Most of the world's workers have insecure jobs, ILO report reveals [Guardian] "A global shift to more insecure jobs since the financial crisis is fuelling growing inequality and higher rates of poverty, according to a new report that estimates only a quarter of the world’s workers are on permanent contracts".
Is your job safe in the second machine age? “computers and other digital advances are doing for mental power … what the steam engine and its descendants did for physical power” http://blogs.ft.com/off-message/2014/02/10/is-your-job-safe-in-the-second-machine-age/ See paper at http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf
How Low Can We Go? State Unemployment Insurance Programs Exclude Record Numbers of Jobless Workers Kimball & McHugh, EPI 3/15
J.Wolfers, NY TimesUpshot ,3/13/15 , "The Wall Street bonus pool for last year is roughly double the total earnings of all Americans who work full time at the federal minimum wage."
McGill, "Losing Mobility and Gaining a Work Life, NYTimes, 2/1/15 "My belief is that the people who are against affirmative action must lack an empathy gene. Oh, if they could only roll a mile in my wheelchair. The unemployment rates for people with disabilities worldwide are mind-numbingly high. I know because I’ve traveled to over two dozen countries and met these people, as a tour guide leader for those with disabilities. The main reason the jobless rate is so high for people with disabilities is that they are not given an equal chance in the mainstream work world.
Employers bring their own baggage and ill-conceived preconceptions about my tribe. The Americans With Disabilities Act and similar laws notwithstanding, some employers are unwilling to make certain changes to an office space that would make a worker’s life more comfortable and productive. I had several jobs where the floor on the building I worked in didn’t have a wheelchair-accessible bathroom; at one job I even had to go across the street to a different office building to use a bathroom that didn’t belong to my company. This little trip was a bonus in the summer, but was dreadful in the winter." http://www.nytimes.com/2015/02/01/business/losing-mobility-and-gaining-a-work-life.html
Financial Times, 1/30/15 "Syriza’s victory stood not for a repudiation of Europe, but for a redefinition of it. The moral reasoning that lay behind the Greek result began from a simple insight: economic trauma of the severity that Greece has suffered is destroying society. With youth unemployment above 50 per cent, an entire generation is being consigned to the scrap heap. At the same time, the notion of the common good is being sacrificed through forced sell-offs of state-owned lands as well as businesses, with the prospect of ecological destruction as a result......If the Greek vote was for solidarity, it displayed a virtue that too much of the continent has lost sight of. German or Finnish voters may feel they have shown enough solidarity with the Greeks. But strictly speaking they have mostly shown solidarity with their own financial institutions — which would have been among the biggest losers if Greece had not been bailed out — and that is another thing entirely. http://www.ft.com/intl/cms/s/0/aeab01f2-a70b-11e4-8a71-00144feab7de.html
"A Big Safety Net and Strong Job Market Can Coexist. Just Ask Scandinavia" "Some of the highest employment rates in the advanced world are in places with the highest taxes and most generous welfare systems, namely Scandinavian countries. The United States and many other nations with relatively low taxes and a smaller social safety net actually have substantially lower rates of employment." Irwin, NYTimes, 12/18/14
Wessel, Brookings "Among men ages 25 to 54, the prime working ages, one in six (16.1%) wasn’t working in October; some were looking for work, but some were “retired” or “disabled.....people are now focusing on the chronic disease: the stagnation of wages and incomes in the middle, the widening gap between winners and losers, and prospects for the next generations. Exit polls this week found that half the voters expect life for the next generation of Americans to be worse than for the current generation; that’s more doubt than at any time since the question was first posed in exit polls in 1996. Broader public opinion polls (ones that survey people who don’t vote, too) find even more pessimism. An August WSJ/NBC News poll found that 76% of adults doubt their children’s generation will have a better life than they do.” [Wall St. Journal]
Garrett-Peltier: "...federal spending dedicated to fighting wars over the past 14 years has resulted in lost employment opportunities of between one and three million jobs." 8/14
NELP: Voters Approve Minimum Wage Increases Across the Nation[The 2014 election] proved, once again, that raising the minimum wage is a winning issue. In binding measures that will directly benefit more than 600,000 low-wage workers, voters in four states--Alaska, Arkansas, Nebraska, and South Dakota--and two cities--San Francisco and Oakland--passed ballot initiatives to raise minimum wage rates to between $8.50 and $15 an hour.
Voters in two more states--Illinois and Wisconsin--approved non-binding referenda, instructing their legislators to raise wages for more than 1.1 million workers. The margins of victory weren't even close, even in deeply conservative "red" states such as Arkansas, where 65 percent of voters approved the wage increase. Clearly, higher wages for working families isn't a partisan issue. ....And the federal minimum wage has been stuck at $7.25 since 2009."Read more.
Zero Hedge, 10/3/14 That Diminishing Labor Force Participation "While by now everyone
should know the answer, for those curious why the US unemployment
rate just slid once more to a meager 5.9%, the lowest print
since the summer of 2008, the answer is the same one we have
shown every month since 2010: the collapse in the labor force
participation rate, which in September slid from an already
three decade low 62.8% to 62.7% - the lowest in over 36 years,
matching the February 1978 lows." "Hiring Grandparents
Only": 230K September Jobs Added In 55-69 Age Group; 10K Lost
In Prime, 25-54 Group"
EPI 10/3/14 "In September, the labor force participation rate dropped to 62.7 percent. The last time the labor force participation rate was this low was February 1978. And, the biggest drop in labor force participation was among prime-age workers, 25-54 years old.
Over the last year, the labor force participation rate fell 0.5 percentage points. Therefore, it’s not surprising that missing workers—potential workers who are neither working nor actively seeking work due to the weak labor market—are at an all-time-high of 6.3 million. The vast majority of them (3.4 million) are 25 to 54 years old."
Another way to squeeze the poor: "Last year, Ferguson, Mo., the site of recent protests over
the shooting of Michael Brown, used escalating municipal court
fines to pay 20.2 percent of the city’s $12.75 million budget.
Just two years earlier, municipal court fines had accounted for
only 12.3 percent of the city’s revenues....." Thomas
Edsall, "Poverty Capitalism," NYTimes, 8/26/14
"There is very little evidence consistent with the complaints
about skills and a wide range of evidence suggesting that they
are not true. Indeed, a reasonable conclusion is that over-education
remains the persistent and even growing situation of the US labor
force with respect to skills." Peter
Cappelli, "Skill Gaps, Skill Shortages and Skill Mismatches:
Evidence for the US " NBER 8/14
E. Kleinbard: "The recent surge in interest in inversion
transactions is explained primarily by U.S. based multinational
firms’ increasingly desperate efforts to find a use for
their stockpiles of offshore cash (now totaling around $1 trillion),
and by a desire to “strip” income from the U.S. domestic
tax base through intragroup interest payments to a new parent
company located in a lower-taxed foreign jurisdiction." 8/14
A data problem with the Norris report below-- the decline is
driven by workers dropping out of the labor force. "The government
uses a relatively narrow definition of unemployment that includes
only people who are actively looking for work. That means unemployment
can fall for good reasons (because people are finding jobs) or
bad ones (because they’re giving up looking)....Only about
11 percent of the long-term jobless find jobs each month, little
better than in the depths of the recession. Moreover, even those
who do find jobs are often able to find only part-time or short-term
If they aren’t finding jobs, what’s happening to
the long-term unemployed? They’re dropping out of the labor
force altogether. As the chart below shows, the share of the long-term
jobless who are giving up their job searches has been rising steadily,
even as the job-finding rate has remained largely flat."
F. Norris, "A Drop in the Long-Term Unemployed,"
NYT 7/25/14 "THE long-term unemployment rate, which
soared in 2009 to heights not seen since the Great Depression,
is finally declining rapidly. The proportion of the work force
that has been unemployed for at least 27 weeks has fallen to 1.98
percent, less than half the record high of 4.4 percent reached
Do Coal Mining Jobs Matter So Much More Than Jobs Lost to Trade?
6/14 When President Obama announced plans to curtail the
use of coal over the next fifteen years major news outlets like
Public Radio and The
New York Times rushed to do pieces on the prospective loss
of jobs in coal mining areas. There are a bit less than 80,000 workers
directly employed in the coal industry. A large percentage of these
jobs will be lost in the next fifteen years due to these regulations.
While it is good to see
the media paying attention to this job loss and its implications
for families and communities, this concern is a striking departure
from normal practice. This was demonstrated clearly last week
when the Commerce Department reported a large jump in the trade
deficit for April. The report, and the implied job loss, received
almost no attention from the media. ....a trade deficit means
that demand generated in the United States is going overseas.
Money spent by businesses or consumers is going for goods and
services produced in Europe, Mexico, and China rather than in
....This implied job loss from this rise in the trade deficit
over the prior three months is roughly ten times the number of
jobs at risk in the coal industry over the next fifteen years.
Yet there was not a story in any major media outlet that highlighted
the jobs put in jeopardy by a growing trade deficit.
It is worth noting who benefits
from the trade deficit. Major retailers like Walmart have worked
for decades to develop low cost supply chains in the developing
world. .... They would not be pleased by measures to reduce the
Krugmas's blog: "Supply, Demand, and Unemployment Benefits"
Casselman points out that we’ve had a sort of natural
experiment in the alleged effects of unemployment benefits in
reducing employment. Extended benefits were cancelled at the beginning
of this year; have the long-term unemployed shown any tendency
to find jobs faster? And the answer is no
Chair Janet Yellen, speech 3/14: " It might seem obvious, but
the second thing that is needed to help people find jobs...is
jobs. No amount of training will be enough if there are not enough
jobs to fill.....
A final piece of evidence of slack in the labor market has been
the behavior of the participation rate--the proportion of working-age
adults that hold or are seeking jobs. Participation falls in a slack
job market when people who want a job give up trying to find one.
When the recession began, 66 percent of the working-age
population was part of the labor force. Participation dropped, as
it normally does in a recession, but then kept dropping in the recovery.
It now stands at 63 percent, the same level as in 1978, when a much
smaller share of women were in the workforce. Lower participation
could mean that the 6.7 percent unemployment rate is overstating
the progress in the labor market.
One factor lowering participation is the aging of the population,
which means that an increasing share of the population is retired.
If demographics were the only or overwhelming reason for falling
participation, then declining participation would not be a sign
of labor market slack. But some "retirements" are not
voluntary, and some of these workers may rejoin the labor
force in a stronger economy. Participation rates have been falling
broadly for workers of different ages, including many in the prime
of their working lives. Based on the evidence, my own view is
that a significant amount of the decline in participation during
the recovery is due to slack, another sign that help from the
Fed can still be effective."....emphasis mine--jz
Paul Krugman's blog, Nov. 16, 2013: “We now know that the
economic expansion of 2003–2007 was driven by a bubble.
You can say the same about the later part of the 90s expansion,
and you can in fact say the same about the later years of the
Reagan expansion, which was driven at that point by runaway thrift
institutions and a large bubble in commercial real estate.”.....So
how can you reconcile repeated bubbles with an economy showing
no sign of inflationary pressures? [Larry] Summers’s answer
is that we may be an economy that needs bubbles just to achieve
something near full employment – that in the absence of
bubbles the economy has a negative natural rate of interest. And
this hasn’t just been true since the 2008 financial crisis;
it has arguably been true, although perhaps with increasing severity,
since the 1980s."
"There are complaints from Washington about a bloated federal
government.....In September, before the government shutdown, the
government had 2,723,000 employees, according to the latest job
report, on a seasonally adjusted basis. That is the lowest figure
since 1966. Until now, the lowest figure for the current century
had been 2,724,000 federal employees in October 2004, when George
W. Bush was seeking a second term in the White House. Now, the
federal government employs exactly 2 percent of the people with
jobs in this country. In 1966, the figure was more than twice
that, 4.3 percent. All these figures, by the way, are for civilian
jobs" Floyd Norris, Economix, NYTimes, 10/23/13 http://economix.blogs.nytimes.com/2013/10/22/bloated-government-federal-employment-at-47-year-low/
"The median income for a person over age 65 is
less than $20,000 a year. Relatively few seniors are enjoying
anything that could be considered a comfortable retirement. It
is completely wrongheaded to look to make their situation worse
by the reducing the Social Security cost-of-living adjustment
by adopting the chained CPI as the measure of inflation.
This switch would reduce benefits by roughly 0.3 percentage points
annually, implying a cut of 3 percent after 10 years and a cut
of 6 percent after a person has been retired for 20 years. This
is a larger hit to the income of the typical senior than the tax
increases faced by the typical
wealthy person as a result of the ending of the Bush tax cut
last fall. Seniors will be hit even harder if Medicare is cut
in ways that lead to increased out-of-pocket costs for beneficiaries."
The Rich Get Richer Through the Recovery
Lowrey, NY Times, 9/11/13 The top 10 percent of earners
took more than half of the country’s total income
in 2012, the highest level recorded since the government
began collecting the relevant data a century ago, according
updated study by the prominent economists Emmanuel Saez
and Thomas Piketty. ....The economy remains depressed for
most wage-earning families. With sustained, relatively high
rates of unemployment, businesses are under no pressure
to raise their employees’ incomes because both workers
and employers know that many people without jobs would be
willing to work for less. The share of Americans working
or looking for work is at its lowest
in 35 years. http://economix.blogs.nytimes.com/2013/09/10/the-rich-get-richer-through-the-recovery/
Wonder why wages lag? "Caterpillar's
chief executive, Douglas Oberhelman (whose compensation
has increased more than 80 percent over the last two years),
says the [pay] freeze was vital to keep wages competitive
with rival companies. "I always try to communicate
to our people that we can never make enough money...We can
never make enough profit." NY Times, Greenhouse,
"Fighting Back Against Wretched Wages", 7/28/13
TPP and the Dismantling of Japanese Agriculture
"The traditional Japanese diet—rice combined
with locally produced vegetables and fish—constituted
one of the biggest barriers to post-war US imports. To open
up a market for US food products, Japanese diets had to
change to include bread, meat and dairy products.Through
the US-funded “Nutrition Improvement Action' program,
people were told, 'Eating rice makes you stupid! Eat Bread!'
School lunch menus were westernized and 'American Trains”
and 'Kitchen Cars' crisscrossed the country to promote a
western diet. Today, Japanese people consume 9.5 percent
more wheat, 152 percent more animal products and 131 percent
more fat than in the 1950s. According to the Japanese Ministry
of Agriculture and Fisheries (MAFF), TPP would drop food
self-sufficiency from 39 to 14 percent. Food First
Few borders in the world are so heavily
guarded by sophisticated technology, and so subject to impassioned
rhetoric, as the one that separates Mexico from the United States,
two countries with amicable diplomatic relations.
That border was established by U.S. aggression during the
19th century. But it was kept fairly open until 1994, when President
Bill Clinton initiated Operation Gatekeeper, militarizing it.
Before then, people had regularly crossed it to see relatives
and friends. It’s likely that Operation Gatekeeper was
motivated by another event that year: the imposition of the
North American Free Trade Agreement, which is a misnomer because
of the words “free trade.”
Doubtless the Clinton administration understood that Mexican
farmers, however efficient they might be, couldn’t compete
with highly subsidized U.S. agribusiness, and that Mexican businesses
couldn’t compete with U.S. multinationals, which under
NAFTA rules must receive special privileges like “national
treatment” in Mexico. Such measures would almost inevitably
lead to a flood of immigrants across the border. Noam Chomsky,
"Job Loss Raises Threat of Heart Attack"Unemployment
increases the risk of heart attack, a new study reports, and
repeated job loss raises the odds still more. In a prospective
analysis from 1992 to 2010 with interviews every other year,
researchers tracked job history and heart attacks among more
than 13,000 people ages 51 to 75. The study, published online
Nov. 19 in The Archives of Internal Medicine, recorded
1,061 heart attacks over the period.
After adjusting for well-established heart attack risks
- age, sex, smoking, income, hypertension, cholesterol screening,
exercise, depression, diabetes and others - the researchers
found that being unemployed also increased the risk of a heart
attack, by an average of 35 percent.
Beyond the first year, the length of time unemployed was
not significantly associated with increased risk, but repeated
job loss was. Losing one job was linked to a 22 percent increase
in heart attack risk, losing two jobs with a 27 percent increase,
three jobs with a 52 percent increase, and a loss of four
or more jobs with a 63 percent increase.
The magnitude of these risks for heart attack, the authors write,
is similar to that of smoking, diabetes and hypertension. ...."N.
Pay the Bills
By Adam Davidson "The secret behind this
skills gap is that it’s not a skills gap at all. I spoke
to several other factory managers who also confessed that they
had a hard time recruiting in-demand workers for $10-an-hour jobs.
“It’s hard not to break out laughing,” says
Mark Price, a labor economist at the Keystone Research Center,
referring to manufacturers complaining about the shortage of skilled
workers. “If there’s a skill shortage, there has to
be rises in wages,” he says. “It’s basic economics.”
After all, according to supply and demand, a shortage of workers
with valuable skills should push wages up. Yet according to the
Bureau of Labor Statistics, the number of skilled jobs has fallen
and so have their wages.
In a recent study, the Boston Consulting Group noted that, outside
a few small cities that rely on the oil industry, there weren’t
many places where manufacturing wages were going up and employers
still couldn’t find enough workers. “Trying to hire
high-skilled workers at rock-bottom rates,” the Boston Group
study asserted, “is not a skills gap.” The study’s
conclusion, however, was scarier. Many skilled workers have simply
chosen to apply their skills elsewhere rather than work for less,
and few young people choose to invest in training for jobs that
pay fast-food wages. As a result, the United States may soon have
a hard time competing in the global economy. The average age of
a highly skilled factory worker in the U.S. is now 56." ....
NYTimes 11/ 20/12 http://www.nytimes.com/2012/11/25/magazine/skills-dont-pay-the-bills.html
Is the Drought a New Dust Bowl? No, Thanks to the New Deal
"It is thanks to the New Deal’s establishment of the
Soil Conservation Service and the planting of the Great Plains Shelter
Belt that we have not experienced another Dust Bowl—even in
the face of such severe conditions as this summer’s dry spell
or the even more extensive drought the nation experienced in 1956.
As was typical of most New Deal infrastructure projects, the programs
the government designed to combat this unprecedented environmental
disaster were not developed merely as a means to provide jobs and
short-term work relief to those who were suffering unemployment.
Rather, they were part of a large-scale effort to bring about a
long-term solution to a very difficult environmental problem. This
emphasis on long-term environmental planning, which recognizes the
need create a balance between stewardship and managed exploitation
and which sees the federal government as playing a crucial role
in establishing the parameters of that balance, is now referred
to as sustainable development." David Woolner,
Suburban and Struggling, ‘Near Poor’ Startle the Census
"When the Census Bureau this month released
a new measure of poverty, meant to better count disposable income,
it began altering the portrait of national need. Perhaps the most
startling differences between the old measure and the new involves
data the government has not yet published, showing 51 million
people with incomes less than 50 percent above the poverty line.
That number of Americans is 76 percent higher than the official
account, published in September. All told, that places 100 million
people — one in three Americans — either in poverty
or in the fretful zone just above it.....Of
the 51 million who appear near poor under the fuller measure,
nearly 20 percent were lifted up from poverty by benefits the
official count overlooks. But more than half were pushed down
from higher income levels: more than eight million by taxes, six
million by medical expenses, and four million by work expenses
like transportation and child care.....Perhaps the most surprising
finding is that 28 percent work full-time, year round."NYTimes
Matter: Changes in Unionization Rates in Rich Countries,
1960-2010 "The national political environment, not globalization
or technology, is the most important factor driving long-run changes
in unionization rates in the United States." CEPR 11/11
a Huge Amount of Anger"...the "official" unemployment
rate is 9.1 percent -- but the one that includes discouraged workers
who have left the labor force or partially unemployment has gone
from 16.2 percent to 16.5 percent. And if you add to it the millions
of people that you have in jail in the U.S. -- which is four times
the amount of any civilized country as a share of population --
than unemployment is probably closer to 20 percent. And that's just
among the average population. For minorities, the youth, or unskilled
people that don't have a high school degree, the number is closer
to 30 percent. It's a stressful situation." Nouriel Roubini,
Foreign Policy, 10/10/11
costs of rising economic inequality By 2007, the
top 1 percent of households took home 23 percent of the national
income after a 15-year run in which they captured more than half
- yes, you read that right, more than half - of the country's
economic growth. As Tim Noah noted recently in a wonderful series
of articles in Slate, that's the kind of income distribution you'd
associate with a banana republic or a sub-Saharan kleptocracy,
not the world's oldest democracy and wealthiest market economy.
Wash. Post , 10/6/10
Insurance: "...even in normal times, the benefits
outweigh the work disincentive costs. Now the long-term unemployed,
who have depleted their savings, who have a hard time finding
a job period in the current economy, would gain the most from
unemployment insurance. And that’s even before the macroeconomic
effects. And it’s even before the interesting problem of
subsidizing people to look for a job (which unemployment insurance
requires) rather than join the long-term unemployed, where some
current research shows that human capital depreciates at an alarming
America Can Create Jobs"The former Intel chief
[Andy Grove] says "job-centric" leadership and incentives
are needed to expand U.S. domestic employment again
'....the great Silicon Valley innovation machine hasn't been creating
many jobs of late—unless you're counting Asia, where American
tech companies have been adding jobs like mad for years.
The underlying problem isn't simply lower Asian costs. It's our
own misplaced faith in the power of startups to create U.S. jobs.
Americans love the idea of the guys in the garage inventing something
that changes the world. New York Times columnist Thomas L. Friedman
recently encapsulated this view in a piece called "Start-Ups,
Not Bailouts." His argument: Let tired old companies that do
commodity manufacturing die if they have to. If Washington really
wants to create jobs, he wrote, it should back startups.
Friedman is wrong. Startups are a wonderful thing, but they cannot
by themselves increase tech employment. Equally important is what
comes after that mythical moment of creation in the garage, as
technology goes from prototype to mass production. This is the
phase where companies scale up. They work out design details,
figure out how to make things affordably, build factories, and
hire people by the thousands. Scaling is hard work but necessary
to make innovation matter.
The scaling process is no longer happening in the U.S. And as long
as that's the case, plowing capital into young companies that build
their factories elsewhere will continue to yield a bad return in
terms of American jobs.
War on Social Security:"Everyone who looks at
the projections agrees; the scary budget stories being hyped in
the media and by the Wall Street crew are driven almost entirely
by projections of exploding health care costs. But instead of proposing
ways to fix the health care system, these deficit hawks want to
attack Social Security. They tell us that fixing health care is
hard. By contrast they think that cutting money from Social Security
will be relatively easy.....Federal Reserve Board Chairman Ben Bernanke
recently suggested cutting Social Security because: 'that’s
where the money is.' That’s not true, the real money is on
Wall Street. Let’s go get it." D. Baker,
"...there were bank panics — systemic crises —
in 1873, 1884, 1890, 1893, 1896, 1907, and 1914. On the other hand,
there were no systemic crises from 1934 to 2007. The problem, as
Gorton makes clear, is that the Quiet Period reflected a combination
of deposit insurance and strong regulation — undermined by
the rise of shadow banking. So we have a choice: restore effective
regulation or go back to the bad old days."
Paul Krugman's blog, 3/23/10 http://krugman.blogs.nytimes.com/2010/03/23/jamie-dimon-was-right/
a New Jobless Era Will Transform America The Great
Recession may be over, but this era of high joblessness is probably
just beginning. Before it ends, it will likely change the life course
and character of a generation of young adults. It will leave an
indelible imprint mately, it is likely to warp our politics, our
culture, and the character of our society for years to come.
Safety Net Living on Nothing but Food Stamps About
six million Americans receiving food stamps report they have no
other income... they described themselves as unemployed and receiving
no cash aid — no welfare, no unemployment insurance, and no
pensions, child support or disability pay. Their numbers were rising
before the recession as tougher welfare laws made it harder for
poor people to get cash aid, but they have soared by about 50 percent
over the past two years. About one in 50 Americans now lives in
a household with a reported income that consists of nothing but
a food-stamp card. NYT, DeParle & Gebeloff,
Your Cobra Subsidy Ends According
to a report recently released by Families USA, a nonprofit health
care advocacy group, Cobra premiums for family health coverage will
cost laid-off workers, on average, $1,111 a month, which is almost
84 percent of the average monthly unemployment check those families
receive. In nine states — including Alaska, Arizona, Mississippi
and Florida — full Cobra benefits exceed the amount of the
average unemployment check, according to the report. That is why
the Cobra subsidy has been so important and why there is a big push
in Congress to extend the benefit. Bills were introduced recently
in the House and the Senate that would extend the subsidy for six
months. Unemployed workers who have lost their subsidy would probably
be grandfathered under the legislation and receive a refund for
any unsubsidized premiums they pay before the legislation is enacted.
economic pain brings hunger pangsThe nation's economic
crisis has catapulted the number of Americans who lack enough food
to the highest level since the government has been keeping track,
according to a new federal report, which shows that nearly 50 million
people -- including almost one child in four -- struggled last year
to get enough to eat. Goldstein, Wash. P, 11/09
Laws, Unprotected Workers...America's
workplace laws are failing to protect our country's workers. In
industries ranging from construction and food manufacturing to restaurants,
janitorial services and home health care, workers are enduring minimum
wage and overtime violations, hazardous working conditions, discrimination,
and retaliation for speaking up or trying to organize. They have
little recourse because of their need for work, especially during
the recession. Until now, however, advocates and policy makers lacked
representative and reliable data on the magnitude of the problem,
the workers who are most affected, and the industries that are the
biggest culprits. Bernhardt et al, 9/09
Job Growth Lacking in the Private Sector
For the first time since the Depression, the American economy
has added virtually no jobs in the private sector over a 10-year
period. The total number of jobs has grown a bit, but that is only
because of government hiring. Norris, NYT 8/09 graph
in Minimum Wage Helps Economic Recovery "The recently
enacted American Recovery and Reinvestment Act included policies
to help struggling families and create jobs. But an extremely effective
and simple policy that achieves both of these goals is often overlooked:
increases in the minimum wage. Each increase provides financial
relief directly to minimum wage workers and their families and helps
stimulate the economy. By increasing families’ take-home pay,
workers gain both financial security and an increased ability to
purchase goods and services, thus creating jobs for other Americans."
"The sudden emergence of the H1N1 virus and
the possibility of an epidemic outbreak on a scale not seen in decades
has led to the closings of schools and workplaces around the world.
President Obama recently urged workers with flu symptoms to 'stay
home'. But a new report from the Center for Economic and Policy
Research (CEPR) shows that the
United States is the only one of 22 rich countries that fails to
guarantee sick workers some form of paid sick leave. "
"...a 2004 study by the National Institute
of Justice reported that women whose male partners experienced two
or more periods of unemployment over five years were three times
more likely to be abused. " Tough
Times, Domestic Violence, and Economic Abuse
Job May Be Hazardous to Health
"Workers who lost a job though no fault of their
own...were twice as likely to report developing a new ailment like
high blood pressure, diabetes or heart disease over the next year
and a half, compared with people who were continuously employed.
Interestingly, the risk was just as high for those who found new
jobs quickly as it was for those who remained unemployed."NYT
the Century Foundation: ...one number that merits special attention
is the estimate by Emmanuel Saez and Thomas Piketty of the distribution
of new income generated between 2002 and 2006. Saez and Piketty
show that almost three quarters of the additional income (73%) went
to the top one percent of households. That is, families making more
than $376,000 in 2006 enjoyed three out of every four dollars in
raises during the growth of 2002-2006. During the Clinton boom years
(1993-2000), the top one percent enjoyed nearly half (45%) of the
total increase in income.
a Better Capitalism, Myerson The Reagan-Thatcher model,
which favored finance over domestic manufacturing, has collapsed.
The decline of American manufacturing has saddled us not only with
a seemingly permanent negative balance of trade but with a business
community less and less concerned with America's productive capacities.
Federal Deficits can raise private investment
The idea that tight fiscal policy
when the economy is depressed actually reduces private investment
isn’t just a hypothetical argument: it’s exactly what
happened in two important episodes in history.
The first took place in 1937, when Franklin Roosevelt
mistakenly heeded the advice of his own era’s deficit worriers.
He sharply reduced government spending, among other things cutting
the Works Progress Administration in half, and also raised taxes.
The result was a severe recession, and a steep fall in private investment.
The second episode took place
60 years later, in Japan. In 1996-97 the Japanese government tried
to balance its budget, cutting spending and raising taxes. And again
the recession that followed led to a steep fall in private investment.....
What made fiscal austerity such a bad idea both in Roosevelt’s
America and in 1990s Japan were special circumstances: in both cases
the government pulled back in the face of a liquidity trap, a situation
in which the monetary authority had cut interest rates as far as
it could, yet the economy was still operating far below capacity.....Krugman,
Build Confidence, Aim for Full Employment, R.Shiller, NYTimes,
12/14/08. In the
current crisis, discussions of economic policy have often centered
on uninspiring, short-term goals. To restore confidence in our economic
future, we need appropriate, firm targets that will clearly put
us where we want to be. ....If the new president had a target of
full employment, and if Americans believed that he could reach it,
the confidence problem could be quickly solved.
Mr. Obama’s announced goal of 2.5 million
new jobs by 2011 is too modest. In the next two years, almost four
million workers will enter the labor force — or would if there
were jobs. Combined with the loss of employment this year, that
means we should be striving to create more than five million jobs.
Joseph Stiglitz, NYT, 11/30/08
The immunity wore off "...a
speculative outbreak has a greater or less immunizing effect. The
ensuing collapse automatically destroys the very mood speculation
requires. It follows that the outbreak of speculation provides a
reasonable assurance that another outbreak will not immediately
occur. With time and dimming of memory, the immunity wears off.
A recurrence becomes possible. Nothing would have induced Americans
to launch a speculative adventure in the stock market in 1935."
JK Galbraith, The Great Crash, 1954, 176
Problem Is House Prices, NOT Interest Rates Economists
used to believe in prices being determined by supply and demand.
The bubble pushed house prices up by more than 70 percent above
their trend level. There was no change in the fundamentals that
justified this rise....The bubble was extended
by the predatory mortgages in the subprime market and new exotic
mortgage instruments developed in these years, but the underlying
problem was house prices, not the mortgages. Dean
Baker, Beat the Presss, 10/3/08
In fact, some of the most basic details [of the
bailout plan], including the $700 billion figure Treasury would
use to buy up bad debt, are fuzzy. "It's not based on any particular
data point," a Treasury spokeswoman told Forbes.com Tuesday.
"We just wanted to choose a really large number."
Forbes, "The Paulson Plan: Bad News For The Bailout"
"Despite strong gains in earnings last year,
who worked full-time made essentially no gains from 2000-2007
because of large losses from 2003 to 2006. The 2007 median earnings
of these workers 'closely connected to the job market' were only
0.6% higher—$260 dollars—than their level in 2000."
Income Picture, EPI, Bernstein, 8/08
Irrelevance of Workers In Economic Theory An
August 8, 2008 search of 73 economics journals collected electronically
in the JSTOR database revealed how marginal work, workers, and working
conditions has become in economic literature. Of the articles published
since January 2004, the term "working conditions" appeared
in only 12, not counting four more substantial articles in the Review
of African Political Economy, a journal rarely cited by mainstream
economists. Of the remaining articles, three concerned the problem
of retention of teachers. Another had a footnote that observed that
people can learn about working conditions from websites. One article
noted that faculty members in colleges and universities join unions
to improve working conditions. A book review considered whether
globalization could improve working conditions. Two articles mentioned
legislation that took working conditions into account. One article
disputed that child labor abroad experienced hideous working conditions.
Another cited a mid-nineteenth century British economist who said
that factory working conditions were good.
slips down development index
Americans live shorter lives than citizens of almost every other
developed nation, according to a report from several US charities.
The report found that the US ranked 42nd in the world for life expectancy
despite spending more on health care per person than any other country.
Overall, the American Human Development Report ranked the world's
richest country 12th for human development.The study looked at US
government data on health, education and income. BBC News, 7/08
Fed Fears Wage Spiral That Is Little in
Evidence "... the typical American worker...has not
had a raise to speak of in this decade. Workers’ leverage
is gone. Companies are not creating jobs. Unions that negotiated
big wage increases in the 1970s are shadows of their former selves.
Cost-of-living adjustments, once commonplace, have disappeared.
And the movement of jobs offshore, or the threat of it, has conditioned
workers to not even ask for a raise, fearing they will join the
millions already laid off. Still, the Federal Reserve’s policy
makers — its governors and the presidents of its regional
banks — are convinced that wage pressures could emerge unexpectedly.
That concern, and the idea that wage pressures could lead to yet
higher prices and a rising inflation rate, showed up in half-a-dozen
interviews with policy makers over the last week. " Uchitelle,
NYT 8/1/08 [Inflation and
Wages Out of Sync ]
Women Are Now Equal as Victims of Poor Economy
Labor market woes have chipped away for
years at the presence of men at work, and now that is happening
to women. For the first time, the percentage of women employed in
their prime working years has fallen, not risen, during a period
of economic recovery. Uchitelle, NYTimes,
disparities in life expectancy "Rising
economic inequality is often discussed as a significant social problem.
Too often, that claim remains unsubstantiated. Why is rising inequality
so problematic? What negative impacts does it have on our living
standards? One compelling example comes from research on growing
socio-economic disparities in life expectancy.While life expectancy
has grown across the United States between 1980 and 2000, the degree
to which people live longer has become increasingly connected to
their socio-economic status. .... In 1980,
those with the highest socio-economic status had a life expectancy
2.8 years higher than those with the lowest status (75.8 versus
73.0 years, respectively). By 2000, that gap had grown: those in
the top decile had attained a life expectancy of 79.2 years—4.5
years more than those in the bottom decile. Disparities in life
expectancy also increased between the top and the middle decile
and between the middle and the bottom." E. Gould, EPI, 7/08
"...from 1947 to about 1973...real hourly pay
for nongovernment workers rose by about 40%....Since then, real
wages both hourly and weekly for all nongovernment workers, on average,
have fallen by about 5%, very roughly.""Why Oil and Wages
Don't Mix," B. Stein, NYTimes, 6/29/08
"Laid-off Danes who have worked 52 weeks over
the previous three years are eligible to receive 90% of their average
earnings for up to four years." "World's
Best Places For Unemployment Pay," Woolsey, Forbes,
Chronic joblessness and the decline of
two-parent families: "Andrew Sum, director of the
Center for Labor Market Studies, put it this way in a research
paper: 'The marriage rates of all native-born young males and
young black males (22-32 years old) in the U.S. are strongly correlated
with the annual earnings of these young men. The higher their
annual earnings, the more likely they are to be married. Among
native-born black males, those men with earnings over $60,000
were four times more likely to be married than their peers with
annual earnings under $20,000.
'"Unfortunately, the mean annual earnings
of young men without four-year college degrees have plummeted
substantially over the past 30 years, and declined again over
the 2000-2007 period. Declining economic fortunes of young men
without college degrees underlie the rise in out-of-wedlock child-bearing,
and they are creating a new demographic nightmare for the nation."
Bob Herbert, "A Dubious Milestone," NYTimes,
June 21, 2008
Tough Times for the American Worker "One
of the least examined but most important trends taking place in
the United States today is the broad decline in the status and treatment
of American workers -- white-collar and blue-collar workers, middle-class
and low-end workers -- that began nearly three decades ago, gradually
gathered momentum, and hit with full force soon after the turn of
this century. A profound shift has left a broad swath of the American
workforce on a lower plain than in decades past, with health coverage,
pension benefits, job security, workloads, stress levels, and often
wages growing worse for millions of workers." Steven
Greenhouse, The Big Squeeze, quoted by von
Inequality and Health Outcomes
"The health situation in Japan after World War II was extremely
poor. However, in less than 35 years the country’s life expectancy
was the highest in the world. Japan’s continuing health gains
are linked to policies established at the end of World War II by
the Allied occupation force that established a democratic government.
The Confucian principles that existed in Japan long before the occupation
but were preempted during the war years were reestablished after
the war, facilitating subsequent health improvements. Japan’s
good health status today is not primarily the result of individual
health behaviors or the country’s health care system; rather,
it is the result of the continuing economic equality that is the
legacy of dismantling the prewar hierarchy." Bezruchka, Namekata,
& Sistrom, "Interplay of Politics and Law to Promote Health,"
American Journal of Public Health: April 2008,
Vol. 98, No. 4, pp. 589-594. http://ajph.aphapublications.org/doi/abs/10.2105/AJPH.2007.116012
Substantially Improves the Pay and Benefits of African Americans
"The report, "Unions and Upward Mobility for African-American
Workers," found that unionized black workers earned, on average,
12 percent more than their non-union peers. In addition, black workers
in unions were much more likely to have health-insurance benefits
and a pension plan." Schmitt, CEPR 3/08
"What are the consequences of a world in which
regulators rescue even the financial institutions whose recklessness
and greed helped create the titanic credit mess we are in? Will
the consequences be an even weaker currency, rampant inflation,
a continuation of the slow bleed that we have witnessed at banks
and brokerage firms for the past year?" "Wall
Street's Economic Chaos Has Big Political Consequences,"
von Hoffman, TheNation, 3/08
on Iraq is also a job killer "...the
economic consequences of Iraq run even deeper than the squandered
opportunities for vital public investments. Spending on Iraq is
also a job killer. Every $1 billion spent on a combination of education,
healthcare, energy conservation and infrastructure investments creates
between 50 and 100 percent more jobs than the same money going to
Iraq. Taking the 2007 Iraq budget of $138 billion, this means that
upward of 1 million jobs were lost because the Bush Administration
chose the Iraq sinkhole over public investment." "The
Wages of Peace," Pollin & Garrett-Peltier, 3/08, the
in five Americans in working families have income below a minimum
middle-class budget standard for the area in which they live.
The authors argue this is the result of a frayed social contract
that must be updated so that more workers can move into the middle
class." Movin’ On Up: Reforming America’s Social
Contract to Provide a Bridge to the Middle Class, CEPR, Fremstad,
Ray, Chimienti, & Schmitt, 2/08
"The major causes of hunger in survey cities
are poverty, unemployment and high housing costs. The hunger crisis
is exacerbated by the recent spike in foreclosures, the increased
cost of living in general, and increased cost of food." Hunger
& Homelessness Survey, US Conference of Mayors,
"Think about the jobs you've had. Where were
you the most productive? Was it when you worked for a boss and an
organization that treated you with respect, that valued your contributions,
where you actually felt that you were part of something useful?
Or were you more productive when you worked for a boss and an organization
that governed by fear, that treated you with suspicion and contempt?
Most adults have worked for the latter kind, while only some have
had the good fortune to work for the former. And many if not most
of them do just enough work to stay out of trouble and avoid the
wrath of their superiors. That's the spirit fostered in a workplace
where employees are treated like criminals.""Woe
Is the American Worker, Waldman, The American Prospect,
"...this EPI analysis finds that between 18%
and 22% of today's jobs — about 25 to 30 million — could
potentially be offshored. Interestingly, the workers most vulnerable
to offshoring are those with at least a four-year college degree."The
Characteristics of Offshorable Jobs, Bernstein, Lin, &
Mishel, EPI, 11/07
"The number of good jobs --jobs that pay at
least $17 an hour, and provide health insurance and a pension --
declined by 3.5 million between 2000 and 2006....
The report, "The
Good, The Bad, and the Ugly: Job Quality in the United States
over the Three Most Recent Business Cycles," found that the
economy has created fewer good jobs in the 2000s than was the
case over comparable periods in the 1980s and 1990s.
The research defined a good job as one that pays
$17 an hour, or $34,000 annually, has employer-provided health care
and offers a pension. The $17 per hour figure is equal to the inflation-adjusted
earnings of the typical male worker in 1979, the first year of data
analyzed in the report." Schmitt, CEPR, 11/07
"...by addressing social needs in the areas
of health care, education, education, mass transit, home weatherization
and infrastructure repairs, we would also create more jobs and,
depending on the specifics of how such a reallocation is pursued,
both an overall higher level of compensation for working people
in the U.S. and a better average quality of jobs." U.S.
Employment Effects of Military & Domestic Spending Priorities,
Pollin & Garrett-Peltier, IPS, 10/07"Government should
not devise elaborate job training schemes, especially those disconnected
from real jobs. The research shows that most such programs bring
few benefits. Access to college should be eased to improved people's
general skills and sense of well-being; job-specific training programs
should normally involve on-the-job training for real jobs.
In part because economic authorities will never allow macroeconomic
policy to run fast and long enough to create all the jobs we need,
the federal government should expand its own labor force. For decades
government jobs have been an important avenue of success for the
poor and near poor, especially among minorities, but that effect
has waned recently, in part due to the conservative assault on government.
Governments should do more to create permanent jobs that provide
useful services and pay decently (protecting our national parks,
running after-school programs at neighborhood parks, delivering
the mail, building schools, insulating buildings, manufacturing
solar cells, caring for our children, acting as teaching aids).
The private sector is subverting the American dream; there is less
job mobility today than in the 70s. Few Bush supporters admit it,
but all net job growth was in government employment from 2000 to
mid-2005. Honesty requires that we acknowledge the failure of the
private sector, and create civilian-sector government jobs."
Frank Stricker, Why
American Lost the War on Poverty and How to Win It,
"According to a 2005 report of the International
Centre for Prison Studies in London, the United States—with
five percent of the world’s population—houses 25 percent
of the world’s inmates. Our incarceration rate (714 per 100,000
residents) is almost 40 percent greater than those of our nearest
competitors (the Bahamas, Belarus, and Russia). Other industrial
democracies, even those with significant crime problems of their
own, are much less punitive: our incarceration rate is 6.2 times
that of Canada, 7.8 times that of France, and 12.3 times that of
Japan. We have a corrections sector that employs more Americans
than the combined work forces of General Motors, Ford, and Wal-Mart,
the three largest corporate employers in the country, and we are
spending some $200 billion annually on law enforcement and corrections
at all levels of government, a fourfold increase (in constant dollars)
over the past quarter century." Why
Are So Many Americans in Prison? Race and the transformation
of criminal justice," Glenn C. Loury
"The substantial declines in job stability
for prime-age men..., in conjunction with the high rates of permanent
job loss (relative to the unemployment rate) and large associated
earnings losses..., lend credence to the view that worker anxiety
about job stability and security is real rather than illusory. At
the same time, the burden of job loss and its consequences, most
notably earnings losses, has shifted towards groups like the highly
educated....," FRBSF, 6/07
Your Income Tax Money Really Goes: Total Outlays (Federal Funds):
$2,387 billion-- MILITARY: 51% and $1,228 billion NON-MILITARY:
49% and $1,159 billion
"If economic theory is unkind to trickle-down
proponents, the lessons of experience are downright brutaltrickl.
If lower real wages induce people to work shorter hours, then the
opposite should be true when real wages increase. According to trickle-down
theory, then, the cumulative effect of the last century’s
sharp rise in real wages should have been a significant increase
in hours worked. In fact, however, the workweek is much shorter
now than in 1900.
Trickle-down theory also predicts shorter workweeks
in countries with lower real after-tax pay rates. Yet here, too,
the numbers tell a different story. For example, even though chief
executives in Japan earn less than one-fifth what their American
counterparts do and face substantially higher marginal tax rates,
Japanese executives do not log shorter hours.
Trickle-down theory also predicts a positive correlation
between inequality and economic growth, the idea being that income
disparities strengthen motivation to get ahead. Yet when researchers
track the data within individual countries over time, they find
a negative correlation. In the decades immediately after World War
II, for example, income inequality was low by historical standards,
yet growth rates in most industrial countries were extremely high.
In contrast, growth rates have been only about half as large in
the years since 1973, a period in which inequality has been steadily
rising." R. Frank, "In the Real World of Work and Wages,
Trickle-Down Theories Don't Hold Up," NY
"A new report
from The Mobility Agenda finds that over 40 million jobs in
the United States-- about 1 in 3--pay low wages ($11.11 per hour
or less) and often do not offer employment benefits like health
insurance, retirement savings accounts, paid sick days, or family
leave. Moreover, these jobs tend to have inflexible or unpredictable
scheduling requirements and provide little opportunity for career
“We did not realize it until we lost unions
how crucial they are to our well-being.”Paul Krugman, Congressional
Numbers in Severe Poverty "The percentage of poor
Americans who are living in severe poverty has reached a 32-year
high, millions of working Americans are falling closer to the poverty
line and the gulf between the nation's "haves" and "have-nots"
continues to widen.
A McClatchy Newspapers analysis of 2005 census
figures, the latest available, found that nearly 16 million Americans
are living in deep or severe poverty. A family of four with two
children and an annual income of less than $9,903 - half the federal
poverty line - was considered severely poor in 2005. So were individuals
who made less than $5,080 a year. The
McClatchy analysis found that the number of severely poor Americans
grew by 26 percent from 2000 to 2005. That's 56 percent faster than
the overall poverty population grew in the same period...."
U.S. economy leaving record numbers in severe poverty ..."
By James Lardner, from San Francisco Chronicle November 22, 2006
In the late 1970s and early '80s, when the inequality trend first
surfaced, the most conspicuous victims were workers in industries
shaken by competition from Asia. From then on, highly regarded authorities
have continued to present the problem as a matter of technology
and trade creating a "rising skill premium," as Federal
Reserve Board Chairman Ben Bernanke put it at a congressional hearing
earlier this year. Americans have clearly taken that analysis to
heart. By and large, according to a recent Wall Street Journal/NBC
News poll (in which the widening pay gap was rated the country's
No. 1 economic problem by 24 percent of those surveyed), people
don't hold Republicans responsible. They're more inclined to blame
corporate greed or the global economy; and either way, they don't
think there's much that mere humans, regardless of party, can do
about it. But that fatalistic outlook is not supported by the facts.
If cheap imports (or, for that
matter, low-wage immigrants) could explain a long, sharp increase
in inequality, France, the Netherlands and much of Europe would
be going through the same experience; they're not. If skill was
the crucial factor, the long-term winners would be the top 20
or 30 percent of Americans. Instead, they've been the top 5, 2,
or 1 percent -- the 1 percent who now pocket almost a fifth of
all personal income, roughly twice what their share was during
the 1960s and '70s.
The data suggests a story of
power rather than skill--rule-making power. The trail of evidence
leads into the arcane world of economic policy; and if you look
back over the past few decades, ignoring the catchy labels ("deregulation,"
"personal responsibility" and the rest), you'll find
a pattern of government action--on taxes, trade and the minimum
wage, among other things--favoring corporate insiders and financial
manipulators over the rest of us.
You'll also find inaction -- a wholesale abandonment
of the tradition of public investment that, in earlier periods of
our history, from the Louisiana Purchase to the G.I. Bill and the
Higher Education Act of 1965, earned the United States the right
to honestly call itself a land of opportunity.....
Culture of poverty? For decades,
scholars and opinion makers have been seduced by cultural explanations
for economic problems. Recently, comedian Bill Cosby has caught
the bug, leading him to inveigh against aspects of black culture
he views as intimately linked to problems among African-Americans,
from poverty to crime and incarceration. Mr. Cosby is merely the
latest and most visible in a long chain of cultural critics.....
This work is misguided at best and destructive at
worst. One key to the success of the cultural argument is
the omission of inconvenient facts.... For example, people arguing
that African-Americans are suffering from a culture of poverty stress
that blacks are much more likely to be poor than whites. True, but
this fact misses the most important development about black poverty
in recent years: its steep decline during the 1990s.
Black poverty fell 10.6 percentage points from 1993
to 2000 (from 33.1 to 22.5 percent) to reach its lowest level on
record. Black child poverty fell an unprecedented 10.7 percentage
points in five years (from 41.9 percent in 1995 to 31.2 percent
The "culture of poverty" argument cannot
explain these trends. Poor black people did not develop a "culture
of success" in 1993 and then abandon it for a "culture
of failure" in 2001.
What really happened was that in the 1990s, the
job market finally tightened up to the point where less-advantaged
workers had a bit of bargaining clout. The full-employment economy
offered all comers opportunities conspicuously absent before or
since. Since 2000, black employment rates have fallen much faster,
and poverty rates have risen faster, than the average.
What this episode reveals is how we squander our
human resources when slack in the economy yields too few decent
employment opportunities for those who want to work..... "Don't
Blame Black Culture for Economic Decline," A. Austin &
Good News! "..minimum wage
initiatives passed in all six states where they were on the ballot
on November 7. This means over 1.5 million workers in Arizona, Colorado,
Missouri, Montana, Nevada and Ohio, will see their wages increase,
thanks in part to your support. Not only did each of these states
raise their minimum wages, they also adopted automatic annual cost-of-living
adjustments, bringing to 10 the number of states with inflation
indexing."Monique Morrissey, EPI
Gender Pay Gap is the Smallest on Record—Not Necessarily Good
News, Sylvia Allegretto New data released by the U.S.
Census Bureau show that the gender pay gap for full-time, full-year
workers is the smallest on record. The shrinking gap was a feature
in the Department of Labor’s report, Highlights of America’s
Workforce: Labor Day 2006. Women now earn 77 cents on the dollar
compared to men. After an increase in the gap from 2002 to 2003,
the gap shrunk over the last two years. However, as the Figure shows,
these declines were solely due to the fact that earnings have fallen
for both men and women, but have fallen more so for men—not
a desirable scenario.
Amazingly, the Department of Labor brags that the
gender gap in pay is now the smallest ever, while completely ignoring
how we got there.....
"Even households at the 95th percentile--that
is, households richer than 19 out of 20 Americans--have seen their
real income rise less than 1 percent a year since the late 1970's.
But the income of the richest 1 percent has roughly doubled, and
the income of the top 0.01 percent--people with incomes of more
than $5 million in 2004--has risen by a factor of 5." "Whining
Over Discontent,"Paul Krugman, NYT, 9/6/06
"The stagnation of real wages — wages
adjusted for inflation — actually goes back more than 30 years.
The real wage of nonsupervisory workers reached a peak in the early
1970’s, at the end of the postwar boom. Since then workers
have sometimes gained ground, sometimes lost it, but they have never
earned as much per hour as they did in 1973.
Meanwhile, the decline of employer benefits began
in the Reagan years, although there was a temporary improvement
during the Clinton-era boom. The most crucial benefit, employment-based
health insurance, has been in rapid decline since 2000." "The
Big Disconnect," Krugman, NYT 9/1/06
CEO pay-to-minimum wage ratio soars
Today's average CEO earns more before lunch in one day than the
average minimum wage worker earns all year, with a compensation
ratio of 821-to-1. CEO pay continues to climb, while the federal
minimum wage has remained unchanged since 1997 [and is at a 50-year
low]. forthcoming The State of Working America, 2006/07.--EPI
"Income Inequality, and Its Cost"
"Unchecked inequality may also tend to create still
more inequality. Edward L. Glaeser, a professor of economics at
Harvard, argues that as the rich become richer and acquire greater
political influence, they may support policies that make themselves
even wealthier at the expense of others. In a paper published last
July, he said, 'If the rich can influence political outcomes through
lobbying activities or membership in special interest groups, then
more inequality could lead to less redistribution rather than more.'
In the United States, there is plenty of evidence
that this has been occurring. Bush administration policies that
have already reduced the estate tax and cut the top income and capital
gains tax rates benefit the well-to-do. It seems hardly an accident
that the gap between rich and poor has widened." A. Bernasek,
"Dean Baker debunks the myth that conservatives
favor the market over government intervention. The book
examines a variety of "nanny state" policies that make
the rich richer while leaving most Americans worse off."
The Conservative Nanny State 5/06
Basics, Not Luxuries, Blamed for High Debt,
Washington Post, 5/12/06 Why are Americans
so deeply in debt? It's not because they are using credit cards
to buy plasma TVs and premium coffee drinks at Starbucks. The real
culprits, according to a new analysis, are the rising costs of housing,
health care and education.
The debt of the typical American family earning
about $45,000 a year rose 33.1 percent from 2001 to 2004, after
adjusting for inflation, according to a study based on data compiled
from the Federal Reserve Board's most recent Survey of Consumer
Finances. ...Real wages, after adjusting for inflation, have been
flat since 2001, according to the study, while the cost of big-ticket
items for which families pay the most rose. In the past five years,
the costs of medical care, housing, food, cars and household operations
rose 11.2 percent, the study said. Many families are trying to make
up the difference by borrowing....
Stagnating minimum wages and housing bubble:
"Last year was the first year of record, according to an annual
study conducted by the National Low Income Housing Coalition,
that a full-time worker at minimum wage could not afford a one-bedroom
apartment anywhere in the country at average market rates. In 2001,
officials in ...a suburb of Seattle passed an ordinance imposing
penalties of 90 days in jail or fines of up to $1000 against people
caught living in their cars." "Keeping It Secret as the
Family Car Becomes a Home," NY Times, 4/2/06
The minimum wage buys less today than it
did when Wal-Mart founder Sam Walton opened his first Walton’s
5 & 10 in Bentonville, Arkansas in 1951. It would take more
than $9 in 2006 to match the federal minimum wage peak reached in
1968, adjusting for inflation. ...........
The minimum wage sets the wage floor. When the minimum
wage is stuck in quicksand, it drags down wages for workers up the
pay scale as well. Hourly wages for average workers are 11 percent
lower than they were in 1973, despite rising worker productivity.
It wasn't always like this. Between 1947 and 1973, worker productivity
rose 104 percent while the minimum wage rose 101 percent, adjusting
for inflation........The downward shift in wages is moving higher
up the career ladder. The inflation-adjusted earnings of college-educated
workers have fallen since 2000.................The share [of national
income] going to after-tax corporate profits.... is at the highest
level since 1929. "Wanted: A High-Road Economy," Holly
Sklar, 3/06 http://www.tompaine.com/articles/2006/03/17/wanted_a_highroad_economy.php
More bad news on inequality "Between
1979 and 2003, according to...the IRS, the share of overall income
received by the bottom 80 percent of taxpayers fell from 50 percent
to barely over 40 percent. The main winners from this upward redistribution
of income were a tiny, wealthy elite: more than half the income
share lost by the bottom 80 percent was gained by just one-fourth
of 1 percent of the population, people with incomes of at least
$750,000 in 2003." Krugman, NYTimes, 3/6/06
The Culture of the New Capitalism
"... the pervasive insecurity that is inextricably part of
today's capitalism has become the dominant fact of modern life.
'The fragmenting of big institutions has left many people's lives
in a fragmented state: the places they work more resembling train
stations than villages,' writes sociologist Richard Sennett in The
Culture of the New Capitalism.... Throughout most of the 20th
century, the insecurity endemic to capitalism was mitigated by business
institutions organized..., along military lines. The corporation
gave the employee a place and a ladder, and in such a lifelong institution,
Sennett notes, 'it became possible to define what the stages of
a career ought to be like, to correlate longtime service in a firm
to specific steps of increased wealth.' Sennett
is no apologist for the old corporate order, but it did impart a
structure to people's work lives and a place to hone their crafts.
The new workplace, by contrast, is a brave new
world of short-term employment and relationships, where experience
is not necessarily a virtue and institutional memory is sketchy
at best. It may be a fine place for young workers, but 'as middle
age looms and children, mortgages and school fees appear, the need
for structure and predictability in work grows greater.' The frequent
migration of executives from one firm to another, Sennett adds,
imposes further costs on employees: 'This managerial revolving door
has meant that the steady, self-disciplined worker has lost his
audience.'" "A Gentler Capitalism," Harold Meyerson,
Wash. Post, Jan 4, 2006
Median family income held up only by two
workers "Today the median income for a fully employed
male is $41,670 per year (all numbers are inflation-adjusted to
2004 dollars)—nearly $800 less than his counterpart of a generation
ago. The only real increase in wages for a family has come from
the second paycheck earned by a working mother. ........today’s
median-earning, median-spending middle-class family sends two people
into the workforce, but at the end of the day they have about $1,500
less for discretionary spending than their one-income counterparts
of a generation ago." "The Middle Class on the Precipice,"
Elizabeth Warren http://www.harvard-magazine.com/on-line/010682.html
See also http://privatizationofrisk.ssrc.org/Warren/
Tax Cuts Don't Pay for Themselves:
"...The recent analysis by [Ben] Page at the Congressional
Budget Office dismisses the idea that tax cuts may actually improve
the government's fiscal situation. Even in his most generous scenario,
only 28 percent of lost tax revenue is recouped over a 10-year period.
The United States, it seems, is firmly planted on the left side
of the Laffer Curve.
Recent experience corroborates this prediction.
In the second quarter of 2001, just before the first of President
Bush's tax cuts took effect, federal receipts from personal taxes
accounted for 10.3 percent of the economy. By the end of the post-recession
slump, receipts had dropped to 6.4 percent. But in the third quarter
of 2005, with the economy booming, they were still under 7.5 percent
- an enormous difference. In dollar terms, federal receipts from
personal income taxes, at $802 billion in 2004, are still lower
than they were in 1998 ($826 billion) and much lower than in 2001
($994 billion)....Even in Mr. Page's most generous picture, the
federal government would probably have to pay an extra $200 billion
in interest over the decade covered by his analysis. "A Bit
of Doodling About a Tax-Cut Danger," Daniel Altman, NY
Times Business, Jan. 1, 2006
Further horizons in outsourcing--our own
computer-game playing. "...from
Seoul to San Francisco, affluent online gamers who lack the time
and patience to work their way up to the higher levels of gamedom
are willing to pay the young Chinese here to play the early rounds
for them.""Ogre to Slay? Outsource
It to Chinese," New York
Times, Dec. 9, 2005
Anti-Unionism is the Date Rape of Corporate
Crime "...despite starting almost every union drive
with majority support, by the time the corporate wave of crime is
over, only 31% of union elections end with a vote in support of
the union." Nathan
The New Rich-Rich Gap, by Robert
Reich, Common Dreams: The wealthy class is splitting into two
elites, one national and threatened by outsourcing, the other international
and profiting wildly from globalization.
"..a new group is emerging at the very top.
They're CEOs and CFOs of global corporations, and partners and
executives in global investment banks, law firms and consultancies.....It
used to be that about a third of the work forces in advanced economies
were in person-to-person jobs; now, close to half are. Today,
more Americans work in laundries and dry cleaners than in steel
mills; more in hospitals and nursing homes than in banks and insurance
companies. More work for Wal-Mart than for the entire U.S. automobile
Routine office jobs are disappearing almost as fast
as routine factory jobs. Almost any office task—claims adjusting,
mortgage processing—can be done more cheaply and accurately
these days by specialized software. Jobs that can't be turned into
software are heading to low-wage countries as fast as telecom systems
can reach them. Not only are call centers, tech support and routine
computer coding going abroad, but so are jobs involved in patent
applications, divorce papers and certain domains of research."
Wal-Mart Seeks Unbiased Research -- and
Gets It, LA Times November 3, 2005
Some of their findings, which a few of the researchers released
before the conference, tend to confirm what Wal-Mart critics have
been saying for years.
At least two concluded that Wal-Mart stores'
pay practices depressed wages beyond the retail sector. Another
found that states on average spent $898 for each Wal-Mart worker
in Medicaid expenses.
One study concluded that Wal-Mart's giant grocery
and general merchandise Supercenters brought little net gain for
local communities in property taxes, sales taxes and employment;
instead, the stores merely siphoned sales from existing businesses
in the area.
Not all the news was bad for Wal-Mart. Several
of the studies noted that its stores led to lower prices throughout
a region. Two suggested that Wal-Mart increased a county's total
employment, with one pegging that long-term gain at 1% to 2%.
David Neumark, a senior fellow at the Public
Policy Institute of California, found that "residents of
a local labor market do indeed earn less following the opening
of Wal-Mart stores."
Worse yet, he wrote, is Wal-Mart's influence in
the South, where it has its greatest concentration of stores. There,
Neumark and his coauthors found, Wal-Mart has decreased retail employment
and total employment...........
"...inequality, in fact, increased at the insistence
of southern representatives in Congress, while their other congressinal
colleagues were complicit. As a result of the legislation they passed,
blacks became even more significatnly disadvantaged when a modern
American middle-class was fashioned during and after the Second
World War." When Affirmative Action Was White,
Ira Katznelson,. x.
At the Very Top, a Surge in Income in '03,
Johnston, NY Times. 10/5/05 "The income of [the top tenth of
1 percent] grew by 9.5 percent in 2003 over the previous year...
////for the bottom 99 percent of taxpayers, income rose by less
than 2 percent, which was below the inflation rate... ...among major
world economies, the United States in recent years has had the third-greatest
disparity in incomes between the very top and eve ryone else. Only
Mexico and Russia, among major economies, ahve greater disparity."
"More People Are Working Now Than Ever
Before" (But Less Often) Max Sawicky, 8/ 11/05 http://www.maxspeak.org/mt/
"I remember first hearing the boast in the top line above from
the 1976 Gerald Ford campaign. He had Bob Hope helping him out.
Even before I had done any formal study of economics, I though,
"Gee, what an idiot. Or does he think we are idiots."
Now the vacationing Mr. Bush is handing out the
same drivel. Well, one helping of drivel deserves another. It
is true that according to the latest monthly report from the BLS
Establishment Survey of jobs, more people are working now than
ever before. But, you might ask with some prompting, how often
could this be said of presidents since, let's say Jimmy Carter.
Below are percentages of months in office where
the statement was true (we use January of inauguration to December
before the next joker's inauguration as time periods).
"All" is an average of all months after
January of 1939. To save myself the trouble of disentangling JFK
from LBJ and Nixon from Ford, I started with Jimmy Carter.
Bush I 38%
Bush II 15%
By this reckoning, it is true that more people are working now than
ever before, but this is true less often -- much less, in fact --
for Bush the Younger than for his predecessors.
Reponse to NY Times article on problems
for SS of increasing longevity:
[non-working link] "Incredibly,
in an article which is entirely devoted to the impact of life expectancy
increases on social security's finances, the authors do not, one
single time, mention the fact that the Social Security Trustees
(and the Congressional Budget Office) factor life expectancy increases
into their assessment of the program's long-term well-being. Now,
there is a debate about whether the trustees have over- or under-estimated
the increase in life expectancy going forward. Robert Pear, for
example, in an article written last December, marshalled evidence
suggesting that the trustees have under-estimated the likely increase.
However, he provided room for experts who disagree with that assertion.
Furthermore, this March, the New England Journal of Medicine published
a study (one that has
generated controversy) arguing that, due to increasing obesity,
life expectancy in the
United States will fall, not rise, over the next seventy five years.
But, there is not a single
mention of that debate in the Toner/Rosenbaum piece...."
A Galbraith Revival
James K. Galbraith June 07, 2005
" Full employment prosperity is not a birthright,
it must be earned. It doesn't come by
magic, by cutting deficits or through prayer to the Great God Greenspan.
employment prosperity must be created in the solution of our own
Let's therefore rebuild our cities, conserve our energy resources,
save education, extend
health care, restore the environment and preserve Social Security.
When we have taken
back America, we will surely have to rebuild it, finally ending
the long age of "public
squalor" of which my father [ John Kenneth Galbraith] wrote
in The Affluent Society 50 years ago."
Long-Term Joblessness Grows Despite Lower
Women and White-Collar Workers Now Vulnerable Three and a half years
into this recovery, one in five unemployed Americans has been out
of work for six months or more – marking the first time ever
that so many jobless have been out of work for so long while the
unemployment rate is relatively low and falling...http://www.nelp.org/news/pressreleases/prui052505.cfm
President Eisenhower letter on
Social Security to his brother Edgar on November
8, 1954: "Should any political party
attempt to abolish social security, unemployment insurance, and
eliminate labor laws and farm programs, you would not hear of that
party again.... There is a tiny splinter group, of course, that
believes you can do these things. Among them are H.L. Hunt...a few
other Texas oil millionaires, and an occasional politician or businessman
from other areas. Their number is negligible and they are stupid."
"Will a Social Security Bill Become
a Vehicle For Budget-Busting Tax Cuts?The potential is
growing that efforts to address the Social Security shortfall could
become a vehicle for budget-busting tax cuts. At a press conference
on April 29, House Ways and Means Committee Chairman Bill Thomas
(R-CA) and Social Security Subcommittee Chairman Jim McCrery (R-LA)
suggested combining the broad type of Social Security benefit reductions
that President Bush has proposed with additional tax cuts on savings
and investments by higher-income people, such as making permanent
the capital gains and dividend tax cuts enacted in 2003. The Washington
Post reported May 5 that Chairman Thomas also is considering including
large increases in contribution limits for IRAs and 401(k)s in his
Social Security legislation." http://www.cbpp.org/5-6-05socsec.htm#_ftnref1
* The deterioration in the
75-year actuarial balance of Social Security that has occurred since
1983 has been caused overwhelmingly by economic developments, trends
in disability incidence, and programmatic changes to Social Security.
* Sixty percent of the current shortfall would be eliminated by
a reversal of two adverse economic trends that have emerged since
1983: sluggish growth in average (real) wages and erosion of the
tac base due to rapid growth in the inequality of earnings.
* Reversing the demographic change most commonly identified with
placing strain on the Social Security system--declining mortality
rates--would eliminate less than 5% of the current shortfall. http://www.epinet.org/content.cfm/ib207
An investment pro on pritvatization:
May 1, 2005 Social Security: [Berkshire Hathaway Inc. Chairman Warren]
Buffett and [Vice Chairman Charles] Munger also told shareholders
they oppose U.S. President George W. Bush's plan to allow privatization
of Social Security because the government has a duty to take care
of the country's elderly.``The Republicans are out of their cotton-picking
minds on this issue,'' said Munger, a self-described right-wing
Republican. Social Security is ``one of the most successful things
that the government has ever done.'' http://www.bloomberg.com/apps/news?pid=10000006&sid=aGh_OPpEs3_4&refer=home
2006 Budget vs Trustees' 2005 Report April 16, 2005
"They let the cat out of the bag. I
did some poking around the 2006 Budget and found the following on
p. 191. I have posed the question here and there: How do the Presidents'
men predict productivity when they are talking tax cuts? The answer
is here. 'conservatively, to be 2.6% per year'. How then do they
get away with 2.1% as their optimistic number when talking [Social
Security] Trust Funds?http://www.whitehouse.gov/omb/budget/fy2006/
Analytical Perspectives Potential growth is approximately equal
to the sum of the trend rates of growth of the labor force and of
productivity. Potential GDP growth is projected to be 3.2 percent
through 2008, and then edge down to 3.1 percent during 2009–2010,
primarily because of an assumed slowing in labor force growth. The
labor force is projected to grow about 1.2 percent per year through
2008 on average, slowing to about 0.8 percent yearly on average
during 2009–2010 as increasing numbers of baby boomers enter
retirement. Trend productivity growth is assumed, conservatively,
to be 2.6 percent per year. That pace is noticeably below the average
since the business cycle peak in the first quarter of 2001 (4.2
percent per year). It is, however, close to the pace during 1996–2000
(2.5 percent) and not far from the average since the official productivity
series began in 1947 (2.3 percent). "
Further Horizons in Offshoring
Outsourcing off Los Angeles? By Linda L. Briggs ADTmag.com
What if you could outsource to
a company that offered the cost savings of an
India-based outsourcing firm, but whose facilities were just a
few hours away?
That’s the premise of three entrepreneurs
in San Diego, who are in the final throes of launching a company
that will offer software development off the coast of California—three
miles outside Los Angeles, to be specific.
The three plan to buy a used cruise ship and station
it close enough for a half-hour water taxi ride to shore, but far
enough to avoid H1B jurisdiction. ......
President "cares the most" about
the working poor; poor may not agree "I'm
1,000-percent convinced of this: The president cares the most about
this $10-an-hour person," said Allan B. Hubbard, director of
the White House National Economic Council. "And what he gets
most irritated by is when it is suggested, 'Oh the $10-an-hour person
isn't sophisticated enough to deal with a personal retirement account.'
" ...."When you know you're entitled to Social Security,
you know it's going to continue to come until you breathe your last
breath," said Sondra Gilbert, a former D.C. government worker
who had been jobless since 1999. "But if I start putting the
few dollars he's going to let me put into an account, I could run
out of that in a year or two, or whatever. Then I'm back on what?
A homeless shelter?" "Bush Social Security Plan Proves
Tough Sell Among Working Poor", J. Weisman, Wash. Post,
April 18, 2005
While a smaller fraction of workers have
pensions and Social Security is in danger--"Everyone
knows that chief executives are paid huge amounts of money while
they are working. Less known is just how much they make in retirement.
At many of America's biggest corporations, it is not uncommon for
retired executives who were paid tens or even hundreds of millions
of dollars during their tenures to receive $1 million or more in
pension benefits every year-- for as long as they live.
Some will take home much more. ....At a time when
millions of American workers have seen their pension plans pared
back or shut down, and millions more are being asked to bear the
risk of managing their own retirement savings, departing chief executives
are making out better than ever. A total of 113 chief executives
can anticipate retirement benefits worth more than $1 million a
year; at least 31 may get twice that amount, or more." "The
New Executive Bonanza: Retirement" by Eric Dash 3 April 2005
Wage Gap Figures in Social Security's Ills,
Wall Street Journal, 4/11/05
"In the past 25 years, a growing share of income has been paid
to people who earn more than the cap. This increasing concentration
of income at the upper strata of society is an important reason
why, from 1980 through 2000, taxable payroll fell to 83% of wages
of contributing workers from 90%. Both these trends partially were
reversed in 2001, but there are signs inequality is growing again:
The Federal Reserve estimates that the pay of managers and supervisors
is rising much faster than that of production workers. Meanwhile,
Social Security actuaries expect taxable payroll, which rebounded
to 86% of total wages in 2002, to return to 83% by 2013."
2005 Social Security Trustees Report, Brad DeLong,
March 23, 2005
The 2005 Social Security Trustees Report lowers
the estimate of Social Security's deficit through 2079 to 0.6%
of GDP. Last year's Trustees Report pegged the deficit through
2078 at 0.7% of GDP.
Social Security's financial status improved even
though the new forecast window adds a big deficit year--2079--to
the calculation. And its financial status improved even though
the Bush administration assumed:
1. Reduced earnings on the part of the young.
That's six thumbs on the scales, and still the long-run
deficit shrinks. So why is the headline that the financial status
of Social Security has gotten worse? Can you say "an easily
snowed press corps"? I knew you could.
2. Reduced death rates on the part of the old.
3. Lower labor force participation on the part of the young and
4. More short term inflation.
5. No change in long-run productivity growth (in spite of very
good productivity news).
6. No change in immigration (in spite of immigration running ahead
Mishel, Economic Policy Institute "The policy argument
for raising the cap is that the payroll tax used to be levied on
90 percent of all wages (in the early 1980s, when the last major
change in Social Security was legislated), but that now only about
85 percent of wages are taxed. The cap in taxes is tied to a cap
in benefits. But, with this growth in inequality, those who are
getting the maximum benefit are now paying taxes at a lower rate.
The taxable wage base eroded because the wages of top earners grew
far faster than the wages of the typical worker, putting more wages
out of reach of the payroll tax and undermining the system. If the
cap were raised to a level where 90 percent of all wages were taxed,
as was the case in the early ’80s, the cap would need to be
at about $140,000."
Fed Chairman Greenspan on Social Seducity:"In
response to a question [at hearings of the House Financial Services
Committee]...Mr. Greenspan said he could not say whether he would
have voted to create Social Security if he had been a member of
Congress in 1935 when the retirement system was established."
[Alan Greenspan, as well as being the current Chair of the Federal
Reserve, was also Chair of the National Commission on Social Security
Reform that in 1983 increased SS taxes, generating the current large
surpluses in the Trust Fund that he later used to justify tax cuts
for higher-income taxpayers.] NYT 2/18/05
"'The Wall Street Journal spotted
yet another depressing trend in the pension field. Many companies
have started suing their own retired employees in order to cut their
pension benefits.'Many companies have already
cut back company-paid health-care coverage for retirees from their
salaried staff,' the Journal notes. 'But until recently, employers
generally were barred from touching unionized retirees' benefits
because they are spelled out in labor contracts. Now some are taking
aggressive steps to pare those benefits as well, including going
to court.' Here's the part I love: The companies'
legal argument is that the 'lifetime' coverage specified in the
contracts does not mean the lifetime of the workers, but the 'lifetime'
of the labor contract. Cute, eh?" http://www.freepress.org/columns/display/1/2004/1006
Molly Ivins, "A Few Political Developments," The Free
Press, Nov. 25, 2004
"I personally think
that society is responsible for a very significant percentage
of what I've earned."— Warren Buffett, CEO of Berkshire
Hathaway, in I Didn't Do It Alone: Society's Contribution
to Individual Wealth and Success, Responsible Wealth, United
for a air Economy
New Horizons in Outsourcing:"With
Roman Catholic clergy in short supply in the United States,
Indian priests are picking up some of their work, saying Mass
for special intentions, in a sacred if unusual version of outsourcing.
American, as well as Canadian
and European churches, are sending Mass intentions, or requests
for services like those to remember deceased relatives and thanksgiving
prayers, to clergy in India." "Short on Priests, U.S.
Catholics Outsource Prayers to Indian Clergy," New
York Times, June 13, 2004
Move, J. Chait, New Republic 3/05:
"Privatizers portray Social Security as a kind of low-performing
401(k) plan. But the program was never intended as a personal
retirement plan. It's a form of social insurance, designed to
spread risks throughout the population. One such risk is that
you get sick or hurt and can't work anymore; 11.5 percent of
Social Security benefits go to disabled workers (which is another
reason why retirees get a lower rate of return).
Another risk is that your income
will decline, perhaps because economic changes make your skills
less valuable. (Today, for example, steelworkers could be made
redundant by productivity increases. Perhaps in 30 years it
will be accountants or software engineers whose work was outsourced
overseas.) That's why Social Security gives low-earning retirees
a greater return on their taxes than high-income retirees. Still
another risk is that you'll live a very long time and exhaust
your savings, which is why old-age benefits are indexed to inflation
and last for a lifetime.
A system of individual accounts
would concentrate all these risks on the shoulders of the individual.
The inherent risks of investing have captured the most attention.
Obviously, if you invest poorly--or even retire at the end of
a market slump--you may get a nasty surprise at retirement.
(Gary Burtless of the Brookings Institution studied what would
have happened historically if workers had invested two percentage
points of their Social Security taxes in stocks. Those retiring
at the end of a slump would have less than half the income of
their more fortunate counterparts who cashed in a few years
earlier.) But the risks of replacing social insurance pose an
even harsher dilemma. If you suffer a career-ending disability
before you've put aside enough in your account, if you find
yourself at the low end of the income scale, or if you live
longer than you had made contingencies for, you would be out
of luck. Social Security doesn't make anybody a millionaire,
but it offers everyone the assurance against suffering too much
from outrageous fortune. A privatized system would invert that