Wealth gap is worse than you think

Economists Emmanuel Saez, of the University of California–Berkeley, and Gabriel Zucman, of the London School of Economics, are out with a new set of findings on American wealth inequality, and their numbers are startling. Wealth, for reference, is the

value of what you own—assets like housing, stocks, and bonds, minus your debts. And while it certainly comes up from time to time, it has

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tended to play second fiddle to income in conversations about America’s widening class divide. In part, that’s because it’s a trickier conversation subject. Wealth has always been far more concentrated than income in the United States. Plus, research suggested that the top 1 percent of households had actually lost some of its share since the 1980s.That might not really have been the case.

Forget the 1 percent. The winners of this race, according to Zucman and Saez, have been the 0.1 percent. Since the 1960s, the richest one-thousandth of U.S. households, with a minimum net worth today above $20 million, have more than doubled their share of U.S. wealth, from around 10 percent to more than 20 percent. Take a moment to process that. One-thousandth of the country owns one-fifth of the wealth. By comparison, the entire top 1 percent of households takes in about 22 percent of U.S. income, counting capital gains.

While the super-rich have risen, the merely affluent have barely budged. As shown on this next graph from Saez and Zucman, the share of wealth belonging to the top 1 to 0.5 percent of households has remained about level. The 0.5 to 0.1 percent have tacked roughly an extra percentage point onto their piece of the pie. The relative gains have been eaten up by the elite—the 0.1 percent and even the 0.01 percent. Continue reading “Wealth gap is worse than you think”

The arts boost California’s economy

The results of the 2013 Otis Report on the Creative Economy were unveiled today at an event produced by Otis

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College of Art and Design, held at the Broad Stage in Santa Monica, CA.Speakers included California State Senator Ted Lieu (Chair of the Joint Committee of the Arts, and Chair of the Business, Professions and Economic Development Committee); Los Angeles Economic Development Corporation’s Chief Economist Robert Kleinhenz; Director, Western Region of the Actors Fund Keith McNutt; Otis President Samuel Hoi, California Arts Council Director Craig Watson; and Executive Director of Arts for L.A. Danielle Brazell.

The UCIRA reports that “Otis has commissioned this annual report from the Los Angeles County Economic Development Corporation since 2007, underscoring its commitment to measuring, benchmarking, and assessing trends of the creative economy. The Otis Report was expanded this year to include data for the entire state.

“Significant findings in the 2013 Otis Report on the Creative Economy include:
-In the Los Angeles region, the creative sectors supported 1 in 7 wage and salary jobs, with a net economic output contribution of 10.4% of the region’s gross total.
-The Los Angeles regional creative industries sustained 726,300 workers who earned labor income of $50.6 billion.
-California’s creative economy contributed 7.8% of the gross state product in 2012. Across the state, with a total of 1.4 million workers, the creative industries accounted for directly or indirectly 9.7% of all wage and salary employment, or roughly 1 in 10 jobs.
-Entertainment, fashion, and furniture and the decorative arts were the largest industries in California’s creative economy but nearly 6 of 10 (56%) creative occupations are found outside of the creative industries.
-The Los Angeles region is undisputedly the creative nexus of the state, with over 44% of California’s workers engaged in creative occupations.
-By 2017, creative economy employment will be up by 3.1% or 12,600 jobs from 2012 levels. Creative industry employment in the Los Angeles-Orange County region will total 416,500 wage and salary jobs by 2017.

“The Otis Report has firmly established that the ‘creative economy’ is a powerful force, both in Southern California and in the state,” said Otis President Samuel Hoi. “Signals abound that creativity and innovation are pivotal to the economy and general well-being of people and communities. Artistic services and intellectual capital are inarguably essential to the 21st century economy, which is dynamic, knowledge-based, and increasingly global.”

“Los Angeles Economic Development Corporation’s Chief Economist Robert Kleinhenz stated, “The health of the state economy depends on continued progress in the U.S. economy and among its major trading partners. Improvements in the consumer sector will be front and center in both California and the nation, as households respond to declining unemployment, increases in income, stronger real estate markets, and stock market gains.”An addendum to this year’s Otis Report is “L.A. Creates,” a special report by Director, Western Region of the Actors Fund Keith McNutt, detailing the way in which deliberate, collaborative, and regional efforts can support and develop the region’s creative industries.Lead sponsors for this year’s event are the California Arts Council and Mattel. Other support came from the James Irvine Foundation, Nike, Sony Pictures, City National Bank, The Boeing Company, Ovation, and the City of Los Angeles Department of Cultural Affairs.On Wednesday, February 12th in Sacramento, CA, the 2013 Otis Report on the Creative Economy will be presented at an informational hearing of the Joint Committee on the Arts. Senator Ted Lieu will convene the hearing in the state’s capitol to examine the role the creative sector plays in the state’s economy. The hearing starts at 10AM and is open to the public.”

 

More at: http://www.ucira.ucsb.edu/creativity-is-serious-business-in-the-state-of-california/

Revisiting the 47 percent

Just in from Pew Research: 47% of Americans see themselves as lower or lower-middle class.

As PolicyMic reports: “600 economists now say it’s time the federal minimum wage to $10.10, including seven Nobel laureates, attaching their name to a letter from the Economic Policy Institute asking lawmakers to reform wage laws.

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“It couldn’t come at a more pertinent time. On Tuesday during the State of the Union, President Obama is widely expected to state that he will raise the minimum wage for future federal contractors to $10.10 an hour from $7.25 via an executive action. The raise would affect some two million federal employees, and show that the president is serious about backing a proposal stalled in Congress to raise the minimum wage for all employees to $10.10 over three years and then index it to inflation.

“And Americans support it by huge margins. A January Quinnipiac poll discovered that some 71% of American voters support raising the minimum wage. That includes 52% of Republicans. As liberal economist Paul Krugman noted, perhaps the reality of class distinctions is beginning to sink in for many Americans as they see an economy recovery bypass so many of them and opportunities disappear across the board. A Pew survey found that Americans’ perception of their class status is converging towards reality, with some 47% of Americans defining themselves as lower and lower-middle class. Krugman thinks this is why economic inequality is now such a popular issue across the country. Continue reading “Revisiting the 47 percent”

Saved by the internet of things

I know the coffee’s ready because the light in the Quartz kitchen is purple, not pink. Writing in The Atlantic, Tom Fernholz states:

“The light knows the coffee is ready is because there are sensors–heat and pressure–taped to the coffee maker. This is the internet of things. It will save us all from economic ruin.

“Or at least that’s what a new estimate from innovation guru Michael Mandel says. He figures that the “internet of things”–the increasing number of machines equipped with internet-connected sensors–will expand the US economy by $600 billion and $1.4 trillion in 2025, roughly the equivalent of boosting GDP by 2% to 5% over the intervening time period. That could be the difference between so-so growth to the kind of stable growth that drives down debt and unemployment.

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“More broadly, the argument he’s making is a reply to economists like Robert Gordon and Tyler Cowen who fear that the big gains in productivity that supported an expanding middle class and the modern welfare state won’t be replicated anytime soon. This has major social repercussions–namely a scenario known as the great stagnation. The internet, for all the ways its changed our lives, has offered its gains largely in the form of consumer surplus–free stuff on the internet you used to pay for, in short–that is great and important but not necessarily

money in your pocket.

“Today’s internet of things is limited to consumer surplus, like Quartz’s coffee pot monitor or our weather bulb.

“But the future internet of things will be a different beast, because by definition it takes the internet out of the world of abstraction and into industries–manufacturing, energy, transportation–where productivity gains would have a more tangible impact. For instance, while some trash cans are spying on you, others, made by BigBelly Solar, are keeping track of how full they are so garbage collectors can plan their routes more efficiently, saving fuel and time. The largest gains are still to come: Sticking sensors on a turbine to know exactly when it will break down and how to fix it sounds great, but actually handling all that data in a meaningful way isn’t easy.

“Another hope Mandel holds out for the technology is to make on-the-job-training easier by making machines more responsive to their users.

“Does it all sound too good to be true? Absolutely. The estimates cited are a ballpark take on figures produced by McKinsey and Co., not necessarily the gold standard of foresight. The amount of investment needed to take advantage of this technology is high, and it will be years before different systems can be integrated in ways that allow companies, individuals, and eventually governments to appreciate their benefits. But the creeping networks might be the last hope of preserving growth.”

China’s economy slowing

China’s manufacturing activity fell to an 11-month low in July, hurt by a decline in new orders, according to the BBC

“The bank’s Purchasing Managers’ Index (PMI) fell to 47.7 from 48.2 in June. The PMI is a key indicator of activity in the sector and a reading below 50 shows contraction. This is the third month in a row that the HSBC reading has been below that level.imgres

“The data comes amid fears of a slowdown in China’s overall economy. Data released earlier this month showed that China’s economic growth slowed in the April to June period, the second straight quarter of weaker expansion. The world’s second biggest economy grew by 7.5% compared to the previous year, down from 7.7% in the January to March period. China’s manufacturing and export sectors have been key drivers of its economic growth over the past decades. However, demand for China’s exports has slowed recently, especially from key markets such as the US and Europe as they grapple with slowing economic growth. At the same time, policymakers have found it tough to boost domestic consumption enough to offset the decline in foreign sales. Continue reading “China’s economy slowing”

It’s still the economy…

Economic issues dominate Americans’ concerns about the nation’s future, according to the latest Gallup Poll. ” Americans say the economy (17%) is their greatest worry or concern for the future of the United States, followed by the federal debt (11%). Five percent or more also mention jobs and international wars and conflicts.

These findings, collected June 20-24, indicate that Americans think economic issues will be the biggest concern for the future, even as the economy shows some positive signs of recovery.

Americans’ concerns for the nation’s future are generally similar to their current worries. In a separate Gallup poll conducted June 1-4, Americans said the economy is the most important problem facing the country today, followed by jobs or unemployment.

After economic issues, Americans frequently mention war and conflicts in other countries as their top worry, with 5% saying so. Americans’ involvement in the civil war in Syria and recent escalating tension with North Koreaare likely driving this concern.

Healthcare or cost of healthcare and losing freedom or civil liberties also rank toward the top of the list of Americans’ concerns for the nation’s future, likely reflecting Americans’ worries about the impact of theAffordable Care Act and disapproval of the federal government’s surveillance of Internet and telephone communication. Fewer mention terrorism — which the federal government cites as the reason for its surveillance of communications — with 1% saying it is their greatest concern.

Republicans and Republican leaners are as likely as Democrats and Democratic leaners to mention the economy as their biggest worry for the future. However, Republicans are much more likely than Democrats to say the federal debt is their top concern, 15% vs. 6%. Slightly more Democrats than Republicans mention jobs and wars as their greatest worry.

 

More at: http://www.gallup.com/poll/163298/americans-say-economy-top-worry-nation-future.aspx?utm_source=tagrss&utm_medium=rss&utm_campaign=syndication

Why the minimum wage matters

Three and a half million people of color would be lifted out of poverty if Congress raised the minimum wage to $10.10, according to a new report from the restaurant workers’ group ROC United. According to a recent post on ThinkProgress:  “This would be the majority of the six million people overall who would be lifted out of poverty. People of color are far more likely to work minimum wage jobs, as they represent 42 percent of those earners even though they make up just 32 percent of the workforce.images

“That big number is in large part thanks to the overrepresentation of people of color in low-wage restaurant industry jobs. Over 500,000 of those lifted out of poverty by a raise in the minimum wage would be restaurant workers, 300,000 of whom would be workers of color.

“Restaurants are the single largest employer of people of color, but they are disproportionately concentrated in the lowest paying positions. As the report notes, “Two of the lowest-paying jobs, dishwashers and fast food preps and cooks, are 59% and 35% people of color, and earn a median wage of $8.78 and $8.85, respectively.” Forty percent of tipped workers — who make an even lower minimum wage of $2.13 — are people of color.

“The people of color who hold these jobs are also more likely to live in poverty. They make up more than half of tipped workers and restaurant workers with incomes below the poverty line.”

 

Read full story at: http://thinkprogress.org/economy/2013/06/21/2194701/race-minimum-wage/

Women as breadwinners at record high

Pew Research Center published an interesting report this week noting that women are now the sole or primary source of family income in 40% of U.S. households with children — a record high reports Maddow Blog.  “As Emily Arrowood explained, Fox host Lou Dobbs and his all-male panel of guests did not take the news well.images-1

“The clip has to be seen to be believed, but for those who can’t watch clips online, Dobbs said the Pew report is evidence of “society dissolving around us.” Juan Williams said the more women become the “primary bread winner,” the more we see “the disintegration of marriage.” He added, “Left, right, I don’t see how you can argue this.”

“Erick Erickson went even further:

“I am so used to liberals telling conservatives that they are anti-science. But I mean this is — liberals who defend this and say it’s not a bad thing are very anti-science. When you look at biology, look at the natural world, the roles of a male and female in society; in other animals the male typically is the dominant role, the female is not antithesis or is not competing; it’s a complementary role.” Continue reading “Women as breadwinners at record high”

Gentrification and suburban poverty

A new study from the Brookings Institution shows that poverty in American suburbs increased by 64 percent over the last decade, more than twice the rate of poverty growth in cities, reports the Village Voice. ” In the New York/tristate metro area alone, the number of suburban poor grew 28 percent since 2000, while the number of poor in the city grew 2 percent.images

“Alan Berube, one of the authors of the report, says that while the city becomes more expensive and popular, low wage economies are increasingly found outside them. The recession coupled with population growth in the suburbs contributed to the explosion of poverty there. “And in the end,” ze adds, “Where poverty is–is where affordable housing is.”

“Still, the study doesn’t really support the conclusion that gentrification is ruining everything, that “reverse white flight” is displacing low-income communities and exporting them to places like Ossining or New Rochelle. The report looked at Census data across the last decade, but Berube says that the study didn’t examine who was displacing whom–and much of the population growth in the suburbs came from new immigrants, from those who didn’t stop in the city first.

“Poverty is a structural feature of the American economy today,” Berube says, while noting that the disparity between rich and poor in the city is as stark as ever. But if disasters likeSandy are an example, the Brookings data could also support the idea that cities are awful at fostering opportunities for low-income communities to find affordable housing–which is why it may be easier for those living under the federal poverty line to survive in the ‘burbs after all.”

 

More at: http://blogs.villagevoice.com/runninscared/2013/05/richer_city_making_suburbs_poorer.php

Bop till you drop: Forget early retirement

The average age at which U.S. retirees say they actually retired is now at 61, up from 57 in the early 1990s, reports Gallup today

“These results are from Gallup’s annual Economy and Personal Finance survey, conducted April 4-14. The average retirement age has crept up by four years over the past two decades, from 57 in 1991 to the current 61. Because most of the uptick came before the 2008 recession, this shift may reflect more than just a changing economy. It may also indicate changing norms about the value of work, the composition of the workforce, the decrease in jobs with mandatory retirement ages, and other factors.images-1

“Whereas the average current retiree stopped working at age 61, those still working expect to work well beyond that age. The average nonretired American currently expects to retire at age 66, up from 60 in 1995.

“Currently, 37% of nonretired Americans say they expect to retire after age 65, 26% at age 65, and 26% before age 65. The most notable change over time is the increase in those expecting to work past age 65 — the 37% this year is up from 22% a decade ago and 14% in 1995. Meanwhile, the percentage of nonretirees who say they expect to retire before age 65 has declined to 26% from 49% in 1995.The percentage who say they will retire at exactly 65 has held fairly constant over the decades. Continue reading “Bop till you drop: Forget early retirement”

Boomer suicides outpace auto deaths

These days more middle aged American are dying at their own hands than perish in car crashes, reports the New York Times. Topping the list are men in their 50s and women in their 60s.images-5

“Suicide rates among middle-aged Americans have risen sharply in the past decade, prompting concern that a generation of baby boomers who have faced years of economic worry and easy access to prescription painkillers may be particularly vulnerable to self-inflicted harm.

“More people now die of suicide than in car accidents, according to the Centers for Disease Control and Prevention, which published the findings in Friday’s issue of its Morbidity and Mortality Weekly Report. In 2010 there were 33,687 deaths from motor vehicle crashes and 38,364 suicides.

“Suicide has typically been viewed as a problem of teenagers and the elderly, and the surge in suicide rates among middle-aged Americans is surprising.

 Read more at: http://www.nytimes.com/2013/05/03/health/suicide-rate-rises-sharply-in-us.html?nl=todaysheadlines&emc=edit_th_20130503&_r=0

Chinese tourists lead the world

The United States is ranked as the world’s biggest economy and the world’s largest military spender. But Chinese people lead the world in global tourist spending. Asia times reports that:images-2

“China, which has outranked Japan as the world’s second-largest economy and moved ahead of Russia as the world’s second-largest military spender, has hit the top spot in global tourism.

“Chinese tourists spent US$102 billion during their travels in 2012, more than any other nationality, making the Asian nation the world’s number one tourism source market, according to a report released by the United Nations World Tourism Organization (UNWTO).

“Asked if China will be able to hold on to the number one ranking inyears ahead, Lakshman Ratnapala, chair of Enelar International, San Francisco, and emeritus president and chief executive officer of the Pacific Asia Travel Association (PATA), told IPS, ”Yes, the primary reason being the continuing growth of the Chinese middle class.”  Continue reading “Chinese tourists lead the world”

Male losers and the “traditional” family

imgres-3“Culture of poverty” and “cycle of dependency” theories have largely been discredited as biased and often ethnocentric. They also often don’t square well with popular American ideals of individual achievement and upward mobility.

But recent economic studies looking at the changing gender gap in education and income suggest new reasons for explaining the shrinking numbers of people living in what used to be called the “traditional” nuclear family, as discussed this week in the New York Times

“The economic struggles of male workers are both a cause and an effect of the breakdown of traditional households. Men who are less successful are less attractive as partners, so some women are choosing to raise children by themselves, in turn often producing sons who are less successful and attractive as partners. Continue reading “Male losers and the “traditional” family”

The other sin of the American South

imgres-2Contemporary American politics cannot be understood apart from the North-South divide in the U.S., as I and others have argued, writes Michael Lind in today’s Salon Magazine.   “Neither can contemporary American economic debates.  The real choice facing America in the 21st century is the same one that faced it in the 19th and 20th centuries — Northernomics or Southernomics?

“Northernomics is the high-road strategy of building a flourishing national economy by means of government-business cooperation and government investment in R&D, infrastructure and education.  Continue reading “The other sin of the American South”

Art and the economy explained

Experts agree that arts and culture are an important part of the economy – but the precise relationship is complicated.

As governments and organizations increasingly have to justify spending, the big question remains: does investment in the arts stimulate growth, or are the arts the product of economic development? These questions were posed in today’s edition of The Guardian in a story that continues below:imgres-1

“Few people think of the economic impact of visiting a gallery or buying a ticket to the theatre. But arts and culture in the US generated $135.2 billion (£87 billion) and supported 4.1 million jobs in 2010, according to the latest economic snapshot from the non-profit advocacy group, Americans for the Arts. It would seem that the case for continued arts funding is clear cut – enjoying the arts boosts the economy. But experts say the link between arts investment and economic output is tenuous. Continue reading “Art and the economy explained”

Celebrity isn’t what is used to be

imgres-2As the magazine industry continues to suffer from declining circulation, celebrity gossip magazines and young women’s titles have taken some of the biggest hits, reports a recent item in the New York Times

“According to data released by the Alliance for Audited Media on Thursday morning, overall paid and verified circulation of magazines declined slightly by 0.3 percent in the second half of 2012. But newsstand sales – which are often viewed as the best barometer of how well a magazine is doing – dropped by 8.2 percent.

“These figures were far worse for celebrity magazines, which largely suffered double-digit declines. People’s newsstand sales dropped by 12.2 percent while US Weekly experienced a 14.6 percent decline. In Touch Weekly declined by 14.8 percent and Life & Style Weekly suffered a 19.1 percent drop on newsstands. Continue reading “Celebrity isn’t what is used to be”

Robots stole my life

“The robots are coming! Word is they want your job, your life and probably your little dog, too.” This is how a piece by Catherine Rampell begins in yesterday’s New York Times. This is hardly a new worry, as the piece continues to discuss:

“Robots have once again gripped the nation’s imagination, stoking fears of displaced jobs and perhaps even a displaced human race. An alarmist segment on “60 Minutes’ was only the most vivid of a recent series of pieces in respected magazines and newsoutlets warning about widespread worker displacement.Professors at Cambridge University and a co-founder of Skype

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are creating a newCenter for the Study of Existential Risk, which would research a ‘Terminator’-like scenario in which supercomputers rise up and destroy their human overlords, presumably plotting the whole caper in zeros and ones.

“In New York alone, there are four plays running this month with themes of cybernetics run amok. One is a revival of ‘R.U.R.,’ a 1920 Czech play that was the granddaddy of the cybernetic revolt genre and that originated the current meaning of the word “robot.” Continue reading “Robots stole my life”

How economy is hitting older people

Young graduates are in debt, out of work and on their parents’ couches.

People in their 30s and 40s can’t afford to buy homes or have children.Retirees are earning nea

r-zero interest on their savings. Today’s New York times carries a sobering story about the way the economy is hitting people just under retirement age:

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“In the current listless economy, every generation has a claim to having been most injured. But the Labor Department’s latest jobs snapshot and other recent data reports present a strong case for crowning baby boomers as the greatest victims of the recession and its grim aftermath. Continue reading “How economy is hitting older people”

Jobs are returning to the U.S.

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American manufacturing lost more than two million jobs during the recession, accelerating a decline that had begun long ago in the 1970s.

Yet since then, manufacturing has been one of the biggest drivers of job growth in the US, adding more than 500,000 jobs.

The BBC reports that “While much of that job growth could be attributable to post-recession pent-up demand, that is not the whole story.According to the Reshoring Initiative, a group of companies and trade associations trying to bring factory jobs back to the US, about 10% of those job gains – 50,000 jobs – were created by companies bringing back manufacturing from overseas. Continue reading “Jobs are returning to the U.S.”

China’s growing economic fortunes

China’s strong economy is expected to surpass that of the US by the end of the decade, with Chinese sales of goods to the rest of the world continuing at an astonishing rate.

China’s trade surplus surged 48.1china_2924_600x450 percent to $231.1 billion in 2012 from the previous year, though total trade volume grew at a much slower pace, official data showed on Thursday. This report come from today’s edition of channelnewasia.com. The story further states:

“Exports from the world’s second-largest economy rose 7.9 percent to $2.05 trillion, while imports increased 4.3 percent to $1.82 trillion, Continue reading “China’s growing economic fortunes”