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Saturday Stat: 23% of U.S. Children Live in Poverty

If the well-being of our children is an indicator of the health of our society we definitely should be concerned.  Almost one-fourth of all children in the U.S. live in poverty.

The Annie E. Casey Foundation publishes an annual data book on the status of American children.  Here are a few key quotes from 2014 (all data refer to children 18 and under, unless otherwise specified):

  • Nationally, 23 percent of children (16.4 million) lived in poor families in 2012, up from 19 percent in 2005 (13.4 million), representing an increase of 3 million more children in poverty.
  • In 2012, three in 10 children (23.1 million) lived in families where no parent had full-time, year-round employment. Since 2008, the number of such children climbed by 2.9 million.
  • Across the nation, 38 percent of children (27.8 million) lived in households with a high housing cost burden in 2012, compared with 37 percent in 2005 (27.4 million).

As alarming as these statistics are, they hide the terrible and continuing weight of racism.  Emily Badger, writing in the Washington Post, produced the following charts based on tables from the data book.

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Children live in poverty because they live in families in poverty.  Sadly, despite the fact that we have been in a so-called economic expansion since 2009, most working people continue to struggle.  The Los Angeles Times reported that “four out of 10 American households were straining financially five years after the Great Recession — many struggling with tight credit, education debt and retirement issues, according to a new Federal Reserve survey of consumers.”

Martin Hart-Landsberg is a professor of economics at Lewis and Clark College. You can follow him at Reports from the Economic Front.

Saturday Stat: Median Household Wealth Fell by 1/3 since 2003

According to a June 2014 Russell Sage Foundation report, the average U.S. household experienced a real wealth decline of more than one-third over the 10 years ending in 2013.

Table 1 shows that the net worth of the median household fell from $87,992 in 2003 to $56,335 in 2013, for a decline of 36%.  In fact, the last ten years were hard on the overwhelming majority of American households.  Only the top 2 groups enjoyed wealth gains over the period.  Also noteworthy is the tiny net worth of households below the median.

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Figure 1 provides a longer term perspective on wealth movements.  We can see that most households enjoyed growing wealth from 1984 to the 2007 crisis, with wealth falling across the board since.  However, the median household is now significantly poorer than it was in 1984.  Only the richer households managed to maintain most of their earlier gains in wealth.

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These trends highlight the fact that we have a growing inequality of wealth, as well as of income, and they are not likely to reverse on their own.

Martin Hart-Landsberg is a professor of economics at Lewis and Clark College. You can follow him at Reports from the Economic Front.

Saturday Stat: World’s Top Military Spender

According to the Stockholm International Peace Institute, the United States remains the world’s top military spender. In fact, U.S. military spending equals the combined military spending of the next ten countries.  And most of those are U.S. allies.

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Although declining in real terms, the U.S. military budget remains substantial and a huge drain on our public resources.  As the following chart shows, military spending absorbs 57% of our federal discretionary budget.

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 Notice that many so-called non-military discretionary budget categories also include military related spending. For example: Veteran’s Benefits, International Affairs, Energy and the Environment, and Science.   We certainly seem focused on a certain kind of security.

Martin Hart-Landsberg is a professor of economics at Lewis and Clark College. You can follow him at Reports from the Economic Front.

$291,978 Spent in Philadelphia to Make Poverty Pretty

We have the money and the know how to tackle most of our social problems.  Certainly unemployment, houselessness, and poverty.  So, why don’t we?

In large part it is because our socially created wealth remains outside social control.  Critical economic decisions are driven by private interests not the public good.  One result is hipster economics.

If you are not familiar with the concept, I recommend Sarah Kendzior’s The Perils of Hipster Economics. Here is the first part:

On May 16, an artist, a railway service and a government agency spent $291,978 to block poverty from the public eye.

Called psychylustro, German artist Katharina Grosse’s project is a large-scale work designed to distract Amtrak train riders from the dilapidated buildings and fallen factories of north Philadelphia. The city has a 28 percent poverty rate – the highest of any major U.S. city – with much of it concentrated in the north. In some north Philadelphia elementary schools, nearly every child is living below the poverty line.

Grosse partnered with the National Endowment of the Arts and Amtrak to mask North Philadelphia’s hardship with a delightful view. The Wall Street Journal calls this “Fighting Urban Blight With Art.” Liz Thomas, the curator of the project, calls it “an experience that asks people to think about this space that they hurtle through every day.”

The project is not actually fighting blight, of course – only the ability of Amtrak customers to see it.

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“I need the brilliance of colour to get close to people, to stir up a sense of life experience and heighten their sense of presence,” Grosse proclaims.

“People,” in Grosse and Thomas’s formulation, are not those who actually live in north Philadelphia and bear the brunt of its burdens. “People” are those who can afford to view poverty through the lens of aesthetics as they pass it by.

Urban decay becomes a set piece to be remodeled or romanticised.

The rest of the article is here.

Martin Hart-Landsberg is a professor of economics at Lewis and Clark College. You can follow him at Reports from the Economic Front.

The U.S. is Replacing Good Jobs with Bad Ones

In a fancy bit of marketing, U.S. capitalists have been reborn as “job creators.”  As such, they were rewarded with lower taxes, weaker labor laws, and relaxed government regulation. However, despite record profits, their job creation performance leaves a lot to be desired.

According to the official data the last U.S. recession began in December 2007 and ended in June 2009. Thus, we have officially been in economic expansion for almost five years.  The gains from the expansion should be strong and broad-based enough to ensure real progress for the majority over the course of the business cycle.  If not, it’s a sign that we need a change in our basic economic structure.  In other words, it would be foolish to work to sustain an economic structure that was incapable of satisfying majority needs even when it was performing well according to its own logic.

A recent study by the National Employment Law Project titled The Low-Wage Recovery provides one indicator that it is time for us to pursue a change.  It shows that the current economic expansion is transitioning the U.S. into a low wage economy.

The figure below shows the net private sector job loss by industries classified according to their medium wage from January 2008 to February 2010 and the net private sector job gain using the same classification from March 2010 to March 2014. As we can see, the net job loss in the first period was greatest in high wage industries and the net job creation in the second period was greatest in low wage industries.

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As the study explains:

 The food services and drinking places, administrative and support services (includes temporary help), and retail trade industries are leading private sector job growth during the recent recovery phase. These industries, which pay relatively low wages, accounted for 39 percent of the private sector employment increase over the past four years.

If the hard times of recession disproportionately eliminate high wage jobs and the “so called” good times of recovery bring primarily low wage jobs, it is time to move beyond our current focus on the business cycle and initiate a critical assessment of the way our economy operates and in whose interest.

Cross-posted at Pacific Standard.

Martin Hart-Landsberg is a professor of economics at Lewis and Clark College. You can follow him at Reports from the Economic Front.

Saturday Stat: The U.S. is a “Low Tax Country”

This chart comes from Chuck Marr at the Center on Budget and Policy Priorities.  As Marr explains:

The United States is a relatively low-tax country, as the chart shows.  When measured as a share of the economy, total government receipts (a broad measure of revenue) are lower in the United States than in any other member of the Organization for Economic Co-operation and Development (OECD), even after accounting for the modest revenue increases in the 2012 “fiscal cliff” deal and the taxes that fund health reform.

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Martin Hart-Landsberg is a professor of economics at Lewis and Clark College. You can follow him at Reports from the Economic Front.

Overwork And Its Costs: The U.S. in International Perspective

On average, U.S. workers with jobs put in more hours per year  than workers in most OECD countries. In 2012, only Greece, Hungary, Israel, Korea, and Turkey recorded a longer work year per employed person.

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A long work year is nothing to celebrate. The following chart, from the same Economist article, shows there is a strong negative correlation between yearly hours worked and hourly productivity.

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More importantly, the greater the number of hours worked per year, the greater the likelihood of premature death and poor quality of life.  This reality is highlighted in the following two charts taken from an article by Angus Chen titled “8 Charts to Show Your Boss to Prove That You Can Do More By Working Less.”

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In sum, we need to pay far more attention to the organization and distribution of work, not to mention its remuneration and purpose, than we currently do.

Martin Hart-Landsberg is a professor of economics at Lewis and Clark College. You can follow him at Reports from the Economic Front.

Security Guards Now Outnumber High School Teachers

There are now more people working as private security guards than high school teachers.

Samuel Bowles and Arjun Jayadev offer the following graph, highlighting the number of “protective service workers”* employed per 10,000 workers and the degree of income inequality in the year 2000 for 16 countries.  The United States is tops on both counts.

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Two things stand out from this graph beyond U.S. “leadership.”  The first is the relationship between the share of protective service workers  – or “guard labor” – and inequality.  As Bowles and Jayadev comment:

In America, growing inequality has been accompanied by a boom in gated communities and armies of doormen controlling access to upscale apartment buildings. We did not count the doormen, or those producing the gates, locks and security equipment. One could quibble about the numbers; we have elsewhere adopted a broader definition, including prisoners, work supervisors with disciplinary functions, and others.

But however one totes up guard labor in the United States, there is a lot of it, and it seems to go along with economic inequality. States with high levels of income inequality — New York and Louisiana — employ twice as many security workers (as a fraction of their labor force) as less unequal states like Idaho and New Hampshire.

When we look across advanced industrialized countries, we see the same pattern: the more inequality, the more guard labor. As the graph shows, the United States leads in both.

The second is the rapid rise in the U.S. share of guard labor and inequality from 1979 to 2000.

One can only wonder in what ways and for whom this large and growing dependence on guard labor represents a rational use of social resources.

* For those who like definitions: The category protective service workers includes those employed as Private Security Guards, Supervisors of Correctional Officers, Supervisors of Police and Detectives, Supervisors of all other Protective Service Workers, Bailiffs, Correctional Officers and Jailers, Detectives and Criminal Investigators, Fish and Game Wardens, Parking Enforcement Workers, Police and Patrol Officers, Transit and Railroad Police, Private Detectives and Investigators, Gaming Surveillance Officers, and Transportation Security Screeners.  A broader measure of guard labor might include members of the armed forces, civilian employees of the military, and those that produce weapons to those employed as protective service workers.  That total was 5.2 million workers in 2011.

Cross-posted at Reports from the Economic Front.

Martin Hart-Landsberg is a professor of economics at Lewis and Clark College. You can follow him at Reports from the Economic Front.