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US slips down development index Americans live shorter lives than citizens of almost every other developed nation, according to a report from several US charities. The report found that the US ranked 42nd in the world for life expectancy despite spending more on health care per person than any other country. Overall, the American Human Development Report ranked the world's richest country 12th for human development.The study looked at US government data on health, education and income. BBC News, 7/08

"...from 1947 to about 1973...real hourly pay for nongovernment workers rose by about 40%....Since then, real wages both hourly and weekly for all nongovernment workers, on average, have fallen by about 5%, very roughly.""Why Oil and Wages Don't Mix," B. Stein, NYTimes, 6/29/08

Chronic joblessness and the decline of two-parent families: "Andrew Sum, director of the Center for Labor Market Studies, put it this way in a research paper: 'The marriage rates of all native-born young males and young black males (22-32 years old) in the U.S. are strongly correlated with the annual earnings of these young men. The higher their annual earnings, the more likely they are to be married. Among native-born black males, those men with earnings over $60,000 were four times more likely to be married than their peers with annual earnings under $20,000.

'"Unfortunately, the mean annual earnings of young men without four-year college degrees have plummeted substantially over the past 30 years, and declined again over the 2000-2007 period. Declining economic fortunes of young men without college degrees underlie the rise in out-of-wedlock child-bearing, and they are creating a new demographic nightmare for the nation." Bob Herbert, "A Dubious Milestone," NYTimes, June 21, 2008

Inequality and Health Outcomes "The health situation in Japan after World War II was extremely poor. However, in less than 35 years the country’s life expectancy was the highest in the world. Japan’s continuing health gains are linked to policies established at the end of World War II by the Allied occupation force that established a democratic government. The Confucian principles that existed in Japan long before the occupation but were preempted during the war years were reestablished after the war, facilitating subsequent health improvements. Japan’s good health status today is not primarily the result of individual health behaviors or the country’s health care system; rather, it is the result of the continuing economic equality that is the legacy of dismantling the prewar hierarchy." Bezruchka, Namekata, & Sistrom, AJPH 4/08

"What are the consequences of a world in which regulators rescue even the financial institutions whose recklessness and greed helped create the titanic credit mess we are in? Will the consequences be an even weaker currency, rampant inflation, a continuation of the slow bleed that we have witnessed at banks and brokerage firms for the past year?" "Wall Street's Economic Chaos Has Big Political Consequences," von Hoffman, TheNation, 3/08

Spending on Iraq is also a job killer "...the economic consequences of Iraq run even deeper than the squandered opportunities for vital public investments. Spending on Iraq is also a job killer. Every $1 billion spent on a combination of education, healthcare, energy conservation and infrastructure investments creates between 50 and 100 percent more jobs than the same money going to Iraq. Taking the 2007 Iraq budget of $138 billion, this means that upward of 1 million jobs were lost because the Bush Administration chose the Iraq sinkhole over public investment." "The Wages of Peace," Pollin & Garrett-Peltier, 3/08, the Nation

"...one in five Americans in working families have income below a minimum middle-class budget standard for the area in which they live. The authors argue this is the result of a frayed social contract that must be updated so that more workers can move into the middle class." Movin’ On Up: Reforming America’s Social Contract to Provide a Bridge to the Middle Class, CEPR, Fremstad, Ray, Chimienti, & Schmitt, 2/08

"For the first time in the past quarter of a century, in 2007 U.S. unions increased their share of membership among workers, according to the Bureau of Labor Statistics' (BLS) annual union membership report released today. Unions added about 310,000 members last year, raising the unionized share of the workforce to 12.1 percent from 12.0 percent in 2006.

The increase is small, and may well reflect statistical variation rather than an actual increase in the union membership share, but the uptick is striking because it is the first time since the BLS began collecting annual union membership rates in 1983 that the union share has increased. The small national rise in union membership rates reflected a large increase in union membership in California, partially offset by substantial declines in the Midwest," Zipperer & Schmitt, CEPR, 1/08

"The major causes of hunger in survey cities are poverty, unemployment and high housing costs. The hunger crisis is exacerbated by the recent spike in foreclosures, the increased cost of living in general, and increased cost of food." Hunger & Homelessness Survey, US Conference of Mayors, 12/07

"Think about the jobs you've had. Where were you the most productive? Was it when you worked for a boss and an organization that treated you with respect, that valued your contributions, where you actually felt that you were part of something useful? Or were you more productive when you worked for a boss and an organization that governed by fear, that treated you with suspicion and contempt? Most adults have worked for the latter kind, while only some have had the good fortune to work for the former. And many if not most of them do just enough work to stay out of trouble and avoid the wrath of their superiors. That's the spirit fostered in a workplace where employees are treated like criminals.""Woe Is the American Worker, Waldman, The American Prospect, 12/07

"...this EPI analysis finds that between 18% and 22% of today's jobs — about 25 to 30 million — could potentially be offshored. Interestingly, the workers most vulnerable to offshoring are those with at least a four-year college degree."The Characteristics of Offshorable Jobs, Bernstein, Lin, & Mishel, EPI, 11/07

"The number of good jobs --jobs that pay at least $17 an hour, and provide health insurance and a pension -- declined by 3.5 million between 2000 and 2006....

The report, "The Good, The Bad, and the Ugly: Job Quality in the United States over the Three Most Recent Business Cycles," found that the economy has created fewer good jobs in the 2000s than was the case over comparable periods in the 1980s and 1990s.

The research defined a good job as one that pays $17 an hour, or $34,000 annually, has employer-provided health care and offers a pension. The $17 per hour figure is equal to the inflation-adjusted earnings of the typical male worker in 1979, the first year of data analyzed in the report." Schmitt, CEPR, 11/07

"...by addressing social needs in the areas of health care, education, education, mass transit, home weatherization and infrastructure repairs, we would also create more jobs and, depending on the specifics of how such a reallocation is pursued, both an overall higher level of compensation for working people in the U.S. and a better average quality of jobs." U.S. Employment Effects of Military & Domestic Spending Priorities, Pollin & Garrett-Peltier, IPS, 10/07

"Government should not devise elaborate job training schemes, especially those disconnected from real jobs. The research shows that most such programs bring few benefits. Access to college should be eased to improved people's general skills and sense of well-being; job-specific training programs should normally involve on-the-job training for real jobs.

In part because economic authorities will never allow macroeconomic policy to run fast and long enough to create all the jobs we need, the federal government should expand its own labor force. For decades government jobs have been an important avenue of success for the poor and near poor, especially among minorities, but that effect has waned recently, in part due to the conservative assault on government. Governments should do more to create permanent jobs that provide useful services and pay decently (protecting our national parks, running after-school programs at neighborhood parks, delivering the mail, building schools, insulating buildings, manufacturing solar cells, caring for our children, acting as teaching aids). The private sector is subverting the American dream; there is less job mobility today than in the 70s. Few Bush supporters admit it, but all net job growth was in government employment from 2000 to mid-2005. Honesty requires that we acknowledge the failure of the private sector, and create civilian-sector government jobs." Frank Stricker, Why American Lost the War on Poverty and How to Win It, 2007

"According to a 2005 report of the International Centre for Prison Studies in London, the United States—with five percent of the world’s population—houses 25 percent of the world’s inmates. Our incarceration rate (714 per 100,000 residents) is almost 40 percent greater than those of our nearest competitors (the Bahamas, Belarus, and Russia). Other industrial democracies, even those with significant crime problems of their own, are much less punitive: our incarceration rate is 6.2 times that of Canada, 7.8 times that of France, and 12.3 times that of Japan. We have a corrections sector that employs more Americans than the combined work forces of General Motors, Ford, and Wal-Mart, the three largest corporate employers in the country, and we are spending some $200 billion annually on law enforcement and corrections at all levels of government, a fourfold increase (in constant dollars) over the past quarter century." Why Are So Many Americans in Prison? Race and the transformation of criminal justice," Glenn C. Loury

"The substantial declines in job stability for prime-age men..., in conjunction with the high rates of permanent job loss (relative to the unemployment rate) and large associated earnings losses..., lend credence to the view that worker anxiety about job stability and security is real rather than illusory. At the same time, the burden of job loss and its consequences, most notably earnings losses, has shifted towards groups like the highly educated....," FRBSF, 6/07

"If economic theory is unkind to trickle-down proponents, the lessons of experience are downright brutaltrickl. If lower real wages induce people to work shorter hours, then the opposite should be true when real wages increase. According to trickle-down theory, then, the cumulative effect of the last century’s sharp rise in real wages should have been a significant increase in hours worked. In fact, however, the workweek is much shorter now than in 1900.

Trickle-down theory also predicts shorter workweeks in countries with lower real after-tax pay rates. Yet here, too, the numbers tell a different story. For example, even though chief executives in Japan earn less than one-fifth what their American counterparts do and face substantially higher marginal tax rates, Japanese executives do not log shorter hours.

Trickle-down theory also predicts a positive correlation between inequality and economic growth, the idea being that income disparities strengthen motivation to get ahead. Yet when researchers track the data within individual countries over time, they find a negative correlation. In the decades immediately after World War II, for example, income inequality was low by historical standards, yet growth rates in most industrial countries were extremely high. In contrast, growth rates have been only about half as large in the years since 1973, a period in which inequality has been steadily rising." R. Frank, "In the Real World of Work and Wages, Trickle-Down Theories Don't Hold Up," NY Times, 4/07

"A new report from The Mobility Agenda finds that over 40 million jobs in the United States-- about 1 in 3--pay low wages ($11.11 per hour or less) and often do not offer employment benefits like health insurance, retirement savings accounts, paid sick days, or family leave. Moreover, these jobs tend to have inflexible or unpredictable scheduling requirements and provide little opportunity for career advancement."

“We did not realize it until we lost unions how crucial they are to our well-being.”Paul Krugman, Congressional testimony, www.tompaine.com/articles/2007/02/22/union_states_of_america.php

Record Numbers in Severe Poverty "The percentage of poor Americans who are living in severe poverty has reached a 32-year high, millions of working Americans are falling closer to the poverty line and the gulf between the nation's "haves" and "have-nots" continues to widen.

A McClatchy Newspapers analysis of 2005 census figures, the latest available, found that nearly 16 million Americans are living in deep or severe poverty. A family of four with two children and an annual income of less than $9,903 - half the federal poverty line - was considered severely poor in 2005. So were individuals who made less than $5,080 a year.

The McClatchy analysis found that the number of severely poor Americans grew by 26 percent from 2000 to 2005. That's 56 percent faster than the overall poverty population grew in the same period...." U.S. economy leaving record numbers in severe poverty ..." 2/22/07 http://www.realcities.com/mld/krwashington/16760690.htm

Populism's Revival By James Lardner, from San Francisco Chronicle November 22, 2006
................
In the late 1970s and early '80s, when the inequality trend first surfaced, the most conspicuous victims were workers in industries shaken by competition from Asia. From then on, highly regarded authorities have continued to present the problem as a matter of technology and trade creating a "rising skill premium," as Federal Reserve Board Chairman Ben Bernanke put it at a congressional hearing earlier this year. Americans have clearly taken that analysis to heart. By and large, according to a recent Wall Street Journal/NBC News poll (in which the widening pay gap was rated the country's No. 1 economic problem by 24 percent of those surveyed), people don't hold Republicans responsible. They're more inclined to blame corporate greed or the global economy; and either way, they don't think there's much that mere humans, regardless of party, can do about it. But that fatalistic outlook is not supported by the facts.

If cheap imports (or, for that matter, low-wage immigrants) could explain a long, sharp increase in inequality, France, the Netherlands and much of Europe would be going through the same experience; they're not. If skill was the crucial factor, the long-term winners would be the top 20 or 30 percent of Americans. Instead, they've been the top 5, 2, or 1 percent -- the 1 percent who now pocket almost a fifth of all personal income, roughly twice what their share was during the 1960s and '70s.

The data suggests a story of power rather than skill--rule-making power. The trail of evidence leads into the arcane world of economic policy; and if you look back over the past few decades, ignoring the catchy labels ("deregulation," "personal responsibility" and the rest), you'll find a pattern of government action--on taxes, trade and the minimum wage, among other things--favoring corporate insiders and financial manipulators over the rest of us.

You'll also find inaction -- a wholesale abandonment of the tradition of public investment that, in earlier periods of our history, from the Louisiana Purchase to the G.I. Bill and the Higher Education Act of 1965, earned the United States the right to honestly call itself a land of opportufnity.............http://www.demos.org/aroundthekitchentable/article.cfm?id=11220601

Culture of poverty? For decades, scholars and opinion makers have been seduced by cultural explanations for economic problems. Recently, comedian Bill Cosby has caught the bug, leading him to inveigh against aspects of black culture he views as intimately linked to problems among African-Americans, from poverty to crime and incarceration. Mr. Cosby is merely the latest and most visible in a long chain of cultural critics.....

This work is misguided at best and destructive at worst.  One key to the success of the cultural argument is the omission of inconvenient facts.... For example, people arguing that African-Americans are suffering from a culture of poverty stress that blacks are much more likely to be poor than whites. True, but this fact misses the most important development about black poverty in recent years: its steep decline during the 1990s.

Black poverty fell 10.6 percentage points from 1993 to 2000 (from 33.1 to 22.5 percent) to reach its lowest level on record. Black child poverty fell an unprecedented 10.7 percentage points in five years (from 41.9 percent in 1995 to 31.2 percent in 2000).

The "culture of poverty" argument cannot explain these trends. Poor black people did not develop a "culture of success" in 1993 and then abandon it for a "culture of failure" in 2001.

What really happened was that in the 1990s, the job market finally tightened up to the point where less-advantaged workers had a bit of bargaining clout. The full-employment economy offered all comers opportunities conspicuously absent before or since. Since 2000, black employment rates have fallen much faster, and poverty rates have risen faster, than the average.

What this episode reveals is how we squander our human resources when slack in the economy yields too few decent employment opportunities for those who want to work.....
"Don't Blame Black Culture for Economic Decline," A. Austin & J. Bernstein,

Good News! "..minimum wage initiatives passed in all six states where they were on the ballot on November 7. This means over 1.5 million workers in Arizona, Colorado, Missouri, Montana, Nevada and Ohio, will see their wages increase, thanks in part to your support. Not only did each of these states raise their minimum wages, they also adopted automatic annual cost-of-living adjustments, bringing to 10 the number of states with inflation indexing."Monique Morrissey, EPI

The Gender Pay Gap is the Smallest on Record—Not Necessarily Good News, Sylvia Allegretto New data released by the U.S. Census Bureau show that the gender pay gap for full-time, full-year workers is the smallest on record. The shrinking gap was a feature in the Department of Labor’s report, Highlights of America’s Workforce: Labor Day 2006. Women now earn 77 cents on the dollar compared to men. After an increase in the gap from 2002 to 2003, the gap shrunk over the last two years. However, as the Figure shows, these declines were solely due to the fact that earnings have fallen for both men and women, but have fallen more so for men—not a desirable scenario.

Amazingly, the Department of Labor brags that the gender gap in pay is now the smallest ever, while completely ignoring how we got there..... EPI Snapshot for September 6, 2006. http://www.epi.org/content.cfm/webfeatures_snapshots_20060906

"Even households at the 95th percentile--that is, households richer than 19 out of 20 Americans--have seen their real income rise less than 1 percent a year since the late 1970's. But the income of the richest 1 percent has roughly doubled, and the income of the top 0.01 percent--people with incomes of more than $5 million in 2004--has risen by a factor of 5."
"Whining Over Discontent,"Paul Krugman, NYT, 9/6/06

"The stagnation of real wages — wages adjusted for inflation — actually goes back more than 30 years. The real wage of nonsupervisory workers reached a peak in the early 1970’s, at the end of the postwar boom. Since then workers have sometimes gained ground, sometimes lost it, but they have never earned as much per hour as they did in 1973.

Meanwhile, the decline of employer benefits began in the Reagan years, although there was a temporary improvement during the Clinton-era boom. The most crucial benefit, employment-based health insurance, has been in rapid decline since 2000." "The Big Disconnect," Krugman, NYT 9/1/06

CEO pay-to-minimum wage ratio soars Today's average CEO earns more before lunch in one day than the average minimum wage worker earns all year, with a compensation ratio of 821-to-1. CEO pay continues to climb, while the federal minimum wage has remained unchanged since 1997 [and is at a 50-year low]. forthcoming The State of Working America, 2006/07.--EPI

"Income Inequality, and Its Cost" "Unchecked inequality may also tend to create still more inequality. Edward L. Glaeser, a professor of economics at Harvard, argues that as the rich become richer and acquire greater political influence, they may support policies that make themselves even wealthier at the expense of others. In a paper published last July, he said, 'If the rich can influence political outcomes through lobbying activities or membership in special interest groups, then more inequality could lead to less redistribution rather than more.'

In the United States, there is plenty of evidence that this has been occurring. Bush administration policies that have already reduced the estate tax and cut the top income and capital gains tax rates benefit the well-to-do. It seems hardly an accident that the gap between rich and poor has widened." A. Bernasek, NYT, 6/06

"Dean Baker debunks the myth that conservatives favor the market over government intervention. The book examines a variety of "nanny state" policies that make the rich richer while leaving most Americans worse off." The Conservative Nanny State 5/06

Why are Americans so deeply in debt? It's not because they are using credit cards to buy plasma TVs and premium coffee drinks at Starbucks. The real culprits, according to a new analysis, are the rising costs of housing, health care and education.

The debt of the typical American family earning about $45,000 a year rose 33.1 percent from 2001 to 2004, after adjusting for inflation, according to a study based on data compiled from the Federal Reserve Board's most recent Survey of Consumer Finances. ...

Real wages, after adjusting for inflation, have been flat since 2001, according to the study, while the cost of big-ticket items for which families pay the most rose. In the past five years, the costs of medical care, housing, food, cars and household operations rose 11.2 percent,
the study said. Many families are trying to make up the difference by borrowing....

Stagnating minimum wages and housing bubble: "Last year was the first year of record, according to an annual study conducted by the National Low Income Housing Coalition,
that a full-time worker at minimum wage could not afford a one-bedroom apartment anywhere in the country at average market rates. In 2001, officials in ...a suburb of Seattle passed an ordinance imposing penalties of 90 days in jail or fines of up to $1000 against people caught living in their cars." "Keeping It Secret as the Family Car Becomes a Home," NY Times, 4/2/06

The minimum wage buys less today than it did when Wal-Mart founder Sam Walton opened his first Walton’s 5 & 10 in Bentonville, Arkansas in 1951. It would take more than $9 in 2006 to match the federal minimum wage peak reached in 1968, adjusting for inflation. ...........

The minimum wage sets the wage floor. When the minimum wage is stuck in quicksand, it drags down wages for workers up the pay scale as well. Hourly wages for average workers are 11 percent lower than they were in 1973, despite rising worker productivity. It wasn't always like this. Between 1947 and 1973, worker productivity rose 104 percent while the minimum wage rose 101 percent, adjusting for inflation........

The downward shift in wages is moving higher up the career ladder. The inflation-adjusted earnings of college-educated workers have fallen since 2000.................The share [of national income] going to after-tax corporate profits.... is at the highest level since 1929. "Wanted: A High-Road Economy," Holly Sklar, 3/06 http://www.tompaine.com/articles/2006/03/17/wanted_a_highroad_economy.php

More bad news on inequality "Between 1979 and 2003, according to...the IRS, the share of overall income received by the bottom 80 percent of taxpayers fell from 50 percent to barely over 40 percent. The main winners from this upward redistribution of income were a tiny, wealthy elite: more than half the income share lost by the bottom 80 percent was gained by just one-fourth of 1 percent of the population, people with incomes of at least $750,000 in 2003." Krugman, NYTimes, 3/6/06

Disconnect between growth and jobs:"This year's report [Global Employment Trends] shows once again that economic growth alone isn't adequately addressing global employment needs. This is holding back poverty reduction in many countries," said ILO Director-General Juan Somavia. "We are facing a global jobs crisis of mammoth proportions, and a deficit in decent work that isn't going to go away by itself. We need new policies and practices to address these issues."

The Culture of the New Capitalism "... the pervasive insecurity that is inextricably part of today's capitalism has become the dominant fact of modern life. 'The fragmenting of big institutions has left many people's lives in a fragmented state: the places they work more resembling train stations than villages,' writes sociologist Richard Sennett in The Culture of the New Capitalism.... Throughout most of the 20th century, the insecurity endemic to capitalism was mitigated by business institutions organized..., along military lines. The corporation gave the employee a place and a ladder, and in such a lifelong institution, Sennett notes, 'it became possible to define what the stages of a career ought to be like, to correlate longtime service in a firm to specific steps of increased wealth.'

Sennett is no apologist for the old corporate order, but it did impart a structure to people's work lives and a place to hone their crafts. The new workplace, by contrast, is a brave new world of short-term employment and relationships, where experience is not necessarily a virtue and institutional memory is sketchy at best. It may be a fine place for young workers, but 'as middle age looms and children, mortgages and school fees appear, the need for structure and predictability in work grows greater.' The frequent migration of executives from one firm to another, Sennett adds, imposes further costs on employees: 'This managerial revolving door has meant that the steady, self-disciplined worker has lost his audience.'" "A Gentler Capitalism," Harold Meyerson, Wash. Post, Jan 4, 2006

Median family income held up only by two workers "Today the median income for a fully employed male is $41,670 per year (all numbers are inflation-adjusted to 2004 dollars)—nearly $800 less than his counterpart of a generation ago. The only real increase in wages for a family has come from the second paycheck earned by a working mother. ........today’s median-earning, median-spending middle-class family sends two people into the workforce, but at the end of the day they have about $1,500 less for discretionary spending than their one-income counterparts of a generation ago." "The Middle Class on the Precipice," Elizabeth Warren http://www.harvard-magazine.com/on-line/010682.html See also http://privatizationofrisk.ssrc.org/Warren/

Tax Cuts Don't Pay for Themselves: "...The recent analysis by [Ben] Page at the Congressional Budget Office dismisses the idea that tax cuts may actually improve the government's fiscal situation. Even in his most generous scenario, only 28 percent of lost tax revenue is recouped over a 10-year period. The United States, it seems, is firmly planted on the left side of the Laffer Curve.

Recent experience corroborates this prediction. In the second quarter of 2001, just before the first of President Bush's tax cuts took effect, federal receipts from personal taxes accounted for 10.3 percent of the economy. By the end of the post-recession slump, receipts had dropped to 6.4 percent. But in the third quarter of 2005, with the economy booming, they were still under 7.5 percent - an enormous difference. In dollar terms, federal receipts from personal income taxes, at $802 billion in 2004, are still lower than they were in 1998 ($826 billion) and much lower than in 2001 ($994 billion)....Even in Mr. Page's most generous picture, the federal government would probably have to pay an extra $200 billion in interest over the decade covered by his analysis. "A Bit of Doodling About a Tax-Cut Danger," Daniel Altman, NY Times Business, Jan. 1, 2006

Further horizons in outsourcing--our own computer-game playing. "...from Seoul to San Francisco, affluent online gamers who lack the time and patience to work their way up to the higher levels of gamedom are willing to pay the young Chinese here to play the early rounds for them.""Ogre to Slay? Outsource It to Chinese," New York Times, Dec. 9, 2005

Anti-Unionism is the Date Rape of Corporate Crime "...despite starting almost every union drive with majority support, by the time the corporate wave of crime is over, only 31% of union elections end with a vote in support of the union." Nathan Newman

The New Rich-Rich Gap, by Robert Reich The wealthy class is splitting into two elites, one national and threatened by outsourcing, the other international and profiting wildly from globalization.

"..a new group is emerging at the very top. They're CEOs and CFOs of global corporations, and partners and executives in global investment banks, law firms and consultancies.....It used to be that about a third of the work forces in advanced economies were in person-to-person jobs; now, close to half are. Today, more Americans work in laundries and dry cleaners than in steel mills; more in hospitals and nursing homes than in banks and insurance companies. More work for Wal-Mart than for the entire U.S. automobile industry............

Routine office jobs are disappearing almost as fast as routine factory jobs. Almost any office task—claims adjusting, mortgage processing—can be done more cheaply and accurately these days by specialized software. Jobs that can't be turned into software are heading to low-wage countries as fast as telecom systems can reach them. Not only are call centers, tech support and routine computer coding going abroad, but so are jobs involved in patent applications, divorce papers and certain domains of research."

Wal-Mart Seeks Unbiased Research -- and Gets It, LA Times November 3, 2005
.....................
Some of their findings, which a few of the researchers released before the conference, tend to confirm what Wal-Mart critics have been saying for years.

At least two concluded that Wal-Mart stores' pay practices depressed wages beyond the retail sector. Another found that states on average spent $898 for each Wal-Mart worker in Medicaid expenses.

One study concluded that Wal-Mart's giant grocery and general merchandise Supercenters brought little net gain for local communities in property taxes, sales taxes and employment; instead, the stores merely siphoned sales from existing businesses in the area.

Not all the news was bad for Wal-Mart. Several of the studies noted that its stores led to lower prices throughout a region. Two suggested that Wal-Mart increased a county's total employment, with one pegging that long-term gain at 1% to 2%.

David Neumark, a senior fellow at the Public Policy Institute of California, found that "residents of a local labor market do indeed earn less following the opening of Wal-Mart stores."

Worse yet, he wrote, is Wal-Mart's influence in the South, where it has its greatest concentration of stores. There, Neumark and his coauthors found, Wal-Mart has decreased retail employment and total employment...........

"...inequality, in fact, increased at the insistence of southern representatives in Congress, while their other congressinal colleagues were complicit. As a result of the legislation they passed, blacks became even more significatnly disadvantaged when a modern American middle-class was fashioned during and after the Second World War." When Affirmative Action Was White, Ira Katznelson,. x.

At the Very Top, a Surge in Income in '03, Johnston, NY Times. 10/5/05 "The income of [the top tenth of 1 percent] grew by 9.5 percent in 2003 over the previous year... ////for the bottom 99 percent of taxpayers, income rose by less than 2 percent, which was below the inflation rate... ...among major world economies, the United States in recent years has had the third-greatest disparity in incomes between the very top and eve ryone else. Only Mexico and Russia, among major economies, ahve greater disparity."

"More People Are Working Now Than Ever Before" (But Less Often) Mas Sawicky, 8/ 11/05 http://www.maxspeak.org/mt/ "I remember first hearing the boast in the top line above from the 1976 Gerald Ford campaign. He had Bob Hope helping him out. Even before I had done any formal study of economics, I though, "Gee, what an idiot. Or does he think we are idiots."

Now the vacationing Mr. Bush is handing out the same drivel. Well, one helping of drivel deserves another. It is true that according to the latest monthly report from the BLS Establishment Survey of jobs, more people are working now than ever before. But, you might ask with some prompting, how often could this be said of presidents since, let's say Jimmy Carter.

Below are percentages of months in office where the statement was true (we use January of inauguration to December before the next joker's inauguration as time periods).

"All" is an average of all months after January of 1939. To save myself the trouble of disentangling JFK from LBJ and Nixon from Ford, I started with Jimmy Carter.
All 60%
Clinton 92%
Carter 79%
Reagan 71%
Bush I 38%
Bush II 15%

By this reckoning, it is true that more people are working now than ever before, but this is true less often -- much less, in fact -- for Bush the Younger than for his predecessors.

Commencement address, Senator Barack Obama [IL] "What if no matter where you worked or how many times you switched jobs, you had health care and a pension that stayed with you always, so you all had the flexibility to move to a better job or start a new business? What if instead of cutting budgets for research and development and science, we fueled the genius and the innovation that will lead to the new jobs and new industries of the future?"

Have Homeowners Over-Borrowed?

Reponse to NY Times article on problems for SS of increasing longevity: [non-working link]

"Incredibly, in an article which is entirely devoted to the impact of life expectancy increases
on social security's finances, the authors do not, one single time, mention the fact that the
Social Security Trustees (and the Congressional Budget Office) factor life expectancy
increases into their assessment of the program's long-term well-being. Now, there is a
debate about whether the trustees have over- or under-estimated the increase in life
expectancy going forward. Robert Pear, for example, in an article written last December,
marshalled evidence suggesting that the trustees have under-estimated the likely increase.

However, he provided room for experts who disagree with that assertion. Furthermore,
this March, the New England Journal of Medicine published a study (one that has
generated controversy) arguing that, due to increasing obesity, life expectancy in the
United States will fall, not rise, over the next seventy five years. But, there is not a single
mention of that debate in the Toner/Rosenbaum piece...."

A Galbraith Revival James K. Galbraith June 07, 2005
http://www.tompaine.com/articles/20050607/a_galbraith_revival.php

" Full employment prosperity is not a birthright, it must be earned. It doesn't come by
magic, by cutting deficits or through prayer to the Great God Greenspan. Full
employment prosperity must be created in the solution of our own national problems.
Let's therefore rebuild our cities, conserve our energy resources, save education, extend
health care, restore the environment and preserve Social Security. When we have taken
back America, we will surely have to rebuild it, finally ending the long age of "public
squalor" of which my father [ John Kenneth Galbraith] wrote in The Affluent Society 50 years ago."

Long-Term Joblessness Grows Despite Lower Unemployment Rates
Women and White-Collar Workers Now Vulnerable Three and a half years into this recovery, one in five unemployed Americans has been out of work for six months or more – marking the first time ever that so many jobless have been out of work for so long while the unemployment rate is relatively low and falling...http://www.nelp.org/news/pressreleases/prui052505.cfm .

President Eisenhower letter on Social Security to his brother Edgar on November 8, 1954:

"Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again.... There is a tiny splinter group, of course, that believes you can do these things. Among them are H.L. Hunt...a few other Texas oil millionaires, and an occasional politician or businessman from other areas. Their number is negligible and they are stupid." http://www.thenation.com/doc.mhtml?i=20041220&c=13&s=forum

"Will a Social Security Bill Become a Vehicle For Budget-Busting Tax Cuts?The potential is growing that efforts to address the Social Security shortfall could become a vehicle for budget-busting tax cuts. At a press conference on April 29, House Ways and Means Committee Chairman Bill Thomas (R-CA) and Social Security Subcommittee Chairman Jim McCrery (R-LA) suggested combining the broad type of Social Security benefit reductions that President Bush has proposed with additional tax cuts on savings and investments by higher-income people, such as making permanent the capital gains and dividend tax cuts enacted in 2003. The Washington Post reported May 5 that Chairman Thomas also is considering including large increases in contribution limits for IRAs and 401(k)s in his Social Security legislation." http://www.cbpp.org/5-6-05socsec.htm#_ftnref1

White House Distortions Mask Social Security Benefit Reductions The White House ignores the fact that, under its proposal, the Trust Fund would be exhausted in 2047, and benefits would consequently have to be cut about 10 percent at that time; this reduction would be in addition to the benefit reductions the Administration has explicitly proposed. http://www.cbpp.org/5-6-05socsec2.htm

Graph below at http://www.cbpp.org/5-2-05socsec2.htm

* The deterioration in the 75-year actuarial balance of Social Security that has occurred since 1983 has been caused overwhelmingly by economic developments, trends in disability incidence, and programmatic changes to Social Security.
* Sixty percent of the current shortfall would be eliminated by a reversal of two adverse economic trends that have emerged since 1983: sluggish growth in average (real) wages and erosion of the tac base due to rapid growth in the inequality of earnings.
* Reversing the demographic change most commonly identified with placing strain on the Social Security system--declining mortality rates--would eliminate less than 5% of the current shortfall. http://www.epinet.org/content.cfm/ib207

An investment pro on pritvatization: May 1, 2005 Social Security: [Berkshire Hathaway Inc. Chairman Warren] Buffett and [Vice Chairman Charles] Munger also told shareholders they oppose U.S. President George W. Bush's plan to allow privatization of Social Security because the government has a duty to take care of the country's elderly.

``The Republicans are out of their cotton-picking minds on this issue,'' said Munger, a self-described right-wing Republican. Social Security is ``one of the most successful things that the government has ever done.'' http://www.bloomberg.com/apps/news?pid=10000006&sid=aGh_OPpEs3_4&refer=home

Productivity: 2006 Budget vs Trustees' 2005 Report April 16, 2005 http://bruceweb.blogspot.com/2005/04/productivity-2006-budget-vs-trustees.html=

They let the cat out of the bag. I did some poking around the 2006 Budget and found the following on p. 191. I have posed the question here and there: How do the Presidents' men predict productivity when they are talking tax cuts? The answer is here. "conservatively, to be 2.6% per year". How then do they get away with 2.1% as their optimistic number when talking [Social Security] Trust Funds?

http://www.whitehouse.gov/omb/budget/fy2006/
Analytical Perspectives Potential growth is approximately equal to the sum of the trend rates of growth of the labor force and of productivity. Potential GDP growth is projected to be 3.2 percent through 2008, and then edge down to 3.1 percent during 2009–2010, primarily because of an assumed slowing in labor force growth. The labor force is projected to grow about 1.2 percent per year through 2008 on average, slowing to about 0.8 percent yearly on average during 2009–2010 as increasing numbers of baby boomers enter retirement. Trend productivity growth is assumed, conservatively, to be 2.6 percent per year. That pace is noticeably below the average since the business cycle peak in the first quarter of 2001 (4.2 percent per year). It is, however, close to the pace during 1996–2000 (2.5 percent) and not far from the average since the official productivity series began in 1947 (2.3 percent).

Further Horizons in Offshoring
Outsourcing off Los Angeles? By Linda L. Briggs ADTmag.com 4/18/2005

What if you could outsource to a company that offered the cost savings of an
India-based outsourcing firm, but whose facilities were just a few hours away?

That’s the premise of three entrepreneurs in San Diego, who are in the final throes of launching a company that will offer software development off the coast of California—three miles outside Los Angeles, to be specific.

The three plan to buy a used cruise ship and station it close enough for a half-hour water taxi ride to shore, but far enough to avoid H1B jurisdiction. ......

President "cares the most" about the working poor; poor may not agree

"I'm 1,000-percent convinced of this: The president cares the most about this $10-an-hour person," said Allan B. Hubbard, director of the White House National Economic Council. "And what he gets most irritated by is when it is suggested, 'Oh the $10-an-hour person isn't sophisticated enough to deal with a personal retirement account.' " ...."When you know you're entitled to Social Security, you know it's going to continue to come until you breathe your last breath," said Sondra Gilbert, a former D.C. government worker who had been jobless since 1999. "But if I start putting the few dollars he's going to let me put into an account, I could run out of that in a year or two, or whatever. Then I'm back on what? A homeless shelter?" "Bush Social Security Plan Proves Tough Sell Among Working Poor", J. Weisman, Wash. Post, April 18, 2005

While a smaller fraction of workers have pensions and Social Security is in danger--

"Everyone knows that chief executives are paid huge amounts of money while they are working. Less known is just how much they make in retirement. At many of America's biggest corporations, it is not uncommon for retired executives who were paid tens or even hundreds of millions of dollars during their tenures to receive $1 million or more in pension benefits every year-- for as long as they live.

Some will take home much more. ....At a time when millions of American workers have seen their pension plans pared back or shut down, and millions more are being asked to bear the risk of managing their own retirement savings, departing chief executives are making out better than ever. A total of 113 chief executives can anticipate retirement benefits worth more than $1 million a year; at least 31 may get twice that amount, or more." "The New Executive Bonanza: Retirement" by Eric Dash 3 April 2005 New York Times

"Why Profits Are Defying Gravity," Business Week, April 18, 2005--continued productivity growth, slow job increase; larger percent of profits from foreign operations; greater pricing power. Result: profit margins widened sharply. Graphs from Business Week.

Wage Gap Figures in Social Security's Ills, Wall Street Journal, 4/11/05
"In the past 25 years, a growing share of income has been paid to people who earn more than the cap. This increasing concentration of income at the upper strata of society is an important reason why, from 1980 through 2000, taxable payroll fell to 83% of wages of contributing workers from 90%. Both these trends partially were reversed in 2001, but there are signs inequality is growing again: The Federal Reserve estimates that the pay of managers and supervisors is rising much faster than that of production workers. Meanwhile, Social Security actuaries expect taxable payroll, which rebounded to 86% of total wages in 2002, to return to 83% by 2013."

The 2005 Social Security Trustees Report, Brad DeLong, March 23, 2005

The 2005 Social Security Trustees Report lowers the estimate of Social Security's deficit through 2079 to 0.6% of GDP. Last year's Trustees Report pegged the deficit through 2078 at 0.7% of GDP.

Social Security's financial status improved even though the new forecast window adds a big deficit year--2079--to the calculation. And its financial status improved even though the Bush administration assumed:

1. Reduced earnings on the part of the young.
2. Reduced death rates on the part of the old.
3. Lower labor force participation on the part of the young and old.
4. More short term inflation.
5. No change in long-run productivity growth (in spite of very good productivity news).
6. No change in immigration (in spite of immigration running ahead of assumptions).

That's six thumbs on the scales, and still the long-run deficit shrinks.

So why is the headline that the financial status of Social Security has gotten worse? Can you say "an easily snowed press corps"? I knew you could.

"Waging Inequality" Lawrence Mishel, Economic Policy Institute

"The U.S. economy grew at a brisk 4.4% clip last year, but it was not until last month that the number of jobs recovered to the levels of early 2001. The Labor Department pegs the unemployment rate at 5.2%, the lowest in four years, but the share of people who have stopped hunting for work is the largest it has been since 1988. Today's job growth is more than twice as slow as it was after the 1990-91 recession, and slower than during any recovery since World War II, analysts say..... ...wages remain relatively flat, growing slower last year than the rate of inflation — translating into a cut in take-home pay for many workers." "Economy's Growing, but Where Are the New Jobs?" LA Times, Feb.15, 2005

Fed Chairman Greenspan on Social Seducity:"In response to a question [at hearings of the House Financial Services Committee]...Mr. Greenspan said he could not say whether he would have voted to create Social Security if he had been a member of Congress in 1935 when the retirement system was established." [Alan Greenspan, as well as being the current Chair of the Federal Reserve, was also Chair of the National Commission on Social Security Reform that in 1983 increased SS taxes, generating the current large surpluses in the Trust Fund that he later used to justify tax cuts for higher-income taxpayers.] NYT 2/18/05

Brad de Long, Feb. 15, 2005 on Social Security Privatization

"Social Security is the basic, minimum tranche of retirement income. If you give people control over their savings, some who have few other resources will do badly with it. They will then either eat cat food and shiver in the cold in their old age, or their private accounts will be topped off to keep them from penury. But if we choose the second option, then we are creating grave moral hazard: people can speculate with their private accounts, playing the game of heads-I-win-tails-the-government-pays. To head off this moral hazard meltdown, a plan should--and the Bush plan appears to--very tightly constrain where the investments can go. In which case "control of their savings... [not] rely so heavily on the state" means nothing: a shell of rhetoric and talking points attempting to misdirect, to divert attention from the government's decisive continuing role." http://www.j-bradford-delong.net/movable_type/

More Bad News on the Jobs Front: Bush's Jobless Economy

"Average weekly pay in the US is declining in real terms. Obviously, if outsourcing is creating jobs, they are less good jobs than the ones being outsourced. Trading better jobs for worse ones is the road to poverty, not the road to wealth.

The dismal US performance in job and pay growth is despite the most stimulative monetary and fiscal policy in my lifetime. If the lowest US interest rates in memory, tax cuts and the biggest budget deficits in US history cannot create jobs and boost pay, what can?"

Paul Craig Roberts, Assistant Secretary of the Treasury in the Reagan administration, former Associate Editor, Wall Street Journal editorial page, and former Contributing Editor, National Review.

"The Times has sought to make sense of an American paradox: why so many people report being less financially secure even as the nation, by many measures, has grown far more prosperous.

The answer, the newspaper has found, lies in the shifting of economic risks from the broad shoulders of business and government to the backs of working families.

Over the last quarter of a century, many safeguards that people once counted on to shield them from financial harm have been weakened or completely lost. These include formal protections such as guaranteed corporate pensions and state and federal unemployment benefits. And they include informal ones, like the loyalty that employers once showed their workers by offering secure jobs with relatively little prospect of long-term layoff. Other cushions that families like the Ryans have relied on, such as the financial stability that comes with a college education, also have eroded."

"How Just a Handful of Setbacks Sent the Ryans Tumbling Out of Prosperity," Los Angeles Times, December 30, 2004

"Some trade experts question whether new trade agreements are the solution to the growing deficit. Greg Elias, a trade lawyer and former senior Congressional aide, said that the trade deficits were a result of trade agreements that are really investment agreements.

'Our trade agreements are about investing in foreign countries and sending back the products unimpeded to the United States.'" "October Trade Gap a Record," New York Times, December 15, 2004, Business

""The Wall Street Journal spotted yet another depressing trend in the pension field. Many companies have started suing their own retired employees in order to cut their pension benefits.

'Many companies have already cut back company-paid health-care coverage for retirees from their salaried staff,' the Journal notes. 'But until recently, employers generally were barred from touching unionized retirees' benefits because they are spelled out in labor contracts. Now some are taking aggressive steps to pare those benefits as well, including going to court.'

Here's the part I love: The companies' legal argument is that the 'lifetime' coverage specified in the contracts does not mean the lifetime of the workers, but the 'lifetime' of the labor contract. Cute, eh?" http://www.freepress.org/columns/display/1/2004/1006

Molly Ivins, "A Few Political Developments," The Free Press, Nov. 25, 2004

"This year [2003], more people will end up bankrupt than will suffer a heart attack. More adults will file for bankruptcy than will be diagnosed with cancer. More people will file for bankruptcy than will graduate form college, And, in an era when traditionalists decry the demise of marriage, Americans will file more petitions for bankruptcy than for divorce." Eliabeth Warren, quoted by Bob Herbert, New York Times, August 9, 2004