three important economic distributions and the politics that shape them cepr basic economics seminar...
TRANSCRIPT
Three important economic distributions and the politics
that shape them
CEPR Basic Economics Seminar John Schmitt
September 29, 2005
Today’s talk
• Three important economic distributions
•Wages
•Incomes
•Wealth
• Political forces shaping these distributions
Table 1: Hourly wage distribution, 2004
Percentile
10 50 90 95
All 6.80 14.00 30.46 37.34
Table 4: Hourly wage distribution , by race and gender, 2004
Percentile10 50 90 95
All 6.80 14.00 30.46 37.34
White 7.28 14.94 32.39 38.74 Black 6.80 12.14 25.28 31.11 Hispanic 6.55 10.62 23.30 28.45
Women 6.80 12.45 27.18 33.61
White 6.80 13.11 28.01 34.31 Black 6.36 11.65 24.27 29.13 Hispanic 6.07 9.71 21.51 26.77
Men 7.28 15.53 33.61 40.05
White 7.77 17.26 35.27 42.01 Black 7.01 12.91 26.89 33.61 Hispanic 6.80 11.09 24.27 29.56
Figure 1: Real hourly wage growth, all, 1979-2004
80
90
100
110
120
130
140
150
1973 1983 1993 2003
1979
=10
0 .
10th 50th 90th
Figure 2: Real hourly wage growth, men, 1979-2004
80
90
100
110
120
130
140
150
1973 1983 1993 2003
1979
=10
0 .
10th 50th 90th
Figure 3: Real hourly wage growth, women, 1979-2004
80
90
100
110
120
130
140
150
1973 1983 1993 2003
1979
=10
0 .
10th 50th 90th
Table 7: Annual family income distribution, 2001
LowerLowest Second Middle Fourth Limit of
Fifth Fifth Fifth Fifth Top 5%All 24,000 41,127 62,500 94,150 164,104
White 26,000 44,000 65,283 97,185 169,501Black 14,256 26,350 42,400 67,523 110,977Hispanic 16,000 28,000 41,600 66,040 113,374
Figure 4: Real median family income, 1947-2003
0
20,000
40,000
60,000
80,000
1947 1957 1967 1977 1987 1997
$200
3
Figure 5: Annual growth real family income, 1947-2003
20th 40th 60th 80th 95th0.0
1.0
2.0
3.0
4.0
5.0
3.735596867705273.906723653066644.005964285599024.13102174966819
3.88527139948738
0.2658625746043920.470499302112142
0.7325554162782950.88016209831537
1.29548656640708
1947-19731973-2003
Percentile of family income distribution
Ave
rage
an
nu
ali p
erce
nt
grow
th
Figure 6: Share of wealth, by wealth level, 1962-2001
33.4 33.837.4
33.4
15.616.518.719.1
0
10
20
30
40
50
1962 1983 1989 2001
Per
cen
t
Top 1% Bottom 80%
Table 9: Average wealth, by wealth class, 1962-2001
Wealth class 1962 1983 1989 1998 2001
Top fifth 638.2 939.3 1,105.1 1,224.2 1,604.7Top 1% 5,271.5 7,795.8 9,889.0 11,086.4 12,962.1Next 4% 834.6 1,289.5 1,427.0 1,565.9 2,453.0Next 5% 390.1 560.8 614.5 677.4 937.4Next 10% 220.4 302.8 343.2 374.7 490.3
Bottom four-fifths 37.5 53.9 54.5 61.0 74.0Fourth 105.7 145.2 163.0 175.3 215.3Middle 42.8 60.3 63.9 66.3 75.0Second 7.5 13.6 11.1 12.1 13.9Lowest -5.8 -3.5 -20.0 -9.6 -8.2
Median 42.2 59.3 63.5 65.9 73.5
Figure 7: Households with zero or negative net wealth, 1962-2001
23.6
15.517.9 17.6
30.131.8
29.7
34.3
0
10
20
30
40
1962 1983 1989 2001
Per
cen
t
Zero or negative Less than $10,000
Figure 8: Share of gains in wealth, 1983-2001
32.8 31.2
25.2
9.4
1.4
0
10
20
30
40
50
Top 1% Next 4% Next 15% Next 20% Rest
Per
cen
t
Policies lowering bargaining power ofworkers, relative to their employers
• Decline in purchasing power of minimum wage
• Decline in unionization rate• Economic deregulation• Privatization (state and local)• Welfare Reform• Recessionary macroeconomic policy• Pro-corporate globalization
Figure 10: Real value of the minimum wage, 1955-2004
3
4
5
6
7
1955 1965 1975 1985 1995
$200
0
Figure 9: Share of workers in unions, 1948-2004
0
10
20
30
40
1948 1958 1968 1978 1988 1998
Per
cent
Table 6: Health-care coverage rates, by wage quintile 1979-2002
1979 1989 2002
Lowest 37.9 26.4 26.6 -11.5 0.2 Second 60.5 51.7 48.8 -8.8 -2.9 Middle 74.7 67.5 62.7 -7.2 -4.8 Fourth 83.5 78.0 72.1 -5.5 -5.9 Top 89.5 84.7 78.5 -4.8 -6.2
Percentage-point change
1979-1989
1989-2002
Table 8: Distribution of household wealth, 1962-2001
Wealth class 1962 1983 1989 1998 2001
Top fifth 81.0 81.3 83.5 83.4 84.4Top 1% 33.4 33.8 37.4 38.1 33.4Next 4% 21.2 22.3 21.6 21.3 25.8Next 5% 12.4 12.1 11.6 11.5 12.3Next 10% 14.0 13.1 13.0 12.5 12.9
Bottom four-fifths 19.1 18.7 16.5 16.6 15.6Fourth 13.4 12.6 12.3 11.9 11.3Middle 5.4 5.2 4.8 4.5 3.9Second 1.0 1.2 0.8 0.8 0.7Lowest -0.7 -0.3 -1.5 -0.6 -0.4
Total 100.0 100.0 100.0 100.0 100.0
Figure 11: Prison and jail population, 1980-2003
1980 1985 1990 1995 2000 .00
.25
.50
.75
1.00
1.25P
erce
nt o
f po
pula
tion
16-6
4
Reading List• John Schmitt. “Labor markets and economic inequality in
the United States since the end of the 1970s,” International Journal of Health Services, vol. 35, no. 4, pp. 655-673. [Available in Working Paper form: http://www.noapparentmotive.org/papers/schmitt_ijhs.pdf.]
• John Schmitt. “How Good is the [US] Economy at Creating Good Jobs?” Center for Economic and Policy Research Briefing Paper, October 2005. [http://www.cepr.net/publications/labor_markets_2005_10.pdf]
• Lawrence Mishel, Jared Bernstein, and Silvia Allegretto. The State of Working America 2004-2005. Ithaca, New York: Cornell University Press, 2005.
Three important economic distributions and the politics
that shape them
John SchmittCenter for Economic and Policy Research
www.cepr.net