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How to Get $500 Million: Play Powerball or Become a CEO Print
Written by Nicole Woo   
Wednesday, 28 November 2012 16:20

Across the nation, lines are winding down streets and around corners as folks wait to buy a ticket for Powerball's $550 million dollar jackpot, the second-largest in U.S. history.  While that seems like an unimaginable amount of riches for typical Americans, it's what many corporate CEOs regularly make in a just few years.

The Institute for Policy Studies (IPS) recently exposed "The CEO Campaign to ‘Fix’ the Debt: A Trojan Horse for Massive Corporate Tax Breaks" and listed the taxable compensation of the CEOs involved in it.  The list is topped by Leon Black of Apollo Global Management, a private equity fund. He made $215 million last year and was in the news for spending $120 million on a single famous painting.

IPS also released "Executive Excess 2012: The CEO Hands in Uncle Sam's Pocket," highlighting the corporate executives who've reaped the highest pay.  That list is led by James Mulva of ConocoPhillips, who took home almost $146 million in taxable pay in 2011.

The Associated Press analyzed the compensation packages at S&P 500 companies to identify the 50 highest-paid CEOs. Number one on that list is David Simon of the Simon Property Group, who made $137 million last year.

And Apple's Tim Cook recorded the highest compensation on record in the Wall Street Journal's annual CEO pay survey. In August 2011, he was awarded a $378 million annual pay package, mostly from a million shares of Apple stock. Since then, Apple's share price has exploded, so that part of his pay is today worth $583 million (more than the Powerball jackpot!).

Add up the pay of any three of the CEOs above, and you get about $500 million (or much more) for just one year of work. They don't need Powerball to get hundreds of millions of dollars; they just need to keep being CEOs.

While it's nice to dream about what we'd do if any of us won the lottery, this is also a good day to think about how corporate CEO pay packages have risen so unbelievably sky-high.  And while you're at it, check out the IPS reports for concrete proposals to bring them back to down to earth.

 
Sign Language from the Invisible Hand? How Do We Know That We Need to Reduce the Deficit by $4 Trillion Over the Next Decade Print
Written by Dean Baker   
Monday, 26 November 2012 22:10

Millions are no doubt wondering how we know that the government has to reduce deficits by $4 trillion over the next decade. This appears to be the magic number that underlies the budget discussions between President Obama and the Republicans in Congress, and it is widely accepted by Serious People everywhere, but where did this magic number come from?

One place where it gained prominence was in the report authored by Morgan Stanley director Erskine Bowles and former senator Alan Simpson, the co-chairs of President Obama's deficit commission. However, many other people have touted this $4 trillion number as the appropriate limit on the country's debt burden.

The attachment to a particular debt number seems more than a bit peculiar for a number of reasons. The first and most obvious is that the financial markets don't seem the least bit bothered by the current levels of debt and prospective future levels of debt. They presumably understand what most people in the Washington policy debate do not, the high deficits of the last 5 years are the result of an economic collapse, not profligate spending or huge tax cuts. This is why the interest rate on long-term Treasury bonds is at post-war lows.

The markets recognize that if the economy recovered, then deficits would again be at manageable levels. In the mean time, low interest rates reflect the fact there is little demand for capital.

However beyond the economic facts, the Washington debt mongers also seem confused on what the debt means. The proximate burden of the debt on the government is the amount of interest that we pay. Instead of being very high, this is in fact near a post-war low. 

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The States and Full Employment Print
Written by John Schmitt   
Monday, 26 November 2012 13:45

State governments spend a lot of money — usually in the form of tax breaks for companies — trying to bring jobs to their states. The problem with this kind of race-to-the-bottom strategy is that the most they can hope to achieve is to shift jobs from one state to another, leaving total national employment unchanged.

When it comes to state employment, the real drivers of success or failure lie almost completely beyond the reach of state governments. The overwhelming determinants of state employment are monetary and fiscal policy, which are set entirely at the federal level.

The chart below helps to illustrate the point. The third and longest bar in the figure shows the unemployment rate in each of the 50 states and the District of Columbia in 2010, the worst year in the labor market in the recent recession. Not only was the overall unemployment rate high (9.6 percent), but the range in unemployment rates across states was large – from under 4 percent in North Dakota, to over 12 percent in California, Michigan, and Nevada.

Click for larger version

state-unemployment-2012

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Part-time Work Isn't Driving Inequality Print
Written by John Schmitt and Milla Sanes   
Tuesday, 20 November 2012 15:00

parttimeblog

In 2012, about one-in-five workers is in a part-time job (following the Bureau of Labor Statistics definition of working fewer than 35 hours per week). The rate is higher for women (26.1 percent in October 2012) than for men (13.5 percent), but what is most striking about the chart below is the trend over time in part-time work. Over the last three decades, as economic inequality has been climbing, the overall rate of part-time employment (the top line in the chart) has barely changed.

Before the jump in part-time employment in 2008, which was entirely a function of the big increase in involuntary part-time employment related to the Great Recession, part-time employment was actually on a slow decline. Given that overall part-time employment was becoming less important for almost 30 years (voluntary part-time work was flat, but involuntary part-time work was on the decline), it is hard to argue that part-time work has played an important role in rising inequality.

What is more, as the chart shows, part-time work was rising between the mid-1960s and 1980, a time when economic inequality was basically flat.

The problem facing workers isn't a rise in part-time work. The problem is the increasing precarity of full-time work.

 
Hostess: Challenges Facing Unions when PE Doesn't Deliver Print
Written by Eileen Appelbaum   
Tuesday, 20 November 2012 11:19

If there is one thing about the Hostess failure that everyone can agree on, it’s that – in the words of Term Sheet’s Dan Primack – the bakery company’s management was ‘dunderheaded.’ When Ripplewood Holdings bought Hostess out of bankruptcy in February 2009, the company was in danger of failing. Unable to adapt to consumer demand for healthier products and slow to adopt new technologies, Hostess had been in trouble since the early 2000s and in bankruptcy protection since September 2004. As it prepared its takeover offer, Ripplewood presented itself as a hot shot private equity firm that could turn around the ailing company and save its iconic brands. Both Hostess’ largest creditors and its major unions were persuaded.

Ripplewood negotiated major concessions with the bakery company’s two major unions – the Teamsters and the Bakery Workers. Silver Point Finance and Monarch Alternative Capital, Hostess’ largest creditors, set the terms under which they would lend Ripplewood money. And Ripplewood knew the dimensions of the huge debt burden Hostess would carry as it emerged out of bankruptcy. But Ripplewood had a credible plan for saving Hostess that it believed would work – and that it sold its creditors and unions on.

For all the fanfare, Ripplewood failed miserably in implementing the turnaround and misfired badly on execution. The company was poorly managed, failed to introduce successful new products, did not invest in new equipment and technology, and faced falling demand for its products and rising debt and interest payments. Managers took steps to line their own pockets as the company grew increasingly troubled. The company cited sales revenue of $2.5 billion in 2011 as proof that demand remained strong and it had done a good job, but failed to mention that sales revenue was down 11 percent from 2008 and 28 percent from 2004.

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No Cupcake: Workers Turn Down Bad Deal from Hostess Print
Written by Dean Baker   
Friday, 16 November 2012 17:33

There have been a number of news stories about the closing of Hostess’ factories and plans to liquidate the company in the wake of the refusal of one of its unions to accept reductions in pay and benefits and other concessions. It appears as though this will leave Hostess’ 18,000 workers without a job by the end of the year.

While this is certainly a bad story for the workers, it is not clear that they had a better route available to them. It is important to understand a bit about the history of Hostess in assessing whether the workers and their union made the right call.

Hostess has been relying on pretty much the same mix of products for decades. While other companies have sought to adjust to changing consumer tastes, Hostess still gets the vast majority of its revenue from a relatively small number of products that it has been selling in largely the same form since the sixties. This failure to innovate was the main reason that the company first went into bankruptcy in 2004.

Hostess remained in bankruptcy for five years until it was brought out of bankruptcy in February of 2009 by Ripplewood Holdings, a private equity company. Remarkably, it exited bankruptcy with nearly $670 million in debt, almost 50 percent more than the $450 million it owed when it went into bankruptcy.

Usually companies use bankruptcy to shed debt. With Hostess the opposite was true. This meant that Ripplewood was taking a heavily leveraged gamble. If the company survived, it would get a very high return on its investment. However there was a strong likelihood that the company would not be able to make it given its extraordinary debt burden and the weakness of the economy.

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Labor Market Policy Research Reports, November 10 – November 16, 2012 Print
Written by Mark Azic   
Friday, 16 November 2012 17:13

Here’s a roundup of labor market research reports released in the past week:

Center for American Progress

Congress Should Extend Emergency Unemployment Benefits

Sarah Ayres

Ensuring Benefits Parity and Gender Identity Nondiscrimination in Essential Health Benefits

Kellan Baker and Andrew Cray

There are Significant Business Costs to Replacing Employees

Heather Boushey and Sarah Jane Glynn

Center on Budget and Policy Priorities

Pulling Apart: A State-by-State Analysis of Income Trends

Elizabeth McNichol, Douglas Hall, David Cooper, and Vincent Palacios

Political Economy Research Institute

The Rich Get Richer: Neo-Liberalism and Soaring Inequality in the United States

Tim Koechlin

Wage-Led Growth: Theory, Evidence, Policy

Englebert Stockhammer and Özlem Onaran

 
Help CEPR Educate the Public on the Real Issues Print
Written by Dawn Lobell   
Friday, 16 November 2012 12:45

As the holiday season approaches, CEPR decided that the best gift we could give would be to offer a free Econ 101 class to all those in need.  And since there are so many in need, we had a hard time deciding where to begin…

Erskine Bowles gets an F

We decided to start with the deficit hawks, that group of powerful elites who have continuously misled the public, the press, and the policymakers on the true nature of U.S. debt (while also convincing millions of Americans that Social Security won’t be there for them”).

With your help, we can teach the likes of Erskine Bowles, Alan Simpson, Peter Peterson and the rest of the class of 2013 these basic economic concepts:

Read more...

 

 
Shameless CEO Campaign Sends Debt-Laden Caesar’s CEO to Lecture the 99% on Fixing Debt Print
Written by Eileen Appelbaum   
Thursday, 15 November 2012 12:40

If there is one thing the recent presidential election made clear, it is that the 1% have no shame. So it’s no surprise that CEOs are drumming up "fiscal cliff" hysteria to protect their wealth. Their campaign to ‘Fix the Debt’ wants to retain the Bush-era tax cuts for the wealthy and expand tax breaks for corporations while fixing the debt through a Medicare/Medicaid system that "spends considerably less."  But choosing Caesar’s Entertainment CEO Gary Loveman to deliver their message on NPR’s ‘All Things Considered’ demonstrates once again how shameless the very rich are in their contempt for the 99% who depend on Medicare and Medicaid – and for the ‘elites’ who get their news from NPR. As for NPR, let’s give folks there the benefit of the doubt and just say they are clueless.

The CEO campaign sent Loveman to impress upon the rest of us the importance of fixing the debt so CEOs wouldn’t be forced to lay off millions of us and to make sure we understood the necessity of preserving tax breaks for the ‘job creators.’ You might think they would have chosen a CEO who leads a company that has created value for the U.S. economy and jobs for American workers. But you would be wrong.  Gary Loveman is the CEO of a company loaded up with debt by private equity that has ripped off its creditors, disappointed its shareholders, and laid off workers.

Loveman was CEO and President of Harrah’s Entertainment (now known as Caesar’s Entertainment Corporation), the world’s largest casino company with 30,440 unionized employees when it was acquired by private equity firms, the Apollo Group and the Texas Pacific Group (TPG) in 2006. The PE firms paid $90 a share to take the company private. By June 2007, the casino company’s long-term debt had more than doubled to $23.9 billion, resulting in an interest bill of $2.1 billion. Piling up debt magnifies private equity’s returns in good economic times, but it raises the risks of default and downsizing for the acquired companies when times are tough. Caesar’s Entertainment struggled under its debt burden when the recession hit. The company cut staff, reduced hours, outsourced jobs and scaled back operations.

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What We Can Still Learn from Germany and Denmark Print
Written by Alan Barber   
Wednesday, 14 November 2012 14:25

Unemployment remains stubbornly high, and even since the end of the Great Recession, millions of Americans continue to suffer from long-term unemployment. In the hopes of fostering a greater understanding of the problem of long-term unemployment, its consequences, and policies that can address the problem, The Upjohn Institute has just released a new edited volume by Lauren Appelbaum, "Reconnecting to Work: Policies to Mitigate Long-Term unemployment and Its Consequences." Included amongst the examination of different policies is a chapter from CEPR’s John Schmitt, “Labor Market Policy in the Great Recession: Some lessons from Denmark and Germany.”

Schmitt looked at the labor-market experience of 21 rich countries with a focus on Denmark and Germany.  The graph below represents the change in unemployment rates in these countries between the years 2007 – the beginning of the recession — and 2009.

labor-2011-05-fig1

Prior to the recession, Denmark had been one of the world’s most successful economies, but has struggled in recent years. Germany, on the other hand, has outperformed many of the rich countries since 2007 despite earlier labor market struggles. As Schmitt explains, labor market institutions seemed to be at the root of the recent developments in each economy. Denmark’s institutions and their extensive opportunities for education, training, and placement of unemployed workers, was positioned to perform well at or near full employment, but significantly less so in a downturn. And with a focus on job security by keeping workers connected to employers, Germany was able to spread the pain of the downturn and has outperformed many of the world’s other rich countries since 2007, though it was on less stable ground after reunification in the 1990s through the 2000s. It was through this program of “work sharing,” or companies cutting hours rather than workers while partially compensating the workers for lost hours, that Germany actually saw its unemployment level fall during the recession.

Schmitt and CEPR have argued that work sharing could be used to lower the unemployment rate here in the United States, as well — an idea that appears to have caught on. It was even alluded to in President Obama’s acceptance speech, having already been incorporated into the Middle Class Tax releif and Job Creation Act of 2012.

 
Labor Market Policy Research Reports, November 2 – November 9, 2012 Print
Written by Mark Azic   
Friday, 09 November 2012 16:48

Here’s a roundup of labor market research reports released in the past week:

Center for American Progress

Why Gay and Transgender Workers and Families Need Paid Sick Days

Kellan Baker and Crosby Burns

Center for Economic Policy and Research

Reducing Inequality and Insecurity: Rethinking Labor and Employment Policy for the 21st Century

Eileen Appelbaum

Married…Without Means

Shawn Fremstad

Center on Budget and Policy Priorities

Are Low-Income Programs Enlarging the Nation’s Long-Term Fiscal Problem?

Robert Greenstein and Richard Kogan

Economic Policy Institute

Polishing Apple: Fair Labor Association Gives Foxconn and Apple Undue Credit for Labor Rights Progress

Scott Nova and Isaac Shapiro

 
If the Deficit Disappeared, Where Would the Deficit Hawks Find Work? Print
Written by Dean Baker   
Friday, 09 November 2012 15:32

That doesn't seem likely at the moment, but there would be some real justice in this story. After all, the deficit hawks have used the deep pockets of their backers and their connections with prominent politicians and media figures to completely misrepresent the reality about the deficit.

The story of near-term deficit, as every real budget wonk knows, is the story of a collapsed economy. When the economy weakens, tax collections fall and payments for programs like unemployment insurance and food stamps rise. In addition, we also had explicit counter-cyclical policies, like the stimulus and the payroll tax cut, that were designed to boost the economy but also added to the deficit.

deficits-per-GDP-10-2012Source: Congressional Budget Office.

As can be seen, the deficit in 2007 was a modest 1.2 percent of GDP. An amount that can be sustained literally forever. Deficits were projected to remain low, until the scheduled ending of the Bush tax cuts in 2011 pushed the budget into surplus in fiscal 2012.

The reason that we didn't follow this path was the economic plunge that followed the collapse of the housing bubble. There were no big new permanent government programs or tax cuts pushing up the deficit in the last four years. It was the economic collapse pure and simple. The implication of this graph is that if we fix the economy we fix the deficit, end of story.

While this is fairly straightforward, our deficit hawk friends have their long-term deficit story hidden up their sleeve. This is the line that if we don't do something about Social Security and Medicare, then we will soon have an unbearable debt burden.

This one is misleading since it really is a story about rising health care costs making Medicare, Medicaid and other public sector health care programs unaffordable. The story here should be to focus on fixing the health care system, not running around yelling about soaring deficits.

But there is potentially bad news for the deficit hawks here also. Health care costs have moderated sharply in the last few years. While this undoubtedly is partly due to the impact of the recession, the moderation has continued long enough that it is difficult to believe that we are not already on a slower health care cost growth path. Certainly costs are coming in well below thhe projections of a few years ago.

rate-of-health-spending-11-2012

Source: Bureau of Economic Analysis.

If this is true then the deficit hawks are in a desperate race. At some point the Congressional Budget Office (CBO) will have to adjust its cost growth projections downward to correspond to a lower trend in health care cost growth.

When CBO does make this adjustment, the projections of long-term deficits will shrink by tens of trillions of dollars and the budget hawks' horror stories will vanish. They will no longer be able to tell us how we have to be responsible by gutting our childrens' Social Security and Medicare to save them from the burden of a crushing debt.

In this context it is easy to see the urgency around the message of the Campaign to Fix the Debt and the other organizations pushing for the overhaul of Social Security and Medicare. If they are not able to pull off their scam now, they may lose the opportunity forever. For them, that is a crisis.

 
Are the Labor Force and Employment Numbers Each Growing At 'About 171,000' Each Month? Print
Written by David Rosnick   
Monday, 05 November 2012 12:45

Last month, when the Bureau of Labor Statistics released its report on the state of the September labor force, it showed a fall in the rate of unemployment from 8.1 percent of the labor force to only 7.8 percent.  In response, the Heritage Foundation’s J.D. Foster argued these numbers were not sufficiently reliable because “The household survey, a relatively small sample, reported an astounding 418,000 jobs jump in the labor force at a time when it has been steadily shrinking, and the survey reported an 873,000 jobs jump in employment at a time when the economy is stumbling.” Foster did not provide numbers he thought reasonable.

Friday morning, however, brought us a new report on employment in October, and inspired Heritage’s Amy Payne to write “the economy created about 171,000 jobs, roughly equal to the usual number of new workers in the labor force.” Apart from the fact that 171,000 new workers would only be usual given an economy far from full employment, what makes this assertion interesting is that Payne argues that the “October report partly reversed the mysterious drop in the unemployment rate in the September jobs report.”

These make for an odd collection of claims. If the labor force is growing by 171,000 per month, we should have expected the labor force to grow 171,000 from August to September, and again by 171,000 from September to October, for a total of 342,000 over the two months. The fact that the BLS reported a jump of 418,000 from August to September would suggest that Heritage have anticipated a fall of 76,000 in the size of the labor force in October to bring it back in line with the trend.  Instead, BLS reported 578,000 additional labor force participants in October. In other words, if the growth in the labor force was unreliable in last month’s report, it was much more so in this month’s.

Likewise, if the number of employed is growing by 171,000 per month, then the 873,000 increase in employed persons from August to September should have led to a 531,000 decrease in employment in October.  Instead, BLS reported a 410,000 increase. As with the labor force numbers, the employment numbers seem more surprising in this report than the previous.

It is true that the fall in the unemployment rate reversed itself in part, but more reliable numbers surely do not explain it.  At Heritage, it seems, two worse wrongs can make a right.

 
Labor Market Policy Research Reports, October 27 – November 2, 2012 Print
Written by Mark Azic   
Friday, 02 November 2012 15:25

Here’s a roundup of labor market research reports released in the past week:


Center for American Progress

The Many Benefits of Paid Family and Medical Leave
Heather Boushey and Sarah Jane Glynn


Economic Policy Institute

Migration and Domestic Labor Markets: Auctions and Employer Demand Versus Public Policy
Ray Marshall

More Extraordinary Returns
Josh Bivens


Political Economy Research Institute

The Working Poor: A Booming Demographic
Jeanette Wicks-Lim

 
Latest BLS Employment Report Shows Brighter Picture of Labor Market Print
Written by Dean Baker   
Friday, 02 November 2012 11:15

The establishment survey added 171,000 jobs in October, according to the Bureau of Labor Statistics' latest employment report. This increase coupled with sharp upward revisions to the prior two months of data brought the average over the last three months to 170,000. The employment-to-population rate (EPOP) also rose to 58.8 percent, its highest level since August of 2009. However, despite the increase and upward revisions, the unemployment rate slipped up to 7.9 percent, reflecting the fact that the September drop was an aberration.

Most of the other data in the household survey was also positive, showing a brighter picture of the labor market. The number of people involuntarily working part-time fell by 269,000 reversing most of the September rise. The number of discouraged workers was 154,000 below its year-ago level, continuing its recent pattern. The percentage of unemployment due to people who voluntarily quit their jobs, a key measure of workers’ confidence in their labor market prospects, rose to 8.3 percent. With the exception of the 8.7 rate reported in March, this is the highest share since December of 2008. Nevertheless, with the economy still down by more than 9 million jobs from its trend level of unemployment, the current rate of job growth implies that we may not reach full employment until the end of the decade.

For a more in-depth analysis, check out the latest Jobs Byte.

 
Katrina and Sandy Print
Written by Milla Sanes   
Friday, 02 November 2012 08:32

In the aftermath of Hurricane Katrina, the two states impacted the most, Louisiana and Mississippi, both had huge spikes in unemployment. The graph below shows the monthly unemployment rates of all 50 states and the District of Columbia from January 2000 through September 2012, with Louisiana in yellow, Mississippi in blue, and the rest of the states and DC in grayscale.

For several months after Katrina hit in August 2005, the unemployment rate in Louisiana and Mississippi rose to rates that the rest of the country would not experience until the Great Recession several years later.

With current unemployment rates well above where they were before Katrina, how will the latest natural disaster, Hurricane Sandy, affect employment in the states hit hardest?

Click to enlarge

Katrina Unemployment

 
CEPR News October 2012 Print
Written by Dawn Lobell   
Thursday, 01 November 2012 13:00

The following highlights CEPR's latest research, publications, events and much more.

CEPR Launches The Americas Blog: Analysis Beyond the Echo Chamber
CEPR’s latest blog seeks to present a more accurate perspective on economic and political developments in the Western Hemisphere than is often presented in the United States. It provides information about Latin America that is often ignored, buried, and sometimes misreported in the major U.S. media. CEPR’s economic expertise also allows for analysis of important economic data and trends that are missed by other sources. CEPR has repeatedly been ahead of the curve in identifying important economic trends in the hemisphere, including the United States.

Recent blog posts have included these two posts by CEPR’s International Communications Director Dan Beeton on Honduras and this one on Latin American elections by CEPR Program Assistant Sara Kozameh. In addition, CEPR Research Associate Jake Johnston provides daily headlines – summaries of news items from across Latin America.


CEPR on Unemployment
A new issue brief by CEPR Co-director Dean Baker assesses the cause of U.S. unemployment. The brief, “The Problem with Structural Unemployment in the U.S.,” provides evidence that a lack of demand caused by the collapse of the housing bubble is at the root the unemployment crisis, not a mismatch between the skills of the unemployed and the types of jobs available as some have argued. The brief was mentioned several times in this piece in the Washington Post’s Think Tanked blog.

Dean schooled former chief executive of General Electric, Jack Welch, on how the BLS compiles the unemployment numbers in this op-ed on CNN.com.  Dean also explained the jobs numbers to Fox Business News. You can read Dean’s analysis of the September numbers in this Jobs Byte. And here’s a graph that shows the unemployment rate for select sectors.

Read more...

 

 
Year-round Vacancy Rate Fell in Third Quarter Print
Written by Dean Baker   
Thursday, 01 November 2012 11:45

While most housing vacancy measures are still well above pre-bubble levels, the vacancy rate continued to edge lower in the third quarter, according to the Census Bureau. The overall year-round vacancy rate fell to 10.2 percent in the third quarter — down from 10.8 percent in the third quarter of 2011 and a peak of more than 11.0 percent in the trough of the recession. Other recent housing news was also overwhelmingly positive. The number of new homes sold in September was up 27.1 percent from its year-ago level; although, it is still only a bit more than half of the pre-bubble level.

The Case-Shiller 20-City index rose by 0.5 percent in August, the seventh consecutive increase. It is now up by 2.0 percent compared with the year-ago level. Price increases continue to be seen primarily in the bottom tier of the market, especially in the cities hardest hit by the collapse of the bubble. These sharp price increases at the lower end of these markets probably should be viewed with some caution. There are accounts in Phoenix and some of the other markets of bidding wars for properties in distressed sales. It is likely that these price increases are being driven by speculators who may not have a clear sense of the market, meaning some of the recent price increases could be reversed in the near future.

For a more in-depth analysis, see the latest Housing Market Monitor.

 
Does the NYT Know that Much of the Working Class is Not White? Print
Written by Shawn Fremstad   
Wednesday, 31 October 2012 13:20

In a New York Times article with the headline “Ohio Working Class May Offer Key to Obama’s Reelection,” the reporters explain that “Mr. Obama’s ability to prevent erosion among working-class voters may be his best path to re-election.”

Given how rarely working-class Americans have been discussed by candidates and the media this election season, I was glad to see a NYT article focusing on them. In the 2006 General Social Survey, about 46 percent of Americans self-identified as “working class” and a roughly similar number self-identified as “middle class,” so they’re not a small group.

But then I read the second paragraph of the article, which made clear that by "working class" the NYT actually meant “white voters who do not have college degrees.” The real working class includes African-Americans, Latinos, Asians, and Native Americans, but you won’t know if from reading this article—or pretty much all of the media coverage of the “working class.” In fact, as the chart below shows, the majority of blacks and Latinos self-identify as working class, while the majority of non-Latino whites self-identify as middle class. Also worth noting, whites who self-identify as “working class” are substantially more likely to have education beyond high school—nearly 1 in 5 have a college degree or higher—than working-class blacks.

blacks-latino-class-10-2012

Source: Author's tabulations using General Source Survey Panel (2006 Sample) Wave 3.

 
Labor Market Policy Research Reports, October 19 – 26, 2012 Print
Written by Mark Azic   
Friday, 26 October 2012 15:15

Here’s a roundup of labor market research reports released in the past week:


Center on Budget and Policy Priorities

A Guide to Statistics on Historical Trends in Income Inequality
Chad Stone, Danilo Trisi, and Arloc Sherman


Employment Policy Research Network

The Most Egalitarian of All Professions
Lawrence Katz and Claudia Goldin


National Employment Law Project

Testimony on Problems in Pennsylvania’s Unemployment Compensation Service Center System
George Wentworth

 
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