Companies appear reluctant to step up spending on the basic building blocks of the economy, such as machines, computers and new buildings. The broadest measure of U.S. business investment advanced 2.2% from a year earlier in the third quarter, the Commerce Department said last week, marking one of the worse performances of the six-year-old economic expansion.
Beyond the questions for business and taxpayers there is the cloud of politics that sits over the Secure Choice program. Public labor unions, battered by criticisms of over-generous retirement plans that eat deeply into government budgets, embraced the Secure Choice program. For the unions, enlarging a retirement system that is overseen by the public sector could mean more sympathetic allies in the private sector in the battle over reform of current pension policies.
Personal income increased $68.1 billion, or 0.4 percent, and disposable personal income (DPI) increased $56.8 billion, or 0.4 percent, in October, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $15.2 billion, or 0.1 percent. In September, personal income increased $27.4 billion, or 0.2 percent, DPI increased $27.0 billion, or 0.2 percent, and PCE increased $9.5 billion, or 0.1 percent, based on revised estimates.
The Commerce Department on Tuesday said the nation’s gross domestic product grew at a 2.1 percent annual pace, not the 1.5 percent rate it reported last month. It said efforts by businesses to reduce an inventory bloat had not been as aggressive as previously believed.
Real gross domestic product — the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes — increased at an annual rate of 2.1 percent in the third quarter of 2015, according to the “second” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 3.9 percent.
“A minimum-wage job has always been the role of an entry-level position into the workforce,” Lapsley said. “(Those jobs are) to help get people initially trained and then move into a … different job so that they have a long-term future.”
The inefficiency of the minimum wage stems directly from who are working minimum wage jobs in California. First, based on the Census Bureau’s Current Population Survey, in 2014, almost one-third of hourly workers making $9 per hour live in households with family income above the federal poverty line; moreover, 79 percent were ages 25 or younger (i.e. individuals who are just entering the labor force). And lastly, 73 percent of Californian hourly workers making $9 per hour (or less) didn’t have a college degree, suggesting a majority of minimum wage workers are, in fact, lower skilled.
The state budget is better prepared for an economic downturn than it has been at any point in decades. In 2015–16, we project that the state’s “Big Three” General Fund revenues—principally the personal income tax—will exceed June 2015 budget assumptions by $3.6 billion, with most of that gain to be deposited into the Proposition 2 rainy day fund. In 2016–17, we project that revenues will exceed spending under current policies, resulting in even further improvement in the state’s fiscal situation. Assuming no new budget commitments are made, we estimate 2016–17 would end with reserves of $11.5 billion.
Silicon Valley-Bay Area’s strong post-recession economic growth is the reason California has had a recovery; hence, the recovery shouldn’t be cause for celebration among the state’s leaders. California’s economic recovery is occurring on the shoulders of just one region. This lack of economic diversification puts the Golden State in a precarious position. And yet, Sacramento continues to pretend everything is just okay.
The state will end the current fiscal year in June with $3.5 billion more in revenue than lawmakers expected when they approved the budget for the current year last June. And the state would have reserves of $11.5 billion in June 2017, the end of the 2016-17 budget year, barring any new budget commitments.
Moreover, says the report from the National Resource Network, California’s distressed cities are more than a quarter of the 297 U.S. cities over 40,000 population that fall into that category. The organization is affiliated with the White House Council on Strong Cities.
The consumer price index increased 0.2% in October after a 0.2% decline the previous month, the Labor Department said Tuesday. The rise, driven by higher food and energy prices, was in line with economists’ expectations.
While those on the economic ladder’s top rungs are doing very well, the report continued, “many other Californians, however, are not thriving and continue to experience significant levels of unemployment, steeply rising housing and higher education costs, and stagnant wages and incomes.”
That said, would increasing the minimum wage help to decrease the poverty rate? In this paper, we addressed that topic, developing a regression model looking at minimum wage, education level, labor force participation rate, and the cost of living and their impact on the poverty rate. Our results indicate that there is no statistical significance between minimum wage and poverty rate and our other independent variables were all statistically stronger than minimum wage.
But that swift economic growth hasn’t improved the fortunes of California’s poorest. The state’s official poverty rate (based on a federal threshold of $24,230 for a family of four) is at 16.4%, according to the most recent census data from 2014, up from 12.4% in 2007.