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Posts Tagged ‘Henry George

“An imbalance between rich and poor is the oldest and most fatal ailment of all republics”*…

In a stark sign of the economic inequality that has marked the pandemic recession and recovery, Americans as a whole are now earning the same amount in wages and salaries that they did before the virus struck — even with nearly 9 million fewer people working. 

The turnaround in total wages underscores how disproportionately America’s job losses have afflicted workers in lower-income occupations rather than in higher-paying industries, where employees have actually gained jobs as well as income since early last year.

In February 2020, Americans earned $9.66 trillion in wages and salaries, at a seasonally adjusted annual rate, according to the Commerce Department data. By April, after the virus had flattened the U.S. economy, that figure had shrunk by 10%. It then gradually recovered before reaching $9.67 trillion in December, the latest period for which data is available. 

Those dollar figures include only wages and salaries that people earned from jobs. They don’t include money that tens of millions of Americans have received from unemployment benefits or the Social Security and other aid that goes to many other households. The figures also don’t include investment income… 

The figures document that the vanished earnings from 8.9 million Americans who have lost jobs to the pandemic remain less than the combined salaries of new hires and the pay raises that the 150 million Americans who have kept their jobs have received.

The job cuts resulting from the pandemic recession have fallen heavily on lower-income workers across the service sector— from restaurants and hotels to retail stores and entertainment venues. By contrast, tens of millions of higher-income Americans, especially those able to work from home, have managed to keep or acquire jobs and continue to receive pay increases.

“We’ve never seen anything like that before,” said Richard Deitz, a senior economist at the Federal Reserve Bank of New York, referring to the concentration of job losses. “It’s a totally different kind of downturn than we’ve experienced in modern times.”

The figures also underscore the unusually accelerated nature of this recession. As a whole, both the job losses that struck early last spring and the initial rebound in hiring that followed have happened much faster than they did in previous recessions and recoveries. After the Great Recession, for example, it took nearly 2 1/2 years for wages and salaries to regain their pre-recession levels…

One reason why the job losses have had relatively little impact on the nation’s total pay is that so many of the affected employees worked part time. The average work week in the industry that includes hotels, restaurants and bars is just below 26 hours. That’s the shortest such figure among 13 major industries tracked by the government. The next shortest is retail, at about 31 hours. The average for all industries is nearly 35 hours. 

The recovery in wages and salaries helps explain why some states haven’t suffered as sharp a drop in tax revenue as many had feared. That is especially true for states that rely on progressive taxes that fall more heavily on the rich. California, for example, said last month that it has a $15 billion budget surplus. Yet many cities are still struggling, and local transit agencies, such as New York City’s subway, have been hammered by the pandemic.

The wage and salary data also helps explain the steady gains in the stock market, which have been led by high-tech companies whose products are being heavily purchased and used by higher-income Americans, such as Apple iPads, Peloton bikes, or Amazon’s online shopping.

This week, the New York Fed released research that underscored how focused the job losses have been. For people making less than $30,000 a year, employment has fallen 14% as of December. For those earning more than $85,000, it has actually risen slightly. For those in-between, employment has fallen 4%… 

Some companies have cut wages in this recession, but on the whole the many millions of Americans fortunate enough to keep their jobs have generally received pay raises at largely pre-recession rates. Some of those income gains likely reflect cost-of-living raises; the Commerce Department’s wage and salary data isn’t adjusted for inflation…

Truman Bewley, a retired Yale University economist who wrote a book about the concept of sticky wages, said that most companies have a key core of workers they rely on through hard times and are reluctant to cut pay for them. 

And there’s another reason, Bewley said, why many companies cut jobs instead of pay. While researching his book, he said a factory manager told him why his company did so: “It gets the misery out the door.”  

More at: “Sign of inequality: US salaries recover even as jobs haven’t.”

See also “More Than 33 Million Americans Have Filed for Unemployment During Coronavirus Pandemic.” source of the image above.

And to compare the U.S. to other countries, try this nifty interactive visualization.

* Plutarch

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As we examine equity, we might send foundational birthday greetings to Pierre le Pesant, sieur de Boisguilbert; he was born on this date in 1646. A French lawmaker and a Jansenist, he is best remembered as one of the inventors of the notion of an economic market– he championed free trade in opposition to Colbert‘s mercantilist views (which generated government revenues through duties and tariffs).

But he is also noteworthy as the champion of a single tax on each citizen (in lieu of all tariffs, customs, and other trade-related fees) that in some ways presaged Henry George‘s proposals.

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“if we’re measuring the wrong thing, we’re going to do the wrong thing”*…

 

Money and markets have been around for thousands of years. Yet as central as currency has been to so many civilizations, people in societies as different as ancient Greece, imperial China, medieval Europe, and colonial America did not measure residents’ well-being in terms of monetary earnings or economic output.

In the mid-19th century, the United States—and to a lesser extent other industrializing nations such as England and Germany—departed from this historical pattern. It was then that American businesspeople and policymakers started to measure progress in dollar amounts, tabulating social welfare based on people’s capacity to generate income. This fundamental shift, in time, transformed the way Americans appraised not only investments and businesses but also their communities, their environment, and even themselves.

Today, well-being may seem hard to quantify in a nonmonetary way, but indeed other metrics—from incarceration rates to life expectancy—have held sway in the course of the country’s history. The turn away from these statistics, and toward financial ones, means that rather than considering how economic developments could meet Americans’ needs, the default stance—in policy, business, and everyday life—is to assess whether individuals are meeting the exigencies of the economy…

Eli Cook explains how America pioneered a way of thinking that puts human well-being in economic terms: “How Money Became the Measure of Everything.”

* “GDP is not a good measure of economic performance; it’s not a good measure of well-being.  What we measure informs what we do. And if we’re measuring the wrong thing, we’re going to do the wrong thing.”    – Joseph Stiglitz

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As we muse on metrics, we might spare a thought for Henry George; he died on this date in 1897.  A writer, politician and political economist, George is best remembered for Progress and Poverty, published in 1879, which treats inequality and the cyclic nature of industrialized economies, and proposes the use of a land value tax (AKA a “single tax” on real estate) as a remedy– an economic philosophy known as Georgism, the main tenet of which is that, while individuals should own what they create, everything found in nature, most importantly the value of land, belongs equally to all mankind.

George’s ideas were widely-discussed in his time and into the early 20th century, and admired by thinkers like Alfred Russel Wallace, Jose Marti, and William Jennings Bryan; Franklin D. Roosevelt sang his praises, as did George Bernard Shaw.  But with the rise of neoclassical economics, George’s star began to recede.  Still, more modern thinkers like Albert Einstein and martin Luther King were fans.

In a sequence that mimicked George’s arc of influence, it was George’s work that inspired Elizabeth Magie to create The Landlord’s Game in 1904 to demonstrate his theories; ironically, it was Magie’s board game that became in the 1930s (as recently noted here and here) the basis for Monopoly.

In 1977, Joseph Stiglitz showed that under certain conditions, spending by the government on public goods will increase aggregate land rents/returns by the same amount. Stiglitz’s findings were dubbed “the Henry George Theorem,” as they illustrate a situation in which Henry George’s “single tax” is not only efficient, it is the only tax necessary to finance public expenditures.

Henry George

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Written by (Roughly) Daily

October 29, 2017 at 1:01 am

“Our people are good people; our people are kind people. Pray God some day kind people won’t all be poor”*…

 

For a singular image of the Great Depression and the roughness of those years, it’s hard to do much better than Dorothea Lange’s 1936 photograph of Florence Owens Thompson, two of her children tucking their faces over her shoulders, a baby in her lap.

Where that image comes from, there are many, many more: around 175,000 surviving portraits of America between 1935 and 1945 taken by the photographers of the government’s Farm Security Administration. The Library of Congress, which houses the collection, has, remarkably, digitized all the negatives and tagged the records with loads of data, such as who took the picture and where it was taken.

Now, thanks to a new project known as Photogrammar from Yale University, viewers will have a much easier time exploring the photographs. There’s a map that displays the images by county and another that shows where each picture was taken and by which photographer. There’s also an interactive that allows viewers to sort the photos by theme (e.g. “war” or “religion”) and then browse from there. Other tools are still in the works

Agricultural workers bound for upstate New York in time for the harvest

More at “Seeing the Great Depression.”

* John Steinbeck, The Grapes of Wrath

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As we go West, we might recall that it was on this date in 1935 that Parker Brothers purchased the patent for “The Landlord’s Game” from Elizabeth Magie, a Quaker political activist who had used the theories of the economist Henry George to create the game to illustrate the way in which monopolies impoverish (“bankrupt”) the many while concentrating extraordinary wealth in one or few.  Parker Brothers had released a copy– Charles Darrow’s “Monopoly”– which  was (to put it politely) closely modeled on “The Landlord’s Game”; when Darrow’s version became a hit in 1933, Parker Brothers bought “The Landlord’s Game” as insurance against a intellectual property suit– and subsequently paid Ms. Magie $500 for her patent to avoid a (completely justified) claim from her that “Monopoly” was, in effect, stolen.  It is estimated that over a billion people have played “Monopoly” over the years.

“The Landlord’s Game” board, from Magie’s original patent application

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Written by (Roughly) Daily

November 6, 2015 at 1:01 am

“Better a diamond with a flaw than a pebble without”*…

 

What would be the most expensive way to fill a size 11 shoebox (e.g. with 64 GB MicroSD cards all full of legally purchased music)?

– Rick Lewis

A shoebox full of valuable stuff seems to top out at about $2 billion. Surprisingly, this turns out to be true for a wide range of possible fillings…

Randall Munroe explains, as he runs through the candidates– from diamonds to Lucy in the Sky with Diamonds– at What If?

* Confucius

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As we ponder pricing, we might might send simple birthday greetings to Henry George; he was born on this date in 1839.  A writer, politician and political economist, George is best remembered for Progress and Poverty, published in 1879, which treats inequality and the cyclic nature of industrialized economies, and proposes the use of a land value tax (AKA a “single tax” on real estate) as a remedy– an economic philosophy known as Georgism, the main tenet of which is that, while individuals should own what they create, everything found in nature, most importantly the value of land, belongs equally to all mankind.

It was George’s work that inspired Elizabeth Magie to created The Landlord’s Game in 1904 to demonstrate his theories; ironically, it was Magie’s board game that became (as recently noted here and here) the basis for Monopoly.

In 1977, Joseph Stiglitz showed that under certain conditions, spending by the government on public goods will increase aggregate land rents/returns by the same amount. Stiglitz’s findings were dubbed “the Henry George Theorem,” as they illustrate a situation in which Henry George’s “single tax” is not only efficient, it is the only tax necessary to finance public expenditures.

Henry George

source

 

Written by (Roughly) Daily

September 2, 2014 at 1:01 am

Warts and all…

With thanks to reader PL (and apologies that– for reasons that will be obvious– there’s no way to paste it in here), the extraordinary “gigapan” photo of the Inauguration here.  Zoom in from the rafters, and a view of the crowd as a whole, to a tight shot of any face in the crowd.  As creator David Bergman explains:

I made this Gigapan image from the north press platform during President Obama’s inaugural address at the U.S. Capitol in Washington, DC on January 20, 2009. It’s made up of 220 images and the final image size is 59,783 X 24,658 pixels or 1,474 megapixels.

1,474 megapixels… pictures that we civilians take on our digital cameras may be 10 megs, usually more like 5.

Finally, what the America public has been awaiting:  resolution.

As we give it up for the new CiC, we might recall that it was on this date in 1935 that The Parker Co. board game Monopoly was created (it was released on November 5 of that year).  In fact, Monopoly was based on an earlier game, The Landlord Game, created in 1903 by Lizzie Magie, a young Quaker from Virginia who was demonstrating the theories of progressive economist Henry George.  Parker Bros. bought her out for a flat $500, and the promise to release The Landlord Game and two other games she’d contrived.

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Written by (Roughly) Daily

February 6, 2009 at 1:01 am

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