Archive for February, 2015

net worth

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.

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Chart of the day

Posted: 27 February 2015 in Uncategorized
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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.

 

[ht: ke]

My only excuse: it’s Friday. . .

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Recovery: New Job, Day One

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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. . .