Category Archives: Economy

Chart of the day: Gender, ethnic pay divides


From the Washington Center for Equitable Growth, average hourly pay figures for American workers:

BLOG Pay

More from the Center:

At the bottom of the distribution, low-wage workers from different demographic backgrounds have relatively similar wages. Low-wage Latinas and African American women earn the least ($8.14 and $8.15 per hour, respectively), while low-wage white men earn the most ($10.00). This clustering of wages at the bottom is likely a result of current federal and state minimum wage policies, which legally mandate employees to be paid at least $7.25 per hour (or more, in many states).

For workers in the middle range of each demographic group, the gender gap is bigger. Median-wage Latinas and African American women are the lowest-wage recipients, earning $12.65 and $14.25 per hour, respectively. In contrast, white men earn the highest median wages, making $21.79. At the top, where the gap is largest, the lowest wages are $28.83 (Latinas) and $32.50 (African American women), while the highest wage is $50.54 (white men), a difference of more than $20.00. The spreading out at the top reflects discrimination across both gender and race.

Charts of the day II: Economic malaise and divides


BLOG Incomes

From the Washington Center for Equitable Growth, which notes:

Of all the indicators describing the not-very-impressive U.S. economic performance of the first decade-and-a-half of the 21st century the least impressive is probably median household income. It hit an all-time high in 1999 of $57,843 (converted into 2014 dollars), and as of 2014 stood at $53,657–a 7.2 percent decline…. The typical American household remains poorer than it was 16 years ago.

The states that have struggled the most tend to have manufacturing-intensive economies (Delaware and Nevada are the exceptions). Also, it’s worth pondering for a moment just how bad things have been in some of these states. The typical household in Michigan and Mississippi was more than 20 percent poorer in 2014 than in 1999. And Mississippi, which had the fifth-lowest median income in 1999, was dead last in 2014, with a median household income ($35,521) less than half that of Maryland, the most-affluent state.

Chart of the day II: Ill prepared for tough times


Amidst growing economic uncertainty and signs of yet another crash to come, young Americans have few resources to fall back on, and virtually no savings.

From Visual Capitalist:

BLOG Savings

H/T to Undernews.

IMF sounds the alarm for the U.S. economy


It’s bad, and getting worse.

From Xinhua:

The U.S. economy risks getting stuck in a prolonged period of low-growth amid slowing productivity and a shrinking middle class, the International Monetary Fund (IMF) has warned.

The U.S. economy grew at an annual rate of 1.2 percent in the second quarter this year, following a downwardly revised 0.8 percent gain in the first quarter, according to the U.S. Department of Commerce. That marked the third straight quarter in which the U.S. economy grew at lower than 2 percent, the weakest period in four years.

The weaker-than-expected economic data underscores the continuing frustration about the current U.S. recovery, which has repeatedly failed to shift to higher gear in the past seven years.

The U.S. economy has grown at an average pace of 2.1 percent since the recession ended in the mid-2009, registering the weakest U.S. economic expansion since World War II. During the postwar period up to the current recession (1947-2007), the average annual growth rate for the United States was 3.4 percent.

The IMF warned in June that the United States faces “potentially significant longer-term challenges” to strong and sustained growth, including a shrinking labor force and middle class.

Recoveries grow increasingly feeble

A report from the Economic Policy Institute reveals that recoveries are slower with each succeeding recession:

BLOG Econ 2More from the EPI:

One key gauge of the severity of recessions is the output gap, which measures the difference between the economy’s actual output and its potential output if all resources (including workers) were fully employed. At the trough of the Great Recession in June 2009, the output gap was 7.1 percent, equivalent to over a trillion dollars. The only larger output gap in the postwar period was the 7.6 percent gap recorded at the trough of the early 1980s recession in the last quarter of 1982. Cumulatively, the losses over the Great Recession and the sluggish recovery dwarf even those from the early 1980s recession. The output gaps at the trough of the early 1990s recession (the first quarter of 1991) and that of the early 2000s (the final quarter of 2001) were 2.6 and 1.8 percent, respectively.

And the gold goes to. . .

From the World Socialist Web Site:

Hundreds of retail stores have been shut over the past two years as the impact of relentless cuts in wages and pensions and the permanent destruction of decent-paying jobs, combined with sweeping cuts in social programs, have thrown tens of millions of working class families into poverty or near-poverty. The bankers and speculators have placed relentless pressure on the chains to cut costs and increase profit margins at the expense of their employees and the general public.

The surge in stock and bond prices both in the US and internationally, which has further enriched the capitalist elite, has come amid mounting indications of stagnation and slump in the real economy and a worsening social crisis. Economic growth in the US, Europe, Japan and China has slowed to a crawl. New figures released Friday pointed to a slowdown across the entire Chinese economy, with factory output, business investment and retail sales all failing to meet economists’ projections.

The euro zone economy grew by a paltry 0.3 percent in the second quarter, with Italy failing to register any growth and the German economy expanding at a reduced rate.

Gross domestic product in the US is barely increasing, rising only 0.8 percent in the first quarter and 1.2 percent in the second. Both labor productivity and business investment are falling sharply, reflecting the systematic diversion of resources from productive investment to financial speculation and parasitic activities such as stock buybacks, dividend increases and mergers and acquisitions.

US corporations, flush with cash extorted through the slashing of wages and benefits and the imposition of speedup, are hoarding $1.9 trillion. They refuse to invest in new plants and equipment that could provide decent jobs and address the decay of the country’s bridges, roads, schools and housing because the profit margins are too low, preferring instead to speculate on the market and buy back their own stock to increase the take of big investors and inflate the bonuses of top executives.

More from the Associated Press:

Income inequality has surged near levels last seen before the Great Depression. The average income for the top 1 per cent of households climbed 7.7 per cent last year to $1.36 million, according to tax data tracked by Emmanuel Saez, an economics professor at the University of California, Berkeley. That privileged sliver of the population saw pay climb at almost twice the rate of income growth for the other 99 per cent, whose pay averaged a humble $48,768.

But why care how much the wealthy are making? What counts the most to any family is how much that family is bringing in. And that goes to the heart of the income-inequality debate: Most Americans still have yet to recover from the Great Recession, even though that downturn ended seven years ago. The average income for the 99 per cent is still lower than it was back in 1998 after adjusting for inflation.

Meanwhile, incomes for the executives, bankers, hedge fund managers, entertainers and doctors who make up the top 1 per cent have steadily improved. These one-percenters account for roughly 22 per cent of all personal income, more than double the post-World War II era level of roughly 10 per cent. One reason the income disparity is troubling for the nation is that it’s thinning out the ranks of the middle class.

Incomes in California follow the pattern

The Golden State is, increasing, golden for those at the top, lead for those below.

Consider this graphic from the Public Policy Institute of California:

BLOG Econ

More from the Institute:

Over the past three decades, the distribution of pre-tax cash income in California has been driven by broad, long-term economic forces—although economic booms and busts also figure in. We can track changes in the spread of incomes since 1980 by measuring family incomes at the top, middle, and bottom of the ladder.

Top income levels (at the 90th percentile) were 39.7 percent higher in 2014 than they were in 1980, while low incomes (at the 10th percentile) were 18.6 percent lower. The middle-income level (at the 50th percentile) in California is a mere 5 percent higher than it was in 1980.

California’s economy has experienced a number of boom-and-bust cycles in the past three decades, and incomes across the spectrum have clearly been affected by the gains and losses of these cycles. However, their effects have been uneven. Top incomes have contracted in bust periods, but they have typically rebounded fairly quickly and have gained additional ground. Over the long term, top incomes have increased well beyond 1980 levels. Middle incomes gained some ground in the late 1990s and early 2000s, rising roughly 10 percent above 1980 levels, but these gains disappeared during the last recession. Low incomes declined the most during each of he major recessions since 1980 (early 1980s, early 1990s, and late 2000s) and did not rise above 1980 levels during recovery periods. In 2006, after the growth period of the late 1990s and early 2000s, the 10th and 20th percentiles of income had rebounded to 1980 levels, but the Great Recession took hold soon after. These trends at the bottom, middle, and top of the income ladder add up to a long-term divergence of family incomes in California.

According to the most recent data (from 2014), the median family income before taxes and adjusted to represent a family of four in California is about $69,000. Incomes at the bottom are $15,000 or less, while the top incomes are $198,000 or more.

Chart of the day II: Old Blighty misperceptions


Or would Britain elect Donald Trump?

The same British voters who approved the Brexit, the United Kingdon’s exit from the European Union, were utterly uniformed about key issues that motivated their votes, as revealed by an IPSOS Mori poll, with the graphic by Financial Times via Birgitta Jónsdóttir:

BLOG Brexit

Greece slides gently into a new recession


The bad news from To Vima:

The Greek statistics authority ELSTAT has documented a 0.7% rate of recession in the second trimester of 2016, compared to the same trimester last year in its last flash estimates.

Compared to the first trimester of 2016 though, the non-seasonally adjusted data shows that the Gross Domestic Product (GDP) in volume terms increased by 0.3% during this period.

Available non-seasonally adjusted data indicate that in the second quarter of 2016 the GDP in volume terms decreased by 0.1% in comparison with the second quarter of 2015.

Greeks ready report on German occupation costs


With Greece reeling under demands to repay debts to German banks, Greece is preparing demands that Europe’s economic giant should make good on the costs of German looting, extortion, and other damage inflicted during World War II.

From Ekathimerini:

The findings of the intra-party committee which was set up to look into Greek claims for German war reparations are expected to be submitted to Parliament in early September, reports said on Friday. The committee wrapped up its probe on July 27.

Greece is demanding 269 billion euros – adjusted to inflation – for damages incurred during the Nazi occupation in World War II, including forced loans plus interest.

According to German magazine Der Spiegel, the 77-page report recommends that Greece employs diplomatic means to persuade Germany but doesn’t rule out legal action if that fails.

The reparations issue has been repeatedly raised by the SYRIZA-led coalition and Prime Minister Alexis Tsipras timed an appeal last week – to European leaders for solidarity over the country’s debt burden – to coincide with the anniversary of the so-called London Debt Agreement in 1953, which secured West Germany a write-down of more than 50 percent of the debts it accumulated during the two world wars.

Given that much of the money extracted from Greece in recent years went to Germany, debts that have driven the nation deep into economic misery because of austerity measures imposed by the German-dominated European Central Bank and the European Commission, plus the International Monetary Fund, we think the Greeks have an excellent case.

Add in the fact that much of that debt comes from contracts to German firms, companies that extracted the wealth by criminally bribing officials of previous conservative Greek governments, there’s goof cause for debt relief, and reparations is a good first step.