Economy

The Depressing Picture of Economic Mobility in America

Today's New York Times has a big article by David Leonhardt on a new study of income mobility with a bunch of interesting findings, the core of which is that, especially for middle-class and poor people, where you live matters tremendously to your chances of improving your economic station. Here's an excerpt: But the researchers identified four broad factors that appeared to affect income mobility, including the size and dispersion of the local middle class. All else being equal, upward mobility tended to be higher in metropolitan areas where poor families were more dispersed among mixed-income neighborhoods. Income mobility was also higher in areas with more two-parent households, better elementary schools and high schools, and more civic engagement, including membership in religious and community groups. Regions with larger black populations had lower upward-mobility rates. But the researchers' analysis suggested that this was not primarily because of their race. Both white and...

What Tom Friedman Doesn’t Understand About the Economy, Part 72

AP Images/Charles Dharapak
“Average is over,” New York Times columnist Tom Friedman likes to proclaim, and in at least one particular, he’s right. Friedman no longer writes average columns. With each passing week, his efforts become steadily more moronic. His latest , in Sunday’s paper, is entitled “Welcome to the Sharing Economy,” and in it, Friedman mistakes economic marginality and desperation for innovation and opportunity. The subject of this particular essay is Airbnb, a website where travelers go to rent bedrooms in other people’s homes. “There’s an innkeeper residing in all of us!” Friedman effuses, as he recounts how Airbnb may have as many as 200,000 people per night this summer plopping down in some stranger’s kid’s bedroom. Enthralled by the sheer techno-innovation of it all, Friedman doesn’t pause to ponder just what would impel a parent to turn over junior’s room for a few bucks. Could it be that the factory closed? That Wal-Mart pays so little? No matter: “Ordinary people can now be micro-...

Coming Home for the Recession

AP Photo/Bob Leverone
AP Photo/Bob Leverone This is the third installment of a four-part series on Millennials and the new economy, based on the author’s monthlong road trip with stops in the Rust Belt, Omaha, and Texas. Read the first and second . O ne mosquito-heavy evening in May, I met 30-year-old Pat Valdez near San Antonio’s old Lone Star brewery. Valdez makes $15 an hour working in the human-resources department of Wells Fargo. She takes classes part-time at an online university, where she hopes to earn a degree in journalism. With $30,000 in student-loan debt, she’s living paycheck to paycheck. But unlike other Millennials struggling to make ends meet on their own, she’s not in dire straits. After a short, “way too expensive” stint in California living with her older brother, she’s back at home with her parents. She suspects that some people from her South Side neighborhood think she is following the example of many other women in more traditional Hispanic families: staying home until she marries...

The Great Detroit Betrayal

AP Photo/Paul Sancya
AP Photo/Duane Burleson D etroit has filed for bankruptcy. Most of the spot-news coverage has focused on the immediate fiscal crisis of the city, but the immediate fiscal crisis really isn’t what got the city into such deep trouble. Certainly, Detroit’s contracts with its employees and its debts to its retirees don’t explain anything about how and why this once-great city has come to such grief. Those contracts and retirement benefits are par for the course for major American cities—certainly, no more generous than those in cities of comparable size. Any remotely accurate autopsy of the city will find the cancer that killed Detroit was the decline of the American auto industry. The failure of U.S. automakers in the '70s, '80s and '90s to make better cars at a time when foreign-made autos were beginning to enter the U.S. market was surely one factor. Another was the trade deals that made it easy for Detroit automakers to relocate to cheaper climes—most particularly, NAFTA, which...

Netanyahu versus the EU

EU sanctions against Israeli settlements are a warning from friends that their patience has run out.

Sipa via AP Images
AP Photo/Ariel Schalit, File "T his is the chronicle of a crisis foretold years in advance," said the Israeli ex-ambassador to Germany, in that petulant tone of a diplomat working very hard not to sound infuriated. Shimon Stein was trying to explain new European Union sanctions against Israeli settlements. Neither journalists nor politicians should sound so shocked by the EU move, he lectured the anchor of state radio's morning news program. He was right, but he was trying to outshout a hurricane of public anger and disbelief. The anchor herself had begun the show with a riff of indignant surprise that the EU considered her Israeli neighborhood in East Jerusalem to be a settlement. Of course, the EU position has consistently been that the country called Israel is defined by its pre-1967 borders, or Green Line—and that anything built beyond those borders is not part of Israel. The sanctions are designed to give more teeth to that position. Under new budget guidelines, EU bodies must...

Rhode Island’s Small Victory

AP Photo/Susan E. Bouchard, File
AP Photo/Mel Evans W hen Governor Lincoln Chaffee signed the Temporary Care Giver’s Insurance law last week, Rhode Island became the third state—along with California and New Jersey—to grant paid time off to care for a sick loved one or a new baby. Rhode Island’s law, which goes into effect in 2014, will not only provide most workers with up to four weeks off with about two-thirds of their salaries (up to $752 a week), it will protect employees from being fired and losing their health insurance while they’re out. Workers will be able to use the time to care for a broad range of people, including children, spouses, domestic partners, parents, parent-in-laws, grandparents, and foster children. And, though the maximum single leave is four weeks, each parent can take four weeks off to bond with a new baby. A mother recovering from birth could combine that with an additional six weeks paid through an existing state program, bringing her total paid time off to ten weeks. An entire family...

Transatlantic Trouble

How much has America's spying on European allies damaged the transatlantic trade deal once thought to be one of Obama's best opportunities for shaping his foreign policy legacy?

AP Images/Charles Dharapak
Recent revelations that the U.S. government had been spying on European allies continue to rile public sentiment on the continent, just as officials from both sides of the Atlantic sit down for talks in Washington on the Transatlantic Trade and Investment Partnership (TTIP), a wide-ranging deal that the Obama administration has been pushing as a key foreign policy initiative. If successful, TTIP would deepen the economic ties between North America and the European Union and represent the biggest trade deal in over two decades. But with public trust in the United States ebbing throughout the core countries of the European Union, President Obama will probably have to do more than simply downplay the scandal as a hyped-up, misunderstood policy detail. Old school Atlanticists have long touted the wisdom of deeper economic integration between the United States and the European Union, which is already vast and significant. U.S.-EU trade in goods and services totals about one trillion...

Online LL.M.'s: A New Way to Rob Peter to Pay Paul?

flickr/David Ortez
Two weeks ago, faculty at Seton Hall’s School of Law were informed their pay would be cut by 10 percent during the upcoming term. All junior (untenured) faculty were told they could be fired after the 2013-2014 school year. Seton Hall joined Florida Coastal, (where 10 percent of staff were fired ) and Vermont Law School (one-fifth of tenure-track faculty positions were removed ), in delivering a message professors not at elite schools have long feared was coming. As the legal job market remains in shambles and law school applications continue their historic free-fall, schools will be forced to take a variety of drastic measures to remain solvent until the millions in disappearing tuition dollars return. Firing faculty and downsizing staff—perhaps even closing whole schools—will likely soon be common; so will the appearance of the LL.M., a degree whose strange history may be emblematic of the most serious problems in legal education. The LL.M., awarded after the first degree in law,...

How to Keep Bad Cops on the Beat

A few states forego a key tool protecting the public from rogue police officers.

AP Photo/Harold Valentine
AP Photo/Elise Amendola David Silva died during an arrest in Bakersfield, California on the night of May 8. The Kern County sheriff’s department contends that the 33-year-old was drunk and uncooperative and fought back during the arrest. The sheriff’s deputies on the scene also fought back during the arrest—using unreasonable and excessive force, as the civil-rights lawsuit Silva's family filed charges—allegedly beating Silva with batons while he lay on the ground. One of the accused deputies has the same name as one charged in the 2010 beating of a man that resulted in a $4.5-million court judgment against Kern County. County sheriff Donny Youngblood declined to tell The Los Angeles Times whether he is the same officer. If the deputy is one and the same and the lawsuit succeeds, the circumstances will fit an emerging pattern in the state—police departments retaining cops with questionable records. In October 2011, two San Joaquin Valley TV stations revealed that several officers with...

Wal-Mart Plays Hardball in D.C.

Flickr/laurieofindy
There's a power struggle going on in Washington right now, not between Republicans and Democrats but between Wal-Mart—which is supposed to open six stores in the District—and the city council, which has a bill pending to require big-box retailers to pay a living wage. As you surely know, Wal-Mart was built on keeping costs as low as possible, particularly labor costs. The model Wal-Mart recruit is someone who has no other employment options and will take whatever they can get. The retail colossus isn't going to let some uppity city council tell it how much it can pay its employees: The world's largest retailer delivered an ultimatum to District lawmakers Tuesday, telling them less than 24 hours before a decisive vote that at least three planned Wal-Marts will not open in the city if a super-minimum-wage proposal becomes law. A team of Wal-Mart officials and lobbyists, including a high-level executive from the mega-retailer's Arkansas headquarters, walked the halls of the John A...

The Recession That Always Was

Nona Willis Aronowitz
Nona Willis Aronowitz Young fast-food and retail workers demonstrate on the streets of Milwaukee This is the second installment of a four-part series on Millennials and the new economy, based on the author’s monthlong road trip with stops in the Rust Belt, Omaha, and Texas. Read the first . T his past May, I visited Milwaukee and spent the day with a few young startup founders. You know the types: college-educated twenty-somethings who, upon graduating into a terrible job market, decided to create their own jobs instead. Bright, organized, and creative, they are the kind of Millennials often held up as the scrappy saviors of our brave new economic world. They told me how affordable Milwaukee was, especially compared to the city’s pricier neighbor, Chicago. Angela Damiani, director of NEWaukee, a networking organization for young professionals, and a homeowner at 27, observed that “if you want to start a business or follow a pipe dream, Milwaukee is the type of place you can do that,...

The State of the Unions

AP Images/Bill Wagner
Gallup and Pew concur: Just over one-half of Americans approve of labor unions. In late June, the Pew Research Center released the results of its biennial poll on unions and corporations , and reported that 51 percent of Americans had a favorable view of unions—up from just 41 percent in 2011, the last time Pew popped the question. Pew’s new number is almost identical to Gallup’s, which found that 52 percent of Americans approved of unions when it last asked that question in August of 2012. Gallup polls on union approval every year and has reported a 52 percent approval rating each of the past three years. Before then, union approval had hit an all-time low for Gallup surveys, with just 48 percent in 2009. So unions are modestly, sorta, kinda back, in the public’s estimation. Back, that is, from the trough into which they fell during the first year of the recession, when their approval ratings toppled from the high-50s (Gallup) and the mid-50s (Pew) by ten points in each poll. The...

Congress Is Squandering the Opportunity of a Lifetime

Dan McKay / Flickr
Dan McKay / Flickr It’s the first Friday of the month, which means a jobs report . And this one isn’t bad. The economy added a net 195,000 jobs in June, with upwards revisions of 70,000 in April and May. Which means that, so far this year, the economy has added more than 1 million jobs. To repeat a point, this is why the 2012 election was so critical for Democrats—a Mitt Romney win would have given Republicans a chance to claim credit for the current job growth, and use the political capital to push a highly-ideological agenda. But back to the numbers. Federal government employment dropped by 5,000, a likely result of sequestration, and part of an overall decline of public employment—since 2010, the public sector has shed more than 600,000 jobs. The unemployment rate remained unchanged at 7.6 percent, with a slight drop in long-term unemployment. Still, more than four million people have been out of work for longer than six months. In other words, despite the improving economy, we’re...

The Part-Timer Problem

The Obama Administration’s decision to delay for a year the penalty that employers (in firms of 50 or more employees) must pay if they don’t provide health insurance to their workers shines a light on a problem that may be even more profound than getting health coverage for every American: that is, the decline of the American job. The employer mandate was designed for an economy in which American workers were employed in what had been normal jobs. In firms of 50 or more, all workers who put in at least 30 hours a week were either to receive coverage from the firm or else the firm would have to pay the government a $2,000 yearly penalty. Problem is, fewer and fewer workers are putting in 30 hours a week. To begin with, labor-force participation is at its lowest level since women increased their work-force participation in the 1970s. It has declined even during the past four years of so-called recovery. The past four years have also seen a rise in the percentage of workers who are part-...

Bright Kids, Small City

Harrisburg, Pennsylvania has long been the sort of place where you grew up and got out. But with fewer opportunities elsewhere, many young people are choosing to stay.

Amanda Owens/Makespace
Amanda Owens/Makespace This is the first installment of a four-part series on Millennials and the new economy, based on the author’s monthlong road trip with stops in the Rust Belt, Omaha, and Texas. A fter 24-year-old Sam Melville graduated from a small arts school 20 minutes outside of Harrisburg, Pennsylvania, she made a beeline for Los Angeles, where she hoped to make it in the film industry. She scored a production internship and was excited to put her film degree to good use. But she spent most of her time working at a frozen yogurt shop 30 hours a week for minimum wage, a night job that was an hour-and-a-half bus ride from her house. She was scraping by, but her career was going nowhere. She didn’t have time to meet anyone. And she certainly didn’t have time to work on her own projects. A few months later, she decided to move back to Harrisburg. “I knew I’d have a social life there, and I knew it was cheap,” Melville said. Now working at a sandwich shop, “I make about the same...

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