Category Archives: Economy

America the Unequal: Origins and Impacts of a Policy Revolution

Source: Josh Bivens, Dēmos, 2013

This paper reassesses the origins and effects of the neoliberal policy revolution launched in the late 1970s. … This paper argues that growing inequality is not just the most salient economic fact of life for the vast majority of American families over the past generation; it is also a direct consequence of profound changes in economic policy, with systematic distributional implication. We begin by charting out the changes in policy that were undertaken, and then provide an examination of why these changes were proposed and (more importantly) what led to their adoption. The paper concludes by assessing what can be learned about policy impacts on the distribution of economic rewards, and by identifying the challenges and opportunities inherent in undertaking a political campaign to brake or reverse the rise in inequality …

U.S. Metro Economies Outlook – Gross Metropolitan Product, with Metro Employment Projections

Source: IHS Global Insight, November 2013

From the press release:
The nation’s cities are struggling more economically in 2013 than they did in 2012, according to a report done by IHS Global Insight for The U.S. Conference of Mayors. The report findings show that one-third (119) of the nation’s 363 U.S. metropolitan are as — cities and their surrounding suburbs — will see stagnant or declining economies this year. That number has increased significantly since last year, when only one-fifth (73) of U.S. metros experienced no growth. …[T]he report also shows that while two-thirds (244) of U.S. metropolitan areas will see
some measure of economic expansion in 2013, almost 40 percent of the cities/metros will grow by only 1 percent or less.
See also:
Key Findings

Investing in Young Children: A Fact Sheet on Early Care and Education Participation, Access, and Quality

Source: Stephanie Schmit, Hannah Matthews, Sheila Smith and Taylor Robbins, Center for Law and Social Policy (CLASP), Fact Sheet, November 2013

High-quality early care and education can play a critical role in promoting young children’s early learning and success in life, while also supporting families’ economic security. Young children at highest risk of educational failure – those experiencing poverty and related circumstances that may limit early learning experiences – benefit the most from high-quality early care and education programs. This joint fact sheet, from CLASP and NCCP, reveals that significant underinvestment in early care and education programs at the state and federal levels has left large numbers of eligible children underserved.

The Glass Floor: Education, Downward Mobility, and Opportunity Hoarding

Source: Richard V. Reeves and Kimberly Howard, Brookings Institution, Center on children and Families, November 2013

From the summary:
From an intergenerational perspective, the U.S. income distribution is sticky at both ends. Affluence and poverty are both partially inherited. Policy and research has focused on upward mobility, especially from the bottom. But relative intergenerational upward mobility is only possible with equivalent rates of downward mobility, where much less attention has been directed. Those born into more affluent families may be protected from falling by a “glass floor,” even if they are only modestly skilled.

In this paper we identify a group raised in higher-income households (top two-fifths of family income), who are predicted on the basis of their skills—both cognitive and non-cognitive—to fall down the ladder, but who remain in the higher-income bracket.

Surviving the post-employment economy

Source: Sarah Kendzior, Al Jazeera, November 3, 2013

The author argues that in the new economy, it’s people, not skills or majors, that have lost value….If you are 35 or younger – and quite often, older – the advice of the old economy does not apply to you. You live in the post-employment economy, where corporations have decided not to pay people. Profits are still high. The money is still there. But not for you. You will work without a raise, benefits, or job security. Survival is now a laudable aspiration….

…What must be made clear is that this is not a crisis of individual choices. It is a systemic failure – within higher education and beyond. It is a crisis of managed expectations – expectations of what kind of job is “normal”, what kind of treatment is to be tolerated, and what level of sacrifice is reasonable…. But no worker deserves to suffer. To compound the suffering of material deprivation with rationalisations for its warrant is not only cruel to the individual, but gives exploiters moral license to prey….

The 40-Year Slump

Source: Harold Meyerson, American Prospect, Vol. 24 no. 5, September/October 2013

From 1954 thought 1974, American workers brought home most of the wealth that they produced. Since 1974, they’ve steadily lost power—and they’re getting just a fraction of the wealth they produce today….What no one grasped at the time was that this wasn’t a one-year anomaly, that 1974 would mark a fundamental breakpoint in American economic history. In the years since, the tide has continued to rise, but a growing number of boats have been chained to the bottom. Productivity has increased by 80 percent, but median compensation (that’s wages plus benefits) has risen by just 11 percent during that time. The middle-income jobs of the nation’s postwar boom years have disproportionately vanished. Low-wage jobs have disproportionately burgeoned. Employment has become less secure. Benefits have been cut. The dictionary definition of “layoff” has changed, from denoting a temporary severance from one’s job to denoting a permanent severance….

The market for bigness: economic power and competition agencies’ duty to curtail it

Source: Adi Ayal, Journal of Antitrust Enforcement, Volume 1, Issue 2, October 2013

From the abstract:
In its early days antitrust policy was motivated largely by public fears regarding economic power, the excess influence owners of large businesses might exert over political and commercial markets. Over time, antitrust enforcement has come to focus exclusively on market power, the ability to raise prices or reduce output in narrowly defined product markets. This article calls for a return to the wisdom of days past, less for the populist reasons then articulated, and more due to the ‘influence effect’, the scale and scope economies in procuring political influence and their detrimental effects on democracy. After delving into the market and political effects created by big business, the recent financial crises and Too-Big-To-Fail (TBTF) dynamic are discussed. The main problem, it is argued, is not potential business failures and resulting bailouts, but the influence TBTF institutions exert ‘while business is going well’. Preventing excess economic power and TBTF firms is a task originally entrusted to antitrust agencies, and this article calls for reaffirming this obligation. There are practical difficulties and political risks inherent in combating economic power, and these are discussed. In the end, such difficulties are very real and require careful formulation of enforcement strategy, but antitrust agencies should not shy away from the task.

America’s Hispanic Population: An Economic Snapshot

Source: Joint Economic Committee, October 2013

Hispanics are playing an increasingly prominent role in the U.S. economy. They are the youngest and fastest growing segment of the population and are expected to make up nearly one-third of all people living in the United States by the year 2050. But significant challenges remain for many Hispanics, particularly with respect to poverty, education and health insurance coverage. Comprehensive immigration reform could help address these issues for a number of
Hispanic immigrants. This report provides an economic snapshot of the current state of the Hispanic population in the United States….

What We’ve Learned from the Financial Crisis

Source: Justin Fox, Harvard Business Review, Vol. 91 no. 11, November 2013

…Five years after the crash of 2008 is still early to be trying to determine its intellectual consequences. Still, one can see signs of change. I’ve been following academic economics and finance as a journalist since the mid-1990s, and I’ve researched academic debates going back much further than that. To me, three shifts in thinking stand out: (1) Macroeconomists are realizing that it was a mistake to pay so little attention to finance. (2) Financial economists are beginning to wrestle with some of the broader consequences of what they’ve learned over the years about market misbehavior. (3) Economists’ extremely influential grip on a key component of the economic world—the corporation—may be loosening.

These trends are within and on the fringes of elite academia; I won’t attempt to delve into politics or public opinion in this article. That’s partly because doing so would make it impossibly broad, but also because—for the past half century at least—economic ideas born at the University of Chicago, MIT, Harvard, and the like really have tended to trickle down and change the world. …