Source: Real Clear Markets
News
June 27, 2017

For months, I've planned to write a column on the future of the U.S. labor market. Stacked on my desk are reports on "the gig economy," "independent workers," "contingent workers," "freelancers" and the like. All signify a new, less secure labor market. Workers won't have long-lasting career jobs, as the old post-World War II employment model promised. Now it's survival of the fittest. Workers who can adapt to constant change will thrive. As for everyone else, tough luck. I never wrote that column. The main reason is that I never felt certain that this widely prophesied labor market would prevail. Indeed, the postwar employment model might make a comeback. Demographics — the ongoing retirement of the massive baby-boom generation — would make experienced and competent workers prized resources. Because the labor force would be growing only slowly, many companies would try to stabilize their employment by offering career jobs with better wages and benefits. I still don't know which of these models will triumph: the first reflecting a management belief that workers must be hired and fired as business conditions dictate; the second based on the notion that good workers will be scarce for the foreseeable future and smart companies will do their best to train and retain them.

News
June 2, 2017

When OMB director Mick Mulvaney unveiled the new Trump budget, he used language that is so important -- although we haven’t heard it in so many years. To paraphrase Mulvaney, the measure of budget success for the Trump administration is not how much federal assistance is given out, but how many people leave government dependency and join the private labor force as full-fledged workers.

News
May 19, 2017

Earlier this month four economists released a study of income trends based on an under-used data source, Social Security wage records. These earnings reports are submitted by employers for the purpose of calculating workers’ tax payments and, eventually, Social Security benefits. The income amounts are quite accurate and cover a full career of wage income. The new study confirms that average male earners have seen scant wage gains over the past generation. The study also turned up a surprise. When we combine the earnings trends for men and women, the rise in inequality appears much slower than when we examine trends among each sex separately.

News
May 19, 2017

Since Fiscal Year 1984-1985, real special fund expenditures have ballooned a whopping 447 percent or about 6 percent, on average, per year.  In Governor Brown’s budgeting era, more and more of the budget is locked into these special funds. The May Revise pegs total special fund expenditures at $56 billion for Fiscal Year 2017-2018, about 50 percent higher than Arnold Schwarzenegger’s last budget and more than double Gray Davis’ last budget.  Moreover, we’ve seen a rise in the share of special fund spending to overall expenditures. The May Revise has special fund spending accounting for almost one-third of overall expenditures. This is not an anomaly for Governor Brown.  On average, real special fund expenditures have been 28 percent of overall spending during his last two terms – the highest of recent Governors. 

News
April 12, 2017

It may turn out that the widespread belief that most Americans' incomes have stagnated for years is, well, false or at least overstated. . . In a provocative new study, economist Bruce Sacerdote of Dartmouth College reviewed the material well-being of the poorest 50% and 25% of Americans. What he concluded was that even these families had achieved a "meaningful growth in consumption ... (despite) a prolonged period of increasing income inequality ... and a decreasing share of national income accruing to labor."

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