Brad DeLong: Worthy reads on equitable growth, September 28–October 4, 2018

Worthy reads from Equitable Growth:

1. One thing making me hopeful for our future is that as our technological powers and capabilities grow, our ideas of what people need to be fully included members of society also grow to keep pace. Just think of how high-speed computer access is becoming something that it is obvious that all Americans—and especially all American children—very much need to have. The fact that we (or some of us, at least) think that the failure to make sure this is provided is a “gap” is something I—at least, in historical perspective—find very heartening. Read Delaney Crampton, “Why Accessibility To High-Quality Broadband Matters To U.S. Schoolchildren,” in which he writes: “Nearly 5 million households with school-aged children in the United States lack high-quality broadband access at home … 31.4 percent of households earning an annual income lower than $50,000 with school-aged children … 40 percent of those with annual incomes lower than $25,000.”
2. Heather Boushey said wise things about distributional national accounts before the U.S. Congress’ Joint Economic Committee: Read her “Testimony Before the Joint Economic Committee,” in which she says: “The U.S. Bureau of Economic Analysis releases a new estimate of quarterly or annual GDP growth every month. Distributional national accounts would add to this release an estimate that disaggregates the topline number and tells us what growth was experienced by low-, middle-, and high-income Americans. Academics have already constructed such a measure. The so-called DINA dataset constructed by economists Thomas Piketty, Emmanuel Saez, and Gabriel Zucman…”
3. I was tremendously disappointed to find myself trapped in Berkeley, California, and so I missed Ellora Derenoncourt, David Grusky, Trevon Logan, and Kimberly Adams at Equitable Growth’s “Research on Tap: Economic mobility—The Impact of Race and Place,” where they discussed how “place-based disparities and structural barriers based on race shape economic outcomes.”
4. This may well be the most interesting working paper we released last month. Read Daniel Schneider and Kristen Harknett’s “Consequences of Routine Work Schedule Instability for Worker Health and Wellbeing,” in which they write: “Wages certainly matter for outcomes like sleep and happiness, but schedules in our data matter much more … Research has overwhelmingly focused on the economic dimension of precarity, epitomized by low and stagnant wages. But the rise in precarious work has also involved a major shift in the temporal dimension of work such that many workers now experience routine instability in their work schedules.”

Worthy reads not from Equitable Growth:
 

1. One might, naively, think that the economies of scale that companies such as Walmart Inc. possess should redound to the benefit of workers, as well as consumers. More efficiencies from economies of scale should leave a bigger pie for everyone else, which would be shared, right? Apparently not. When a business earns more by selling to large buyers, its workers’ wages appear not to go up, but to go down. Something to watch very closely. The Wall Street Journal’s Sharon Nunn sends us to a report by Nathan Wilmers in her “Big Businesses Push Down Prices, and Perhaps Wages,” in which she notes: “As large firms … command increasing market share in the retail industry, they narrow the field of buyers for companies that make and move consumer products.” She then references Wilmers’ report, which “found that since the late 1970s … a 10 percent increase in [corporate] earnings that depend on larger buyers is associated with a 1.2 percent decline in wage growth.”
2. Hal Varian writes in “Bots vs. Tots” that the “U.S. labor market is already beginning to tighten. Expect a tight labor market for the next 15-25 years. Retirees continue to consume. Robots don’t consume. Labor supply is growing more slowly than labor demand. Old intuitions no longer helpful.”
3. Read Bradley L. Hardy, Trevon D. Logan, and John Parman’s “The Historical Role of Race and Policy for Regional Inequality,” in which they write: “Contemporary racial inequality can be thought of as the product of a long historical process with at least two reinforcing sets of policies: First are the policies governing the spatial distribution of the black population, and second are the policies that had a disparate impact on black individuals because of their locations.”
4. Very clever article by Benjamin Born, Gernot Müller, Moritz Schularick, and Petr Sedláček, “£350 Million a Week: The Output Cost of the Brexit Vote,” and this certainly looks right: 2 percent of GDP as the (ongoing) cost of the Boris Johnson Brexit clown show. The four authors write: “The current cost of Brexit … counterfactual … a matching algorithm … combination of comparison economies best resembles the pre-referendum growth path of the UK economy … The negative drag from the Brexit vote now appears to be roughly £350 million a week.”