- Links for 03-07-15
- Fed Watch: 'Patient' is History
- 'Connections in the Modern World: Network-Based Insights'
- How Inequality Harms Health -- and the Economy
- Paul Krugman: Pepperoni Turns Partisan
- 'Job Growth Remains Strong in February'
Posted: 07 Mar 2015 12:06 AM PST
Posted: 06 Mar 2015 11:58 AM PST
Posted: 06 Mar 2015 10:19 AM PST
Research on networks could be very helpful in determining when financial systems are under the type of stress that could lead to a major collapse:
Posted: 06 Mar 2015 10:18 AM PST
How inequality harms health -- and the economy: One of the hottest topics around lately concerns the widespread effects of inequality. For example, evidence suggests that when inequality is very large, it can lower economic growth. But there's quite a bit of uncertainty about how this occurs. What are the pathways that connect large disparities in income and wealth to economic growth?
Recent research (summarized here) from UCLA's Fielding School of Public Health provides evidence that income inequality is associated with inequality in health. In particular, lower income is associated with "high levels of stress, exhaustion, cardiovascular disease, lower life expectancy and obesity." These factors alone could lead to lower economic growth than we would have if the work force were healthier.
Also important when thinking about the impacts on long-run growth are the potential intergenerational impacts. As Dr. Linda Rosenstock, the UCLA paper's senior author, noted, these health effects aren't limited to the parents -- children are also affected.
Does this matter for economic growth and intergenerational mobility? Some research says it does. ...
Posted: 06 Mar 2015 09:58 AM PST
Why are Republicans in the grips of "Big Pizza"?:
Pepperoni Turns Partisan, by Paul Krugman, Commentary, NY Times: If you want to know what a political party really stands for, follow the money. ... Major donors ... generally have a very good idea of what they are buying, so tracking their spending tells you a lot.
So what do contributions in the last election cycle say? The Democrats are, not too surprisingly, the party of Big Labor (or what's left of it) and Big Law: unions and lawyers are the most pro-Democratic major interest groups. Republicans are the party of Big Energy and Big Food: they dominate contributions from extractive industries and agribusiness. And they are, in particular, the party of Big Pizza.
No, really. ... And pizza partisanship tells you a lot about what is happening to American politics as a whole. ...
The rhetoric of this fight is familiar. The pizza lobby portrays itself as the defender of personal choice and personal responsibility. It's up to the consumer, so the argument goes, to decide what he or she wants to eat, and we don't need a nanny state telling us what to do. ...
But..., anyone who has struggled with weight issues ... knows that this is a domain where the easy rhetoric of "free to choose" rings hollow. Even if you know very well that you will soon regret that extra slice, it's extremely hard to act on that knowledge. Nutrition, where increased choice can be a bad thing,... it ... is one of those areas — like smoking — where there's a lot to be said for a nanny state.
Oh, and diet isn't purely a personal choice, either; obesity imposes large costs on the economy as a whole.
But you shouldn't expect such arguments to gain much traction. For one thing, free-market fundamentalists don't want to hear about qualifications to their doctrine..., and partisan orientation: heavier states tend to vote Republican...
At a still deeper level, health experts may say that we need to change how we eat, pointing to scientific evidence, but the Republican base doesn't much like experts, science, or evidence. Debates about nutrition policy bring out a kind of venomous anger ... that is all too familiar if you've been following the debate over climate change.
Pizza partisanship, then, sounds like a joke, but it isn't. It is, instead, a case study in the toxic mix of big money, blind ideology, and popular prejudices that is making America ever less governable.
Posted: 06 Mar 2015 09:16 AM PST
Dean Baker on the employment report (subtitle: The strongest wage growth is showing up in the lowest-paying sectors):
Job Growth Remains Strong in February (CC): The labor market had another strong month in February, with employers adding 295,000 in the month. While there were small downward revisions to the January numbers, this still left the three month average at 288,000 jobs. The unemployment rate dropped to 5.5 percent, its lowest level since May of 2008, the early days of the recession. The employment-to-population ratio (EPOP) remained at 59.3 percent, more than 3.0 percentage points below its pre-recession level.
The February performance is especially impressive given that an unusually severe winter might have been expected to dampen job growth, especially in sectors like construction and restaurants. Construction added 29,000 jobs and restaurants added an extraordinary 58,700 jobs. Of course, some of the weather effect may show up in the March data, since the worst weather came towards the end of the month, after the reference week for the survey.
The gain in construction brings the average over the last four months to 38,000 jobs. This comes to a 7.5 percent annual growth rate in a context where reported construction spending has been relatively flat. This suggests that there could be some serious measurement issues in the data. Manufacturing employment growth slowed to 8,000 after averaging 28,000 the prior three months. Retail continues to show strong growth, adding 32,000 jobs, bringing its average since August to 29,900. The professional and technical services category, which tends to be higher paying, again showed strong growth, adding 31,800. This is roughly even with its 30,800 average over the last four months.
There were some anomalies in the data that are likely to be reversed. The courier sector added 12,300 jobs, while education services reportedly added 21,300 jobs. Data in both sectors are highly erratic and almost certain to be largely reversed in future months. The temp sector lost 7,800 jobs in February, its second consecutive decline. Health care job growth fell back to 23,800, compared to an average of 39,250 over the prior four months. The 58,700 jobs added in the restaurant sector was the largest monthly gain since November of 2000.
The data in the household survey was mostly positive. Involuntary part-time employment fell by another 175,000 in February and is now 570,000 below its year-ago level. There was a small rise in the number of people who have voluntarily chosen to work part-time. It is now 750,000 above its year-ago level and almost 900,000 higher than in February of 2013, before the exchanges from the Affordable Care Act came into existence.
The percentage of people unemployed because they voluntarily quit their job rose from 9.5 percent to 10.2 percent, its highest level since May of 2008. This is still close to 2.0 percentage points below the pre-recession levels.
The recovery continues to disproportionately benefit less educated workers. The unemployment rate for workers without a high school degree edged down by 0.1 percentage point to 8.4 percent, 1.4 percentage points below its year-ago level. The current unemployment rate for this least educated group of workers is roughly a percentage point above its pre-recession level, while the unemployment rate for college grads is 0.7 percentage points higher at 2.7 percent. However, the contrast in EPOP is striking. The EPOP for workers without high school degrees is down by roughly a percentage point from its pre-recession level, while the EPOP for college grads is down by close to four percentage points.
Reported wage growth for the month was weak, as expected, following a large reported gain in January. Taking the average for the last three months compared to the prior three months, the annual rate of growth was just 1.8 percent, down from 2.0 percent over the last year. The data on wage growth continue to indicate there is still a large amount of slack in the labor market. There is some evidence of more rapid wage growth in the lowest paying sectors, which is to be expected as workers can increasingly find better jobs elsewhere, but higher-paying sectors continue to show very weak wage growth.
If the economy can sustain job growth in the neighborhood of 300,000 per month, by the end of the year we may start seeing substantial wage gains.
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