09/17/2019

News

More Evidence That Income Stagnation Is a Myth

A few weeks back, I wrote about a new study from the Congressional Budget Office (CBO). It convinced me that, although typical incomes are rising slowly, they are still rising and that, over long periods, the increases are significant. To cite one statistic from that column: Average inflation-adjusted household incomes for the middle fifth of […]

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Improving Health Care Through Occupational Licensing Reform

The rules that determine who can legally work in an occupation and provide particular services—known as occupational licensure—affect a wide swath of workers and are important constraints on how the labor market and economy function. Despite a welcome increase in discussions of occupational licensing in recent years, and a body of research dating back decades, […]

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Steven Pinker Critiques the Inequality Alarmism of Thomas Piketty

In Enlightenment Now, Pinker makes a crucial counterpoint—the distinction between relative and absolute prosperity: “Total wealth today is vastly greater than it was in 1910, so if the poorer half own the same proportion, they are far richer, not ‘as poor’.” Put simply, people can be much richer in absolute terms despite a relatively smaller […]

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Why Judges Aren’t Buying Cities’ Climate Change Lawsuits

A second judge in as many months has tossed a climate lawsuit brought by cities against major energy companies. In dismissing the New York City lawsuit, U.S. District Court Judge John F. Keenan wrote, “Global warming and solutions thereto must be addressed by the two other branches of government. ” Judge Keenan, like his fellow […]

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” Let the Coming Wars Over Welfare Begin “

The Trump administration may have declared it over, but a new War on Poverty is coming anyway. It will be fought largely over the “work requirement” — should the government require welfare recipients either to get a job or to train for one? It’s a philosophical as much as a practical question. A work requirement […]

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As Economy Grows, Why Aren’t Wages Rising Faster?

Strain admits that this is just a guess, and finding corroborating evidence is hard. He also usefully lists other theories. With thanks and apologies to him, here’s a summary of his summary. (1) There’s more “slack” in labor markets than standard employment statistics indicate. People who had given up looking for work are re-entering the […]

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American Markets Need More Competition, More New Businesses

Some of the crucial ingredients of broadly shared prosperity in the U.S. economy include a dynamic market where new ideas can thrive, new businesses can reshape the economic landscape, and vigorous competition allocates resources efficiently. Our collective imagination of the U.S. economy is often one of bold entrepreneurs reshaping the world. TV shows us a […]

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Did You Know the Greatest Two-Year Global Cooling Event Just Took Place?

None of this argues against global warming. The 1950s was the last decade cooler than the previous decade, the next five decades were all warmer on average than the decade before. Two year cooling cycles, even if they set records, are statistical noise compared to the long-term trend. Moreover, the case for global warming does […]

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Government Spending: It’s Children vs. Grandparents

To those paying attention, the recent strikes for higher teachers’ pay in West Virginia and Oklahoma are a harbinger of things to come. You can attribute the strikes to the stinginess of the states’ political leaders. After all, average annual teachers’ salaries in these states ranked respectively 49th lowest (Oklahoma at $45,276) and 48th lowest […]

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I Totally Get California, But the Golden State’s Nightmare Confuses Me

Each year, I author the “Small Business Policy Index” for the Small Business & Entrepreneurship Council. The index ranks the states according to assorted policy and policy-related indicators, including taxes, regulations, government spending and debt, as well as a few measures of governmental performance. But make no mistake, the big governmental burdens for entrepreneurs and […]

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So Long As There Are Wants and Needs, There Will Be Jobs

With the growth of artificial intelligence (AI), many are worried that we may all be put out of work, replaced by robots. We can stop worrying. We’ll run out of jobs when we run out of goods and services we desire. Which will be never.

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Kevin Hassett Smacks Down the Partisan Tax Policy Center

Backing up Hassett’s assertions, former CEA chair Glenn Hubbard recently wrote in the Wall Street Journal that too many economists fail to consider the share of the U.S. corporate tax burden borne by labor — 60 percent according to his research. Neither the TPC, the CBO, nor the JTC (Joint Tax Committee) model these results. Instead, they ignore the evidence.

A recent analysis of the House tax plan — which is nearly identical to the Trump plan — by professors Alan Auerbach (Berkeley) and Laurence Kotlikoff (Boston University) concluded that it would boost wages by 8 percent. That’s a big number.

It’s the difference between a prospering and optimistic middle class and a pessimistic middle class that lives day-to-day, paycheck-to-paycheck.

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America’s Middle Class Is Back…Or So It Seems

The middle class is back — or so it seems.

That’s the message from the Census Bureau’s latest report on “Income and Poverty in the United States.” The news is mostly good. The income of the median household (the one exactly in the middle) rose to a record $59,039; the two-year increase was a strong 8.5 percent. Meanwhile, 2.5 million fewer Americans were living beneath the government’s poverty line ($24,563 for a family of four). The poverty rate fell from 13.5 percent of the population in 2015 to 12.7 percent in 2016.. . . Not all the evidence is upbeat. Here are three sobering takeaways.

First, men’s median wages for full-time, year-round work have stagnated.

. . . Second, the upper middle class is flourishing — but not the lower classes.

. . . Third, almost three-quarters of the rise of Americans living in poverty since 1990 reflects increases in Hispanic poverty — increases linked to immigration, whether legal or illegal.

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Does the U.S. Have a Labor Shortage? Maybe

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.

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Trump Budget Is a Revival of the Clinton/Gingrich Growth Model

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.

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