Category Archives: Economy

Infrastructure Reality Check

Source: Sarah Crane, Regional Financial Review, Volume 28 Number 7, March 2018
(subscription required)

This article assesses the magnitude of needed U.S. infrastructure spending and compares it to current proposals. Further, it assesses the multiplier effect of such spending and finds that it is stronger during a recession and the immediate recovery period when there is considerable idle resources in the economy.

Waiting — and Waiting– For Corporate Tax Cuts to Deliver Those Wage Hikes

Source: Manuel Madrid, American Prospect, April 13, 2018

Though if you’re a CEO or shareholder, the new tax cuts are the gift that keeps on giving. ….

…. It’s been nearly four months since the Tax Cuts and Jobs Act became law, and the good times continue to roll for shareholders and company executives. Corporate profitability is well on its way to hitting decade-long highs, and CEO pay, coming off of a record year in 2017, will be the cause of much champagne-popping. But if the new tax bill, which showered corporate America with an estimated $68 billion in savings, has been a party for Wall Street, folks on Main Street—the supposed primary beneficiaries of the tax-cutting bonanza, as Republicans told it—have yet to receive their invitations.

A new online database launched by Americans for Tax Fairness (ATF), a broad coalition of more than 400 groups championing progressive tax reform, tracks how corporations have responded to the new law. The ATF website, entitled “Trump Tax Cut Truths,” contains information on more than 800 companies, including the amount of tax savings those companies received along with details on planned bonuses, pay raises, and stock buybacks. The information is sourced from news articles, press releases, public corporate filings, independent analysis, and ATF research. ….

Will Corporate Tax Cuts Result in Higher Wages for U.S. Workers?

Source: Gordon Gray and Matthew Gardner, HR Magazine, Vol. 63 no. 3, April 2018
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Two economists debate the issue.

Gordon Gray: Yes. The benefits of the 2017 tax bill are just beginning. ….
Gordon Gray is director of fiscal policy at the American Action Forum in Washington, D.C.

Matthew Gardner: No. Trickle-down tax breaks will have little effect. ….
Matthew Gardner is a senior fellow at the Institute on Taxation and Economic Policy in Washington, D.C.

The Economic Status of Women in the States

Source: Julie Anderson, Jennifer Clark, Institute for Women’s Policy Research, Fact Sheet, IWPR# R532, March 2018

From the summary:
This Fact Sheet presents findings from analysis of the Employment & Earnings Index and Poverty & Opportunity Index of The Status of Women in the States series, a comprehensive project that presents and analyzes data for all 50 states and the District of Columbia. The state grades, rankings, and data provided on these two measures of women’s economic status provide critical information to identify areas of progress for women in states across the nation and pinpoint where additional improvements are still needed. The state-by-state grades are based on composite indices first developed by the Institute for Women’s Policy Research in 1996. For a complete discussion of data sources and methodology, and to find fact sheets on the economic status of women in each state, please visit the interactive Status of Women in the States website at statusofwomendata.org.

Related:
The Economic Status of Women in the U.S.: What Has Changed in the Last 20 – 40 Years
Source: Heidi Hartmann, Institute for Women’s Policy Research, Presentation, March 28, 2018

The Real Cost of Luring Big Companies to Town

Source: Sarah Holder, City Lab, March 29, 2018

A new economic analysis suggests that when cities and states offer tax deals for large companies, public education suffers and incomes eventually fall.

Related:
Who Benefits From Economic Development Incentives? How Incentive Effects on Local Incomes and the Income Distribution Vary With Different Assumptions About Incentive Policy and the Local Economy
Source: Timothy Bartik, W.E. Upjohn Institute, 2018

From the abstract:
As state and local governments have assembled lavish incentive packages to lure business such as Foxconn and Amazon, many have questioned whether these incentives are a good deal. In a new report from the Upjohn Institute, Senior Economist Timothy Bartik shows that the typical incentive package has only modest benefits for local jobs and incomes. Carefully targeted incentives can provide much larger local benefits, but those that draw money from public services such as education can significantly harm local economies.

Policy Brief
Executive Summary

Does County Form of Government Impact Economic Growth and Development Trends? The Case of Four States

Source: Stephanie A. Pink-Harper, The American Review of Public Administration, Vol. 48 no. 3, April 2018
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From the abstract:
Counties have expanded the scope of their activities in the economic development process. However, limited research exists of the factors that influence economic growth and development trends of these unique communities. The primary focus of this case study analysis is to determine whether form of government has an impact on county economic growth and development trends while controlling for environmental context and demographic characteristics in Alabama, Pennsylvania, Illinois, and Washington. To empirically test the impact that county form of government and environmental factors have on local economic growth and development trends, ordinary least squares regression is used. The results of this study show that form of government has only a marginal impact on county economic growth and development trends. County environmental factors are found to have a more substantive impact on the economic growth and development trends of counties across these four states.

Index of State Economic Momentum

Source: State Policy Reports, Vol. 36 no. 6, March 2018
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The Index of State Economic Momentum, developed by Reports founding editor Hal Hovey, ranks states based on their most recent performance in three key measures of economic vitality: personal income growth, employment growth, and population growth. Reports updates the index each quarter. In the first quarter of 2018, Nevada reclaimed the top spot, while the District of Columbia most closely approximated the national average economic performance.

Should State and Local Government Bidding for Big Businesses Be More Like eBay?

Source: Linda McCarthy, Growth and Change: A Journal of Urban and Regional Policy, Early View, April 1, 2018
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From the abstract:
During recent decades, and especially after the economic downturn that began in the late 2000s, many U.S. state and local governments have intensified their pro‐growth efforts to promote corporate investment and jobs, including ever higher incentives (such as tax breaks and grants) in their bidding wars for big businesses. This paper draws an analogy—between bidding for big businesses and bidding on eBay—to highlight the drawbacks of high‐profile bidding wars among governments given that the large corporations establish the bidding rules in their favor. The main consideration raised is whether state and local government bidding for big businesses, which operates analogously to an auction, should be more like eBay, whose rules are fair not only for sellers but also for bidders.