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Monday, February 16, 2015

Where did $25 Trillion Go?

              Where is that $25 Trillion?

The private wealth of the nation increased by $25 trillion since 2008. Did you get some of it?

OK, it was only $24.8 trillion. Where did it go? See the Federal Reserve report here, page 2.
(How this relates to the Ryan-Republican budget plan follows below this discussion of $25 trillion.) 

How much is $24.8 trillion created over a six year period? It is  $77,500 per citizen of new or additional wealth. (Divide $24.8 trillion by 320 million citizens). That's how much more wealth each American has since 2008. Every family of four will have $315,000 more savings since 2008 to add to their previous savings. Now the average family has almost $700,000 in total assets, not bad is it? It is a gain in national wealth of over 44% since 2008 while most families were struggling with declining home values, unemployment, loss of wages, and the worst economic collapse in 75 years. The per capita GDP between 2006 and 2012 increased by all of $3, from $48,905 to $48,908 (see this site to check). The national income, a composite of everyone's income, declined in 2008 for only the second time since 1933. But wealth began to skyrocket -- check the Federal Reserve report cited above. 

Now the average wealth per human being in the U.S. is $254,000, and each household has $676,000 in savings, on average. But, in actual fact, only about 10% are average or above. Most of the $25 trillion went to just 5% of the households. 

The lower-saving 50% -- half of America -- own just 1.1% of all savings (see here) and their average savings is below $14,000, not the average for all of $676,000. Inequality is the structural problem of our nation's economy, and our society. We must ask, does this affect the life opportunities of everyone, including the reader? Are we all poorer as a result of such extreme inequality? Is there an immense and immoral human suffering because many have NO access and many have little access to the immense resources that the nation possesses? Are we ignorant, heedless, or uncaring that we allow this distribution of resources to remain so one-sided. 

I have difficulty explaining the economy. My friends and those I share my concerns with do not get it. The economy's main problem is that the immense "surplus" has not been shared adequately; the poor receive too little for their contributions, and the very wealthy seemingly hog most of the surplus. The result is a horrible distribution of total wealth that is beyond moral justification. Yet the most vociferous among us are silent, as though they must ignore this stupendous inequality. 

Together the economy is a collective effort, but 40% of the workers only receive 4% of the annual income in wage income, check out  the Social Security Administration's report on wage income. The annual surplus, which we call savings, profit, net worth, more-than-we-need-to-use-this-year, mostly goes to waste in excess savings of  the very wealthiest. In order to save $25 trillion over a six year period when total output was around $90 trillion, some 28% of the output had to be saved. How else can one explain a gain of $25 trillion? (25 is 28% of 90) And during this period most were experiencing crushing wage decline, job loss, and housing value collapse. The median family lost 39% of its life savings according to the Federal Reserve (see page 2 and page 17), a drop from $124,000 to $77,000. But the national increase in net worth resulted from a splurge of wealth pouring into capital markets inflating financial assets, creating a bubble condition.    

The new $24.8 trillion of savings increases each household's savings by  $200,000, on average. Or $101,000 per adult. How many readers actually experienced this gain? 

In contrast, about 47 million out of about 320 million Americans (about 1 in 7) cannot buy their food with money, instead they rely on the charity of food stamps (or its equivalent SNAP credits). They get $1.40 per meal, or $30.05 per week or $130 per month. What is a normal food expenditure per household? Let's look to the basic family budget analyzed by the EPI. It is $188.50 per month per person, or $43.50 per week per person, for a family living in Topeka, Kansas, the median expense location in the nation. The SNAP food budget is almost a third less than the basic frugal food budget. Instead of three meals a day, maybe food stamp recipients  eat just two meals daily? 

As a nation are we concerned about those one in seven American citizens, 47 million humans, who must rely on that $30 a week for food? How do we explain this failure in the wealthiest nation on the planet? Are these Americans stuck in a state of dependency on the government? Or is there a structural reason for their poverty, such as perhaps chronically low wages and inadequate job  opportunities? 

Lawrence Mishel published in the New York Times an op-ed that targets low wages as the primary source of the economy's troubles. 
Here's an excerpt:


WASHINGTON — WITH the early stages of the 2016 presidential campaign underway and millions of Americans still hurting financially, both parties are looking for ways to address wage stagnation. That’s the good news. The bad news is that both parties are offering tax cuts as a solution. What has hurt workers’ paychecks is not what the government takes out, but what their employers no longer put in — a dynamic that tax cuts cannot eliminate.
Wage stagnation is a decades-long phenomenon. Between 1979 and 2014, while the gross domestic product grew 150 percent and productivity grew 75 percent, the inflation-adjusted hourly wage of the median worker rose just 5.6 percent — less than 0.2 percent a year. And since 2002, the bottom 80 percent of wage earners, including both male and female college graduates, have actually seen their wages stagnate or fall."

There is an solution, a way to reverse the trend. Briefly, you can go to Bernie Sanders' statement on the 12 proposals to turn the national economy in the correct direction. Or you can read on further in this blog, or review the blog list to the right here, particularly the EPI and its proposal of the Progressive Caucus budget. Sample idea: "
  • Make necessary public investments. The [P C] budget finances roughly $485 billion in job creation and public investment measures in calendar year 2014 alone and roughly $1.35 trillion over calendar years 2014–2016.3 This fiscal expansion is consistent with the amount of fiscal support needed to rapidly shrink the “output gap” and restore the economy to full health.

The economic solution lies in taxing the unused surplus that the wealthiest have coopted and waste in financial speculation and employ at a living wage in public jobs the capable but un-employed and under-employed and under-paid, which is about one in every four adult American workers -- one in four (I explain this 1 in 4 in the most recent posts. It is over 40 million workers.). Yes, we can be proud of our history, our  heritage, our patriots, etc., but surely we can do better. 

I could go on in detail about the means to spread prosperity, to spread the vast resources at hand, to spread the amazing $254,000 per citizen of personal savings or the near $700,000 per household savings, on average. Easily we all could have access to living wage  employment. The CBO shows that the average market income per household is $93,900 per year (see page 2, here), and that translates into $72,000 per worker (on average) including all the unemployed workers. Each worker, even the unemployed and the part-timers, contribute $72,000 to the total national income. Yet 40% of all workers earn less than $20,000 a year  and most of that 40% earn less than half that amount. The average wage income for the 40% (or 62 million workers) is just over $8,000 a year -- not $72,000. We could easily devise a way to share more equally these resources -- a true ownership society. (I explained this in a recent posting.) Figure it out, reader. We have plenty --- $81 trillions in savings, and over $12.7 trillion in annual income, according to the Joint Committee on Taxation, and $14 trillion according to the BEA.gov --- but millions are destitute and suffering, truly suffering. About 44% of citizens live in households where a $1,000 emergency expense is a disaster.  And 40% of the adults self-identify as "lower or lower middle class". Soon the majority will self-identify as poor.  
FT_14.01.24_middleClass_line_420

Most citizens are sleeping. We should be clamoring for real redistribution of resources. But the society is adrift, tragically unconcerned or unperplexed, often caught in a dog-eat-dog mentality, and cannot see its great potential.   

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Wikipedia's article on Income Inequality in the U.S. is an excellent and detailed reference that covers the full scope of the issue. It's an example of the power of "wiki". I highly recommend it.

I looked at the EPI article on international comparisons of "safety net" support for the poor, also an excellent reference. It concludes that the U.S. has a greater differential from low to middle to high incomes, and it also supports low income the least. I'm not convinced the report proves the last statement.

The U.S. Census finds that 48% of citizens are low-income or poor, from an article at Huffington Post.     
Pew Research finds that 69% of Americans believe that government should do more to reduce inequality. 

The Ryan-Republican Budget Plan
The Ryan budget, which is supported by all Republicans, would reduce by half the taxes on the wealthiest who earn more than $400,000 a year, and raise taxes by $788 on households earning $40,000 (see here, page 2 and 5). Tax increases would be served to three out of four Americans. Halving the tax rate on the wealthiest is hare-brained, to say the least, given that research shows that in the 28 years, 1979 to 2007,  the top one percent has increased its income by 200% (a tripling) while the average weekly earnings of the lower 80% of earners has decreased by 2%(see here, Federal Reserve chart and convert for inflation, using this site).The per capita GDP expanded by 72% in this 28 year period, see here. An excerpt from the cited report:

"The average inflation-adjusted income of the bottom 99 percent of taxpayers grew by 18.9 percent between 1979 and 2007. Over the same period, the average income of the top 1 percent of taxpayers grew by 200.5 percent. This lopsided income growth means that the top 1 percent of taxpayers captured 53.9 percent of all income growth over the period."

An updated report shows that between 1979 and 2012 households in the lower 99% had 2.6% income growth and the top 1% had 180.9% growth. Does this mean its time to cut the taxes of the 1%? 
According to Ryan and the Republicans, yes.

Ryan's budget would cut total tax revenues by 22% to 28%, and to compensate for the drop in revenue it would eliminate government programs serving the poor. About 69% of the cuts in program benefits eliminate serves to the poor elderly, the poor disabled, and poor children --- the politically defenseless. Read the report. The Tax Policy Institute predicts that since no new revenues are specified the national debt would climb from around 60% of GDP to 175% by year 2050. Ryan's budget would totally eliminate Medicaid, it would convert Medicare to a poorly funded voucher system, and it would privatize Social Security as well as raise the retirement age to 69. 
I'll write a more detailed analysis someday. References for the above info can be found here, and here and here
Here's an income perspective from the Joint Committee on Taxation, 2014, see page 30:
The wealthiest 5.2% of tax filers, earning over $200,000 yearly, earn 32.3% of all income, pay 70.0% of all income taxes, and 46.7% of all combined income and Social Security taxes. Most of Ryan's tax cuts would benefit the top-earning 5 percent. The fact that they earn almost a third of all income, own 75% of all financial assets, and more than half of all wealth -- that's the status quo that is anti-democratic and harmful. The Ryan Budget is a pay-off to the rich (campaign contributors) who make most of the campaign contributions. Two-thirds of all contributions came in amounts greater than $200 from just 0.5% of all U.S. adults -- see here. The wealthiest exclude, effectively, any candidate who would raise their taxes and reward those who would cut them in half. The Ryan budget is also an insult to intelligence, as it does not balance out as the proponents claim. It is Robin Hood in Reverse. 


Monday, February 9, 2015

What Caused the Recession ? 

          and Are We Still In It in 2015?                

Excessive Private Debt caused the Recession. 
And the employment rate among age 25 to 54 years old has 
recovered by half, so we are half way to recovery --- after 5 and a half years! 
(See here, the February 6, 2015, articles by Elise Gould, with relevant graphs.)
The unemployment rate would be 9.0% she says, if the dropped-out workers
were counted.
9.0% unemployment IS recession.
Not since 1986 has this particular age group showed such low employment.
This age group is not affected by the baby boomer retirement event; their low 
employment rate is solely an effect of the recession. And a perspective on the devastation of long term  unemployment can be found at the CEPR site.  

From 1996 to 2008 outstanding financial debt increased by 162%
and the economy's growth per capita grew by 24%
Creating debt at a rate almost 7 times faster than real growth is disastrous. 
When the median household savings falls by nearly 40%, when 15  million or 11% of the workforce lose their jobs in a two year period, and when the recipients of food stamps increases from 17 million in 2000 to 47 million in 2013, that is a disaster
(see graph here)
Excessive private, not public, debt created the fatal flaw leading to the great recession.
I calculated from the Federal Reserve's Flow of Fund report, Table D3, and then adjusted for inflation. You can also note that government debt grew slower than all other sectors' debt. This Federal Reserve Graph shows the growth of the financial system outstanding debt, numbers unadjusted for inflation. And this one shows the growth of household debt.
Here's another comparing financial debt with non-financial corporate debt.
I also used the Measuring Worth web page where they calculate GDP per capita growth between 1996 and 2008.

Here's a graph of total private debt as a percentage of GDP. We are still around double the historical average. Between 1946 and 1976 the economy grew at a rate of 

Chart- US Private Debt as a Percent of GDP

Here's a video about the drag of private global debt from the Guardian newspaper. 

The U.S. economy grew at half its normal rate between 2000 and 2010. From Wikipedia and BEA.gov:  
"US real GDP grew by an average of 1.7% from 2000 to the first half of 2014, a rate around half the historical average up to 2000.[84]"  There's a chart tucked away in Bailout Nation by Barry Ritholtz showing that GDP growth during the pre-crash 2000s was generated by home loan mortgage borrowing, called 2nd mortgages. 
Christian Weller provides a monthly snapshot of the economy at the Center for American Progress. 
This comes from the January report: "Household debt equaled 102.5 percent of after-tax income in September 2014, down from a peak of 129.7 percent in December 2007." And this graph showing our present recovery vs. other recoveries:


EconSnapshot-Jan15fig1 

The EPI also presents a similar graph (see here) except you can see the performance of the 2007 
recovery is about a third, not a half, of all previous recoveries:
Chart: Real GDP growth, comparison of recessions




Home Mortgage Crisis Still Unfolding
Here's an article about the failure of the Obama Administration effort to save homeowners (from a recent American Prospect issue). This is an example paragraph from the article:

                 "The most direct and effective policy solution to stop foreclosures is to allow bankruptcy judges to modify the terms of primary-residence mortgages, just as they can modify other debt contracts. This is known in the trade as “cramdown,” because the judge has the ability to force down the value of the debt. The logic of bankruptcy law reduces debts that cannot be repaid in order to serve a broader economic interest, in this case enabling an underwater homeowner to keep the house. Liberal lawmakers believed the threat of cramdown would force lenders to the table, giving homeowners real opportunities for debt relief. Wall Street banks were so certain they would have to accept cramdown as a condition for the bailouts that they held meetings and conference calls to prepare for it."

Housing Crisis Myths
Here are the Ten Myths from Jennifer Taub's book Other People's Houses from the last chapter :

1. There has been no official bipartisan consensus on the causes of the financial crisis.

2. The financial crisis was an accident without human causes.

3. The financial crisis was brought about because the Community Reinvestment Act of 1977 forced banks to lend to people with low incomes who could not afford to pay back their mortgages. 

4. The giant government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, caused the financial crisis because he government pushed them to guarantee mortgage loans to people with low incomes as part of their public housing mission.

5. Mistakes were made, but there was not widespread fraud and abuse throughout the financial system.

6. The financial crisis was caused by too much government regulation.

7. Nobody saw it coming.

8. The financial crisis was unavoidable. And financial crises of this magnitude are inevitable.

9. The Dodd-Frank Act has ended "too big to fail". 

10. The bankers are the victims of greedy homeowners who borrowed money and did not pay it back. 

It is a masterful book. It is also very complicated and detailed. The last page of her book quotes 
Bank of America CEO Brian Moynihan testifying to the FCIC, "Over the course of this crisis, we as an industry caused a lot of damage. Never has it been clearer how mistakes made by financial companies can affect Main Street, and we need to learn the lessons of the past few years." 
Excessive private debt is a well-known cause of speculative collapse, it is 
surprising that so many ignore this as the main cause. Economist Steve Keen has 
placed his analysis on it in his book Debunking Economics. From page six, ". . . the 
never ending crisis . . . was no 'Black Swan.' Its inevitability was obvious to anyone
who paid attention to the level of debt-financed speculation taking place, and considered what would happen to the economy when the debt-driven party came to an end.

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POVERTY RAGES
Paul Buchheit has been writing the nation's best journalism. He explains in this February 2015 article the endemic poverty in the wealthiest nation. He cites a study showing that "almost two-thirds of Americans didn't have savings available to cover a $500 repair bill or a $1,000 emergency room visit."
The average household income, pre-tax and pre-transfer, is $93,000 a year (see CBO report here). The average savings per household is around $650,000 (see Federal Reserve report, page 2, here) -- and almost 2 in 3 live in households that cannot pay a $1,000 emergency room visit. !!!
Should it surprise us that the suicide rate among age 40 to 64 group has increased by 40% since 2000?
Read the article here
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LOW WAGES
I made this comment on one of Elise Gould's articles about employment, cited above.
"The Social Security Administration report on wages for 2013 says that 40% of workers earn less than $20,000 a year. The National Jobs for All Coalition shows that 12% of all workers work full-time and year round for under $23,500 a year, the poverty level for a family of four. 

40% of Workers Earned Just 4% of all Income in 2013
The combined or collective income of all 61 million workers who earned less than $20,000 in 2013 is about 4% of the total national income. Again 40% of the workers earn only 4% of all the income our economy generated. 
It's not complicated to figure it out. Add the incomes at the SSA report to get the $504 billion in income going to the lowest earning 40%, then go to the BEA.gov / personal income interactive site to find total personal income for 2013, $14.167 trillion. Then divide the numbers for a percent of total. Even if we take the total income recorded by the Joint Committee on Taxation for 2014, $12.7 trillion, the percentage does not really change much (see here for the JCT, page 30). Or look at the EPI table 2.4, see here, and find that wage income amounts to 54% of total income. 
Something should go off in your mind when you read this. 



Friday, January 23, 2015

The Best Radio Show

     Richard Wolff's Economic Update

I just finished an hour's listening to Economic Update, January 23, 2015. 

It was the best show I've ever heard (click here - Audio/Jan. 23, or click here, KPFA radio which carries Wolff's program), especially the final half when Wolff's wife, psychologist Dr. Harriet Fraad, describes the dangerous plight of our nation's youngsters. I seldom describe the human side of bad economics; this show is refreshing and will enlighten you. One in six youngsters, below 18 year's old, suffers food insecurity and hunger perhaps daily. Half of the children attending public schools now qualify for free lunch, meaning their family has less than $43,000 income. (If you wish, you can check: the  Basic Needs Calculator, the Basic Family Budget Calculator at EPI - Topeka, Kansas is the median expense city in the nation, the MIT calculator, and State of Working America, and here, if you wonder if $43,000 is too high an income to qualify for food assistance.) In 1995, 20 years back, only 33% qualified. Our system of after-school care and infant childcare is lamentable and will destroy our nation ultimately. Other nations provide these services far better. Many, many children arrive at school hungry and need breakfast, and teachers often provide morning snacks out of their own savings. I taught in public schools in east Oakland for over 10 years, I testify that this is a reasonable assertion. Run-away and throw-away children are on the increase since the beginning of the recession. This radio show is a disturbing program, but it highlights the personal effects of an economy and society dangerously out of touch. Too often ordinary people claim that others who have money problems have made bad decisions and now survive  parasitically on the rest of society. Good people seem to make this erroneous assertion regularly, and they should learn better by listening to this radio show. 
I also read Robert Kuttner's article 


about the error of believing in the myth of the free market and that government doesn't work, but  that "Freedom Works" as my Tea Party Congressman states on his campaign billboards. "Don't Vote for Anarchy, Anarchy Doesn't Work" is my response. Kuttner's article, "The Libertarian Delusion", is a convincing rebuttal. It will eventually be posted by American Prospect Magazine.  (And I'll provide a hyper-link. Here's his home at A.P.)

On January 26, 2015, Economic Policy Institute published a report  
that  details lopsided income growth between 1979 and 2012, 33 years, the net result is "Change in Income" for top 1% = 180.9%, for the bottom 99% = 2.6%, Top 1% share of all income growth, 88.5% over 33 years. At Measuring Worth we see in those 33 years GDP per capita increased by 70.3%, from $28,725 to $48,908. Again, 88.5% of that growth went to the top 1%. The income difference between the 1% and the average 99% is 30 times. The wealth difference? I'd like to know, it must be around 1 to 1,000. The lower-saving 50% owns but 1.1% of all wealth (see here). Of the $25 trillion in new wealth since 2008, that is $78,000 per human nationwide of additional savings, most of it went to the top 1% (see here, page 2). 

Complementary to the above is my posting below that shows that freedom is not working for many Americans. 

Sunday, January 11, 2015

America's Inequality


  The Profile of Inequality of Income and Wealth

I read an article by Lawrence Mishel at the American Prospect and left this comment. My comment:

Income Shares --- Are they Healthy? "The lower-earning 45% of U.S. households all with incomes below $40,000 a year, earns in market income about 11.5% of all income, while the top-earning 20%, all with incomes above $100,000, earn 60.0% of all income. This comes out of the Congressional Joint Commission on Taxation (see here, page 30). When I convert this to average income per household, it means that the lower 45% have one dollar of income while the higher 20% have $11. This 1 to 11 ratio between nearly half and the better earning 20% is an unhealthy balance. Living standards for half are strained. And then I looked at the CBO report on income distribution for 2011 (see page 2) and see the same ratio. The market income disparity is relieved by government transfers and taxation, but the final disparity is glaring, 1 to 6 instead of       1 to 11

International Comparisons We are becoming like Mexico, which has the greatest inequality between the 20th and 80th quintiles, and our social ambience will become like Mexico’s as we continue down this line. The OECD places the U.S. income inequality at 4th worse out of 34 advanced nations (see page 45, "inter quintile share ratio 80/20). Mexico's 20th to 80th quintile average income ratio is 13.0 while the U.S. has 7.7. Lawrence Mishel says (at article cited above) that for 70% of the workers wages have been flat for almost 40 years, while the economy’s growth per human has more than doubled since 1964, by a factor of 2.6 times, a percentage of 160%. It's a stunning loss of income for the vast majority of Americans. "Raising America's Pay" is the call of the EPI, which also presents a wage calculator where one can discover what one's income would be if wages and productivity had matched. Not to be missed is the article "Wage Stagnation in Nine Charts" from the EPI. 

Wealth Disparity Wealth disparity is far worse. Professor Saez released a report showing that one in 1,000 has as much savings as 900 in a 1,000, both have about 23% of all wealth. (And read more here) Bernie Sanders seems to be the only politician speaking out about cures."    More to come. But of course you could read the 2014 posts on inequality and capture most of what I have to say. 

Figure 9: Productivity and Wages, 1970-2013
Weekly Wages Today Are Lower than 
1964 Wages for 80% of Workers Even Though the Economy Is Two and a Half Times More Productive Per Worker  
Dollars and Sense magazine published this graph, but the article is not on the web. (They also published 11 graphs at the end of 2014 well worth our time to contemplate, here.)  Total compensation rose by 40% because insurance companies charged employers more for medical insurance. Employees never experienced a raise. Average hourly wages have gone up by 8% since 1964 while average weekly wages have declined by 4%, see the graphs below from the Federal Reserve. Wage income as a share of national income has declined from 51% to 42%, an amount equal to today's $1.26 trillion; and if the former 51% share went to wages then 80% of households would have $10,000 plus income, and poverty would not exist (because I'm distributing the $1.26 trillion equally to all households in the lower-earning 80%).  
The Federal Reserve graphs show that average weekly wage earnings for nonsupervisory employees since 1964 have decreased by 4%. Here are a few Fed graphs showing how poorly the economy has served employees --- here, here, here, and here. Use the BLS inflation calculator, here, and you can learn that incomes have stayed flat. Lawrence Mishel says, in the article cited above, that for 70% of workers, all employees, wages have not budged since 1970. 
The EPI details lopsided income growth since 1979, the net result is "Change in Income" for top 1% = 180.9%, for the bottom 99% =  2.6%, Top 1% share of all income growth, 88.5% over 33 years. At Measuring Worth we see in those 33 years GDP per capita increased by 70.3%, from $28,725 to $48,908. Again, 88.5% of that growth went to the top 1%. The difference between the 1% and the average 99% is 30 times. 

One in Four Workers Are Out-of-Luck
_____________________________________One in four U.S. adults who would like to work are either not working, working only part-time and want full-time, or are working for poverty wages full-time and year-round. One in four is 25% or about 40 million adults. Now I'll try to prove it: 
Look at National Jobs for All Coalition's monthly employment report, njfac.org. They state that 21.9 million are 1) not at work or 2) not working full-time but want full-time. Then they state that 18.5 million workers are 3) working full-time, year-round at less than poverty wages which they put at less than $23,850. This comes out to less than $11.50 an hour. A total of 40.4 million out of a workforce of 156 million (see here) is more than 1 out of 4. 
I could argue that this number is greater, but I won't. Who would read it? It was larger a year ago, about 28% of the labor force. 
So, things are improving. 
I read the December 2014 report of the Council of Economic Advisers, and I am upbeat, at last. Things are improving. But, one in four either working poor or not working? And 45% earning just 11.5% of all income while the top 20% earn 60.0%? A ratio of 1 to 11. And the top 1 in a 1,000 owning more than the lower 900 in 1,000?  We have quite a long, long road before we reach upbeat. 

The System Is Not Working _______________________________________When I think 1 in 4 workers are either not working, not working enough, or being paid a sub-poverty wage, I think this system is not working. Today I saw an old campaign poster for the local Tea Party winner, and it said "Freedom Works". For whom? 
The nation needs to get voters to vote. And to get money out of political campaigns. And to create public employment to drive up wages, while reforming laws pertaining to labor unions. I've gone over this in previous reports. 
In a more real way, we are witnessing a collective movement of  hearts. A very slow awakening of the importance of the economy, a shift of the old story of freedom to one of cooperation. Caring will at last form the basis of voting. Since there is so much wealth and income --- it is absurd to think that for long we can hold the natural instincts down with fear, paranoia, class animosity, and demagoguery. We are reasonable and understanding. "We'll come to understand that we like each other more than we thought we did," was my answer to "How will it ever change?" We'll come to care more and apply our strengths to making equal opportunity and more-or-less equal outcomes happen. I can't say it clear enough.  Too many of my friends insensitively and arrogantly predict calamity. I disagree, but the future will be difficult, both good and bad will come forth. The good will be much more powerful. But that matters little, each person will have to demonstrate his convictions and act. 
Here's a nice read about inequality in movement, from Too Much, again. Two British epidemiologists discuss the powerful insights about inequality, disease and health outcomes, and the reaction to their story, "Pickett: Actually, I don’t think people find what we’re talking about all that difficult at all. I think they find that what we’re saying, about the impact of inequality, is intuitively making sense of their own experiences. So the most common reaction we see among audiences when we’re talking is nodding." 
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Maryland Congressman with a Bold Plan A news report Congressman Chris Van Hollen's plan for a $2,000 tax credit for middle class couple's taxes (an income increase of $1.2 trillion over ten years to about 50% of households), a Financial Transaction Tax, and for a  fine on corporations that boost only CEO pay while employee pay falls. See KPFA's Pacifica Evening News, January 14, 2015. The video of Van Hollen at the CAP is here, 58 minutes. I watched the entire 58 minutes, I feel I should watch it again. 

The nation's surplus is going to waste. 
$25 trillion of new savings has been created in the past 6 years, since 2008 (see Federal Reserve report, page 2). An increase of $78,000 per human, or a 30% increase per capita. It's a stunning increase. Haven't you noticed how much better things are, how much new construction is happening, how strained we are to meet the influx of all the new demand? 
No? Why not? Because all that surplus is going to waste, that's why. Van Hollen's plan, and others like it would put the surplus to productive use. Since 2008 the economic output, GDP, has been $90 trillion, and savings has increased by $25 trillion, and that's an amazing amount of savings. Too bad it goes to absolute waste. 

The CPEG program purports to raise close to $1,000 billion a year while Van Hollen's plan only $120 billion. CPEG recommends: "c) As we exploit our (greatest remaining economic “asset” - rentierism) we need to shrink it and eventually eliminate it. A straightforward way to do both (exploit and gradually eliminate) is to impose a financial transaction tax on all financial trading in the U.S. and with European collaboration (the EU parliament has already recommended this) worldwide.11 It is indicative of the degree of economic distortion of our rentier economy, that this one tax has the potential to raise up to $ 1 T a year and fund up to 25 M living wage jobs over 5 years (Barclay, 2005) (CPEG, 2009,2011). This should be immensely politically popular, would directly repress rentier activity, and if used for a jobs program, directly redevelop the productive side of our economy."

The Van Hollen video is a convincing public display by a knowledgable Congress Representative, and it should have a durable impact as he seeks to publicize it. Watch it. 
Also, here's a short piece from the Brookings Institute on the CBO report that has caught my attention. To quote: "Between 1979 and 2011, CBO calculates, inflation-adjusted market income for the bottom 20 percent of households rose by 16 percent.  For the middle three quintiles of households (the 21st to the 80thpercentile, this income also rose by 16 percent.  For households between the 81st and 99thpercentile, it rose by 56 percent.  And for the top 1 percent of households, it rose by 174 percent." 
See the web page Measuring Worth and calculate as I did that the per capita growth of the nation increased by 70.2% between 1979 and 2011. Not 16%, 70%. Michel's article covers this too.  
The CBO report mentioned in the Brookings report will be the topic of a soon to be posted essay here.

Wednesday, December 3, 2014

Two Stories -- Obamacare Results, and Unemployment Demographics


I present two stories today: Obamacare results, to date, and E/P, the Employment to Population story. The second is for nut-cases like me who can't quite unravel the mystery of the decline in the share of adults who are employed. The official versions are unconvincing, and here is an argument why. But first, 

Here's some info about the Obamacare, or ACA, that relies on this  New York Times article, "Obama's Health Law: Who Was Helped Most", and several other sources. I live in Mariposa County, so it is addressed to my neighbors, but not exclusively.
In Mariposa County the percentage of people without health insurance dropped from 18% in 2013 to 10% in 2014, according to the New York Times article of October 29, 2014.

The article begins, 
"We know that about 10 million more people have insurance coverage this year as a result of the Affordable Care Act." The national picture improved from 16.4% not covered to 11.3%, which also represents 32 million and 22 million, respectively. The NYTimes article continues, "The areas with the largest increases in the health insurance rate, for example, include rural Arkansas and Nevada; southern Texas; large swaths of New Mexico, Kentucky and West Virginia; and much of inland California and Oregon."

Unlike poor American children, poor American adults, age 18 to 65, do not automatically qualify for Medicaid support; each state determines their eligibility according to annual income. But Obamacare, or ACA, replaces the state limits and covers all adults whose incomes fall below 138% of the federal poverty threshold. But states must opt to expand Medicaid coverage, the additional costs are 90% covered by the federal government. Here's a map of all states showing the 22 that rejected Obamacare, the 5 that have a hybrid plan, and the 23 that expanded. 

The biggest winners due to Obamacare are ethnic African Americans and Hispanic Americans. The graph at the bottom of the NYTimes article shows nationally, state-by-state, the areas where lack of health insurance is both highest and lowest. The majority of Southern states, most of whom rejected Obamacare expansion, still have greater than 16% of their adult populations without coverage. The states with Medicaid expansion comprised 68% of all enrollees, and those that rejected it comprised 32% (according to this HHS report, page 5, April 2014. 

California reduced its rate of uninsured from 22% to 11%, according to this LATimes article
The article also states: "Texas, which didn't expand Medicaid, saw its uninsured rate among adults fall from 34% to 22%. Florida saw a smaller decline, from 30% to 26%."  States in the South have the highest percentage of employees earning the minimum wage: Texas 6.4% vs. California 1.3%, and the median hourly earnings vary accordingly, Texas $11.99 an hour, California $13.11. See this report.

To read an article about different states' decisions to expand or not Medicaid to poor adults, you can read this article

In Texas, a couple earning more than $4,900 a year is excluded from Medicaid. In Minnesota, adults in families with over $40,000 still qualify for Medicaid. And the Texas legislature and governor rejected Obamacare expansion, along with 22 other states, which would have increased eligibility to an income equal to 138% of the federal poverty level, or $27,310 for a family of three. See a table chart of other states, mostly in the South, that rejected Medicaid expansion, and the maximum income exclusions still in place excluding about 4 million adults from health insurance. 

Here's an illustration from the Kaiser Family Foundation
In states that do not expand Medicaid under the ACA, there will be large gaps in coverage available for adults.
Figure 1: In states that do not expand Medicaid under the ACA, there will be large gaps in coverage available for adults.

How We Treat the Poorest In Texas, for instance, a couple with an income over $4,900 per year is denied Medicaid, but in the above chart the "Median (for all states) Medicaid Eligibility Limits" is $9,900 for a family of three. Adults in families earning between $9,900 (or above $4,900 in Texas, or $9,393 in Georgia, or $4,699 Alabama) and $27,186 are denied Medicaid coverage. The article also states, " and in nearly all states not expanding, childless adults will remain ineligible."2"  
This KFF article (linked above) states that 4 million adults fall into this "coverage gap" and 86% of them are in the South, and 2/3rds are working adults.


The Cost of Medical Insurance in the U.S.  

From the Milliman Medical Index report
Executive Summary
$23,215. That's how much is spent in 2014 on healthcare for a typical American family of four covered by an average employer-sponsored health plan according to the 2014 Milliman Medical Index (MMI). And yet while the amount has more than doubled over the past 10 years, growing from $11,192 to $23,215, the 5.4% growth rate from 2013 to 2014 is the lowest annual change since the MMI was first calculated in 2002. 

According to the Family Budget Calculator at EPI.org, the cost of "health care" in the median-priced locale in the U.S., which happened to be Topeka, Kansas, in 2013, was $16,104 for a family of four, or 25% of their basic, frugal budget. The FBC says in "Rural" California the cost is $17,928 or 28% of the annual budget, and in Madera County it is 16,992 or 27%. I suggest the reader play around with this family budget calculator, it's fun.  

2013 Costs: $9,255 per person in the U.S
This NYTimes article, Dec 7, 2014, states, "Spending on health care in the United States grew in 2013 at the lowest rate since the federal government began tracking it in 1960, the Obama administration said Wednesday."
That is still 17% of GDP. The graph shows that healthcare has risen by 15.6% in the past 6 years, and over the same period  median household income has been down from 7% to10% of its 2008 high. 

An expanded New York Times article answers 7 major questions
A companion story tells the story of a 27 year old woman in 2008  who develops extensive numbness, weakness and fatigue. Her symptoms disappear, but as a result she is denied insurance because of this pre-existing condition. Later her problems resurface and she is diagnosed with multiple sclerosis. She obtains coverage through the ACA in January 2014 and runs up a medical bill for $65,000 but her monthly premium stays at $66 a month. “It’s great coverage,’’ she said. “It’s affordable for me. It has changed the trajectory of my life for the next 10 years. I feel very, very blessed.’’

Individual Enrollees Plan
About the 7% of ACA enrollees who purchase individual plans, this article is enlightening

From the article: 
"Last month the government announced that 87 percent of shoppers received a subsidy on the federal exchange, bringing their average monthly premium down from $346 to only $82!
That's a 76-percent reduction, and it more than makes up for the 14- to 28-percent premium increase, which may not be much of an increase after all if you include people who didn't buy insurance in the past.
Bottom line: On average, Obamacare clearly lowered the cost of health insurance.
Sure, some people will pay higher rates, but you have to remember that those people only paid low rates in the past because insurers were discriminating against sick people. The new market is much fairer and more affordable for more people -- a fact that you might want to point out to Republicans on the campaign trail this fall."

High Cost and Poor Results of U.S. Medical Services

No conversation about health costs is complete without the following comparisons: See this report from the OECD. Average costs for U.S. citizens is almost $8,000 a year, in the rest of the developed nations it is around $3,200. We spend over 17% of GDP on health, others spend 9.6%. 
It is past time to institute what all others have, a comprehensive system that limits expenses. We are wasting our incomes on exorbitant costs that other people have learned to control. Our system does not work well. Out of eleven nations we rank last, see this report or this Common Wealth Fund report. Or this article citing an OECD study of 26 nations. 
We spend double and our results are the worst !





___________________________________________________

                        Employment to Population, 
                   a nuanced report 


25.1% of U.S. workers are out-of-luck, about 41 million adults. The out-of-luck rate includes those who are unemployed, plus the under-employed involuntary part-timers, plus "working-full-time-but-still-in-poverty" employed -- and the rate is 25.1%, according to the NJFAC.org(Find similar figures at this site: click here.That means 13.8% are unemployed or underemployed and another 11.3% are working full-time and year-round for wages less than the poverty level for a four-person family, see here. Personal income for every citizen (babies, infants, toddlers, children, teen-agers, adults, seniors, everyone) after paying federal taxes is over $40,000 according to the BEA.gov. And average household income is above $95,000 according to the recent CBO report on income distribution in 2011. This means only 23% of Americans are average, 77% are below average (see here, page 23). But still, incredibly, a quarter of workers are getting shafted, and half are making less than $28,031 per year in wages. 

As I've pointed many times, the Social Security Administration shows that the wage income of half of U.S. workers is 7.9% of total U.S. personal income. Workers are inadequately paid in this country. The recent CBO report (page 26) on income distribution in 2011 places the Gini coefficient of inequality at 0.59, which is high. A comparison of the U.S. with other countries is found here at Wikipedia, we compare unfavorably with other developed countries. 
___________________________ On December 11, 2014 the Chicago Political Economy Group, CPEG, issued their report on the Unemployment report. This graph below shows in simplest form the conclusion. Be sure to read the report as well. It is the most reasonable report I've read. 

NOV2014-2
Here's how I interpret the graph: We had the largest collapse of jobs since the 1930s, note that the E/P, the employment to population ratio, dropped by more than double all other recessions. And the important part for today, it's only half way recovered. The graph's creators factored into it the demographics of age cohorts -- something I do not understand completely, but the St. Louis Fed has lots of data on this, as well as the U.S. Census. I think we have a 40% recovery just looking at the E/P for the age 25 to 54 group, and a 20% recovery looking at the "all groups" E/P. But the demographics are that the imaginary bucket had a hole in the bottom as well as a flow-line at the top, and the hole enlarged while the flow-line constricted a little, the net result is a demographically adjusted interpretation of the E/P ratio. We have half a recovery after 5 and a half years, according to the above graph, but the impact of the recession was double the impact of all other recessions. That's simple and accurate. Whatever more I've written, below, you might as well ignore. But it is an exercise in this topic. 
I used think that we could substitute the E/P ratios for 2007 or January 2000 and use them as benchmarks. If we did that, then today's U3 unemployment would be 11.2% or 13.0%, respectively. I used to think that there was a hidden demand for work not captured by the BLS figures. But apparently, but not fully convincingly, the demographics matter, there is no hidden army of workers, they have aged-out. But the U3 employment is close to 9% I would guess -- a true recession. At EPI.org, see link here, Heidi Sheirholz said, July 3, 2014, that the U3 would be 9.6% if "missing workers" were reinserted into the workforce. So today  December 2014 it would be 9.2%, according to me and this expert.
Recession -- does this meet the specs?  
And 25.1% -- the out-of-luck rate. Like a depression. 
__________________________________
Why Did the Employment to Population Ratio Drop by 5% between 2008 and 2010, from about 80% to 75%, among the group 25 to 54 Years Old?


Best to look at this chart at St. Louis Fed: click here

The CBO and the OECD say the retirement of Baby Boomers accounted for half of this drop. The FRB of Atlanta says 1/4 was the cause of retirement. The EPI.org says 1/3. Who is correct? 

The graph below shows the decline for all citizens over 16 active  in the labor force, the LFPR, the participation rate, between 1999 and 2013.  To view the Federal Reserve, Atlanta report, see here. 


The above is the Employment to Population chart for everyone in the Civilian Non-Institutional Population, or those age 16 and above (from the BLS). Then, below, just for those age 25 to 54: 


According to the chart at Atlanta Fed, the age 25 to 54 group, comprises 51% of the CNP, and their participation rate is much higher than that of the full CNP, around 81% instead of around 60% for the full population. The age 25 to 54 group has recovered about 35% of its loss since 2007, and only 27% of its loss since April 2000. I call this a 35% Recovery. 


Employment


Employment-to-Population RatioSeasonally AdjustedEmployment-to-Population RatioJan '00Jan '02Jan '04Jan '06Jan '08Jan '10Jan '12Jan '14586062646656

Employment-to-Population Ratio, SA (Seasonally Adjusted), 16+ non-institutionalized population, is the ratio of the number of employed persons to the number of 16+ non-institutionalized population, times 100.
Source: Bureau of Labor Statistics, Current Population Survey (CPS).


This Employment to Population chart comes from FRB New York, see here. It places the total population E/P at 59.01% which is just 20% above the drop-off since 2007, a 20% recovery. 
And from April 2000, when unemployment hit 3.8%, the recovery is only a 14% recovery. But due to demographic shifts, the above 35% recovery is more accurate. I wish I had never looked into this issue, it's too confusing, but that's the best I can do!  

I recommend readers go to the FRB Atlanta site and explore their reasons, and then read this report by Michael Cassidy, "Uncovering the Labor Market Recovery", at The Century Foundation, plus this article by Cassidy. He writes clearly and adds the human touch to this dry story. At the end of the first report he shows that wage income as a percentage of total "gross domestic  income" has dropped from 50%, between 1948 and 1974, to 42% of GDP. (See this Fed Reserve graph to confirm.) An 8% drop is equivalent to $1,120 billion (or $1.12 trillion). If we could add that 8% back to wage income, lost since 1974, and evenly distribute it, then all households would receive an additional $9,333. This would eliminate poverty in the U.S. The average income for the lower-earning 20% of households is around $15,500. It could be $24,500 if we had a distribution curve similar to the 1948 to 1974 era. Then the redistribution of income would be a minor issue. 

Wage Growth, 1964 to 2013 -- 
           Compared with Disposable Income per capita Growth
In 1964 the average wage for non-supervisory workers was $2.50 per hour, which translates to today's $19.15 an hour adjusting for inflation. In 2014 the average wage is $20.48. (See this St. Louis Fed graph) Non-supervisory workers make-up about 80% of all workers, they are called employees. So average wages have increased by $1.33 in 50 years. That's a 7% wage increase in 50 years (not much a raise is it?). The "real" (meaning adjusted for inflation) GDP per capita has increased by 155% (using this source). Or, "real" disposable personal income per capita increased by 177%, nearly tripling, (using this Federal Reserve source). Where did the extra surplus go? Not to workers. If the (inflation adjusted) average wage of $19.15 had increased at the rate of GDP per capita, then today's average would be $48.80 per hour, not $20.50 and hour. This is why an increase in minimum wage is just a beginning of a process of sharing prosperity. This corresponds to my article that places the minimum wage at $22.81 an hour, read it here. 
       I like this last paragraph, it summarizes 50 years of economic history. 

The Birth Rate Issue -- Did the Baby Boomers Stop Working? 

The following section is complex. Sorry. In fact, I'd prefer that you don't read it. It will just annoy you, it annoys me, but I want to keep the data on the web page! 

An AnalogyVisualize a can of water with a flow hose at the top and a hole at the bottom, and a thirsty dog. Water pours in, the dog drinks, the hole empties. The dog is the main reason the E/P decreased between 2008 and 2010 (look at the graphs above again, if you must).  Think of the population group 25 to 54 over time. It's like a can of water with a flowing hose at the top and a hole at the bottom. Both have valves to increase and decrease according to birth rates. The hole gets bigger and smaller depending on the population size at the bottom. The flow increases and decreases depending on the flow rate at the top. This is too complex. The dog gets thirstier as the economy tanks. 

The U.S. birth rate between 1975 and 1990 dipped. In the mid '70s the rate dipped. Here is a site with the birth rates for the U.S. Many claim that the "retiring baby boomers" is the major factor of the E/P ratio. The age 25 to 54 group in October 2014 is the same as 8 years ago, May 2006. It has decreased by 1.4 million since 2007, see here, FRB St. Louis graph. The principal reason for the 5% decline in employment to population was the  Recession. The second reason has to do with the birth rate issue, and lastly the retiring baby boomers contributed to the fall in E/P. 
The Atlanta Fed, referenced above is a good overview. 

I've taken a closer look at graphs from St. Louis Fed to analyze the unemployment question. 
Here's the core of my findings. 

In 1998 approximately 95.4 million were employed among the working population age 25 to 54 years old, the prime working years. This total population was 117.4 million in 1998. In October 2014, 16 years later, still 95.4 million are employed but total population has increased by 7.2 million to 124.6 million (call it 125 million). Of that 7.2 million increase, normally about 80% would be employed, or 5.7 million. (I argue that we could add at least 10 million more jobs with public employment, and another 414,000 private sector jobs would added. See this essay, the part "14 million new jobs".) So, 95.4 million are working, 5.7 million more should be, a total of  101.1 million out of the total population of 25 to 54 year-olds in their prime work years using the approximate LFPR between 1988 and 2008. Meanwhile, the older  group aged 55 years and above has increased its LFPR from 30% to 40% since 1996, so they have cushioned the drop in employment and lack of slow population growth among the core age, 25 to 55 year old group.  

The other irregularity is that between 2000 and 2014, 
total U.S. population has increased by 12.4%, or 35 million, 
the age 25 to 55 group has increased by 3.2%, or 3.9 million, 
and the group above 16 and above, the Civilian Non-Institutional Population, the "working age population" has increased by 17.0%, or 36 million. We old folks are living longer. 

(Note, CNP stands for Civilian Non-Institutional Population, who are citizens 16 years old and older. Core Age CNP (CA-CNP) are those 25 to 54 years old.):

Between 1980 and 1990 
   CNP grew by 25.3%, increase of 21.3 million; 
CA-CNP grew by 32.6%, increase of 21.7 million.     
Between 1990 and 2000 
   CNP grew by 15% or 15.5 million;
CA-CNP grew by 14.8%, increase of 13.1 million. 
Between 2000 and 2010 
   CNP grew by 11.8%; increase of 25.0 million. 
CA-CNP grew by 3.0%, increase of 3.6 million. 

Between December 1998 and October 2014, about 16 years, the 
    CA-CNP population grew by 6% or 6.8 million (from 117 to 125     million)


Between April 2007 and January 2010 
    CA-CNP employment decreased by 6.3 million  !!!!!
    Since January 2010, CA-CNP has added 1.3 million jobs, 
    an increase of 21%, a 21% recovery. BUT ----
Between January 2010 and November 2014 
   While total CNP increased by 5.0% or 11.8 million,
CA-CNPopulation (age 25 - 54) decreased by 600,000 and 
   employment increased by 1.8 million, the E/P increases    
   by 1.6%. After dropping 4.9% it gains back 1.6%, still need 3.3%
   for Recovery -- it's a 33% recovery for this age group !!!!!
 OK. That's all. Read Elise Gould's reports at EPI.org, several reports, for more. But, again the CPEG report below the first graph at the top is the best report. 
___________________________________________

In 16 years, there has been a net zero increase of employed, age 25 to 54, between December 1998 and Oct. 2014 -- 95.8 million both dates !!!!!  (See here, St. Louis Fed graph. This Fed graph shows the next set of comparisons.) 
But between Jan.2000 and Oct. 2014 
   CA-CNP employment is down 2.6 million.
In 2000, with a total population (age 25 to 54) at 120.7 million, E/P was 81.3%, 98.1 mn. employed. By 2007 100.5 million    employed.
In 2014, total population of age 25 to 54, 124.6 million, E/P is 76.8%, down to 95.4 mn. employed, down 2.7 million in almost 14   years, and down 5 million in 7 years. 
Between 2000 to 2014, CA-CNP number employed drops by 2.7 million, while its total population increases by 3.9 million of which normal about 80% are employed or 3.1 million. So -- add the 2.5 mn. plus the 3.1 mn.  -- 5.8 million in CA-CNP should be employed who are not, out of total population of 124.6 million.  
See these Federal Reserve or BLS sites: 
CA - CNPopulation age 25 -54     
CA - CNPop. Employed age 25 - 54
CNP, Civilian Non-Institutional Population
http://research.stlouisfed.org/fred2/series/LREM25TTUSM156S 

There are some obvious patterns here: the CA-CNP growth rates slow, and then becomes negative. 
Between January 2000 and October 2014 
   CNP increased 17.6% or 37 million;
CA-CNP increased 3.6% or 4.4 million. 
   And total employed for CA-CNP from 1999 to 2015, unchanged, 
no growth in spite of population growth of 6.8 million. Surely there are some needed infrastructure projects that could employ these millions. 

Private sector employment also had very slow growth, it increased by 6.6% or 7.3 million in 14 years, 2001 to Oct. 2014, or about 0.5% per year increase. Between December 2000 and April 2012 (11 years 5 months) private sector employment growth was a net zero, see below. In 11 years, between December 2000 and April 2012, it decreased from 111.9 mn. to 111.8 mn. 
See the bls page: http://data.bls.gov/timeseries/CES0500000001
Total employment (not just private sector employment) increased 5.3% or 7 million in almost 14 years, between Jan 2001 and October 2014. ---- that is total employment since 2001 has increased by 500,000 per year (42,000 a month)  on average. Doesn't that seem slow?    
You should access this St. Louis Fed graph again to see the slow growth of age 25 to 54 population, only 3.6 million growth between Jan 2001 and Oct. 2014. Of that about 80% would normally be employed, or 2.9 million, or again 206,000 per year. This is why I'm not convinced with the Baby-Boomers-Dropping-Out-of-the-Labor-Force argument. Yes, they dropped out, but the faucet flow at the top of the can decreased as well. 

Core age, 25 to 54, population shrunk by 1% after 2007 (see the graph here), but it did not shrink by 5%, while the employment rate for older workers after 2007 dropped by 2% (see the graph here), not by 5% as the E/P  shrank. The Recession was the major cause of the drop. 
I hope you didn't read any of that.   
___________________

I thought I was done. But I wrote a comment here on Sunday 12.7.14. 
Let's look at employment in private enterprises between January 2000 to Nov 2014, 15 years. (I'm taking data from two bls sites, here and here.) The adult population increased by 17%, but employment in private sector work increased by only 7%. Normally the two rates will match, both would grow by 17%. So private sector growth is 10% lower than normal, over a 15 year period. Or 7.7 million found private sector work, a growth rate of 43,300 a month, or a 7% increase over 15 years (save two months).  In 15 years, 36 million people joined the working age population, but only 7.7 million (or 21% instead of 50%) found employment in private sector work. Normally, 50% of 36 million would have found private sector employment. Another way of saying it is that of the 17.9 million expected to obtain private sector employment, only 43% (or 7.7 million) found private sector employment work and 57% (or 10.2 million) did not find employment whatsoever over a nearly 15 year period. The official list shows 9.1 million as unemployed. To this 9.1 million add the 10.2 million I've just discovered, then the total becomes 19.3 million unemployed. The actual U3 unemployment arguably is 11.6%, not 5.8% -- it is double the official rate.  In this calculation I have accounted for the 17% who would normally be employed by all levels of governments.  (I used this BLS web page for some of the calculations. And the data bls private sector employment web page.) We are still in RECESSION. 
______________________________
Why has the Recovery been so disappointing? 

fed2
This graph from EPI's Josh Bivens argues that the Republican filibuster in the Senate crushed all attempts to recharge the economy with federal spending. In the past the government has led the way out through spending. "Spending" is not the problem, it's the answer. Even Reagan knew this, see the above graph. In the 1940s government spending for the war, WWII, increased GDP by 75% in 6 years, and increased employment by 40%. During 1933 to 1937 spending reduced the unemployment rate from 25% to 9.6%. And Bivens' graph shows the same relationship. The financial system increased its debt by 49% in 10 years, 1998 to 2008, while the economy, GDP per capita, grew by 17%. (see "Credit Market Borrowing by Sector", "Domestic Financial Sectors", Federal Reserve data here, Table D.2, page 4, and see GDP/capita data here.) All that private sector debt spending, not government spending, was unsustainable. George Bush was President mostly, Alan Greenspan was Chair of the Fed. Bush cut taxes and raised spending, the public debt under his term increased from 55% to 83% (see here). http://research.stlouisfed.org/fred2/series/GFDEGDQ188S  And see this Atlantic Monthly article (I just read it myself, it's excellent, much like Dan Alpert's book The Age of Oversupply.) that provided this graph: 

Crisis of 2007-2008: U.S. GDP, Public Debt, and Private Debt (in Billions)












GDP data comes from the Bureau of Economic Analysis, private-debt data from the Federal Reserve, and Federal-debt data from the Treasury. (Richard Vague)



When payments came due, foreclosure and default resulted, private sector spending collapsed, corporations contracted and employees were let go, unemployment more than doubled, government aid to the unemployed kicked in, personal income for the second time since 1933 decreased -- the greatest recession in 75 years ensued! And the richest are richer than before as 95% of recent growth goes to just 1% of households who are under-taxed and unscathed. Their share of national income was 8% in 1979, now it's around 17%. Their taxes are lower, and much lower than 1940 to 1983 when the economy did its best.  
Government spending was the only method to restore consumption and production and employment. We have a 33% recovery after 5 and a half years. 

______________________________

L. Randall Wray has an article about public jobs, here. It just appeared, 12.3.15, at EconoMonitor. 

Laura Tyson writes about inequality here, "The Rising Costs of U.S. Income Inequality".   

Paul Buchheit writes the most important journalism today often focusing on extreme inequality at Common Dreams. Did you know that 14 individuals' combined income exceeded the "food stamp" federal budget for 50 million poor Americans? Read here

In the U.S. 33% of the population live in rental properties and 52% pay more than 30% of their income on rent. And here is a portrait of net worth by Race/Ethnicity for 2011. Both available in this report by Population Reference Bureau (and here). Black or African Americans are 13% of the population, Hispanics are 17%, for a total of 30% who have approximately $3,000 in net worth exclusive of home equity. Liquid asset poverty can also been seen here, showing 44% of U.S. population has less than $6,000 available for emergencies. This survey from Credit Union National Association (CUNA) says that 83% of households with incomes  below $25,000 a year " said they did not have extra funds available to pay for an unexpected expense of $1,000."  (I found this info at TooMuch.online, December 8, 2014) In 2012 one in four Americans lived in households, or some 24.7% of households, had income below $25,000 (according to the U.S. Census report on Poverty Income and Health Insurance, page 33). And for all households, "When asked whether they have extra funds available to pay an unexpected expense of $1,000, the proportion who said no fell from 49 percent in 2013 to 47 percent this year." The mean average -- you know, average for all 120 million households -- for household net worth is about $627,000, see here page 89. And the Federal Reserve says it is $678,000 (see here, page i) Sixty-two percent of Americans are "white alone" and half of them have less than $33,408 in liquid funds. How long can one live on that amount? I guess it's paycheck to paycheck for many people.