Source: Theo Francis, Ben Levisohn, Christopher Palmeri and Jessica Silver-Greenberg, Business Week, no. 4157, November 30, 2009
Taxpayers are taking another hit as strapped local governments fork over billions in fees on investments gone bad.
Detroit Mayor Dave Bing is struggling to save his city from fiscal calamity. Unemployment is at a record 28% and rising, while home prices have plunged 39% since 2007. The 66-year-old Bing, a former NBA all-star with the Detroit Pistons who took office 10 months ago, faces a $300 million budget deficit–and few ways to make up the difference.
Against that bleak backdrop, Wall Street is squeezing one of America’s weakest cities for every penny it can.
Source: Harry J. Holzer, Diane Whitmore Schanzenbach, Greg J. Duncan, Jens Ludwig, Journal of Children and Poverty, Volume 14 Issue 1, March 2008
From the abstract:
This paper attempts to estimate the aggregate annual costs of child poverty to the US economy. It begins with a review of rigorous research studies that estimate the statistical association between children growing up in poverty and their earnings, propensity to commit crime, and quality of health later in life. We also review estimates of the costs that crime and poor health impose on the economy. Then we aggregate all of these average costs per poor child across the total number of children growing up in poverty in the United States to obtain our estimate of the aggregate costs of the conditions associated with childhood poverty to the US economy. Our results suggest that these costs total about $500 billion per year, or the equivalent of nearly 4% of gross domestic product (GDP). More specifically, we estimate that childhood poverty each year: (1) reduces productivity and economic output by an amount equal to 1.3% of GDP, (2) raises the costs of crime by 1.3% of GDP, and (3) raises health expenditures and reduces the value of health by 1.2% of GDP.
Source: Ethan Pollack, Economic Policy Institute, Economic Snapshot, November 18, 2009
The recession has led to large budget shortfalls for state and local governments, which unlike the federal government, cannot run deficits. To balance their budgets, they must cut spending and/or raise taxes. These actions depress consumer demand, cause job losses (a majority of which will be in the private sector), and in general create a drag on the economy.
Source: Jacqueline Byers, National Association of Counties, November 2009
In mid October 2009 NACo conducted a survey to look at the continuing impact of the economy on a sample of counties across the country. The sample group was made up primarily of midsize to smaller counties. Media reports of the impact of the economy have largely focused on the counties with the largest populations, but the majority of the counties in the country are midsize or smaller. This survey reveals that the downturn is widespread and is impacting counties of all sizes from several directions.
Source: Daniel C. Vock, Pamela M. Prah, Stephen C. Fehr, Melissa Maynard, John Gramlich, Kimberly Leonard, PEW Center on the States, November 2009
From the summary:
California’s financial problems are in a league of their own. But the same pressures that drove the Golden State toward fiscal disaster are wreaking havoc in a number of states, with potentially damaging consequences for the entire country.
This examination by the Pew Center on the States looks closely at nine states, in addition to California, that are particularly affected by the recession. All of California’s neighbors-Arizona, Nevada and Oregon-and fellow Sun Belt state Florida were severely hit by the bursting housing bubble, landing them on Pew’s list of states facing fiscal difficulties similar to California’s. A Midwestern cluster of states comprising Illinois, Michigan and Wisconsin emerged, too, as did the Northeastern states of New Jersey and Rhode Island.
– Executive Summary
– States to Watch
– 50-State Scorecard
– Press Release
Source: Christine M. Keller, Association of Public and Land-grant Universities, November 2009
From the press release:
Strategic reviews of core activities are underway or planned by two-thirds of the nation’s public research universities according to a survey of chief academic officers by the Association of Public and Land-grant Universities (A۰P۰L۰U). The survey focused on depth of budget cuts, strategies to close deficits, and impact on institutions and students at the nation’s 188 public research universities.
Overall, the picture painted by survey respondents is dreary, with 85 percent of institutions reporting a decrease in state appropriations and nearly one-half of institutions experiencing cuts of 10 percent or greater. Sixty institutions from 32 states reported a decrease in state appropriations averaging 11.4 percent, but ranging from 5 to 20 percent. Nine institutions located in six states reported increases in state appropriations averaging 3 percent.
Source: International Labour Organisation, 2009
The present report is an update of the Global Wages Report 2008/09 released in November 2008. The latter was the ﬁrst in a new series of reports to be published every two years to describe and analyse trends in a number of wage indicators, including average wages, wage inequality between men and women, differentials between high and low wages, the share of wages in GDP, and statutory or negotiated minimum wages. The report covered the years 1995-2007, which were characterised by a generally favourable economic context. Since then, the economic context has changed dramatically. In light of the global economic downturn, the Members of the ILO signed the Global Jobs Pact in June 2009, whereby they agreed to consider strengthening social dialogue, collective bargaining and statutory or negotiated minimum wages in order to avoid deﬂationary wage spirals and to enhance social protection. While a comprehensive assessment will be provided in the next full Global Wage Report in 2010, the present update already provides some indications of wage trends up to the second quarter of 2009 in a number of countries around the world.
Source: Economic Policy Institute, November 2, 2009
From the summary:
Introducing Economy Track: a new Web site created by EPI featuring a collection of charts containing our exclusive data. Economy Track offers a detailed picture of the recession and the current jobs crisis unavailable elsewhere.
The site presents a collection of often complex economic data in an interactive, easy-to-use format that lets users see the context behind the numbers by comparing the latest employment data to that from past recessions. Users can also parse the numbers by race, gender, region, and level of education. Rather than just charting total unemployment, for example, Economy Track illustrates how unemployment is higher for blacks and Hispanics than for whites, higher for men than for women, and much higher for blue-collar workers than for those with white-collar jobs.
Source: David J. Wright and Lisa M. Montiel, Nelson A. Rockefeller Institute of Government, November 2, 2009
As widely recognized, America’s cities and suburbs are mired in the deepest recession in more than a generation. Less well understood is that conditions in the nation’s metro areas were worsening before the recession hit. This Institute report details how, and which areas suffered most.
Source: James K. Boyce & Matthew E. Riddle, Political Economy Research Institute, August 2009
Fromm the summary:
This new study by James Boyce and Matthew Riddle (in partnership with the Economics for Equity and the Environment Network) shows how the increased cost of fossil fuels created by a carbon cap policy could be distributed across the population, based on the carbon footprints of households in different income brackets in each state.
With a carbon price of $25 per ton, Boyce & Riddle estimate that the annual cost to the median family ranges from $239 per person in Oregon to $349 in Indiana. Under cap-and-dividend, each person would receive dividend payments of $386 per year. The median family would end up with a net gain ranging from $37 per person in Indiana to $147 in Oregon, in addition to the benefits of curbing global warming,
At the same time a cap-and-dividend policy would send a clear price signal that burning fossil fuels has a social cost, giving businesses and consumers a strong incentive to invest in energy efficiency and clean energy.
– Press Release
– Boyce’s testimony on cap-and-dividend before the U.S. Senate Finance Committee