Weekend reading: New measures of GDP edition
This is a post we publish each Friday 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 relevant and interesting articles 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
A new measure of county-level Gross Domestic Product called Local Area Gross Domestic Product helps make GDP a more useful metric in tracking economic growth, writes Raksha Kopparam. LAGDP numbers were released late last week by the U.S. Department of Commerce’s Bureau of Economic Analysis and estimate local GDP between 2001–2018, allowing policymakers and economists to study economic conditions and responses to shocks and recoveries on a county level. The data reveal a number of interesting takeaways about how parts of the country have been faring differently since the Great Recession, which Kopparam summarizes in four graphics, highlighting just how valuable it would be to further break down GDP numbers by income decile—something we have long proposed as part of our GDP 2.0 project.
Speaking of, Equitable Growth organized 58 leading economists and social scientists in endorsing the Measuring Real Income Growth Act of 2019, which would add a distributional component to the National Income and Product Accounts, breaking out income growth into deciles and allowing policymakers and the public to see who really prospers when the economy grows. The bill was reintroduced this week in the Senate by Sens. Chuck Schumer (D-NY) and Martin Heinrich (D-NM), after previously being introduced in the House of Representatives by Rep. Carolyn Maloney (D-NY).
How can Green New Deal proponents learn from the original New Deal of the 1930s to grow public support for their policy proposals combatting climate change? Harvard University’s Lizabeth Cohen looks at how Americans came to support the New Deal, lessons learned from that era, and how to apply these lessons to the Green New Deal climate policies today, arguing that the original New Deal’s support from a radial flank of idealists inspiring action, combined with their willingness to accept a more gradual path to change, was key to their success.
Equitable Growth’s 2020 Requests for Proposals will allow scholars to look more deeply at how U.S. economic inequality and intergenerational mobility are connected, writes Liz Hipple, continuing that “we hope to invest in research that pushes beyond individual-level factors such as education and skills and explores the structural barriers that people face in realizing their full human potential, particularly racism and public policies that create and perpetuate those structural barriers.” Be sure to check out more details about our 2020 RFP, as well as the 2020 RFP on paid family and medical leave.
Over the past two weeks, Equitable Growth’s Director of Tax Policy and chief economist Greg Leiserson held two “Economics of Taxation” courses, covering both tax basics and understanding and evaluating the trade-offs of U.S. tax policy. Corey Husak summarizes what Leiserson covered in the courses, including using revenue estimates and distribution analyses to see how much revenue a new tax law will collect or lose and who is affected by tax cuts or increases, respectively, and how economic growth plays a role in tax policy.
Links from around the web
While many policies have been floated lately to address the growing racial wealth gap in the United States, it would likely make more of a difference if we addressed the broader systemic issues driving this gap, argues Anne Kim in Washington Monthly. The problem is not just that black Americans are having a harder time finding a job, she writes, but also that the jobs they do get don’t pay well and tend to be low-level service jobs, making it near impossible for them to catch up to their white counterparts’ wealth accumulation. “All in all, the confluence of systemic disadvantages black workers face—from lower earnings and lesser-quality jobs—has led to fewer opportunities to save and accumulate wealth. That, in turn, has translated to lower rates of homeownership, higher levels of debt, and insecure retirement,” she says, concluding that “black workers need policy solutions that not only boost their earning power but protect their upward mobility in a changing economy.”
New evidence shows that workers are increasingly taking on side jobs in addition to their traditional employment, reflecting how a rise in U.S. economic inequality has caused a surge in the gig economy. About one-third of those workers with multiple jobs say they do them out of financial necessity, explains Jonathan Rothwell for The New York Times’ The Upshot—and at least two comparable countries, Canada and France, are not experiencing the same trends. This is probably due to those nations’ stronger social safety nets and lower rates of inequality.
Now that paid parental leave for federal workers has passed through Congress, Courtenay Brown writes for Axios that corporate America is facing pressure to boost paid leave benefits as well. After the law passed, the Business Roundtable—a group of CEOs whose companies employ more than 15 million workers—urged Congress and President Donald Trump to expand paid leave to as many American workers as possible, saying that its member companies’ sole purpose was no longer just profits but also investing in employees. Since the United States is the only industrialized nation in the world that does not mandate paid leave for new parents, the trend toward expanding these benefits for more and more workers is encouraging.
Earlier this year, it seemed as though a U.S. recession was imminent. Though it appears we’ve dodged that bullet (for now), Ben Casselman of The New York Times has put together a handy list of five indicators that could help warn us when a recession is about to hit or even is already underway. He explains each indicator in turn, and shows why it’s important to keep an eye on each of them to see what they’re saying about the economy.
Friday Figure
Figure is from Equitable Growth’s “New measure of county-level GDP gives insight into local-level U.S. economic growth” by Raksha Kopparam.