Category Archives: Income Inequality/Gap

Make Bad Jobs Better: Forging a “Better Jobs Strategy”

Source: Steven L. Dawson, Pinkerton Foundation, job Quality Series, no. 1, June 2016

A bad job is not simply the absence of a good job. A bad job destabilizes the individual, her family and the community. A bad job not only fails to pay enough for decent food and shelter for a worker’s family, it can risk her health, disrupt any chance for a predictable family life, undermine her dignity, and deny her voice within the workplace.

And when a local economy hosts a large number of bad jobs, the community is forced to subsidize those bad jobs by paying for additional public benefits, tax credits and health-care costs—all while suffering a sluggish economy in which local workers have too little income to generate robust economic growth. In short, bad jobs are a core driver of inequality, and it is left to the rest of us to pick up the costs.

This series of opinion briefs is addressed primarily to The Pinkerton Foundation’s workforce and employment colleagues, both practitioners and their funders. The premise of this first paper is that tightening labor markets across the country are resulting in new opportunities to engage directly with employers—not simply to access more jobs, but to work together to make bad jobs better for low-income workers….
Related:
Abstract

The IRS, Politics, and Income Inequality

Source: Leandra Lederman, Tax Notes, Vol. 150, No. 11, 2016

From the abstract:     
The IRS is in crisis. In recent years, Congress has cut its budget significantly, piled on the workload, and conducted oversight hearings that were often quite partisan. The IRS needs more funding to carry out its mission. For that, it needs Congressional support. Unfortunately, bashing the IRS generally scores political points, while supporting tax collectors does not. However, research suggests that inadequate enforcement of a progressive tax system may actually increase income inequality. Accordingly, Congressional supporters of progressive taxation should use the fight against rising income inequality as a rhetorical tool to help the IRS receive more balanced treatment.

Why Does Inequality Matter? Reflections on the Political Morality of Piketty’s Capital in the Twenty-First Century

Source: Liam Murphy, New York University School of Law, Public Law Research Paper No. 16-19, May 1, 2016

From the abstract:     
In the Conclusion to Capital in the Twenty-First Century Thomas Piketty issues a call for a political and historical economics. Like Marx and the political economists before him, Piketty is interested in how markets work because he is interested in the rights and wrongs of institutional, especially legal, design. His is book is guided by a clear sense that economic inequality, especially inequality of wealth, raises serious prima facie problems of social justice. This essay is a critical investigation into the political morality underlying Capital in the Twenty-First Century that unravels and evaluates the different ways in which economic inequality may or may not matter.

Pay Equity: Legislative and Legal Developments

Source: Jody Feder, Benjamin Collins, Congressional Research Service, CRS Report for Congress, RL31867, May 20, 2016

…..This report begins by presenting data on earnings for male and female workers and by discussing explanations that have been offered for the differences in earnings. It next discusses the major laws directed at eliminating sex-based wage discrimination as well as relevant federal court cases. The report closes with a description of pay equity legislation that has been considered or enacted by Congress in recent years……

Income inequality in the U.S. by state, metropolitan area, and county

Source: Estelle Sommeiller, Mark Price, and Ellis Wazeter, Economic Policy Institute, June 16, 2016

From the summary:
What this report finds: Income inequality has risen in every state since the 1970s and in many states is up in the post–Great Recession era. In 24 states, the top 1 percent captured at least half of all income growth between 2009 and 2013, and in 15 of those states, the top 1 percent captured all income growth. In another 10 states, top 1 percent incomes grew in the double digits, while bottom 99 percent incomes fell. For the United States overall, the top 1 percent captured 85.1 percent of total income growth between 2009 and 2013. In 2013 the top 1 percent of families nationally made 25.3 times as much as the bottom 99 percent.

Why it matters: Rising inequality is not just a story of those in the financial sector in the greater New York City metropolitan area reaping outsized rewards from speculation in financial markets. While New York and Connecticut are the most unequal states (as measured by the ratio of top 1 percent to bottom 99 percent income in 2013), nine states, 54 metropolitan areas, and 165 counties have gaps wider than the national gap. In fact, the unequal income growth since the late 1970s has pushed the top 1 percent’s share of all income above 24 percent (the 1928 national peak share) in five states, 22 metro areas, and 75 counties.
Related:
Press release

It Doesn’t Pay To Be An Early-Childhood Teacher

Source: Elissa Nadworny, NPR, June 14, 2016

Why would she teach preschool when she could make a heck of a lot more money teaching kindergarten? It’s a question I’ve heard over and over again reporting on education. In some places, we pay early childhood teachers less than fast-food workers, less than tree trimmers. As a country, we’ve acknowledged the importance of early learning and yet, when you look at what we pay those educators, it doesn’t add up.
Related:
Troubling Pay Gap for Early Childhood Teachers
Source: U.S. Department of Education, Fact Sheet, June 14, 2016

Social Inequality and the Access Myth

Source: Heather A. Howley, Academe, Volume 102, Number 3, May–June 2016
(subscription required)

Is lack of opportunity the real problem? …. Social inequality needs to be addressed, but the solution is not simply to provide opportunity for moving up the economic ladder. The conditions of those on the bottom rungs are best improved by increased pay and better working conditions. …

County Pay Practices: Although the Counties We Visited Have Rules in Place to Ensure Fairness, Data Show That a Gender Wage Gap Still Exists

Source: California State Auditor, Report 2015-132, May 2016

From the summary:
Our audit concerning county pay practices and policies at four California counties—Fresno, Los Angeles, Orange, and Santa Clara—revealed the following:
– From fiscal years 2010-11 through 2014-15, the aggregate gender wage gap has widened slightly at each of the four counties.
– In the aggregate, female employees earned between 73 percent and 88 percent of what male employees earned.
– Men outnumbered women in classifications with average total compensation greater than $160,000 in fiscal year 2014-15, even though women accounted for between 54 percent and 60 percent of all full time employees.
– When we looked more closely at groups of job classifications with similar compensation amounts, we found that pay disparities between men and women varied between less than 1 percent and nearly 9 percent.
– Three of the four counties did not document why a particular candidate was selected for employment over other qualified candidates.
– County officials could only provide documentation explaining their rationales for 39 of 154 competitive employment decisions we reviewed.
– The counties followed their own salary setting pay policies, but a variety of factors unrelated to an employee’s skills or abilities can influence salary rates.
– Current law does not require counties to consistently monitor gender-based pay equity issues in the hiring and salary-setting process.
– Requiring public employers to report gender information when submitting employee specific data to the State Controller’s Office would enhance transparency on gender pay equity issues.

One third of a nation: Strategies for helping working families

Source: Isabel V. Sawhill, Edward Rodrigue and Nathan Joo, Brookings Institution, May 2016

From the summary:
When Franklin Roosevelt delivered his second inaugural address on January 20, 1936 he lamented the “one-third of a nation ill-housed, ill-clad, ill-nourished.” He challenged Americans to measure their collective progress not by “whether we add more to the abundance of those who have much; [but rather] whether we provide enough for those who have too little.” In our new paper, “One third of a nation: Strategies for helping working families,” we ask a simple question: How are we doing?

In brief, we find that:
– The gulf in labor market income between the haves and have-nots remains wide. The median income of households in the bottom third in 2014 was $24,000, just a little more than a quarter of the median of $90,000 for the top two-thirds.
– The bottom-third households are disproportionately made up of minority adults, adults with limited educational attainment, and single parents.
– The most important reason for the low incomes of the bottom third is a “work gap”: the fact that many are not employed at all, or work limited hours.