Weekend Reading: “Disaggregating Growth” edition
This is a weekly post we publish on Fridays with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth published this week and the second is the work we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context.
Equitable Growth round-up
The March 2019 jobs report was released today, and you can check out analysis and charts from Equitable Growth’s Raksha Kopparam and Kate Bahn here.
Women’s Equal Pay Day on April 2 coincided with a recent court victory for pay transparency, as Equitable Growth’s Raksha Kopparam and Kate Bahn noted. On March 5, a judge ruled in favor of a lawsuit to reinstate the requirement that large employers must report pay data by gender and race to the U.S. government’s Equal Employment Opportunity Commission. The Obama administration originally introduced the requirement in 2016, but the Trump administration had reversed it in 2017. The rule is now back in place.
Somin Park of Equitable Growth highlighted the valuable research done by Janet Currie, an economist at Princeton University and member of Equitable Growth’s Steering Committee, on the importance of early childhood experiences for adult outcomes. Currie’s research finds that children’s early years affect their educational attainment, criminal behavior, probability of having a job, and earnings, and that early childhood programs such as Head Start can help improve these outcomes.
Every week, Brad DeLong, a professor at the University of California, Berkeley and Equitable Growth columnist, blogs about worthy reads from both within Equitable Growth and around the web. You should check out this week’s edition if you’re interested in how to cut the child poverty rate in half or how national income inequality is contributing to regional economic disparities in the United States, among other topics.
Alexander Hertel-Fernandez, a professor at Columbia University and Equitable Growth grantee, presented new research at Equitable Growth on April 4 on what workers want from labor organizations. Equitable Growth compiled relevant research that it has published on unions and firms’ monopsony power in prelude to his presentation.
Links from around the web
Three members of Congress—Senate Minority Leader Chuck Schumer (D-NY), Sen. Martin Heinrich (D-NM), and Rep. Carolyn Maloney (D-NY-12)—sent a letter to Bureau of Economic Analysis Director Brian Moyer last week urging his agency to report how gross domestic product growth is distributed across the income distribution. Their letter notes that the 2019 appropriations law encourages the BEA to report income growth for each income decile, starting no later than 2020. They ask how soon the agency can start and request a response by April 12. Equitable Growth has been a longtime supporter of reporting GDP growth across the income distribution. [Vox]
President Trump has threatened to shut down the U.S.-Mexico border, and USA Today reports that a border shutdown, if implemented, would have a significant impact on the economy. It could bring U.S. auto manufacturing to a halt and put U.S. factories at risk of shutting down, since important supply chains are deeply integrated between the United States and Mexico. There also would be food shortages and price hikes, particularly for avocadoes, tomatoes, and berries. About 5 million U.S. jobs depend on border trade. Mexico would be at risk of falling into a recession if there is a prolonged border shutdown, since 37 percent of Mexico’s GDP depends on border trade. [USA Today]
Choosing a college major is one of the most consequential decisions that a young person will make. The Washington Post’s Andrew Van Dam highlights new research showing that students often choose their majors for sub-optimal reasons. Students are influenced by factors such as the time of day they’re taking a class and whether they’re taking a certain class the same semester that they need to choose a major. On top of that, 37 percent of college students end up switching majors. [Washington Post]
Technology platforms that classify their workers as independent contractors instead of employees, such as Uber Technologies Inc., Lyft, Inc. and Handy.com, are trying to ensure that they can keep things that way, according to Noam Scheiber of The New York Times. If these companies had to classify their workers as employees, it is estimated that their costs would rise by 20 percent to 30 percent, since they would have to pay at least minimum wage, pay for overtime, and more. These platforms have successfully lobbied Texas and other states to continue to classify their workers as independent contractors. Lyft went public last week, and Uber plans to go public later this year. [New York Times]
Sen. Ron Wyden (D-OR), the top Democrat on the Senate Finance Committee, has proposed an overhaul of the U.S. tax system that would more heavily tax wealth. Under current law, people are taxed on the appreciation of their assets only when they are sold, at a lower rate than for other forms of income. Under Wyden’s plan, people would be taxed on gains in the value of their assets every year even when they have not been sold, and at the same rate as other income. [Wall Street Journal]
Friday Figure
Figure is from Equitable Growth’s “Disaggregating growth” by Austin Clemens and Heather Boushey.