Brad DeLong: Worthy reads on equitable growth, October 19-25, 2021

Worthy reads from Equitable Growth:

1.  Highlighting this from a year and a half ago from Equitable Growth’s new president & CEO. Read Michelle Holder, “The “Double Gap” and the Bottom Line: African American Women’s Wage Gap and Corporate Profits,” in which she wrote: “Though African American women have historically had the highest labor force participation rate among major female demographic groups in the United States, they face both the gender wage gap and the racial wage gap—a reinforcing confluence that I term the ‘double gap’… [showing] that both the share of women in the labor force and the crowding of women into low-wage jobs are negatively correlated with the labor income share.”

2. Check out Equitable Growth’s new “A Visual Economy,” which features “visuals on a particular topic related to economic inequality and equitable growth … [and] offers a way to sort through thousands of figures produced since the beginning of 2019. The six ‘Featured Visualizations’ … showcase some of our most recent work and older classics. Filter and download our visuals using 31 different economics topics as well as by our signature ‘Jobs Day’ and ‘JOLTS Day’ features.”

3. Read Liz Hipple and Alix Gould-Werth, “Weak income support infrastructure harms U.S. workers and their families and constrains economic growth,” in which they write: “People in the United States access income support from a wide range of programs … [yet] many … who need this support are blocked from accessing it. During the COVID-19 crisis, the existing income support infrastructure has been wholly insufficient. … While … pandemic-specific income supports … blunted some of the worst pain … they also failed to deliver for all … due to sustained underinvestment in these key income support programs over the past half-century.”

Worthy reads not from Equitable Growth:

1. The very sharp Ryan Avent hammering home the point that the failure of equitable growth to happen in the 2010s was not due to any structural or supply-side failures of human and other resources to exist or be mobilized, but just to prolonged, sustained weakness in aggregate demand. Read his “Revenge of the robots,” in which he writes: “If the Fed doesn’t overreact to inflation and other events don’t blow up the recovery, then this labor market has some room to run. Workers at the bottom of the distribution are getting better money, which should support continued demand growth, which should keep the economy humming, which should prevent the emergence of lots of new slack—for now. … In many industries we already have in place business models that use less labor more productively, but which have not yet become dominant because broader conditions haven’t been sufficiently encouraging. … The technological capacity to automate the work of large swathes of the labor force has been building over time but hasn’t materially affected labor markets yet because there’s been no incentive to make use of it. … Alternatively, industry shake-ups and the occasional adoption of labor-saving methods and technologies begin to undercut the earning power that workers enjoy, and after a glorious few years wage growth decelerates. As it does, and the share of purchasing power held by those with a high propensity to spend declines, the old macroeconomic malaise sets in again. … The current labor-market boom demonstrates that weak demand was the thing that made the 2010s so crummy.”

2. Lots of us have been seeing a silver lining in our belief that China’s rapid growth will soon lead it to become a major source of demand for products made by U.S. workers. Here, however, is more evidence that that hope may be vain—that China is already running into the middle-income growth trap. Read The Economist, “A triple shock slows China’s growth,” in which the magazine writes: “From the sublime to the subpar: A triple shock slows China’s growth: Power cuts, the pandemic and a property slowdown: all have taken a toll.”

October 25, 2021


Brad DeLong


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