Posts Tagged ‘chart’

aca

source

As readers know, I am no fan of the current U.S. healthcare system.

The U.S. healthcare system, as it is currently configured, only really works for those who make a profit—selling health insurance, pharmaceuticals, and in-patient and acute-care services in hospitals—and those who have the wherewithal to finance their own healthcare.

But Republican plans to repeal the Affordable Care Act, aka Obamacare, will move us even further from the goal of providing universal, affordable, high-quality healthcare for the American people.

According to a new study by the Congressional Budget Office (pdf), both the number of people who do not have health insurance and the premiums paid by people who do purchase individual health insurance will likely rise in dramatic fashion:

The number of people who are uninsured would increase by 18 million in the first new plan year following enactment of the bill. Later, after the elimination of the ACA’s expansion of Medicaid eligibility and of subsidies for insurance purchased through the ACA marketplaces, that number would increase to 27 million, and then to 32 million in 2026.

Premiums in the nongroup market (for individual policies purchased through the marketplaces or directly from insurers) would increase by 20 percent to 25 percent—relative to projections under current law—in the first new plan year following enactment. The increase would reach about 50 percent in the year following the elimination of the Medicaid expansion and the marketplace subsidies, and premiums would about double by 2026.

Oh, and not to be overlooked, repealing the Affordable Care Act would provide an immediate windfall tax cut to the highest-income Americans while raising taxes significantly on about 7 million low- and moderate-income families.

notwork1

Mainstream economists and economic commentators continue to invoke the so-called “dignity of work” to criticize the idea of a universal basic income.

It’s an argument I’ve dealt with before (e.g., here and here). As I see it, there’s nothing necessarily dignified about most people being forced to have the freedom to sell their ability to work to a tiny group of employers. The idea may be intrinsic to capitalism—but that doesn’t mean it contributes to the dignity of people who work for a living, especially when they have no control over how they work or what they produce when they work.

Matt Bruenig, to his credit, suggests an alternative argument against the critics of a universal basic income:

these writers dislike the fact that a UBI would deliver individuals income in a way that is divorced from working. Such an income arrangement would, it is argued, lead to meaninglessness, social dysfunction, and resentment.

One obvious problem with this analysis is that passive income — income divorced from work — already exists.

Bruenig is making a distinction between income related to work and income that comes from other sources—passive or not-work—which represents a fundamental divide within contemporary society.

As is clear from the data in the chart above, very little of the income (15 percent in 2014) of the bottom 90 percent of Americans stems from not-work (and, even then, most of their apparently not-work income is actually related to previous work, in the form of pension incomes). However, for the tiny group at the top, most of their income (59 percent for the top 1 percent, 75 percent for the top 0.01 percent) is related to not-working (and, of course, most of their work-related income is based on sole proprietorships and elevated executive salaries). In other words, most of their income represents a claim on the extra work performed by others.

So, when critics of a universal basic income rely on the “dignity of work” argument, what they’re really doing is reinforcing the idea that most people can and should derive dignity from working for a small group of employers. At the same time, critics are presuming there’s no loss of dignity for the tiny group at the top, those who have managed to capture most of their income from sources related not to their own work, but the work of everyone else.*

Where’s the dignity in that?

*Now, it’s true, as Noah Smith observes, “many rich people believe that investing constitutes work.” But spending a few minutes a day reading the business press and examining alternative investments does not constitute work—at least as most people understand what it means to work. Or are those rich people referring to the fact that they hire a whole host of other people, from financial advisors to accountants, to do the actual work of managing their not-work investments?

Chart of the day

Posted: 4 January 2017 in Uncategorized
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p1-bz531b_401kr_9u_20161212144814

The 401(k) revolution was good for employers but clearly not for workers.

By eliminating almost all defined-benefit plans, employers managed to shift most of the risk and costs of retirement plans to their workers.

What did workers get? Not a lot. Less than 60 percent of workers within ten years of retirement have any kind of retirement plan and their median retirement savings are only $104 thousand. Still, that’s more than the average household of the same age, which has managed to accumulate only $14.5 thousand in retirement savings.

It should come as no surprise, then, that both the early backers of 401(k) plans (like Herbert Whitehouse and Ted Benna) and pension experts who claimed workers would have enough to retire if they set aside just 3 percent of their paychecks in 401(k) plans (like Teresa Ghilarducci) are left to rue the day.

Charts of the year

Posted: 4 January 2017 in Uncategorized
Tags: , ,

borror-2016

As regular readers of this blog know, I try to make available and critically interpret charts of data—both to challenge others’ arguments and to provide a foundation for my own.

Last year, I spent much more time using publicly available data to make my own charts, which readers are free to use for their own purposes.

Here are some of those charts (just click on each chart to go to the post in which it originally appeared).

fredgraph

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wages-2015

2015-31

wealth

inequality

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2015-31

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For some reason, WordPress didn’t crunch the numbers this year. So, just out of curiosity, I did.

As it turns out, this blog was viewed 110,887 times last year—by visitors from 184 different countries, with the United States, Germany, the United Kingdom, Canada, France, and Australia leading the list.

I wrote 860 new posts in 2016 (495 without the daily cartoons), growing the total archive of this blog to 7,571 posts.

As regular readers know, most of what I write on this blog are responses to ideas and items that appear in the daily media. However, as promised, I did work on a few longer series last year—on the numbers concerning inequality in the United States (in four parts: here, here, here, and here), the political economy of the U.S. healthcare system (in seven parts: here, here, here, here, here, here, and here), and the class dimensions of Trumponomics (in four parts: here, here, here, and here).

According to the numbers, most visitors tend to go to the home page. Here are the individual posts (some from 2016, others from previous years) that received the most views last year:

Hillbilly Elegy

Does Wall Street do anything useful?

Capital (gains) vs. labor (income)

Socialism is obvious

Radicals versus liberals

“The university system has gone the way of Walmart”

Only in America

Neoclassical economists and the minimum wage

Mapping the emerging post-capitalist paradigm and its main thinkers

Neoliberalism—ideas AND political project

I finally decided to inaugurate a Twitter account, which includes items posted on the blog as well as many other things.

I want to thank the folks at the Real-World Economics Review Blog, Progress in Political Economy, and Democracy at Work for reposting some of the items that originally appeared here, thus expanding the conversation.

I especially want to thank the readers—Wordpress and email followers, as well as regular and infrequent visitors—who, my hope is, find the occasional useful bits in what I link to and comment on. . .

fredgraph-2

We all know that the recovery since the Great Recession has been highly skewed. But has it hurt whites more than blacks and Hispanics, thereby explaining Donald Trump’s victory in the presidential election?

That’s the story being told by Eduardo Porter (here and here), relying on data from the Economic Cycle Research Institute (pdf). Their basic argument is that, of the millions of net new jobs created since the pre-recession highwater mark of November 2007, most of them went to black and Hispanic (and Asian) workers, not to white workers (who make up the majority of the workforce).

The numbers are correct—but their analysis is seriously incomplete.

According to the numbers that serve as the basis of ECRI analysis (and which are represented in the chart above), about 5.5 million more workers are employed now compared to nine years ago (the purple line)—including 4.9 million more Hispanic (green line) and 2.3 million more African American (blue line) workers but 722 thousand fewer white (red line) workers.*

fredgraph-3

It comes as no surprise that those different job trajectories are reflected in the different trajectories of the employment-population ratio. Whereas the overall ratio and the ratio for whites have barely changed (at 59 and 60 percent, respectively) since the recession ended, the other ratios have in fact changed—rising for both Hispanics (from 59.3 to 62.2) and blacks (from 52.9 to 56.6).

So, there are differences in job growth, a large part of which can be accounted for by different regional growth patterns (large cities vs. small towns and rural areas), sectoral shifts (services vs. industrial production), and demographic profiles (both the proportion of the working-age population and retirement rates).

However, in every other way, the different groups within the American working-class have moved in tandem.

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For example, the labor-force-participation rate has declined over the past nine years—in general and for each subgroup, white, black, and Hispanic—and remains now just above record lows.

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Unemployment rates have also moved in the same direction—first rising dramatically after the crash and then falling during the recovery (but still remaining above what they were before the crash).

fredgraph

Meanwhile, workers’ wages have barely budged—overall and for whites, blacks, and Hispanics—between the fourth quarter of 2007 and the third quarter of 2016.

The folks at the Center for Economic and Policy Research get it:

Porter is right in seeing support for Trump as being to a substantial extent a response to bad economic prospects. But the economic prospects of working class whites in the last decade were not notably worse than the prospects of working class blacks.

And, I would add, all the other groups that make up the American working-class.

The fact is, all members of the working-class—white, black, and Hispanic—have been victimized during the Second Great Depression. As I have shown elsewhere (e.g., here and here), as a class, they’ve fallen further and further behind the tiny group of employers and wealthy individuals at the top. That’s the real skewed nature of the economic recovery.

As I see it, the difference in their political allegiances and voting patterns cannot then be explained by white workers losing out to black and Hispanic workers. It’s due, instead, to the fact that one group that has been left behind (working-class whites) threw in their lot with one candidate (right-wing,  white-nationalist Trump)—while other members of the working-class (blacks and Hispanics), who have been equally left behind, simply could not.

And, soon, all of them will discover Trump’s promises were no more than dog-whistle politics and his economic program will leave them even further behind.

 

*The numbers don’t sum correctly (even without including Asian workers) because white Hispanics may be double-counted as both white and Hispanic, and black Hispanics may be double-counted as both black and Hispanic.

bottom50

There is no stronger indictment of U.S. capitalism than the fact that, over recent decades (especially since 1980), there has been almost no growth for people in the bottom 50 percent of the distribution of income.

As I showed a week ago, according to recent data by Thomas Piketty, Emmanuel Saez, and Gabriel Zucman, from 1979 through 2006, the share of pre-tax income going to the bottom 50 percent of U.S. households fell from an already-low 20.1 percent to an even-lower 13.5 percent—while the share of top 1 percent soared, from 11.1 percent to 20.1 percent.

national-50

There’s even a large and growing gap between average (pre-tax) national income and the average of the bottom 50 percent. That ratio increased from 2.5:1 in 1979 to 4:1 in 2014.

Even in absolute terms (illustrated in the chart at the top of the post), the bottom 50 percent has gone nowhere. Their average pre-tax income actually fell from 1979 to 2014 (in real 2014 dollars)— from $16,632 to $16,197. It’s true, households that find themselves in the bottom half have been helped by tax credits and government transfers. But in 2014, that only raised their post-tax income to, on average, $25,045.

And that’s not even the whole story. If we exclude expenditures on medical care (Medicaid and Medicare, including rising prices for medical treatment), that post-tax income falls to $21,293. And if we calculate their cash income (and thus exclude in-kind transfers), it falls to $17,654—an embarrassingly small increase over their pre-tax income of $16,197.

As Piketty, Saez, and Zucman explain,

The aggregate flow of individualized government transfers has increased, but these transfers are largely targeted to the elderly and the middle-class (individuals above the median and below the 90th percentile). Transfers that go to the bottom 50% have not been large enough to lift income significantly. Given the massive changes in the pre-tax distribution of national income since 1980, there are clear limits to what redistributive policies can achieve.

The unequal distribution of income in the United States is now so obscene that, even with government transfers, the bottom 50 percent are forced to struggle to survive on incomes that, in 2014, came to less than 2.5 percent of those in the top 1 percent.

Is it any wonder that the presidential candidate who promised to continue business as usual, to do no more than maintain the existing set of programs, ended up losing?

And, by the same token, does anyone expect the winning candidate, who promised to shake things up on behalf of the working-class, will actually do anything to fundamentally improve the circumstances of those in the bottom 50 percent?