more chutes than ladders: economic mobility down and up washington a presentation for the
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More Chutes than Ladders: Economic mobility down and up Washington A presentation for the Seattle Economics Council May 14, 2014 John Burbank Economic Opportunity Institute . Hourly compensation for production/non-supervisory workers and total economy productivity, 1948 –1978. - PowerPoint PPT PresentationTRANSCRIPT
More Chutes than
Ladders:Economic mobility
down and up Washington
A presentation for the Seattle Economics Council
May 14, 2014
John Burbank Economic Opportunity
Institute
www.eoionline.org
www.eoionline.org
Hourly compensation for production/non-supervisory workers and total economy productivity, 1948–1978
101%
109%
73%
Cum
ulati
ve p
erce
nt g
row
th si
nce
1948
ProductivityHourly com-pensation
Source: Economic Policy Institute of unpublished total economy data from Bureau of Labor Statistics' Labor Productivity and Costs program and Bureau of Economic Analysis National Income and Product Accounts public data series. Mishel, Lawrence, Josh Bivens, Elise Gould, and Heidi Shierholz. 2012 (forthcoming). The State of Working America, 12th Edition. An Economic Policy Institute book. Ithaca, N.Y.: Cornell University Press.
Average Wages
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19481950
19521954
19561958
19601962
19641966
19681970
19721974
19761978
19801982
19841986
19881990
19921994
19961998
20002002
20042006
20082010
254%
113%
81%
Cum
ulati
ve p
erce
nt g
row
th si
nce
1948
Hourly compensation for production/non-supervisory workers and total economy pro-
ductivity, 1948–2011
Productivity
Hourly compensa-tion
Source: Economic Policy Institute of unpublished total economy data from Bureau of Labor Statistics' Labor Productivity and Costs program and Bureau of Economic Analysis National Income and Product Accounts public data series. Mishel, Lawrence, Josh Bivens, Elise Gould, and Heidi Shierholz. 2012 (forthcoming). The State of Working America, 12th Edition. An Economic Policy Institute book. Ithaca, N.Y.: Cornell University Press.
Average Hourly Wage
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$0.03
$0.05
$0.12
$0.07
$0.14
$0.11
$0.17
Non-financial corporate profits per $ unit of value added
Source: Table 1.15. Price, Costs, and Profit Per Unit of Real Gross Value Added of Nonfinancial Do-mestic Corporate Business, Bureau of Economic Analysis, Last Revised on: January 27, 2012
Economic Context – WA Wages
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10th 20th 30th 40th Median 60th 70th 80th 90th
-3%-5% -5%
-3% -1% 0%
6%
16%
31%
-2%-5% -5% -6% -5%
-2%
1%3%
6%
Washington wage growth lowest decile to highest decile, 1979-2012 (in 2012 dollars)
Wage growth 1979-2012 Wage growth 2008-2012
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Bottom
90%
90%-95%
95%- 99%
99.0-99.5%
99.5%-99.9%
99.9%-99.99%
Top 0.01%$2
9,840
$125
,627 $2
05,52
9 $418
,378
$798
,120 $2
,802,0
20
$23,8
46,95
0Average Market Income for the first 90%, the next 5%, the next 4%, the next .5%, the next .4%, the next .09%, the highest .01%
in 2010
Economic Opportunity Institute
Changing Economic Landscape
19471949
19511953
19551957
19591961
19631965
19671969
19711973
19751977
19791981
19831985
19871989
19911993
19951997
19992001
20032005
20072009
2011-40%
-20%
0%
20%
40%
60%
80%
100%
120%
140%
62%
-17%
Percent Manufacturing Job Growth, WA vs U.S., 1947-2012
WA US
Source: WA Employment Security Department; Bureau of Labor Statistics
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Economic Opportunity Institute
Changing Economic Landscape
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120%
20%
40%
60%
80%
100%
120%
34%
111%
Percent Job Growth, Nonfarm vs Information, WA, 1990-2012
Total nonfarm Information
Source: Bureau of Labor Statistics, Quarterly Census of Employment and Wages
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Economic Opportunity Institute
Changing Economic Landscape
Total Nonfarm
Natural Resources & Mining
Construction
Manufacturing
Retail Trade
Transportation & Utilities
Information
Financial Activities
Professional & Business Services
Education & Health Services
Leisure & Hospitality
Government
-75% -25% 25% 75% 125%
Percent Job Growth, Selected Industries, WA vs U.S. 1990-2012
US WA
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Economic Opportunity Institute
Income Inequality19
79
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
2011
2012
$0
$10
$20
$30
$40
$50
$9.44 $9.15
$18.19 $18.04
$33.17
$43.41
Hourly Wages by Selected Decile, WA, 1979-2012 (2012 Dollars)
10th percentile 50th percentile (Median) 90th percentile
Source: EOI analysis of Economic Policy Institute analysis of Current Population Survey data
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Factors Affecting Mobility
Economic Opportunity Institute
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
2011
2012
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$17.23 $15.03
$17.35 $15.97
$23.56
$28.30
Median Wages by Education Level, WA, 1979-2012 (2012 dollars)
High school Some college Bachelor's or higher
Source: EOI analysis of Economic Policy Institute analysis of Current Population Survey data
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Factors Affecting Mobility
Economic Opportunity Institute
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$2,702
$6,989$9,726
$5,286
$12,428 $12,275
Share of State vs. Student Funding for Central, Eastern and Western Washington Universities, 1990-2011 (2011 dollars)
Tuition (Student Funding) State Funding Total Cost
Source: EOI analysis of data from the Legislative Evaluation and Accountability Program Committee and Washington Student Achievement Council
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TUITION AND FEES, WASHINGTON STATE COLLEGES AND UNIVERSITIES, 1989-2012
1990-911992-93
1994-951996-97
1998-992000-01
2002-032004-05
2006-072008-09
2010-11
$3,276
$12,383$11,386
$2,702
$8,634
$1,454
$4,000
University of Washington Washington State UniversityCWU, EWU, WWU Community/Technical Colleges
1988-891991-92
1994-951997-98
2000-012003-04
2006-072009-10
2012-13
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
5.6%
7.4%
10.2%
15.3%
22.2%
% o
f Med
ian
Hous
ehol
d In
com
e
UNIVERSITY OF WASHINGTON TUITION
AS A PERCENTAGE OF WASHINGTON MEDIAN HOUSEHOLD INCOME
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2006-2007 2007-2008 2008-2009 2009-2010 2010-2011$0
$5,000
$10,000
$15,000
$20,000
$25,000
$0-24,999
$25,000-49,999
$50,000-74,999
$ 75,000 and above
Stud
ent L
oan
Debt
at G
radu
atio
n in
201
1 do
llars
AVERAGE STUDENT LOAN DEBT BY INCOME FOR UNIVERSITY OF WASHINGTON STUDENTS WHO
GRADUATE WITH DEBT
Source: University of Washington Income/Debt Comparisons, 2006-2011
http://projectonstudentdebt.org/www.eoionline.org
% OF INCOME PAID IN STATE AND LOCAL TAXESWASHINGTON STATE
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Poorest 20% (<$20,000)
Second 20% ($20-38,000)
Middle 20% ($38-60,000)
Fourth 20% ($60-95,000)
Next 15% ($95-176,000)
Next 4% ($176-430,000)
Top 1% (>$430,000)
16.9%
12.3%
10.4%
8.7%
6.8%
4.7%
2.8%
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We are leaving a lot of money on the table!
Personal income is growing much faster than sales tax base in WA
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
$350,000,000 $325,982,000
$110,523,000
Personal income Taxable retail sales
$1,0
00s
Sources: U.S. Bureau of Economic Analysis, Washington Economic and Revenue Forecast Council
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If revenue just kept up personal income….
For academic year ending in given year. Source: fiscal.wa.gov
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Washington State General Fund Revenues Per Capita, Inflation-Adjusted
FY 1997-99 FY 1999-01 FY 2001-03 FY 2003-05 FY 2005-07 FY 2007-09 FY 2009-11
$6,056.61 $6,168.57 $6,232.10 $6,141.83 $5,817.73
$5,467.55
$4,236.05
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Washington General Fund higher education spending per enrolled student, 2 and 4-yr
1999-01 2001-03 2003-05 2005-07 2007-09 2009-11 2011-13$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$8,053 $7,981$7,232
$7,829 $7,925
$6,520$5,981
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Women earn majority of degrees
Bachelor's Master's Doctor's
57.4%
62.2%
53.3%
% Female 2010
Source: U.S. Department of Education
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College majors and starting salaries
Engineering Computer Health related Business English Psychology Education $-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
17% 18%
85%
49% 68% 77% 80%
% male
% female
SOURCE: U.S. Department of Education, National Center for Education Statistics, 2009 data
Economic Opportunity Institute
19791980
19811982
19831984
19851986
19871988
19891990
19911992
19931994
19951996
19971998
19992000
20012002
20032004
20052006
20072008
20092010
20112012
2013$10.00
$12.00
$14.00
$16.00
$18.00
$20.00
$22.00
$24.00
$26.00 $23.71
$20.10
$14.06 $16.13
Median hourly wages: WA, 1979-2013
Male Female
Source: Economic Policy Institute analysis of Current Population Survey data
2013
dol
lars
Gendered Wage Gap
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Earnings gap grows in childbearing yearsAverage monthly earnings, Washington, 2012
Source: U.S. Census Bureau, Quarterly Workforce Indicators
25-34 35-44 45-54 55-64
$3,054
$3,989 $3,964 $3,769 $4,230
$6,424 $6,726
$6,197 Women Men
age
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Higher earnings = more retirement income for men
Men
Women
$- $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000
Sources of income, U.S. 65+
Social Security Pensions AssetsEarnings Other
Source: Employee Benefit Research Institute
Millennials
Economic Opportunity Institute
• More students taking on debt and in higher amounts
• 40% of student borrowers are in deferment, forbearance or default
• Highest rates of debt among lowest income students at UW
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Millennials
Economic Opportunity Institute
• Incomes of oldest households have increased at four times the rate of the youngest households
• Younger households also more likely to be in poverty over time> 65
55-64
45-54
35-44
< 35
0% 20% 40% 60% 80% 100% 120%
109%
54%
41%
48%
27%
Change in Median Adjusted Household Income by Age: U.S., 1967-2010
Source: Pew Research Center tabulations of Current Population Survey Annual Social and Economic Supplement
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Millennials
Economic Opportunity Institute
• Great Recession has accelerated generation gap in economic well-being
• All households at the median lost net-worth, but youngest households faced steepest declines
> 65
55-64
45-54
35-44
< 35
-60% -50% -40% -30% -20% -10% 0%
-6%
-14%
-28%
-49%
-55%
Change in Median Net Worth by Age: U.S., 2005-2009
Source: Pew Research Center tabulations of Survey Income and Program Participation data
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The marketplace of benefits
Source: U.S. Bureau of Labor Statistics
Retirement Medical Sick Leave
12% 13%22%
55% 55%
67%
83%75%
90%
Lowest paid 10%AverageTop paid 10%
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PRIVATE-SECTOR WORKERS PARTICIPATING IN AN EMPLOYMENT-BASED RETIREMENT PLAN
1979
19801981
1982
19831984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
28%Defined Benefit Only (DB)
3%7%Defined Contribution Only (DC)
31%
10%Both DB and DC 12%
55%No Employer-Based Re-tirement Plan
54%
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PENSION BENEFIT IMPACTS ON WASHINGTON STATE ECONOMY, 2009
Total Pension Benefits Resulting Increase in Economic Activity
Public Contributions to Pension Benefits
Resulting Increase in Economic Activity
$2,592,229,744
$3,551,354,749
$388,834,462
$3,551,354,749
Multiplier from Almieda, Beth, and Biovie, Ilana, National Institute on Retirement Security, February 2009, “Pensionomics: Measuring the Economic Impact of State and Local Pension Plans, p. 8: http://www.nirsonline.org/storage/nirs/documents/Pensionomics%20Report.pdf; monthly benefit calculations from Merchant, Shawn, DRS Calculations, retirees as of 6/30/09; e-mailed 4/11/2010.
Realizing Upward Mobility
• Wages• Social contract• Family leave• Retirement• Education• Jobs, public and private• Robust public revenue
and progressive taxation
Presented by the Economic Opportunity InstituteFor more information visit: www.eoionline.org
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