Matt Wuerker, Daily Kos, 7/17/15:
Tag Archives: economy
by Lisa Longo, 9/28/14
How does the economy work and what does the minimum wage have to do with anything? Well, it is a very simple, and a very complicated, question.
Let’s start with the simple part.
I’ve done a talk called “The True Cost of Cheap Sh$t”, and in it, I use the example of socks.
You can buy a bag of a dozen socks at a big box store like a Wal-Mart, for $11.64. That is less than $1 per pair. Now, to maintain those low, low prices, Wal-Mart has to have some basic policies so they can afford to profit while selling such cheap socks. The people who work at Wal-Mart therefore can’t make very much, many make just above minimum wage and many don’t have health care, sick or vacation days, pensions or other benefits.
So how do they do it? And how do their employees live on that low wage? Well, this is where it gets a little complicated, the cost for the low wages, and those low, low prices, are paid by taxpayers, to the tune of $6.2 BILLION a year. …
continue reading at Lisa Longo
by Paul Krugman, New York Times, JULY 3, 2014
You often find people talking about our economic difficulties as if they were complicated and mysterious, with no obvious solution. As the economist Dean Baker recently pointed out, nothing could be further from the truth. The basic story of what went wrong is, in fact, almost absurdly simple: We had an immense housing bubble, and, when the bubble burst, it left a huge hole in spending. Everything else is footnotes.
And the appropriate policy response was simple, too: Fill that hole in demand. In particular, the aftermath of the bursting bubble was (and still is) a very good time to invest in infrastructure. In prosperous times, public spending on roads, bridges and so on competes with the private sector for resources. Since 2008, however, our economy has been awash in unemployed workers (especially construction workers) and capital with no place to go (which is why government borrowing costs are at historic lows). Putting those idle resources to work building useful stuff should have been a no-brainer.
But what actually happened was exactly the opposite: an unprecedented plunge in infrastructure spending. Adjusted for inflation and population growth, public expenditures on construction have fallen more than 20 percent since early 2008. In policy terms, this represents an almost surreally awful wrong turn; we’ve managed to weaken the economy in the short run even as we undermine its prospects for the long run. Well played!
And it’s about to get even worse. The federal highway trust fund, which pays for a large part of American road construction and maintenance, is almost exhausted. Unless Congress agrees to top up the fund somehow, road work all across the country will have to be scaled back just a few weeks from now. If this were to happen, it would quickly cost us hundreds of thousands of jobs, which might derail the employment recovery that finally seems to be gaining steam. And it would also reduce long-run economic potential.
How did things go so wrong? …
continue reading and follow links at New York Times
by Robert Reich, Robert Reich’s blog, April 5, 2013
Bad news on the economy. It added only 88,000 jobs in March – the slowest pace of job growth in nine months.
While the jobless rate fell to 7.6 percent, much of the drop was due to the labor force shrinking by almost a half million people. If you’re not looking for work, you’re not counted as unemployed.
That means the percentage of working-age Americans either with a job or looking for one dropped to 63.3 percent — its lowest level since 1979.
The direction isn’t encouraging. The pace of job growth this year is slower than its pace last year.
What’s going on? The simple fact is companies won’t hire if consumers aren’t buying enough to justify the new hires. And consumers don’t have enough money, or credit, or confidence to buy enough.
It’s likely Americans are beginning to feel the pinches of January’s hike in the payroll tax combined with the government budget cuts known as the sequester. Increases in gas prices haven’t helped. All are taking money out of the pockets of most people – whose job situation remains precarious. So they can’t and won’t buy much.
One indicator: Retailers cut their staffs in March — by 24,100.
Yes, the stock market has rebounded. But only a small portion of Americans are affected by the rebound. The richest 1 percent own 35 percent of all shares of stock; the richest 10 percent own 90 percent.
And, yes, housing prices have stopped falling, and construction of new homes has picked up. The construction sector added 18,000 jobs in March.
But the turnaround in housing isn’t because prospective homeowners have been able to get new mortgages. It’s because investors are buying or building homes to rent. And a buoyant rental market doesn’t make most people feel wealthier.
Perhaps the most disturbing aspect of all this is that we’re in the fifth year of a supposed economic recovery from the second-worst economic downturn of the past century, and we’re still not nearly back on track. Instead, we’ve had the most anemic recovery in history.
A Gallup survey released Thursday showed that the percentage of Americans holding full-time jobs has remained essentially unchanged over the past year. With 12 million people out of work and another 8 million holding part-time jobs who’d rather have full-time ones, this just isn’t nearly good enough.
We’re experiencing the burden of austerity economics and the continued scourge of widening inequality. Both are squeezing average Americans. Yet it’s impossible to have a buoyant and sustained recovery without a large and growing middle class.