There is a direct correlation between immigration and middle class wage decline and wealth distribution. Until the immigration debacle is put under control, nothing else will work to solve these problems.EPer: David Schuck (not verified)
This is an economics site and we know, have seen the studies, labor economics that a massive increase in worker supply will lower wages. Businesses have know this forever and why they love illegal labor. Meatpacking used to be a career, union job and one could support a family, benefits, middle class income. Now it's dangerous, minimum wage and you cannot even get hired unless you are illegal. There is a fish packing plant near where I am and they will not hire anyone here legally. Yet city government, the law, state, does nothing even though the locals and called in complaint after complaint.
OK I hate to say this because it goes against the status quo. As long as we have hundreds of applicants for each open position, wages will continue to spiral down. There is a cost to illegal immigration that nobody wants to admit. The middle class is paying the cost.EPer: Don (not verified)
Economist Robert Hall:
* The standard of living stopped growing around 2000.
* The decline in the labor share seems to have started around 2000.
* Capital per household rose more slowly after 2000.
* Hours per household grew rapidly until 2000.
* The decline in hours since 2000 is the single biggest factor in the decline in household earnings.
* Participation rose during the 1990s, but has fallen since.
The LFPR peaked in April 2000, and has been in a steady decline ever since. In the last year of his presidency Bill Clinton called on Congress to help him change China’s normal trade relations status with the U.S. to permanent. Clinton signed on Oct 10, 2000. Since then our trade deficit has risen as well. Coincidence?
Now Obama wants fast-track for the TPP trade agreement. Elizabeth Warren and Bernie Sanders oppose it, while Hillary Clinton seems to be sitting on the corporate fence.
Robert Reich: "Just-in-time" scheduling is another part of America’s new “flexible” economy — along with the move to independent contractors and the growing reliance on “share economy” businesses. New software is behind all of this — digital platforms enabling businesses to match their costs exactly with their needs. Businesses used to consider employees "fixed costs". That meant steady jobs. And with steady jobs came steady paychecks, along with regular and predictable work schedules. But employees are now becoming "variable costs" of doing business — depending on ups and downs in demand that may change hour by hour, possibly minute by minute. American workers can’t simultaneously be variable costs for business, yet live in their own fixed-cost worlds. We need a federal law requiring employers to pay for scheduled work. Alternatively, if American workers can’t get more regular and predictable hours, they at least need stronger safety nets. These would include unemployment insurance for people who can only get part-time work and a minimum guaranteed basic income.
There should be some concern given to the effect of longer life expectancy to us people who started working on having a nest egg based on the time we started doing it. The retirement income, if any, is creeping up, but the taxes go up according to the higher income. Maybe a tax reduction based on ages would be very appropriate.EPer: gunther kaschube (not verified)
The Wall Street Journal cites a NBER study showing tax breaks for the bottom 90% spurs job growth, and tax cuts for the top 10% has little effect.
At first, I found this odd --- not about the tax cuts, but that the Wall Street Journal would cite this study.
And then I got to thinking — even tax cuts for the bottom 90% could force cuts to government spending ("starving the beast") because so many people have transitioned into lower-paying jobs; not to mention, the stagnation of wages across the board for the last several decades (even as profits have grown exponentially compared to productivity).
So even taxing the poor less would give the GOP the overall desired effect that they hope for — less tax revenues. Rather than tax the rich more, they want to tax the poor less.
Brilliant! Imagine all those desperate people voting for Republicans to get a tax break in their paychecks — but at the expense of everything else that they will lose, that they once could one day have relied upon (like Social Security, perhaps?)
And the jobs the NBER study says tax breaks will create --- more low-paying part-time jobs?
From another new study, this time from the UC Berkeley Center for Labor Research and Education ( April 2015) "Poverty-Level Wages Cost U.S. Taxpayers $152.8 Billion Each Year in Public Support for Working Families"
They report that wages of the bottom decile of earners were 5 percent lower in 2013 than in 1979. Trends since the early 2000s are even more pronounced. Inflation-adjusted wage growth from 2003 to 2013 was either flat or negative for the entire bottom 70 percent of the wage distribution ... 73 percent of enrollees in America’s major public support programs* are members of working families; and the taxpayers bear a significant portion of the hidden costs of low-wage work in America.
* Medicaid, Children’s Health Insurance Program (CHIP), Temporary Aid to Needy Families (TANF aka "welfare") and Supplemental Nutrition Assistance Program (SNAP aka "food stamps").
Between 2009 and 2011 the federal government spent $127.8 billion per year on these four programs for working families; and the states collectively spent $25 billion per year for a total of $152.8 billion per year. In all, more than 56 percent of combined state and federal spending on public assistance goes to working families.
Overall, higher wages and employer-provided health care would lower both state and federal public assistance costs, and allow all levels of government to better target how their tax dollars are used.
* But the GOP is against higher wages and employer-provided health care; while at the same time, wants to lower taxes to force cuts in these programs (aka "Starve the Beast"). So instead of just punishing the unemployed, the GOP wants to punish working people too. We're damned if we do (work for low wages) and damned if we don't (work at all).
From Arindrajit Dube (Associate Professor of Economics, UMass Amherst) on this new study:
"If we fund redistribution via taxes and transfers, and it’s paid for by wealthy taxpayers, that’s no worse than funding it via reduced profits going to wealthy investors ... There is also an efficiency argument for paying people via wages rather than public assistance ... Existing research suggests it may be more costly to transfer money from the rich to the poor using tax policies [rather than paying higher wages]. .. These public assistance programs have become de-facto subsidies for low-wage employers. For a program to be a subsidy for an employer, it needs to lower wages ... A balanced portfolio will both include policies that raise wages (like minimum wage policies), as well as robust safety net programs. Minimum wage policies tend to lower the use of public assistance like food stamps ... [But] when work hours are limited, using wages alone to raise incomes is more difficult, and that’s one reason we have safety net programs."
NBER: "Underemployment and hidden unemployment currently account for the bulk of the U.S. employment gap ... Using state-level data, we find strong statistical evidence that each of these forms of labor market slack exerts significant downward pressure on nominal wages."
Here's the open link to the 25-page wonkish study (by David G. Blanchflower and Andrew T. Levin -- March 24, 2015)
Yet more indication of failed Fed policies. The United States has one of the lowest labor participation rates in the developed world, but still manages to stay above basket cases like Greece, Spain and Ireland.
The rich are getting positively obese from the Fed's policy, but after six years it has yet to trickle down to ordinary Americans. To make matters worse, "A forecast model from the Federal Reserve of Atlanta on Wednesday suggested the U.S. economy is barely growing in the first quarter following an unexpectedly steep 1.4 percent drop in durable goods orders in February."
When you run a policy for six years and its primary effect is to redistribute income upwards at the expense of the vast majority of Americans, isn't it finally time for the Fed to step aside, admit its ineffectiveness, and define an effective policy for politicians to implement?
The Democrats' main source of political contributions comes from ordinary individuals and labor unions, while the Republicans' money overwhelming comes from large corporations and super-rich super-PAC donors.
So it should come as no big surprise as to "why" the GOP would prefer NOT to reform election and campaign laws, but instead, kill labor unions, suppress the vote and gerrymander congressional districts — essentially, killing "democracy" and rigging elections to favor the most wealthy.
On April 29, 2010 Chris Van Hollen (D-Maryland) and Charles Schumer (D-New York) introduced the DISCLOSE Act (also known as H.R. 5175). Later, on September 23, 2010 Congress last voted on this bill to: “Amend the Federal Election Campaign Act of 1971 to prohibit foreign influence in Federal elections, to prohibit government contractors from making expenditures with respect to such elections, and to establish additional disclosure requirements with respect to spending in such elections, and for other purposes.”
But the cloture motion failed to pass. Here's how they voted when Congress was still dominated by Democrats:
59 yeas (all Democrats)
39 nays (all Republicans)
2 Republicans didn't vote
(* I'm still not sure why it failed, because doesn't 59 votes pass the threshold for a three-fifths requiremnt?)
So any savings from gasoline prices was eaten up by other price increases --- and why yearly inflation is now "flat".
What about a senior on Social Security (who doesn't benefit from driving a car) -- they would have seen their cost-of-living go up. So how will Social Security determine their next COLA?
The Senate Finance Committee just allowed President Obama to have "fast track". This is a capitulation to global corporate rule. TPP and TTIP are corporate-rigged trade agreements that give corporations tremendous power. These trade agreements create their own court system, a tribunal system that can’t be reviewed, even by the U.S. Supreme Court. We will become serfs of corporations if these trade agreements become law. A federal "Buy American" law can be considered a "trade barrier" and a corporation can sue American taxpayers. A city or state can pass an environmental law and be sued. So it's a real attack on our Constitution. The judiciary gets totally decapitated — both our legislature and our courts, two thirds of our government, are destroyed by this. It will set up a new form of governance that puts corporations before democracy. Add to that, research by CEPR shows 90% of Americans will see their income go down, while the wealthiest get richer. More jobs will be lost and the trade deficit will continue to expand. The Senate Finance Committee is where the corruption began: just last year alone the members received $237 million in donations. It is the most corrupt congressional committee.
(I would read the entire article if you're interested in tax loopholes.)
From Wall Street on Parade: At approximately 1:07 p.m. on Saturday afternoon, April 11, during the annual Cherry Blossom Festival celebrating springtime in the Nation’s Capitol, a 22-year old man took his own life with a gun on the Capitol grounds with a protest sign taped to his hand. According to the Washington Post, the sign read: “Tax the one percent.”
It sounds like the New York Times is "evolving" ...
"Americans’ desire to soak the rich has diminished even as the rich have more wealth available that could, theoretically, be soaked. It's not just public opinion polls, either. It shows up in the actual policies espoused by candidates for office and enacted by Congress."
The New Yorker is also making strange claims:
"In the 2016 Presidential race, there is, naturally, a lot of interest in how voters view the prospect of the federal government adopting more redistributive policies, such as raising taxes on the wealthy. Intuition and rational-choice theory would suggest that, as the gap between the wealthy and everybody else increases, support for redistribution goes up. But a number of empirical studies published in recent years have cast doubt on this theory, finding that support for redistribution has remained flat, or even that it has fallen."
I think you are right but we might look at volume of sales vs. prices. How bad off is demand these days? A lot of people are now owning cars which get > 30mpg?
the 0.6% decrease in sales at gas stations looks to be in error, as gasoline prices were up 3.9% in March, so we would expect to see a significant revision in that figure when the advance report for April is released a month from now...EPer: rjs
per recent posting, from my experience as an SSA Interpreter, no one can submit a bogus Disability claim and get approved. Claimant must be seen by two SSA physicians & have substantial medical reports from their own doctors. And the % of 99er's Long-term Unemployed, haven't dropped out of the work force. They survive on P/T jobs or become self-employed. FOX News can only maintain an audience by portraying villains on any given issue or persons. Truthful reporting doesn't make money for them.EPer: Connie Kaplan (not verified)
Conglomerates control so much that is under different brand names to make it seem like choice, when there is little choice. Food is an example where just a few own all of the brand names, ConAgra Foods as an example. Yum Foods for fast food as another.
(* This is from a joint investigation of The Center for Public Integrity and The Seattle Times)
Clayton-owned mobile home dealerships with different names and similar banners offer to “BEAT OR MATCH ANY DEAL.” Customers say they thought they were comparison shopping, when they were really visiting multiple Clayton-owned dealerships — all owned by one company.
The U.S. second richest man, Warren Buffett, owns Berkshire Hathaway, which owns Clayton, the mobile home industry’s biggest manufacturer and lender. Clayton is a many-headed hydra with companies operating under at least 18 names. It also sells property insurance on their mobile homes — and repossesses them when borrowers fail to pay.
Berkshire Hathaway extracts value at every stage of the process. Clayton even builds the homes with materials supplied by other Berkshire subsidiaries. And Clayton borrows from Berkshire to make mobile home loans, paying up to an extra percentage point on top of Berkshire’s own borrowing costs.
Clayton customers described a consistent array of deceptive practices that locked them into ruinous deals: loan terms that changed abruptly after they paid deposits or prepared land for their new homes; surprise fees tacked on to loans; and pressure to take on excessive payments based on false promises that they could later refinance. Former dealers said the company encouraged them to steer buyers to finance with Clayton’s own high-interest lenders. Those loans averaged 7 percentage points higher than the typical home loan in 2013.
Buyers told of Clayton collection agents urging them to cut back on food and medical care or seek handouts in order to make house payments. If they don't, their mobile homes are repossessed.
Berkshire Hathaway’s Omaha headquarters sent a statement on behalf of Clayton Homes to the Omaha World-Herald (which is also owned by Berkshire Hathaway) to dispute the allegations.
(* Read more in the links below about Warren Buffett's sleazy company to see why we need more government regulation, not less, as the Republicans always want.)
But a "populist Democrat" would. Legislation to increase Social Security benefits and boosting payroll taxes to cover the cost, now has 58 co-sponsors in the House. In the Senate, Elizabeth Warren won 42 Democratic votes (with just two Democrats voting no) for a nonbinding resolution calling for a “sustainable expansion of benefits.” A spokesman declined to comment on Hillary Clinton’s current position on this issue. (Silence speaks a million words.) Hillary is not known as a "progressive" Democrat (like FDR or Elizabeth Warren), but as a "New" pro-corporate "centrist" Democrat. In an op-ed in The Wall Street Journal in 2013, the "centrist" Democratic think tank "Third Way" called plans to increase benefits “reckless” and “irresponsible”. (So now we know what Hillary might privately think.)
How Elizabeth Warren Made Expanding Social Security Cool: "Warren just turned Social Security expansion—once a progressive pipe dream—into a tough-to-ignore 2016 issue."
* The link to that poll in the above article doesn't work, but other polls at their website can be found here:
A solution for the social security dilemma: "There are basically three options to address the problem: increase taxes; reduce benefits; or obtain higher rates of return by privatizing the system ... Some argue for gradually increasing the existing tax rate on both the employee and employer by two percent over a period of twenty years and reducing the annual cost of living (COLA) on the basis that senior spending needs are less than folks in the current workforce. Others suggest increasing the retirement age to 70 and reducing the monthly payments. Another option is to privatize the system by moving from the current 'defined benefit' model to a system where new beneficiaries and those over, for example, age 50 are moved to a system of private accounts ... However, I suggest a more simple approach -- eliminate the taxable maximum ("TAXMAX"). Specifically, instead of taxing only the first $118,500 (plus annual increases based on COLA), individuals would pay on full salary. Thus an individual earning, for example, $750,000 would pay the rate on the full salary rather than just to $118,500. There would be no increase on others."