Posts Tagged ‘chart’

ftblog852

The storm clouds on the horizon continue to gather. Economic growth, in the United States and around the world, continues to slow (or, in the case of Europe, to rise barely above zero).

According to Juan Antolin Diaz’s models,

the probability that the economy is now in a state of strong expansion has dropped from 70 per cent in December 2014 to under 40 per cent now. Over the same period, the probability that the economy is in recession has risen from zero to 14 per cent – still low, but not entirely negligible.

So much for capitalism’s much-vaunted recovery. . .

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Back in 2013, David Simon, “Baltimore’s best-known chronicler of life on the hard streets,” that capital was taking over the electoral process.

The last job of capitalism – having won all the battles against labour, having acquired the ultimate authority, almost the ultimate moral authority over what’s a good idea or what’s not, or what’s valued and what’s not – the last journey for capital in my country has been to buy the electoral process, the one venue for reform that remained to Americans.

Right now capital has effectively purchased the government, and you witnessed it again with the healthcare debacle in terms of the $450m that was heaved into Congress, the most broken part of my government, in order that the popular will never actually emerged in any of that legislative process.

According to CROWDPAC, the top .01 percent of the wealthiest campaign donors in the United States has effectively captured the political process.

In 1980, this elite segment of the population contributed a total of 16% of all campaign contributions. Today, it’s over 40% and heading towards 50%. Yes, already, close to HALF the money in American politics is coming from 0.01% of the wealthiest donors – that’s around 25,000 compared to nearly 150 million registered voters.

labor-vs-capital

The headline, “Labor vs. Capital,” is not mine; it’s the Wall Street Journal’s. And the argument is,

For decades, labor’s share of American national income has shrunk while the share that goes to profits has expanded.

There are now tantalizing signs that labor may finally be gaining ground on capital.

Workers in the first quarter of the year recorded their biggest annual gain in pay since 2008, evidence that a steady decline in unemployment is finally having an effect on paychecks.

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That’s because, according to latest numbers from the Bureau of Labor Statistics [pdf], the wage and salary portion of the employment cost index increased by 0.7 percent during the first quarter of 2015 and 2.6 percent for the 12-month period ending March 2015 (as one can see in the chart above), which was higher than the 1.6-percent increase in March 2014.

fredgraph

But we have to remember that workers’ share of income has been declining for decades, which means that a big chunk of the growth that has occurred during that period has gone to profits, shareholders, and a tiny group at the top of the distribution of income.

It’s going to take much more than a 2.6-percentage annual rise in the wage and salary component of the employment cost index—even if sustained for many years—for workers to really gain ground on capital.

USA-POLICE-BALTIMORE-EQUALITY

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While relative calm has returned to the streets of Baltimore, because of the curfew, the underlying socioeconomic problems haven’t disappeared overnight.

Far from it. The neighborhood in which Freddie Gray was killed, Sandtown-Winchester/Harlem Park, is profoundly segregated (97 percent black), poor (35.4 percent of households live in poverty, and 51.2 percent have incomes less than $25,000), and unemployed (at a rate of 24.2 percent).

As Jana Kasperkevic explains,

After the unrest in Baltimore is over, the clean-up might get rid of the debris, but the inequality will remain.

Chart of the day

Posted: 24 April 2015 in Uncategorized
Tags: , ,

airbus-income

This is what the three-class seating on an Airbus A330-300 would look like if it were reconfigured to represent the distribution of income in the United States:

In Air Gini’s three-class layout, some things look familiar and some things are a bit different. Economy Class makes up just under eighty percent of the passengers. Passengers seated there correspond to everyone who makes less than about $97,000 a year. Their share of total income in the US is just below fifty percent, and thus so is their share of the seating space. On the regular airline it was about fifty eight percent, so for these working stiffs the new arrangement is even more cramped than on our ordinary international flight. Economy Class passengers on Air Gini should expect less overhead bin space and more passive-aggressive interactions with the guy in front of them who insists on reclining his seat.

Up with the managers, meanwhile, things have become more compressed, too. Business Class travelers are just over eighteen percent of passengers, but now they get only fifteen percent of the space. That’s obviously still much better than Economy class, but it’s down from the thirty percent or so they had in the original plane. These fliers are almost all in the top quintile: in real-life terms, they correspond to everyone from just below the 80th percentile of the US income distribution up to just above the 96th percentile. Roughly, that’s households making between $97,000 and $280,000 a year. Yet many of them feel a little angry about how little space they have. Strange though it seems, some of those in the seats closest to the front of their section even feel somewhat poor—at least by comparison to those a bit further up the plane. Air Gini understands their situation and compensates them with a complimentary in-flight snack.

What has happened to make Business Class more cramped? The answer is to be found in Ruling Class. Sorry, I mean, First Class. On Air Gini, those eight most-valued passengers—three and a half percent of those on board—get thirty five percent of the available seating space. That’s a lot of legroom. So much, in fact, that as First Class passengers have spread out to take up the first third of the plane, Air Gini has been forced to replace the luxurious Business Class seats in the real-life configuration with still-comfortable but noticeably smaller chairs.

Not to worry, though. Air Gini’s eight First Class passengers can really enjoy themselves, which is the important thing. And yet, even here at the head of the aircraft, Air Gini’s layout hints that inequality may extend all the way up to the flight deck. Two of the first class seats are close to the front of Business Class, and behind a bulkhead. Awkward. Those passengers make about $300,000 a year. The passenger in the very front row, meanwhile, makes a hell of a lot more than that and has even more room to relax in than his peers. All things considered, you have to wonder exactly who is flying this plane—and more importantly, perhaps, who owns it.

Kenworthy

There are a couple of things worth noting from this chart:

1. It’s time for those on the Left to stop taking Germany as the shining example of how things could be better for workers in the United States if only we followed its example. As Eduardo Porter explains,

In Germany — often portrayed as the gold standard of the postindustrial labor market — the entire bottom half of households experienced shrinking earnings from work. They only got ahead because of rising government benefits.

2. The United States does less than any of the other countries on the list to improve the conditions, via net government transfers, of low-wage workers.

We know that real wage increases for most U.S. workers (including those near the bottom) have been meager since the late 1970s and, even with government assistance (such as tax credits, food stamps, and cash assistance), the increase in workers’ standards of living is far behind their productivity, the profits they create for the corporations where they work, or the amount of income captured by those at the very top.

Bui

Here, in one chart (by Quoctrung Bui), is a summary of changes in the distribution of income from the early-twentieth century (1913) to the present (2012) in the United States.

The story is, grosso modo, one of declining inequality until the late-1970s (with average incomes of the bottom 90 percent growing much faster than those of the top 1 percent) and growing inequality thereafter (with stagnant incomes of the bottom 90 percent and huge gains at the top).

We can also see that sharp right turn by calculating the 1:90 ratio (the ratio of average incomes of the top 1 percent to the average incomes of the bottom 90 percent, both including capital gains and expressed in 2013 dollars). They are:

1917: 26.8*

1943: 16.6

1973: 12.4

2013: 35.36

As Bui explains,

In theory, it should be possible for incomes to rise for everyone at the same time — for the gains of economic growth to be broadly distributed year after year. But the takeaway from these graphs is that since World War II, that’s never really happened in the U.S.

Bui’s chart is basically a summary of the information contained in these two charts (from the World Top-Incomes Database):

chart copy chart

 

*The first year for which data for the bottom 90 percent are available.