NORTON META TAG

18 September 2015

The Decline in Labor’s Share of Corporate Income Since 2000 Means $535 Billion Less for Workers & Journey for Justice, Taxing the Rich, and more in Practical Progress10&17SEP15




GREED, the basis of the 2016 republican presidential candidates campaigns is protecting the greed of the 1%, increasing their wealth and power and moving America closer to being a Third World plutocracy. Check this out from +Economic Policy Institute  and more from the good people of +Agenda Project Action Fund 

The Decline in Labor’s Share of Corporate Income Since 2000 Means $535 Billion Less for Workers





Between 2000 and the second quarter of 2015, the share of income generated by corporations that went to workers’ wages (instead of going to capital incomes like profits) declined from 82.3 percent to 75.5 percent, as the figure shows. This 6.8 percentage-point decline in labor’s share of corporate income might not seem like a lot, but if labor’s share had not fallen this much, employees in the corporate sector would have $535 billion more in their paychecks today. If this amount was spread over the entire labor force (not just corporate sector employees) this would translate into a $3,770 raise for each worker.
Economic Snapshot

The decline in labor’s share of corporate income since 2000 means $535 billion less for workersShare of corporate-sector income received by workers over recent business cycles, 1979–2015


Labor share
Jan-1979 79.0%
Apr-1979 79.5%
Jul-1979 80.2%
Oct-1979 80.8%
Jan-1980 81.2%
Apr-1980 82.7%
Jul-1980 81.9%
Oct-1980 80.6%
Jan-1981 80.3%
Apr-1981 80.4%
Jul-1981 79.6%
Oct-1981 80.5%
Jan-1982 81.6%
Apr-1982 81.0%
Jul-1982 81.0%
Oct-1982 81.4%
Jan-1983 81.0%
Apr-1983 79.9%
Jul-1983 79.4%
Oct-1983 79.1%
Jan-1984 77.8%
Apr-1984 78.0%
Jul-1984 78.5%
Oct-1984 78.3%
Jan-1985 78.4%
Apr-1985 78.6%
Jul-1985 78.2%
Oct-1985 79.6%
Jan-1986 79.9%
Apr-1986 80.8%
Jul-1986 81.5%
Oct-1986 81.8%
Jan-1987 81.7%
Apr-1987 80.9%
Jul-1987 80.4%
Oct-1987 80.9%
Jan-1988 80.9%
Apr-1988 80.9%
Jul-1988 80.8%
Oct-1988 80.2%
Jan-1989 80.6%
Apr-1989 80.9%
Jul-1989 80.9%
Oct-1989 81.9%
Jan-1990 81.8%
Apr-1990 81.6%
Jul-1990 82.7%
Oct-1990 83.1%
Jan-1991 82.2%
Apr-1991 82.5%
Jul-1991 82.8%
Oct-1991 83.3%
Jan-1992 83.0%
Apr-1992 83.1%
Jul-1992 83.6%
Oct-1992 83.0%
Jan-1993 83.5%
Apr-1993 82.7%
Jul-1993 82.7%
Oct-1993 81.4%
Jan-1994 81.4%
Apr-1994 81.3%
Jul-1994 80.6%
Oct-1994 80.3%
Jan-1995 80.6%
Apr-1995 80.4%
Jul-1995 79.5%
Oct-1995 79.7%
Jan-1996 79.1%
Apr-1996 79.1%
Jul-1996 79.2%
Oct-1996 79.3%
Jan-1997 79.0%
Apr-1997 78.9%
Jul-1997 78.3%
Oct-1997 78.5%
Jan-1998 79.9%
Apr-1998 79.9%
Jul-1998 79.8%
Oct-1998 80.4%
Jan-1999 80.3%
Apr-1999 80.6%
Jul-1999 81.0%
Oct-1999 81.4%
Jan-2000 81.8%
Apr-2000 81.9%
Jul-2000 82.4%
Oct-2000 83.1%
Jan-2001 83.1%
Apr-2001 82.8%
Jul-2001 83.0%
Oct-2001 84.0%
Jan-2002 82.0%
Apr-2002 81.8%
Jul-2002 81.8%
Oct-2002 80.9%
Jan-2003 80.3%
Apr-2003 80.1%
Jul-2003 79.8%
Oct-2003 79.9%
Jan-2004 78.8%
Apr-2004 78.7%
Jul-2004 78.6%
Oct-2004 78.5%
Jan-2005 77.0%
Apr-2005 76.9%
Jul-2005 77.2%
Oct-2005 76.0%
Jan-2006 75.5%
Apr-2006 75.4%
Jul-2006 74.7%
Oct-2006 76.1%
Jan-2007 77.3%
Apr-2007 76.9%
Jul-2007 78.3%
Oct-2007 79.4%
Jan-2008 79.8%
Apr-2008 79.7%
Jul-2008 80.1%
Oct-2008 83.7%
Jan-2009 79.8%
Apr-2009 79.4%
Jul-2009 78.4%
Oct-2009 77.4%
Jan-2010 76.4%
Apr-2010 76.7%
Jul-2010 74.9%
Oct-2010 74.9%
Jan-2011 77.1%
Apr-2011 76.0%
Jul-2011 76.0%
Oct-2011 74.2%
Jan-2012 74.6%
Apr-2012 74.2%
Jul-2012 73.9%
Oct-2012 74.6%
Jan-2013 74.3%
Apr-2013 74.3%
Jul-2013 74.7%
Oct-2013 74.6%
Jan-2014 76.4%
Apr-2014 75.0%
Jul-2014 74.1%
Oct-2014 75.0%
Jan-2015 75.7%
Apr-2015 75.5%
198019902000201072.57577.58082.585%
Note: Shaded areas denote recessions. Federal Reserve banks' corporate profits were netted out in the calculation of labor share.
Source: EPI analysis of Bureau of Economic Analysis National Income and Product Accounts (Tables 1.14 and 6.16D)
As Lawrence Mishel and I discuss in our recent paper, the largest wedge driving the growing gap between economy-wide productivity and typical workers’ pay is rising inequality. Part of this increase in inequality is the shift in national income from labor compensation to capital incomes. Since 2000, this decline in labor’s share of income has become a significant contributor to the inequality wedge. The figure shows labor’s share of corporate sector income. Because all income in the corporate sector is either classified as labor compensation or capital incomes (profits plus net interest), this makes it a sensible first place to look for this labor-to-capital shift.

See related work on Wages, Incomes, and Wealth
See more work by Josh Bivens

There’s More to Economic Security than the Official Poverty Measure

Next week, the Census Bureau will release its estimates of the number of Americans who lived in poverty in 2014. The official poverty measure is an important metric—particularly since it’s been in place for nearly 50 years, and its measurement methodology hasn’t had major revisions over that time. As shown in the figure below, the share of Americans living at or below the official poverty line fell in the 1960s and stayed within a small range over the last four decades or so, generally rising in recessions and falling in expansions. Since 2000, the official poverty rate has seen a lot more up than down—the poverty rate at the end of the business cycle in 2007 was higher than at the beginning. 2013 was the first year the poverty rate turned the corner and saw some meaningful improvement since the start of the Great Recession. On Wednesday, September 16, we will see whether that progress has continued. While it would be great to see reductions in poverty over the last year, the fact is had economic growth over the last four decades been broadly shared, we could have made much more progress in reducing poverty, rather than just treading water.
 
GREED, the basis of the 2016 republican presidential candidates campaigns is protecting the greed of the 1%, increasing their wealth and power and moving America closer to being a Third World plutocracy. Check this out from +Economic Policy Institute  and more from the good people of +Agenda Project Action Fund 

The Decline in Labor’s Share of Corporate Income Since 2000 Means $535 Billion Less for Workers


By Josh Bivens | September 10, 2015
Between 2000 and the second quarter of 2015, the share of income generated by corporations that went to workers’ wages (instead of going to capital incomes like profits) declined from 82.3 percent to 75.5 percent, as the figure shows. This 6.8 percentage-point decline in labor’s share of corporate income might not seem like a lot, but if labor’s share had not fallen this much, employees in the corporate sector would have $535 billion more in their paychecks today. If this amount was spread over the entire labor force (not just corporate sector employees) this would translate into a $3,770 raise for each worker.
Economic Snapshot

The decline in labor’s share of corporate income since 2000 means $535 billion less for workersShare of corporate-sector income received by workers over recent business cycles, 1979–2015

198019902000201072.57577.58082.585%
Note: Shaded areas denote recessions. Federal Reserve banks' corporate profits were netted out in the calculation of labor share.
Source: EPI analysis of Bureau of Economic Analysis National Income and Product Accounts (Tables 1.14 and 6.16D)
As Lawrence Mishel and I discuss in our recent paper, the largest wedge driving the growing gap between economy-wide productivity and typical workers’ pay is rising inequality. Part of this increase in inequality is the shift in national income from labor compensation to capital incomes. Since 2000, this decline in labor’s share of income has become a significant contributor to the inequality wedge. The figure shows labor’s share of corporate sector income. Because all income in the corporate sector is either classified as labor compensation or capital incomes (profits plus net interest), this makes it a sensible first place to look for this labor-to-capital shift.

See related work on Wages, Incomes, and Wealth
See more work by Josh Bivens

There’s More to Economic Security than the Official Poverty Measure

Next week, the Census Bureau will release its estimates of the number of Americans who lived in poverty in 2014. The official poverty measure is an important metric—particularly since it’s been in place for nearly 50 years, and its measurement methodology hasn’t had major revisions over that time. As shown in the figure below, the share of Americans living at or below the official poverty line fell in the 1960s and stayed within a small range over the last four decades or so, generally rising in recessions and falling in expansions. Since 2000, the official poverty rate has seen a lot more up than down—the poverty rate at the end of the business cycle in 2007 was higher than at the beginning. 2013 was the first year the poverty rate turned the corner and saw some meaningful improvement since the start of the Great Recession. On Wednesday, September 16, we will see whether that progress has continued. While it would be great to see reductions in poverty over the last year, the fact is had economic growth over the last four decades been broadly shared, we could have made much more progress in reducing poverty, rather than just treading water.

Poverty rate, 1959–2013


Actual poverty rate
1959-01-01 22.4%
1960-01-01 22.2%
1961-01-01 21.9%
1962-01-01 21.0%
1963-01-01 19.5%
1964-01-01 19.0%
1965-01-01 17.3%
1966-01-01 14.7%
1967-01-01 14.2%
1968-01-01 12.8%
1969-01-01 12.1%
1970-01-01 12.6%
1971-01-01 12.5%
1972-01-01 11.9%
1973-01-01 11.1%
1974-01-01 11.2%
1975-01-01 12.3%
1976-01-01 11.8%
1977-01-01 11.6%
1978-01-01 11.4%
1979-01-01 11.7%
1980-01-01 13.0%
1981-01-01 14.0%
1982-01-01 15.0%
1983-01-01 15.2%
1984-01-01 14.4%
1985-01-01 14.0%
1986-01-01 13.6%
1987-01-01 13.4%
1988-01-01 13.0%
1989-01-01 12.8%
1990-01-01 13.5%
1991-01-01 14.2%
1992-01-01 14.8%
1993-01-01 15.1%
1994-01-01 14.5%
1995-01-01 13.8%
1996-01-01 13.7%
1997-01-01 13.3%
1998-01-01 12.7%
1999-01-01 11.9%
2000-01-01 11.3%
2001-01-01 11.7%
2002-01-01 12.1%
2003-01-01 12.5%
2004-01-01
2005-01-01 12.6%
2006-01-01 12.3%
2007-01-01 12.5%
2008-01-01 13.2%
2009-01-01 14.3%
2010-01-01 15.1%
2011-01-01 15.0%
2012-01-01 15.0%
2013-01-01 14.5%

2013: 14.5%1960197019801990200020100510152025%
Source: EPI analysis of Current Population Survey Annual Social and Economic Supplement Historical Poverty Tables (Tables 2 and 4), Bureau of Economic Analysis National Income Product Accounts public data, and Danziger and Gottschalk (1995)

The poverty measure has an important function of historical significance, but it also has limitations. It shows how many people live in severe economic deprivation, but that’s not to say that people who live above the poverty line are doing well. In an admittedly oversimplified characterization, the official poverty threshold is a family-composition-adjusted basic food budget in 1963 multiplied by three, adjusted for inflation over time. The official poverty measure includes Social Security and unemployment insurance as a form of income, but misses some important government supports, like food stamps (SNAP) or the Earned Income Tax Credit. It fails to take into account the fact that the prices of some necessary items, like health care, have grown much faster than overall inflation. It fails to change the items in the basket of costs it measures, neglecting the cost of child care, which became increasingly important as women entered the labor force over the last 50 years. And, it fails to take into account for the vast differences in the cost of living across the country.
The map below shows the poverty threshold for a two-parent, two-child family in 2014—$24,008, everywhere throughout the country, despite the fact that it costs significantly more to live in New York City than it does in Tennessee.

Federal poverty threshold

Federal poverty threshold
Source: EPI analysis of US Census Bureau Historic Poverty Tables “Poverty Thresholds for 2014 by Size of Family and Number of Related Children Under 18 Years.”
The poverty threshold is not only insufficient at capturing differences in the cost-of-living across the country, but it is insufficient at measuring what it truly costs to get by. EPI’s Family Budget Calculator measures the income a family needs in order to attain a secure yet modest standard of living in 618 metropolitan and rural areas across the country. The budgets are calculated by estimating community-specific costs of housing, food, child care, transportation, health care, other necessities, and taxes. The budgets differ by location, since certain costs, such as housing, vary significantly depending on where one resides. Compared with the federal poverty line, EPI’s family budgets provide a more accurate and complete measure of economic security in America.

Family Budget MapThe cost to secure a decent but modest standard of living for a two-parent, two-child family

The cost of living in • • • is:
• • •per year
• • •per month
$49,114$106,493
Note: Data for all 10 family budget types and all 618 family budget areas, including those in Alaska and Hawaii, are available via EPI’s Family Budget Calculator.
Source: EPI Family Budget Calculator (Gould et al. 2015a)
Notably, these budgets do not include several components of what might be considered part of a middle-class lifestyle. In particular, they do not include any savings: There are no savings for a rainy day (e.g., job loss or unexpected medical bills), savings for retirement (except through Social Security payments), or further investments in their children (e.g., enrichment activities or college savings). Thus, these are adequate but decidedly modest family budgets—they show what it takes to get by, but not to thrive. To show just how inadequate the poverty threshold is compared to the real cost of living, the map below subtracts the federal poverty threshold from the family budget for each area across the country.

The difference between the federal poverty line and the actual cost of living for a two-parent, two-child family

The cost of living in • • • is • • • more than the federal poverty threshold.
$25,106$82,485
Note: Data for all 10 family budget types and all 618 family budget areas, including those in Alaska and Hawaii, are available via EPI’s Family Budget Calculator.
Source: EPI analysis of US Census Bureau Historic Poverty Tables “Poverty Thresholds for 2014 by Size of Family and Number of Related Children Under 18 Years and EPI Family Budget Calculator (Gould et al. 2015a)
This map illustrates just how insufficient the poverty threshold is in measuring economic well-being. It takes an additional $25,106 to live in the cheapest budget area (Morristown, Tenn.) and another $82,485 above the poverty threshold to live in the most expensive (Washington, D.C.). In the median family budget area for this family type (Des Moines, Iowa) a two-parent, two-child family needs an additional $39,733 to make ends meet, above the poverty line.
Reducing poverty is a low bar for policy. It’s important to help those having the hardest time make ends meet, but it’s also important to raise our standards and find ways to increase economic security.

The Most Important News from the Progressive Movement brought to you by the Agenda Project Action Fund
JOURNEY FOR JUSTICE…CALIFORNIA WINS … SILENCING SONARS … TAX REFORM IN MASSACHUSETTS… VOTER REGISTRATION VICTORIES...ECONOMIC SNAPSHOT...
JOURNEY FOR JUSTICE - The NAACP has succeeded in their historic 1,000 mile Journey for Justice march, which started in Selma, Alabama and concluded on Capitol Hill in Washington, DC as participants advocated for the restoration of the Voting Rights Act. Learn more about the history making march HERE.
VOTER REGISTRATION LANDMARK - The Brennan Center for Justice is celebrating a landmark victory in California as automatic voter registration passes through the state legislature. Read their press release HERE.
BILLIONAIRES vs. TEACHERS - Brave New Films has released their latest film that shines a light on how the top 25 hedge fund managers make more money and pay less in taxes than all kindergarten teachers in the U.S combined. Watch the brief film HERE.
SNEAK ATTACK- The Free Press Action Fund is calling on Congress to stop the attacks on Net Neutrality that are hidden in the appropriations bill. Stand with the FCC’s rules on Net Neutrality by signing the petition HERE.
HISTORIC HEALTH COVERAGE GAIN- The Center on Budget and Policy Priorities has released its predictions and analysis on the upcoming Census Bureau’s estimate of the U.S population’s health coverage for 2014. See the data that shows historic health coverage gain in our country HERE.
MASSACHUSETTS TAX REFORM - Raise Up Massachusetts has successfully placed an initiative that would implement tax reform for top earners in the state on the 2016 ballot. The initiative calls for all incomes of over $1 million to be taxed at 4% higher rates. Read more information about the initiative HERE.
WEEKLY DEMOCRACY WINNER- The Democracy for All Video Challenge $1,000 winner this week is from the group Student Debt Crisis. Watch the winning video HERE.
CITIZENS UNITED IN CALIFORNIA COURT- The California Supreme Court has announced that they will hear if Proposition 49, the Overturn Citizens United Act, should be on next year’s ballot after it was initially rejected. Read more about upcoming hearing from California Common Cause, a lead organization in the fight HERE.
PROTECTION HOTLINE- Lawyer’s Committee for Civil Rights Under Law has paired up with various organizations to provide over-the-phone assistance to people who are registering to vote on September 22, National Voter Registration Day. To find out more about the hotline click HERE.
SILENCING SONARS- A huge victory for the Natural Resource Defense Council and marine animals around California and Hawaii as the U.S Navy agrees to silence their sonars that often leave marine animals deaf and at risk. Read more about the sonars that are being silenced and the effects they have on the ocean HERE.
ECONOMIC SNAPSHOT- The Economic Policy Institute has released this week’s economic snapshot analyzing the decline in labor’s share of corporate income and the $535 billion less for workers because of it. Read the publication HERE.
… From the Wonk Wire…
It’s Not Just Uber: Why the Taxi Industry Needs an Overhaul- Top Wonk Caroline Fredrickson, the President of the American Constitution Society for Law and Policy, writes about the need for both Uber and the taxi industry to comprehensively reform their structure in a way that services riders and drivers. Read her article HERE.
2015 National Fair Housing Conference, Residential Segregation- Economic Policy Institute research associate and Top Wonk Richard Rothstein joined housing policy experts to discuss residential segregation and diversity in America’s cities for the 2015 National Fair Housing Conference. Watch the discussion HERE.
American Constitution Day Symposium- American Constitution Society for Law and Policy has started a blog series discussing the Constitution written by various constitutional scholars. The blog series will run all week and first few posts can be found HERE.
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