Its the economy stupid! (and it doesnt have to be this way!) - - PowerPoint PPT Presentation

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Its the economy stupid! (and it doesnt have to be this way!) - - PowerPoint PPT Presentation

Feb 03, 2023 161 likes •543 views

Its the economy stupid! (and it doesnt have to be this way!) October 28, 2011 Alameda, CA Sylvia A. Allegretto, PhD Center on Wage & Employment Dynamics University of California, Berkeley The critical role of unions Unions

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October 28, 2011 Alameda, CA

Sylvia A. Allegretto, PhD Center on Wage & Employment Dynamics University of California, Berkeley

It’s the economy stupid!

(and it doesn’t have to be this way!)

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SLIDE 2

The critical role of unions

Allegretto 2011

U.S. Economy: Workers & citizens

Corporate power & the wealthy

Unions

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SLIDE 3

Wealth Political access Policies

Allegretto 2011

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Econ 101

(in very colorful but not so pretty pictures)

  • The mess we are in today is man made:
  • it was an ‘Inside Job’
  • Wall Street, K Steet & PA Avenue
  • Ayn Rand is popping bennies & partying like it’s 1929!
  • Those at the alter of the ‘free market’ are kidding

themselves at best.

  • Greenspan (Rand fan) didn’t know banks

wouldn’t regulate themselves…what?

  • Plutocracy: of the 1%, by the 1%, for the 1%

Allegretto 2011

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Top priorities

Allegretto 2011

Effective regulation Reasonable tax policy EFCA & unions Fix the

  • ngoing

housing crisis Fair trade policies

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SLIDE 6

The only deficit that matters…

  • 10%
  • 8%
  • 6%
  • 4%
  • 2%

0% 2%

3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 CA 2 0 0 1 CA today! ( as of Sept. ’1 1 )

  • 7 .2 % or -1 .1 m illion

CA 1 9 9 0 US today ( as of Sept. ’1 1 )

  • 4 .8 % or -6 .6 m illion

Source: Sylvia Allegretto’s analysis of Current Employment Statistics data.

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SLIDE 7

0% 2% 4% 6% 8% 10% 12% 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 0% 2% 4% 6% 8% 10% 12%

California

United States

These numbers represent people, forever lost output & heartache

Source: Sylvia Allegretto’s analysis of BLS Current Population Survey data.

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Incomes of typical households in California plunge back to 1998 levels

Source: Sylvia Allegretto’s analysis of U.S. Census data 2011.

$46,202 $49,076 $53,252 $52,823 $49,445 $56,042 $59,274 $59,821 $54,459

$30,000 $35,000 $40,000 $45,000 $50,000 $55,000 $60,000 $65,000 $70,000 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Real Median Household Income ( 2010 Dollars)

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“I am trying to enjoy the fruits of my labor...”

~Lucinda Williams

100.0 150.0 200.0 250.0 300.0 350.0 400.0 450.0 1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007

I ndex ( 1 9 7 3 = 1 0 0 )

Average hourly compensation Average hourly wage

Productivity

Source: Economic Policy Institute’s stateofworkingamerica.org

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Union decline and middle-class woes

Allegretto 2011

42 44 46 48 50 52 54 5 10 15 20 25 30 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Union Membership Rate Middle-Class Share of Total Income Source: David Madland, Karla Walter, Nick Bunker, April 4, 2011, Center for American Progress.

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We need a plan to restore manufacturing

32.0% 28.4% 25.1% 20.7% 16.2% 13.1% 10.1% 9.8% 9.1% 8.9%

0% 5% 10% 15% 20% 25% 30% 35%

1950 1960 1970 1980 1990 2000 2007 2008 2009 2010

Source: Sylvia Allegretto’s analysis of CES manufacturing data. Allegretto 2011

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We need an economy that makes things

(the financial industry makes $ from $)

10000 11000 12000 13000 14000 15000 16000 17000 18000 19000 20000

Jan-79 Jan-80 Jan-81 Jan-82 Jan-83 Jan-84 Jan-85 Jan-86 Jan-87 Jan-88 Jan-89 Jan-90 Jan-91 Jan-92 Jan-93 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Source: Allegretto analysis of CES manufacturing data. Allegretto 2011

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Widening wedge of wage inequality

70.0 80.0 90.0 100.0 110.0 120.0 130.0 140.0 1973 1977 1981 1985 1989 1993 1997 2001 2005 2009

I ndex ( 1 9 7 3 = 1 0 0 )

95th 90th 80th 50th 20th 10th

Guys

Allegretto 2011 Source: Economic Policy Institute’s analysis of CPS data downloaded from stateofworkingamerica.org

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Widening wedge of wage inequality

80.0 90.0 100.0 110.0 120.0 130.0 140.0 150.0 160.0 170.0 1973 1977 1981 1985 1989 1993 1997 2001 2005 2009

I ndex ( 1 9 7 3 = 1 0 0 )

95th 90th 80th 50th 20th 10th

Galz

Allegretto 2011

Source: Economic Policy Institute’s analysis of CPS data downloaded from stateofworkingamerica.org

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Retirement risk shift

0% 10% 20% 30% 40% 50% 60% 70%

1983 1986* 1989 1992 1995 1998 2001 2004 2007

Defined benefit

Source: Munnell, Alicia H., Golub-Sass, Francesca & Muldoon, Dan. 2009. *Note: Data for 1986 is not available. The data were estimated using the midpoint between 1983 and 1989 downloaded from EPI.

Defined contribution

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Work Vs. a call to your broker

1945 25.0% 2011 15.0% 10% 15% 20% 25% 30% 35% 40% T

  • p Capital Gains Tax Rates

The rise of the plutocracy

Source: Citizens for Tax Justice Allegretto 2011

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Pre- & post- tax income shares, 2007

2.5% 7.3% 12.2% 19.0% 38.6% 21.3% 5.1% 9.2% 14.0% 19.9% 35.6% 17.1%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Lowest quintile: <20% 2nd quintile: 21%-40% 3rd quintile: 41%-60% 4th quintile: 61%-80% 81st-99th percentiles T

  • p 1%

Source: Congressional Budget Office 2011. Allegretto 2011

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Astonishing picture of income growth

(Growth in inflation adjusted after-tax income from 1979 to 2007)

18.3% 27.5% 35.2% 43.3% 65.0% 277.5%

0% 50% 100% 150% 200% 250% 300%

Lowest quintile: <20% 2nd quintile: 21%-40% 3rd quintile: 41%-60% 4th quintile: 61%-80% 81st-99th percentiles T

  • p 1%

Source: Congressional Budget Office 2011. Allegretto 2011

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The very rich are pulling away

200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006

Top 1% Bottom 90%

Source: CBO $2008 Allegretto 2011

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CEO's distance themselves from the average worker

(Ratio of average CEO compensation to average worker compensation, 1965-2010)

Allegretto 2011 24 35 70 126 100 298 143 277 185 243 50 100 150 200 250 300 350

1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010

Source: EPI analysis of Wall Street Journal/Mercer, Hay Group (2011). Note: Point markers denote where ratio is known.

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The not so invisible hand

(share of income growth 1979-07)

Bottom 99% Rest of

T

  • p 1%

T

  • p 0.1%

40.1% increase 23.9% 36.0%

59.9%

Source: EPI analysis of Piketty & Saez IRS data 2009. Allegretto 2011

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The rich are getting richer!

Trickle up economics. Wealth1983-2009

Source: Allegretto 2011 EPI briefing paper “The State of America’s Wealth 2011”

  • 4.1%
  • 2.0%
  • 1.4%

5.7% 9.8% 10.2% 41.5% 40.2%

  • 0.1

0.1 0.2 0.3 0.4 0.5

Lowest quintile: <20% 2nd quintile: 21%-40% 3rd quintile: 41%-60% 4th quintile: 61%-80% 81%-90% 91%-95% 96%-99% T

  • p 1%
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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1989 1992 1995 1998 2001 2004 2007

Top 1% Next 10%

Next 20%

Next 9% Middle 20% Bottom 40%

The Dow ain’t gonna save you

Source: Allegretto 2011 “The State of America’s Wealth 2011”

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What/Who is to Blame for State Budget Gaps?

The Housing Bust & the Great Recession!!!

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CEOs of Bell.

Robert Rizzo, former city manager of Bell, California, was making $787,638 per year in that position.

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Source: Allegretto & Keefe CWED Brief October 2010. Allegretto 2011 1 2 % 2 2 % 2 0 % 9 % 2 4 % 1 1 % 3 % 1 3 % 1 7 % 1 2 % 3 4 % 2 1 % 0 % 5 % 1 0 % 1 5 % 2 0 % 2 5 % 3 0 % 3 5 % 4 0 % Less than high school High School Som e College Associates degree Bachelors degree Advanced degree* Private sector w orkers State & local governm ent w orkers

Educational attainment of California’s workers

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SLIDE 27

Comparison of CAs public vs. private sector earnings and total compensation

  • 7 .7 7 % * *
  • 7 .5 5 % *
  • 7 .8 6 % * *

0 .8 9 % 1 .0 7 % 0 .0 1 %

  • 9.00%
  • 8.00%
  • 7.00%
  • 6.00%
  • 5.00%
  • 4.00%
  • 3.00%
  • 2.00%
  • 1.00%

0.00% 1.00% 2.00% State & Local Governm ent State Governm ent Local Governm ent Annual Earnings Annual Total Com pensation

Note: **1% and *5% significance levels. Source: Allegretto & Keefe CWED Brief October 2010. Allegretto 2011

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Teacher pay

  • 12.1%
  • 6.6%
  • 23.3%
  • 30.0%
  • 25.0%
  • 20.0%
  • 15.0%
  • 10.0%
  • 5.0%

0.0%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Males Females All

Source: update of Allegretto, Corcoran, & Mishel 2011

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10 20 30 40 50 60 70 80

Number of State and Local Government Employees Per 1,000 Residents

The States With The Lowest Public Union Density The States With The Highest Public Union Density

Source: U.S. Census Bureau and the U.S. Bureau of Labor Statistics. From Allegretto, Jacobs & Lucia, 2011 Allegretto 2011

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0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 Share of State and Local Workers

Allegretto 2011 Source: U.S. Bureau of Labor Statistics, Current Employment Statistics. From Allegretto, Jacobs & Lucia 2011 14.7% 15.2% 14.5% 14.4% 14.6% Aug-11

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Specifications

(1) (2)

Controls: Public sector union density

coeff 0.245* 0.114 se (0.097) (0.082)

House price decline

coeff

  • 0.561**

se

  • (0.11)

Set of union dummy variables

N N

Adjusted R2

0.096 0.421

Note: **1% and *5% significance levels. FHFA State house price change 2005-10 From Allegretto, Jacobs & Lucia, 2011. Allegretto 2011

The Housing Bust

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SLIDE 32

Largest Shortfall on Record

  • $40
  • $75
  • $80
  • $45
  • $110
  • $191
  • $130*
  • $103*
  • $46**

2002 2003 2004 2005 2009 2010 2011 2012 2013

Total state budget shortfall in each FY, in billions

*Reported to date ;** Preliminary. From Allegretto, Jacobs,& Lucia, 2011 Source: Center on Budget and Policy Priorities 2011

Last Recession

Allegretto 2011

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What the hell has been going on?

The “Free Market” is BS rhetoric

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Oh, Oh, Oh, Oh just like a YoYo

~The Osmonds 1971 smash hit #3 Billboard Hot 100!

  • Rise & fall on merit or luck
  • Doubling down on free market ideals
  • Dismantling of public services & goods
  • Shrinking social & worker safety nets
  • Anti-labor sentiment & regulation
  • Erosion of workers rights
  • Shifting the tax, health care & retirement

burden to workers

  • Vilified public sector workers & government

Allegretto 2011

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SLIDE 35

A question of ideology…

A century of change in reverse:

 Unions leveling the playing field  Progressive tax structure  Investments in education  Workers’ compensation  Unemployment Insurance  Social security & Medicare  Child labor laws  Pension plans & dignity in retirement  Employer provided health care

Allegretto 2011

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The U United C Corpora porations tions

  • f America?

rica? A Plutocracy of the 1%, by the 1%, for the 1%

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