Wealth Gap Between White, Black, and Hispanic Americans has Increased

Nearly One Quarter of US Children Grow Up in Relative Poverty

 

The US has the 2nd highest child poverty levels in the Western World, after Romania. Quite surprising how many countries that are thought of as comparatively poor have significantly lower child poverty rates. This chart uses Fuchs’ poverty threshold, which is less than 50% of the median income.

–from AFP and reddit.

Higher Paid People Expect Pay Increases

Of employees with a household income of $75,000, 48% expect a pay raise this year. In comparison, only 30% of those with a household income of less than $30,000 expect an increase this year. This is an interesting new perspective on perceived inequality–those further from the bottom expect more. The differences between men and women are surprising as well. Click through for more charts.

–from Benzinga.com and Glassdoor.com

Dissecting the Labor Force Participation Rate

This fantastic info-graphic shows the various categories of people both in and out of the labor force. It is surprising that 5% of the population is legally disabled–this notion has been getting some attention recently and is sure to get more. Click through for details.

–from The Atlantic and Bloomberg BusinessWeek

Income inequality and life expectancy

Not really a surprise, income inequality and life expectancy are related. From WAPO.

Inequality in America

Upward Mobility in US at Historic Low

Upward mobility in the US is at a post-war low. During the 30′s and 40′s is was three times higher, near 12%, but has since dropped considerably to below 4%. In other words, both rich and poor Americans are likely to stay in the class they were born into. American poverty and wealth are both becoming increasingly stable and permanent.

–from Business Insider

Our Economic Choice: Cut Spending or Grow

Articles from NYT here and here about how we have seen increasing productivity and increasing inequality. Policy-wise, we can cut spending or grow overall…or we can do both. Businesses face the same challenge: grow sales or cut costs. Real wealth is generated by growing sales and, for our country, the greatest improvements will be made by growing GDP.

From the article: “Some people think it’s a law that when productivity goes up, everybody benefits,” says Erik Brynjolfsson, an economics professor at the Massachusetts Institute of Technology. “There is no economic law that says technological progress has to benefit everybody or even most people. It’s possible that productivity can go up and the economic pie gets bigger, but the majority of people don’t share in that gain.”

Problem is that no one seems to know how to increase productivity so that there are benefits to all, not just corporate America, and we’re stuck in partisan policy arguments and not taking significant action. Strengthening the non-1% involves things like raising minimum wage and strengthening unions and making tax policy even more progressive but the list is thin. Growing the economy involves reducing our debt load, reducing taxes, encouraging investment…what I didn’t hear about what strengthening out educational system. Global companies will want our workers if they are smart. I also didn’t see anything about allowing more high tech workers to immigrate into our country. Smart tech workers from Asia are moving to Vancouver because they can’t get permanent residence in the US; smart tech companies are developing offices in Vancouver because its better and closer than having an office Asia.

The Two America’s

The story of corporate America and citizen America is not going away. This
from Business Insider and Goldman Sachs.

Social Security

NYT with a nice data story about the problems with social security calculations. Four solutions offered to the problem:
1-raise retirement age
2-increase payroll tax
3-limit cola adjustments
4-reduce benefits
Also makes case for improved forecasting methodologies, ie more statistical and data-driven (empirical).
One solution not mentioned is to make benefits more progressive. My dad who is 79 doesn’t really need benefits, but he gets them anyways…he has wondered how much we as a country could save if he and others like him have up their benefits.