World War II.
Source: Pew Research Center for People and the Press, News release, February 14, 2008
Public views of the U.S. economy, already quite negative, have plummeted since January. Just 17% currently rate the nation’s economy as excellent or good, down from 26% last month. The percentage of Americans rating the economy as “poor” has increased even more dramatically, from 28% to 45% in one month.
Source: John Holahan and Allison Cook, Health Affairs, Web Exclusives, Vol. 27 no. 2, published online February 20, 2008
From the abstract:
The number of uninsured Americans increased by 3.4 million between 2004 and 2006, despite improving economic conditions. In the first four years of the decade, during a period of economic recession, the number increased by 6.0 million. The dominant factor in both periods was a decline in employer-sponsored insurance coverage. Although the recent decline was less than that experienced from 2000 to 2004, growth in public coverage was small, and the number of uninsured people increased by 1.0 million children and 2.4 million adults. Employer coverage declined most for self-employed or small-firm workers, in the South, and among noncitizens.
• Cost Impact Analysis for the “Health Care for America” Proposal
• Lewin Group Cost Impact Analysis: Executive Summary
• Costs and Savings: Breakdown of Lewin Group Cost Analysis
• Two Approaches to U.S. Health Care Reform: Shared Responsibility vs. ‘You’re On Your Own’
• Lewin Cost Analysis: Coverage Fact Sheet
Source: Julia B. Isaacs, Isabel V. Sawhill, and Ron Haskins, Brookings Institution, Economic Mobility Project (Pew Charitable Trusts), 2008
Since our nation’s founding, the promise of economic opportunity has been a central component of the American Dream. And while the Dream remains a unifying tenet for an increasingly diverse society, it may be showing signs of wear. Growing income inequality and slower economic growth suggest that now is an important moment to review the facts about opportunity and mobility in America and to attempt to answer the basic question: Is the American Dream alive and well?
This volume, authored by a team of scholars at the Brookings Institution, is one in a series of major research products that aims to further enlighten the public dialogue on economic opportunity. While it offers reassuring findings in some areas, in many others there is room for concern. By arming the public and policy makers with facts about the status of opportunity in America today, this volume seeks to stimulate and frame the debate about which policies are likely to be most effective in ensuring that the American Dream endures for the next century.
▪ Key findings