The economics of the minimum wage
Arin Dube reviews recent research to answer some basic questions:
While we can set a wage floor using policy, should we? Or should we leave it to the market and deal with any adverse consequences, like poverty and inequality, using other policies, like tax credits and transfers? These longstanding questions take on a particular urgency as wage inequality continues to grow, and as we consider specific proposals to raise the federal minimum wage — currently near a record low — and to index future increases to the cost of living.
Read his piece in the New York Times here.
Subsidies that fuel fossil fuels
Worldwide subsidies for fossil fuels amount to a whopping $500 billion annually, according to a new report from London-based Overseas Development Institute:
They are subsidizing the very activities that are pushing the world towards dangerous climate change, and creating barriers to investment in low-carbon development.
Read about another tilted playing field here.
Trade deficit or budget deficit: which should worry us?
We hear a lot these days about the U.S. government’s budget deficit. But what we ought to be talking about is the country’s trade deficit, write Jared Bernstein and Dean Baker:
Running a trade deficit means that income generated in the United States is being spent elsewhere. In that situation, labor demand — jobs to produce imported goods — shifts from here to there.
Read their op-ed piece here.
The tilted playing field: in public education, some are more equal than others
In his classic novel Animal Farm, George Orwell famously wrote that “some are more equal than others.” Turns out the same is true for public education in the United States. Eduardo Porter’s column in the Times explains why America’s educational playing field is far from level:
The United States is one of few advanced nations where schools serving better-off children usually have more educational resources than those serving poor students, according to research by the Organization for Economic Cooperation and Development. Among the 34 O.E.C.D. nations, only in the United States, Israel and Turkey do disadvantaged schools have lower teacher/student ratios than in those serving more privileged students.
Andreas Schleicher, who runs the O.E.C.D.’s international educational assessments, put it to me this way: “The bottom line is that the vast majority of O.E.C.D. countries either invest equally into every student or disproportionately more into disadvantaged students. The U.S. is one of the few countries doing the opposite.”
Read his piece here.
A view from the top
Bill Gross, managing director of the investment firm PIMCO, urges the 1% to get some common economic sense:
1) Growth depends on investment and investment in part depends on an equitable rebalancing of personal income taxes, capital gains and carried interest.
2) The era of taxing “capital” at lower rates than “labor” should end.
3) Investors in the U.S. and elsewhere must look for investment in the real economy, not share buy-back maneuvers that artificially elevate stock prices.
Read his blog on the “Scrooge McDucks” of the world and the need for real tax reform here.
The Story of Solutions
Annie Leonard on changing the economic game from More to Better:
Source: http://storyofstuff.org/movies/the-story-of-solutions/
When the going gets tough, the tough build a new economy
Econ4’s Gar Alperovitz on building the new economy from the bottom up:
Deepening economic and social pain are producing the kinds of conditions from which various new forms of democratization—of ownership, wealth and institutions—are beginning to emerge. The challenge is to develop a broad strategy that not only ends the downward spiral but also gives rise to something different: steadily changing who actually owns the system, beginning at the bottom and working up.
Read more here.
How inequality of opportunity varies across America
How a child’s chances of upward mobility vary by location:
For discussion and an interactive map, see here.
Stirrings of the new economy
A new economy is emerging as the old economy falters, writes Econ4’s Juliet Schor in the New York Times:
[W]hile they are no panacea, the emergent trends of community fabrication, self-provisioning and the sharing economy collectively suggest a future for work in wealthy countries that involves more making, sharing and self-organizing. There may be fewer formal jobs — but a more entrepreneurial approach to making money, one that emphasizes smaller-scale companies and collectively owned enterprises, more sharing, and less spending. As painful as the years since the crash have been, a more resilient, satisfying and sustainable way to work and live could be one beneficial consequence.
Read her op-ed piece here.
Wealth-building strategies for America’s communities
Resources for democratic, community-based economic development from the Democracy Collaborative:
