Tag Archives: Wealth inequality

The Roberts Court: a new Gilded Age and a return to the long-discredited Lochner Era

Jedediah Purdy, professor of law at Duke, recently wrote at the New York Times, The Roberts Court Protects the Powerful for a New Gilded Age:

Faith in courts runs deep in the American liberal imagination. Remembering Brown v. Board of Education, Roe v. Wade and the recent marriage-equality decisions, we keep hoping that wise and fair-minded judges will protect the vulnerable and lead the country toward justice.

Recent decisions upholding President Trump’s travel ban and Texas’ racially skewed voting districts are body blows to this optimism. They are unhappy reminders that for much of American history, the Supreme Court has been a deeply conservative institution, preserving racial hierarchy and the prerogatives of employers.

When it comes to economic inequality, today’s Supreme Court is not only failing to help but is also aggressively making itself part of the problem in a time when inequality and insecurity are damaging the country and endangering our democracy.

Under Chief Justice John Roberts, the court has consistently issued bold, partisan decisions that have been terrible for working people. Janus v. American Federation of State, County and Municipal Employees, was one of them.

Just hours after that decision, Justice Anthony Kennedy announced his retirement. With this “swing” vote gone, Chief Justice Roberts is now likely to take even more control over the direction of issues related to economic inequality — a direction that is earning him a legacy as chief justice of bosses, not workers.

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‘Economically forgotten’ have much in common with America’s poor

Axios.com has an Exclusive: 40% in U.S. can’t afford middle-class basics:

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Data: United Way; Chart: Chris Canipe/Axios

At a time of rock-bottom joblessness, high corporate profits and a booming stock market, more than 40% of U.S. households cannot pay the basics of a middle-class lifestyle — rent, transportation, child care and a cellphone, according to a new study.

Quick take: The study, conducted by United Way, found a wide band of working U.S. households that live above the official poverty line, but below the cost of paying ordinary expenses. Based on 2016 data, there were 34.7 million households in that group — double the 16.1 million that are in actual poverty, project director Stephanie Hoopes tells Axios.

Why it matters: For two years, U.S. politics has been dominated by the anger and resentment of a self-identified “forgotten” class, some left behind economically and others threatened by changes to their way of life.

  • The United Way study, to be released publicly Thursday, suggests that the economically forgotten are a far bigger group than many studies assume — and, according to Hoopes, appear to be growing larger despite the improving economy.
  • The study dubs that middle group between poverty and the middle class “ALICE” families, for Asset-limited, Income-constrained, Employed. (The map above, by Axios’ Chris Canipe, depicts that state-by-state population in dark brown.)
  • These are households with adults who are working but earning too little — 66% of Americans earn less than $20 an hour, or about $40,000 a year if they are working full time.

When you add them together with the people living in poverty, you get 51 million households. “It’s a magnitude of financial hardship that we haven’t been able to capture until now,” Hoopes said.

By the numbers: Using 2016 data collected from the states, the study found that North Dakota has the smallest population between poverty and middle class, at 32% of its households. The largest is 49%, in California, Hawaii and New Mexico. “49% is shocking. 32% is also shocking,” Hoopes said.

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Poor People’s Campaign kickoff on Monday

Here is something you can persuade your local church congregation into supporting and participating in. After all, WWJD?

On Monday, thousands of low-wage workers, clergy and activists will gather at the U.S. Capitol and more than 30 statehouses across the country to kick off the Poor People’s Campaign (organization website), a civil disobedience movement that aims to push the issue of poverty to the top of the national political agenda. Here’s how the Poor People’s Campaign aims to finish what MLK started:

Inspired by a 1968 initiative planned by the Rev. Martin Luther King Jr., the multiracial coalition will involve 40 days of protests and direct actions to highlight the issues of systemic racism, poverty, ecological devastation, the war economy and militarism. Organizers are pitching it as one of the largest waves of nonviolent direct action in U.S. history.

About 41 million Americans live below the official poverty line, the majority of them white. Organizers with the Poor People’s Campaign say official measures of poverty are too narrow, and the number of poor and low-income Americans expands to 140 million if food, clothing, housing and utility costs, as well as government assistance programs, are taken into account.

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VP Mike Pence in Phoenix today on GOP Tax Scam Tour

A”whiter shade of pale” Mike Pence is in Phoenix today for the GOP tax scam tour. Vice President Mike Pence visits Phoenix today on tax policy tour:

Pence will arrive shortly before noon Tuesday before meeting with Republican Arizona Gov. Doug Ducey.

Arizona Republican U.S. Rep. Andy Biggs and local business people are expected at the “Tax Cuts to Put America First” gathering at a Tempe hotel.

Maybe an enterprising reporter will ask Pence about Senator Marco Rubio’s view of the GOP tax scam. The Economist reports, Marco Rubio offers his Trump-crazed party a glint of hope (snippet):

“There is still a lot of thinking on the right that if big corporations are happy, they’re going to take the money they’re saving and reinvest it in American workers,” he says. “In fact they bought back shares, a few gave out bonuses; there’s no evidence whatsoever that the money’s been massively poured back into the American worker.”

Arguing that the tax bill’s corporate tax rate cuts aren’t benefiting the average worker is exactly the opposite of what VP Pence will say today about the GOP’s only major legislative “accomplishment.”

For once, “Little Marco,” as Pence’s boss denigrates him, is right. The New York Times reported this week, Investment Boom From Trump’s Tax Cut Has Yet to Appear:

Republicans sold the 2017 tax law as “rocket fuel” for American investment and growth, saying that corporations — flush with cash from lower tax rates — would channel money back into the economy by building factories and offices and investing in equipment, which would help companies grow and provide winnings for workers.

Economists say that may happen as companies readjust their spending plans over the coming months to take advantage of the new law, and they note that it is too early to tell how much the tax law will spread into the broader economy.

But, so far, hard evidence of such an acceleration has yet to appear in economic data, which show more of a steady investment roll than a rapid escalation. And while there are pockets of the economy where investment is picking up — among large tech companies and in shale oil business, for example — corporate spending on buying back stock is increasing at a far faster clip, prompting a debate about whether the law is returning money to the overall economy or just rewarding a small segment of investors.

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December jobs report disappoints, a market correction is on the horizon

If you were hoping to see the U.S. job market end 2017 on an encouraging note you were disappointed today. And no, it was not due to extreme winter weather (that is going to be noted in January’s jobs report).

Steve Benen has the December jobs report. Job growth slows to a six-year low in Trump’s first year:

The Bureau of Labor Statistics reported today that the economy added 148,000 jobs in December, which is down a fair amount from the previous two months, and falls short of expectations. That said, the unemployment rate held steady at 4.1%, which is very low.

DecemberJobs

The revisions from the previous two months were mixed, with October’s totals revised down and November’s totals revised up. Combined, they pointed to a net loss of 9,000 jobs, which adds to the discouraging nature of today’s report.

Providing some additional context, now that we have data for all of the previous calendar year, we can note that the U.S. added 1.84 million jobs in 2011, 2.19 million jobs in 2012, 2.33 million in 2013, 3.11 million in 2014, 2.74 million in 2015, 2.24 million in 2016, and 2.05 million in 2017.

Or put another way, while Donald Trump’s first year as president has been pretty good overall for job creation, Americans nevertheless saw the slowest job growth in six years. (Note, the Bureau of Labor Statistics will revise the 2017 data once more, making the available figures preliminary.)

Here’s another chart, this one showing monthly job losses/gains in just the private sector since the start of the Great Recession.

DecemberPrivate

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2018 World Inequality Report: inequality in U.S. is a result of deliberate policy decisions (updated)

Christopher Ingraham at the Washington Post reports, U.S. lawmakers are redistributing income from the poor to the rich, according to massive new study:

Back in 1980, the bottom 50 percent of wage-earners in the United States earned about 21 percent of all income in the country — nearly twice as much as the share of income (11 percent) earned by the top 1 percent of Americans.

But today, according to a massive new study on global inequality, those numbers have nearly reversed: The bottom 50 percent take in only 13 percent of the income pie, while the top 1 percent grab over 20 percent of the country’s income.

Since 1980, in other words, the U.S. economy has transferred eight points of national income from the bottom 50 percent to the top 1 percent.

That trend is even more remarkable when you set it against comparable numbers for wealthy nations in Western Europe. There, the bottom 50 percent earn nearly 22 percent of the income in those economies, while the top 1 percent take in just over 12 percent of the money.

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The income situation in Western Europe today, in other words, is similar to how things were in the United States nearly 40 years ago.

The 2018 World Inequality Report, written by a team of leading international economists including Thomas Piketty of “Capital in the Twenty-First Century” fame, finds that the rise of income inequality in the United States is “largely due to massive educational inequalities, combined with a tax system that grew less progressive despite a surge in top labor compensation since the 1980s, and in top capital incomes in the 2000s.”

Since the 1970s the price of higher education has skyrocketed, putting the price of tuition out of reach for many low-income students. Over the same time, the tax code became more generous to the wealthiest Americans — the top marginal income-tax rate fell from 70 percent in 1980 to 39.6 percent in 2017, taxes on capital gains fell by more than half from the mid-1970s to the mid-2000s, and the estate tax has fallen as well.

Those changes have made it easier for high-income Americans to grab more and more of the income pie in any given year.

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