Saturday, June 29, 2013

Links worth reading

I'm working on a few posts right now, but I wanted to post a couple things I've come across that I think are worth reading, but probably won't be able to use.

First, a surprisingly thorough summary of criticism of Burkhauser et al's paper arguing that inequality has decreased from 1979-2007 by Tom Edsall.  Edsall reached out to a huge number of economists of different leanings and put together a surprisingly comprehensive round-up of reactions.

The first major point, of course, is that if the value of health insurance is taken into account, there is basically no increase in inequality.  That's not generally disputed.  The problem is that health insurance plans have gotten more expensive, even as they cover less and impose more cost sharing.  Thus, almost the entirety of income increases over the past decade have been eaten up by rising health care costs, according to a RAND corporation study.  The sheer inanity of counting the value of health insurance into workers' incomes is multiplied by the fact that employers never let employees cash out of these benefits--imagine telling your boss you'd rather not take health insurance, but would like to pocket the money they would have spent on providing you with health insurance.

It's also interesting to note that the data ends in 2007, on the eve of the Great Recession.  Since the "recovery," corporate profits have been at record highs and employee compensation at record lows; unemployment is falling in part because so many people have given up looking for work.

Dean Baker is quoted:

If they want to make a big point of saying that middle and low income people would not have been harmed by inequality over the years 1989-2007 if they could have all sold their homes at peak bubble prices, they are welcome to do so, but that seems more than a bit silly to me.

Edsall concludes:

Wealth trends since the 2008 crash, shown in Figure 5, demonstrate an extraordinary growth in inequality, suggesting that Burkhauser’s findings — restricted to his carefully tailored definition of income — are fatally flawed as an instrument to assess the current real-world position of the poor and middle class compared with the very rich: [follow link for graph]
Second, Jacobin has an excellent piece on the role of unions and social democracy.  Well worth reading; it starts:

Then five Democratic mayoral candidates wrote a letter to union members urging them to return to work. Not one of the candidates addressed Bloomberg or Education Chancellor Dennis Walcott, who had stripped a job-security provision from the unions’ contract, inciting the conflict in the first place. Both Bloomberg and Walcott had shrewdly taken to referring to the protests as "a strike against our children."

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