Wages Have Gotten Worse

Source: BLS

From a Bureau of Labor Statistics press release:

06/10/2021
Real average hourly earnings for all employees decreased 0.2 percent in May, seasonally adjusted. Average hourly earnings increased 0.5 percent and CPI-U increased 0.6 percent. Real average weekly earnings decreased 0.1 percent over the month.

Yet red states have been cutting unemployment benefits in an effort to force people to take a job–even if it’s low-paying.

Related:

These businesses found a way around the worker shortage: Raising wages to $15 an hour or more (WaPo)

Republicans Creating Inflation Fear: Fuhgeddaboudit

Slight increases in the rate of inflation in the United States and Europe have triggered financial-market anxieties. Has US President Joe Biden’s administration risked overheating the economy with its $1.9 trillion rescue package and plans for additional spending to invest in infrastructure, job creation, and bolstering American families?

Such concerns are premature, considering the deep uncertainty we still face. We have never before experienced a pandemic-induced downturn featuring a disproportionately steep service-sector recession, unprecedented increases in inequality, and soaring savings rates.

Joseph Stiglitz

It’s the Wages & Benefits, Stupid.

After businesses complained they can’t find enough people to keep their doors open Indiana is set to become the latest state to bring back a requirement that unemployed workers will have to actively search for jobs to get benefits.

“Unemployment has been extended again, stimulus money again – you know, if you’ve got a couple of kids you’re really getting a lot of stimulus money,” Hunter said. “It’s good for them, but it’s bad for me.”

Hunter’s assumption is a common refrain from business owners, the reality is more complicated.

Micah Pollak, a professor of economics at Indiana University Northwest, said plenty of studies have shown that unemployment benefits are not, by and large, keeping people from taking jobs. Instead it boils down to wages.

“I think it’s kind of like a cop-out for business owners to say that because it puts all the blame on the workers and then they don’t take any responsibility for what’s happening,” Pollak said. “I mean, if a couple hundred dollars a week is enough to convince a worker not to work for you, then I think you need to question what kind of work environment and pay are you offering.”

Indiana Public Media

Republicans’ “Economic Miracle”: Tax Cuts. Don’t believe it.

I live and work in the Midwest, which remains locked in a half-century doldrum of population stagnation, locally concentrated job losses and decay. In many ways, the Rust Belt is emblematic of the lack of focus on value to residents. Indiana is the perfect example, since no state in the Rust Belt has cut taxes as aggressively as this one. A decade ago, local property tax caps were added to the Constitution, limiting local spending. Then corporate taxes were cut, and income taxes cut. All of this was done with the hopes of boosting population and economic growth. 

That didn’t happen. Indiana’s economic recovery from the Great Recession was no more than lackluster, and the clearest result of the rush to cut taxes was to make Indiana a magnet for low-wage employers. The state’s per-capita income dropped to 86% of that of the nation as a whole, down from near 90% in 2012. Half of all job growth went to adult workers without a high school diploma.  

The lesson here is that selling your state on price instead of value is likely to draw bargain shoppers. These businesses will view the workforce as a commodity. That is a poor harbinger for the future.

MarketWatch

Time’s up: After a reprieve, a wave of evictions expected across U.S.

On Sept. 1, U.S. health officials announced they would suspend evictions across the United States to help stem further spread of the novel coronavirus.

That was three days too late for Latrise Bean.

About 72 hours before the declaration by the U.S. Centers for Disease Control and Prevention (CDC), Bean, 35, was ordered evicted from her Milwaukee apartment. She’d lived there for three years despite the sagging ceilings, smell of urine in the hallways and homeless squatters in the basement – because it was all she could afford.

September’s reprieve by the CDC, which protected many, but not all, renters will expire in January.

At that point, an estimated $32 billion in back rent will come due, with up to 8 million tenants facing eviction filings.

Reuters

Unemployment aid is running out for millions: “People are going to become desperate”

Millions of unemployed Americans faced an income “cliff” in July when the extra $600 in pandemic jobless benefits came to an end. But millions more are now facing another — and perhaps more dire — hit to their income as they exhaust all their unemployment options at both the state and federal levels. 

“People are saying, ‘Oh my god, I’m running out of money,’ and they have no idea what’s to come,” said Alex Emanuel, an actor, filmmaker and musician in New York whose unemployment aid ran dry two months ago. 

The issue is affecting a range of workers, including people who lost their jobs toward the end of 2019 and have run through multiple unemployment aid extensions provided by Congress earlier this year. Gig-economy workers and others who tapped the federal Pandemic Unemployment Assistance (PUA) program early in the crisis are also about to run out of aid.

CBS News

U.S. Budget Gap Tripled to Record $3.1 Trillion in Fiscal 2020

The world’s largest economy just posted its largest fiscal deficit on record.

The U.S. budget shortfall more than tripled to $3.1 trillion in the government’s fiscal year ended in September, swelling the national debt to exceed the economy’s size, after lawmakers opened the spending spigots to soften the blow from the coronavirus pandemic, Treasury Department data showed Friday.

The deficit as a share of the economy surged to 16%, the largest since 1945, based on second-quarter gross domestic product. At the end of the financial crisis in 2009, the ratio was close to 10% before slowly narrowing through 2015.

Bloomberg

[Remember those #GOPTaxCuts for the rich and corporations?] [And you know what the Republican response will be, right? “Cut Medicare, Cut Medicaid, Cut Social Security, Cut Food Stamps”.]

Pope Francis Laments Failures Of Market Capitalism In Blueprint For Post-COVID World

As Francis writes, the pandemic “unexpectedly erupted” and his focus widened, and the document became a treatise on the lessons that must be learned from the global health crisis.

Once the pandemic passes, the pope writes, “our worst response would be to plunge even more deeply into feverish consumerism and new forms of egotistic self-preservation.”

Picking up on some of his favorite themes, Francis says the marketplace cannot resolve every problem, and he denounces what he describes as “this dogma of neoliberal faith” that “resort[s] to the magic theories of ‘spillover’ or ‘trickle.’ “

A good economic policy, he says, creates jobs — it doesn’t eliminate them.

NPR