Chart of the day

According to a new study by the Federal Reserve Bank of St. Louis, little has changed over the past 25 years in terms of the glaring wealth gap in the United States between blacks and Hispanics on one hand, and whites on the other.

The median wealth levels of Hispanic and black families are about 90 percent lower today than the median wealth levels for whites. Back in 1989, the median wealth of a white family was $130,102. In 2013, it was $134,008, after adjusting for inflation. For a Hispanic family, they were $9,229 and $13,900, while for a black family, they were $7,736 and $11,184.

The one group that has experienced an improvement, both absolutely and relative to whites, are Asian families. Their real median wealth grew between 1989 and 2013 from $64,165 to $91,440. And, because of that growth, and the precipitous decline in white family wealth after 2007, Asian household wealth rose from 49 to 68 percent of white wealth.

While the authors of the study do not attempt to analyze all the factors causing the large and persistent gap between white and black/Hispanic wealth, they do look at the role of age profiles and educational attainment and conclude that

differences in the age composition and in the level of educational attainment across groups explain relatively little of the gaps. Indeed, race- and ethnicity-related financial-health disparities are greatest among older and better-educated groups, where financial health and wealth generally are at their highest levels.

Cartoon of the day

Special mention

 

Chart of the day

According to a new study from the International Monetary Fund,

Inequality has risen in many advanced economies since the 1980s, largely because of the concentration of incomes at the top of the distribution. Measures of inequality have increased substantially, but the most striking development is the large and continuous increase in the share of total income garnered by the 10 percent of the population that earns the most—which is only partially captured by the more traditional measure of inequality, the Gini coefficient (see Chart 1). . .

we find strong evidence that lower unionization is associated with an increase in top income shares in advanced economies during the period 1980–2010 (for example, see Chart 2), thus challenging preconceptions about the channels through which union density affects income distribution.

The main channels they identify include wage dispersion (unionization reduces inequality by helping equalize the distribution of wages), unemployment (union density does not, in general, raise unemployment), and redistribution (strong unions induce policymakers to engage in more redistribution by mobilizing workers to vote for parties that promise to redistribute income or by leading all political parties to do so). Thus, they find, lower union density can increase top income shares by reducing the bargaining power of workers.

The obvious policy conclusions, then, are to improve rules and regulations that allow workers to organize and bargain collectively and to engage in corporate governance reforms that give workers more of a say in the major decisions taken by enterprises—not only in terms of executive pay, but also where and when jobs are created and how the resulting surplus is allocated.

“We are Germans!”

 

[ht: ke]

My only excuse: it’s Friday. . .

Cartoon of the day

Special mention

Cartoon of the day

Special mention

 

Fifty shades of. . .

I haven’t read Fifty Shades of Grey nor have I seen the film. But at some point I may have to, given what others are writing about this particular phenomenon in popular culture.

According to Heather Havrilesky,

the story of Anastasia Steele and Christian Grey isn’t really about dominance or bondage or even sex or love, despite all the Harlequin Romance–worthy character names. No, what Fifty Shades of Grey offers is an extreme vision of late-capitalist deliverance, the American (wet) dream on performance-enhancing drugs. Just as magazines such asPenthouse, Playboy, Chic, and Oui (speaking of aspirational names) have effectively equated the moment of erotic indulgence with the ultimate consumer release, a totem of the final elevation into amoral privilege, James’s trilogy represents the latest installment in the commodified sex genre. The money shot is just that: the moment when our heroine realizes she’s been ushered into the hallowed realm of the 1 percent, once and for all.

Lynn Stuart Parramore offers a similar interpretation:

Author E.L. James has often insisted that Fifty Shades of Grey is wildly popular not because of its titillating trappings of transgression, but because it tells a simple love story for the ages. But this is a romance for a particular kind of age — a time of growing inequality. The social order is breaking up and leaving massive human wreckage in its wake. Dreams of love turn into fantasies of power – who has it and what they can do to those who don’t have it. . .

The film is the dispiriting denouement of this late stage of capitalism, where cruel conditions are accepted and you learn to suffer the whims of the rich — and pretend to like it.

Havrilesky and Parramore have succeeded in doing something I hadn’t expected: they’ve made me rethink my initial ignoring of Fifty Shades. . .

Protest of the day

Today is National Adjunct Walkout Day. Adjunct professors on campuses across the country hope to draw attention to their poverty-level wages, with no chance of advancing to a tenure-track position.

source

According to an extensive crowd-sourced survey of adjunct working conditions conducted in 2012 by the Coalition on the Academic Workforce,

Adjuncts don’t make much money, they receive little support in terms of professional development from the institutions where they teach, and most would accept a full-time tenure-track position if it were offered to them.

As Karen Hildebrand, an adjunct professor at the State University of New York at Plattsburgh, explains,

This National Adjunct Walkout Day aims to help adjuncts achieve parity with full-time faculty – better pay, job security, equality in professional development opportunities, etc.

But there are two things about this day that are pretty basic to how we treat each other and how we view the world.

First, hiring people as adjuncts sets a very bad example to college students. That’s not the way to treat people.

Instead of signaling “Get used to it – this is the world you will inhabit, we will use you, wring everything we can out of you and throw you out,” educators should be signaling, “Young College Graduate – we will help you make the world a better place.”

Second, this thing of paying substandard salaries to teachers is a victimization of people who love what they do.

Ask any musician or actor how many times she or he has been asked to donate a free performance. After all, to the people hiring them, it’s not real work – it’s fun! It seems people who love what they do are punished for it.

Parents tell their children, “Get a degree in something you love – but make sure you can make a living from it.”

Following that logic, teaching is one of the things that you shouldn’t get a degree in.

Chart of the day

As the Economist explains,

Inflation rates around the world have been sinking over the last three years. Pervasive economic weakness in the rich world and a slowdown in Chinese growth drove the initial decline. Lately tumbling oil prices have helped to push inflation into negative territory across much of the euro area. America, Britain and China, where inflation rates have dropped below 1%, may soon join Europe in deflation. Falling prices for things like petrol have been “unambiguously good” for consumers, in the words of Mark Carney, the governor of the Bank of England. But broad and persistent deflation is not a healthy thing for a modern economy. It will make big debts harder for households and governments to repay, and it could hinder central banks looking to perk up slumping economies.

The hustler

The goal of a politician like Chicago Mayor Rahm Emanuel is first to get elected (which he did in 2011, with 55 percent of the vote), and then to get reelected (which he didn’t yesterday, even with a $15-million campaign war chest). He now faces a runoff in April against second-place finisher Jesus “Chuy” Garcia.

It’s no surprise that “Mayor 1%” lost his initial bid for reelection: he has faced scathing criticism, especially outside the city center and away from the north shore, for his decision to close 50 city schools, his showdown with the teachers’ union, and for generally neglecting the many neighborhoods where murders shot up to more than 500 in 2012. That’s exactly the argument made by Garcia, that Emanuel has paid more attention to the city’s upper class and downtown than to the poor and communities outside the commercial center.

As Nelson Algren explained back in 1951, Chicago has long been a city of hustlers, who have managed to rig the game.

Not that there’s been any lack of honest men and women sweating out Jane Addams’ hopes here—but they get only two outs to the inning while the hustlers are taking four. When Big Bill Thompson put in the fix for Capone he tied the town to the rackets for keeps.

So that when the reform mayor who followed him attempted to enforce the prohibition laws, he wakened such warfare on the streets that the Do-Gooders themselves put Thompson back at the wheel, realizing that henceforward nobody but an outlaw could maintain a semblance of law and order on the common highway. Big Bill greeted his fellow citizens correctly then with a cheery, “Fellow hoodlums!”

The best any mayor can do with the city since is just to keep it in repair.

Yet the Do-Gooders still go doggedly forward, making the hustlers struggle for their gold week in and week out, year after year, once or twice a decade tossing an unholy fright into the boys. And since it’s a ninth-inning town, the ball game never being over till the last man is out, it remains Jane Addams’ town as well as Big Bill’s. The ball game isn’t over yet.

But it’s a rigged ball game.