Posts Tagged ‘chart’

Chart of the day

Posted: 20 May 2016 in Uncategorized
Tags: , , ,

CEO-worker

The United States’ top 500 chief executive officers managed to capture 335 times the average worker’s wage last year, taking home $12.4 million on average, according to a new report by the AFL-CIO. That average CEO pay was a whopping 819 times the wage of a worker earning the federal minimum wage.

Here’s the list of the top 25 CEOs by pay—from Joe Kiani of Massimo Corp (at more than $199 million) to Jeff Immelt of GE (at just under $33 million):

CEOs

fredgraph-1fredgraph

If you look very closely, you’ll see an ever-so-slight turnaround in the capital and labor shares in the past year.

The profit share of national income has fallen (from 15.4 percent in the second quarter to 13.7 percent in the last quarter of 2015) while the wage share has risen (from 49.6 percent in 2014 to 50.4 percent in 2015).

So, Neil Irwin is correct:

In the last two or three years, as the economy has firmed up, workers have regained some of that bargaining power they lost in the recession. But they have not, not at this point at least, gained the power they lost over the last three decades.

Indeed, the profit share remains much higher than it was 30 years ago (6.8 percent in the third quarter of 1986) and the wage share much lower (it was 54.6 percent in 1986).

Remember, then, before releasing those balloons, the history of capitalist instability. It tells us that an economic downturn will—once again, with a regularity that continues to escape the notice or understanding of mainstream economists and politicians—reverse those temporary capital losses and labor gains.

4-4

A new study by Barry Bosworth, Gary Burtless, and Kan Zhang (pdf, as discussed here) reveals that (looking at mid-career earnings) the life expectancy gap between those at the top and bottom of the distribution is growing.

For example (from the bottom half of the chart above), for 50-year old women in the top one-tenth of the income distribution, women born in 1940 could expect to live almost 6.4 years longer than women in the same position in the income distribution who were born in 1920. For 50-year old women in the bottom one-tenth of the income distribution, they found no improvement at all in life expectancy.

Longevity trends among low-income men were not much better: Men at the bottom saw only a small improvement in their life expectancy (of 1.7 years) compared to a much large increase for men at the top (8.7 years). So, the life-expectancy gap between low-income and high-income men increased just as fast as it did between low- and high-income women.

This growing gap in life expectancy has lots of different implications, such as the long-presumed progressivity of Social Security payouts (since low-wage contributors receive monthly checks that are a higher percentage of the monthly wages they earn during their careers than high-income participants). But, according to this and similar studies, we’re learning that the growing mortality differences between rich and poor are offsetting the redistributive tilt in Social Security’s benefit formula.

Perhaps even more important, the mortality gap is challenging our long-held expectation that successive generations live longer than the generations that preceded them. For the past three decades, however, improvements in average life spans at the bottom of the income distribution have been negligible while those at the top continue to grow.

What this finding suggests is that it’s not just income and wealth but life itself that has grown starkly more unequal in the United States.

fig1

John Komlos has completed a new study, in which he attempts to improve upon the Congressional Budget Office’s (post-tax, post-transfer) estimates of the growth of U.S. income for the 1979-2011 period. The results are for quintiles and, within the top fifth, for percentiles. (The high estimates are based on using the personal consumption expenditures price index to deflate the modified CBO data, while the low estimates use the consumer price index).

The high estimates of the growth of median income are not changed markedly from the original CBO estimates. But the results are dramatic:

Growth rates varied considerably across the income distribution. The lowest quintile grew well enough at 1.0% per annum, although the dollar value of its average income was still a meager $17,900, which was barely the poverty threshold for a family of three. Moreover, their income grew at a much slower rate than that of the 5th quintile during this 32-year period. Hence, the income of the 1st quintile declined from 15% of the income of the upper quintile to just 10%. In addition, the growth in income of the lower-middle class (2nd quintile) and that of the middle class (3rd quintile) was the slowest, growing at a modest rate of 0.6% to 0.7% per annum, thereby reinforcing the general impression of a floundering middle class even with these high estimates. However, the upper-middle class (quintile 4) did better, growing at 1.1% per annum, but it also fell behind the 5th quintile which grew almost twice as rapidly, at a rate of 2.1%. Moreover, there were noteworthy differences even within the 5th quintile, insofar as the income of the top 1% grew at an “astronomical” pace of 3.9% per annum, so that in the course of this period it grew from 7 times to 14 times the value of the median income. Only the income of the 5th quintile grew faster than the median income. In addition to the growth in median income which was between 0.9% and 1.4% per annum one can also use the average of the five growth rates across the five quintiles as a measure of central tendency for the whole population. Such an average would lower the estimated growth rates of income for the whole population to between 0.6% and 1.1% per annum. (references omitted)

The differences are even more stark in the case of the low estimates:

The low growth rate estimates were 0.5% less than the high ones and, therefore, were quite subdued across the board with the exception of the 5th quintile which grew at a reasonable rate of 1.6% per annum. The estimated growth rates of the 2nd and 3rd quintiles were hardly distinguishable from (0.1%-0.2%). They differed the most from the high estimates in percentage terms. In fact, only quintile 5 registered an exceptional performance of 1.6% and within it the income of the top 1% grew at the stellar rate of 3.4%. In the main, all three middle class quintiles were left very far behind with only quintile 4 advancing slightly at a rate of 0.6% per annum. (references omitted)

We have, then, two major results from Komlos’s analysis: First, the “hollowing out” of the middle-class (as we can see from the fact that the incomes of the second and third quintiles consistently lagged behind those of the other quintiles). And, second, the only real growth occurred at the very top (since the incomes of the top 1 percent increased between 188 and 240 percent). The result was that the ratio between the top 1 percent and the bottom quintile rose dramatically, from 20.9 in 1979 to 51.2 in 2011 (an increase of 144 percent).

Is there any more stark indicator of the spectacular growth of inequality in the United States?

4-28-16tax-f1

The folks at the Center on Budget and Policy Priorities have analyzed the distributional effects of the tax-cut plans proposed by Republican candidates Donald Trump and Ted Cruz.

Here’s what they found (for 2025, when their plans would be fully implemented):

  • Just 0.8 percent of the population would live in households with incomes exceeding $1 million, but such households would receive 38 percent of the Trump tax cuts. This would be greater than the share of the tax cuts (32 percent) that the bottom 80 percent of the population would receive.
  • Millionaires would receive 47 percent of the Cruz tax cuts, or more than double the share of the tax cuts (19 percent) the bottom 80 percent of the population would receive. In fact, under the Cruz plan, millionaires would receive a larger share of the tax cuts than the bottom 95 percent of the population.

Even more:

  • The richest 0.1 percent of the population (those with annual incomes exceeding $5.2 million in 2016 dollars) would receive tax cuts averaging $1.4 million under Trump and $1.8 million under Cruz. Under both plans, this segment of the population would receive significantly larger percentage increases in after-tax income (18 percent and 23 percent, respectively) than any other group.
  • These households would receive 18 percent of the tax cuts under the Trump plan—more than the plan’s combined tax cuts for the bottom 60 percent of the population. Under the Cruz plan, these multi-millionaires would receive 23 percent of the tax cuts, a larger share of the tax cuts than the bottom 80 percent of the population would receive.

 

harvard4

We already knew that Millenials are “generation screwed.” Now we know, thanks to the latest Harvard Public Opinion Project survey, that the majority (51 percent) does not support capitalism—and even fewer (just 19 percent) identify as capitalists.*

It also seems the members of Generation Y don’t see socialism as the preferred alternative (only 33 percent support it)—but at least those who have participated in Democratic primaries have been voting overwhelmingly for the democratic socialist candidate.

 

*A subsequent survey that included people of all ages found that somewhat older Americans also are skeptical of capitalism. Only among respondents at least 50 years old was the majority in support of capitalism.

01_percent_food_insecure_households

According to a new study by Diane Whitmore Schanzenbach, Lauren Bauer, and Greg Nantz (citations omitted),

In 2014 more than 15.3 million children—or more than one in five—lived in a food-insecure household in the United States. This is a marked increase from the years prior to the Great Recession, when an average of 12.9 million children lived in a food-insecure household. . .

After the onset of the Great Recession all household types saw sharp increases in rates of food insecurity, with households with children experiencing the largest increase. From 1998 to 2007 an average of 15.7 percent of households with children, 10.8 percent of households overall, and 6 percent of households with seniors were food insecure. The average from 2008 to 2014 was roughly 4 percentage points higher for households overall and for households with children, and about 2 percentage points higher for households with seniors. These changes amount to millions more Americans living in food-insecure households. Despite recent improvements in the economy, food insecurity rates are still higher than they were prior to the Great Recession, potentially reflecting higher rates of poverty and increased costs of other necessities such as housing.

It’s been a spectacular recovery from the Great Recession for a tiny group at the top. For millions of the nation’s children and working-class families, well, it’s meant something quite different—including a great deal of food insecurity.