The State of Working America

The State of Working America

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Overview

The State of Working America by Lawrence Mishel, Josh Bivens, Elise Gould, Heidi Shierholz

"The State of Working America remains unrivaled as the most-trusted source for a comprehensive understanding of how working Americans and their families are faring in today's economy."—Robert B. Reich

Product Details

ISBN-13: 9780801478550
Publisher: Cornell University Press
Publication date: 12/18/2012
Series: Economic Policy Institute Book Series
Pages: 520
Product dimensions: 6.00(w) x 8.90(h) x 1.30(d)

About the Author

Lawrence Mishel is the president of the Economic Policy Institute and its research director from 1987 to 1999. He is the coauthor of every edition of The State of Working America.

Josh Bivens has been an economist at the Economic Policy Institute since 2002. He is the author of Failure by Design: The Story behind America's Broken Economy and coauthor of The State of Working America, 12th Edition, both from Cornell.

Elise Gould is Director of Health Policy Research at the Economic Policy Institute.

Heidi Shierholz is an economist at the Economic Policy Institute and coauthor of The State of Working America, 2008/2009 and The State of Working America, 12th Edition, both from Cornell.

Table of Contents

Documentation and methodology 1

Chapter 1 Overview: Policy-driven inequality blocks living-standards growth for low- and middle-income Americans 5

America's vast middle class has suffered a 'lost decade' and faces the threat of another 5

Income and wage inequality have risen sharply over the last three-and-a-half decades 6

Rising inequality is the major cause of wage stagnation for workers and of the failure of low-and middle-income families to appropriately benefit from growth 6

Economic policies caused increased inequality of wages and incomes 7

Claims that growing inequality has not hurt middle-income families are flawed 8

Growing income inequality has not been offset by increased mobility 9

Inequalities persist by race and gender 9

Economic history and policy as seen from below the top rungs of the wage and income ladder 10

The Great Recession: Causes and consequences 11

A very condensed macroeconomic history of the Great Recession and its aftermath 12

Economic 'lost decades': Weak growth for most American's wages and incomes before and likely after the Great Recession 15

Weak labor demand at the heart of the lost decade 16

Weak labor demand devastates key living standards 18

Dim growth prospects forecast another lost decade 20

Two key lessons from the lost decade 22

Extraordinarily unequal growth before the lost decade: Rising inequality blocks income and wage growth from 1979 to 2007 23

Income inequality and stagnating living standards 23

Wage inequality and the break between wages and productivity 28

Strong income and wage growth in the atypical last half of the 1990s 31

Economic mobility has neither caused nor cured the damage done by rising inequality 33

Today's private economy: Not performing for middle-income Americans 35

Middle-income growth lags average income growth and historical income growth rates 35

Social insurance programs, not private sources, account for the majority of middle-fifth income growth 36

Growing shares of income are dedicated to holding families harmless against rising medical costs 36

Households have to work more to achieve income gains 37

Assessing what the private economy is really delivering to middle-income Americans 38

Today's economy: Different outcomes by race and gender 39

Many more than just two Americas 39

Male and female America 41

No one 'American economy' 43

Conclusion: The struggling state of working America is policy-driven 43

The policy good for everybody in the fractured U.S. economy: Ensuring rapid recovery to full employment 46

Table and figure notes 48

Chapter 2 Income: Already a 'lost decade' 53

The basic contours of American incomes 57

Family and household money income 58

Median family income as a metric of economic performance 65

A look at income by income fifths 67

Median family income by race, ethnicity, and nativity 68

The Great Recession and American incomes 71

Impact by income group 71

Impact by race and ethnicity 74

Income losses projected for years to come 74

Rising inequality of American incomes 76

Family income inequality 76

Unequal growth of comprehensive household incomes suggests diverging well-being 79

Sharp rise in income inequality apparent in every major data source 80

The limited impact of taxes and transfers relative to market income 84

Factors behind the large rise in inequality of market incomes 94

How much did middle-income living standards actually rise between 1979 and 2007? 106

Measuring living standards at the middle 107

Sources of income for the middle fifth 109

Income growth for the middle fifth has been driven largely by elderly households' pension and transfer income 112

Adjusting income for the truer contribution of health care transfers 112

Disproportionate growth of transfers directed toward elderly households 114

The role of hours worked and educational upgrading in wage growth 120

Little of the growth of middle incomes can be attributed to a well-functioning economy 127

Conclusion 128

Table and figure notes 130

Chapter 3 Mobility: not offsetting growing inequality 139

Intragenerational mobility 142

Lifetime mobility against the backdrop of generational stagnation 142

Family and individual mobility trends 143

Factors associated with intragenerational mobility 147

Intergenerational mobility 150

Cross-country comparisons 151

The impact of race, wealth, and education on mobility 154

Race 155

Wealth 156

Education 157

Income inequality and mobility 161

Has the American Dream become more or less attainable over time? 163

Conclusion 168

Figure notes 169

Chapter 4 Wages: The top, and very top, outpace the rest 173

Describing wage trends 177

The decade of lost wage growth 177

Contrasting work hours and hourly wage growth 179

Contrasting compensation and wage growth 180

Wages of production and nonsupervisory workers 183

Wage trends by wage level 185

Shifts in low-wage jobs 192

Trends among very high earners fuel growing wage inequality 194

Trends in benefit growth and inequality 198

Dimensions of wage inequality 206

Gaps between higher- and lower-wage workers 208

Gaps between workers with different education and experience levels 211

The gap between workers with comparable education and experience 213

Rising education/wage differentials 214

Young workers' wages 222

The growth of within-group wage inequality 228

Wage inequality by race/ethnicity and gender 232

Productivity and the compensation/productivity gap 235

Factors driving wage inequality 241

Unemployment 242

The shift to low-paying industries 247

Employer health care costs 248

Trade and wages 253

Immigration 265

Unionization 268

The decline in the real value of the minimum wage 279

Executive and finance-sector pay 286

Explaining wage inequality: Bringing the factors together 292

Technology and skill mismatches 294

What is the appeal of the technology story? 295

Education gaps and wage inequality 296

The slowdown in the growth of demand for college graduates 299

Within-group wage inequality 301

The labor market difficulties of college graduates 302

Jobs of the future 305

Conclusion 309

Table and figure notes 310

Chapter 5 Jobs: A function of demand 321

Job creation is a macroeconomic outcome 323

Zero is not the baseline for job growth 325

What are today's jobs like? 327

Industries 327

Firm size 329

Occupations 330

Job quality 333

Unemployment 334

Unemployment and age 336

Unemployment and race/ethnicity, gender, and education 339

Unemployment rates of foreign- and native-born workers 342

Unemployment insurance benefits 343

Labor force participation: Structural and cyclical changes 345

Beyond the unemployment rate: Other measures of labor market slack 348

Employment-to-population ratio 349

Underemployment 350

Long-term unemployment 351

Over-the-year unemployment 354

Job-seekers ratio 355

Voluntary quits 356

Recovering from the Great Recession 357

Comparing the Great Recession and its aftermath with earlier recessions and recoveries 358

Job loss and gender in the Great Recession 360

Unemployment in the aftermath of the Great Recession: Structural or cyclical? 363

The consequences of job loss and unemployment for workers and their families 367

Conclusion 370

Table and figure notes 371

Chapter 6 Wealth: Unrelenting disparities 375

Net worth 377

The racial divide in net worth 385

Assets 386

Stocks 391

Housing 393

Retirement insecurity 398

Liabilities 400

Student loan debt 403

Debt relative to disposable personal income 404

Debt service 404

Hardship 408

Bankruptcy 409

Wealth of U.S. citizens compared with citizens' wealth in peer countries 411

Conclusion 413

Table and figure notes 414

Chapter 7 Poverty: The Great Recession adds injury to insult 419

Poverty measurement 421

Official poverty line 421

Supplemental Poverty Measure 428

Relative poverty 431

The working poor 432

Poverty-level wages 432

Job quality 434

Work hours 435

Determinants of low incomes 437

The macro economy and poverty 437

The impact of economic, demographic, and education changes on poverty rates 440

Resources for low-income Americans 444

International comparisons 447

Poverty and the earnings distribution 448

Resource allocation 452

Conclusion 454

Table and figure notes 455

Appendix A CPS income measurement 461

Appendix B Wage measurement 465

Bibliography 475

Index 489

About EPI 504

About the authors 505

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