The U. S. Census Bureau has reported that 23 percent of all new income in 2018 went to the top 5 percent of households, with the middle quintile receiving 14. 1 percent and the lowest quintile 3. 1 percent. Absolute measures like the OPM do not account for the changing nature of consumption or increasing costs over time, nor do they peg the poverty rate to the average income earner. Relative poverty measures better adjust for changing standards of living, and, furthermore, are closer to how most people think about poverty. Relative poverty measures can be used to measure poverty in relation to some income threshold of the population, usually some fraction of median income. While prices in general (“All Items, less shelter, ” or everything except housing) have increased by about 15 percent since June 2009, housing prices have increased by nearly 23 percent.
And we are talking about China’s largest and second-largest economies where many of its manufacturing and services are based. The first is by Peking and Tsinghua Universities on February 5, that says 85 percent of small- to medium-sized Chinese companies polled said they could last no more than three months. The other one, conducted by the American Chamber of Commerce Shanghai between February 11-14, says nearly half of foreign companies in China said their operations were impacted. Just how badly will the coronavirus hit the Chinese economy and the world economy? Amanda Novello is a senior policy associate at The Century Foundation and works with Century’s Rediscovering Government Initiative.
Her research interests include labor economics, the history of policy and economic development, and progressive economic policy. As explained above, given that low inflation and low productivity growth limit the possible year-to-year wage growth American workers can expect, clawing back some national income from profits could be a means that by which to get workers a raise. Global economic institutions like the International Monetary Fund are struggling to warn countries of pursuing economic policies that could further contribute to the worldwide economic slowdown of the past two quarters. As the above figures demonstrate, the economy is not working for most Americans, and particularly for those in vulnerable populations.
Indicators of macroeconomic performance, particularly investment and capacity utilization, point to an economy that is not operating at its full potential. The employment to population ratio, the share of prime-age people who are employed, has been low and slow to recover from the Great Recession, when compared with previous recoveries. When this ratio is low, it either means that people looking for work could not find it, or that the jobs they could find were not sufficient in terms of pay, conditions, or other preferences. These people—those who are no longer participating in the labor force—are not counted in unemployment rates. According to the World Inequality Database, the bottom half of the income distribution took home only 12. 5 percent of the income generated in 2014, while the top 1 percent took home 20 percent of income in the same year.
Medical services, of which health insurance is a major component, have increased by 36 percent since June 2009. The cost of education has also exploded by 40 percent relative to the start of the current recovery. Non-inflation-adjusted median hourly wages have increased by 25 percent since June 2009, meaning that the costs of education and medical care have substantially outpaced increases in pay since the start of the recovery. The recent recovery has not narrowed wage gaps between workers of different races and genders. Despite men and women of various racial and ethnic minorities making modest wage gains in the past five years, there have been persistent wage gaps between groups. Black men earn less than 70 percent of what white men earn in weekly wages in 2019, even after a modest closing of the gap since 2015. Indeed, the wage gap today for black men relative to white men is wider this year than it was in 1982.
Fortunately, the very next day, open public pressure kicked in in addition to those procedures were simplified. To cope with that, new policies have been announced to exempt pension co-pays for private firms. A total of 173 billion U. S. dollars has been injected into the financial system. In fact, since mid-February, those living in Beijing and other major cities saw businesses around them slowly reopened and familiar sights, such as traffic jams, returned. In an exclusive interview with our program, China’s national grid says Guangdong recorded a 62 percent increase in industrial electricity usage in seven days since February 10 (February 10-16). In Guangdong, over 60 percent of companies had reopened as of February 17.