[NJFAC] Persistent Inflation - and the Non-Partisan Fed--James Galbraith

Think Again About Persistent Inflation - and the Non-Partisan Fed Nov 18, 2022 James K. Galbraith https://www.project-syndicate.org/commentary/inflation-not-persistent-fed-guided-by-politics-by-james-k-galbraith-2022-11

Two days after the midterm elections in the United States, the Financial Times reported that US inflation has slowed, markets are "giddy," and the Federal Reserve may now ease up on its interest-rate hikes. The timing was strategic, given that the push from oil prices ended in June, and that overall price changes have been low since July. With the election over, it seems, now it is safe to admit the facts....

America's central bank is dominated by partisan Republicans from the business class – in financial circles, at the regional Federal Reserve Banks, and on the Federal Reserve Board, where Democratic presidents habitually reappoint Republican chairs – as Bill Clinton did with Alan Greenspan, Barack Obama with Ben Bernanke, and Joe Biden with Powell. Democrats who serve are habitually non-partisan – or hard-liners projecting an image. The result is that pressure for tight policies hits harder when Democrats are in power than when Republicans are.....

 

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June Zaccone
National Jobs for All Network
http://www.njfac.org

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[NJFAC] Gig economy and its toll

As Gig Economy Grows, Its Toll on Workers Mounts 

Posted on November 16, 2022 by Conor Gallagher

The Biden Labor Department released a proposal on Oct. 11 that could force regulators and courts to reclassify gig workers as employees rather than independent contractors.

The stakes are high – not only is the gig economy devastating its workers, but there are ongoing efforts to expand the model to nearly all American workplaces. The good folks at McKinsey estimate that 36 percent of the workforce (58 million Americans) are gig, contract, freelance, and temporary workers – up from 27 percent in 2016. And the numbers are only growing as inflation forces people to take on a second or third job in order to make ends meet.

Here's a rundown of some of the latest from the gig economy, as well as reasons to be doubtful about 'Amtrak Joe's' efforts to rein in the abuses.....

A June national survey of gig workers from the Economic Policy Institute found the following:

• 29 percent earned less than the state minimum wage that would be applicable if they were a W-2 service-sector worker.
• 62 percent  lost earnings because of "technical difficulties clocking in or out," compared with 19 percent of W-2 service-sector workers.
• One in 5 gig workers went hungry because they could not afford enough to eat. 30 percent used the Supplementary Nutrition Assistance Program, twice the rate of W-2 service-sector workers.
• 31 percent did not pay the full amount of their utility bills in the month prior to the survey.....

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June Zaccone
National Jobs for All Network
http://www.njfac.org

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[NJFAC] employed and homeless

Employed and Experiencing Homelessness: What the Numbers Show

Written by Julie Pagaduan September 2, 2022

Have you ever heard the idea that people experiencing homelessness "don't want to work" or they should "just get a job?"

The truth is that many do – in fact, a 2021 study from the University of Chicago estimates that 53% of people living in homeless shelters and 40% of unsheltered people were employed, either full or part-time, in the year that people were observed homeless between 2011 – 2018.

Despite how many people experiencing homelessness work, a job doesn't solve everything. Life-sustaining wages are a key determinant of housing security; however, most people experiencing homelessness are not earning enough to afford rent.

Low Wages and Underemployment: What the Numbers Show

The National Low Income Housing Coalition's Out of Reach Report calculates that a household would need to earn an average salary of $46,967, or $23 per hour, to afford a 2-bedroom apartment at Fair Market Rent. This is much higher than the federal minimum wage of $7.25 per hour – or in cities with a higher minimum wage. Even if people are working full time, they would not be able to afford housing earning minimum wage.....

wage stagnatio, investor purchases of housing, among other problems. jz

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June Zaccone
National Jobs for All Network
http://www.njfac.org

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Re: [NJFAC] S. Korea's minimum wage helped it avoid global shocks

wow. This is great stuff. Thanks, June.  See you on Friday.

F

https://www.dsausa.org/democratic-left/june-jobs-pretty-good-but-wait-for-the-recession-train/

Frank Stricker

-----Original Message-----
From: June Zaccone <junez@njfac.org>
To: goodjobs list <goodjobsforall@googlegroups.com>
Sent: Sat, Jul 30, 2022 2:06 pm
Subject: [NJFAC] S. Korea's minimum wage helped it avoid global shocks

Minimum Wage and How South Korea Avoided Japanization

South Korea's high minimum wage made its export-dependent economy more resilient.

....

The liberal Moon Jae-in 문재인 administration steeply increased the minimum wage, raising it by 41.6% over its five years from 2018 to 2022. The raise provoked outcry from businesses, pushing the conservative Yoon Suk-yeol 윤석열 administration to hold back the minimum wage increase despite high inflation. (See previous coverage, "The Triple Quandary.")

Yet the wage increase, including minimum wage hike, is precisely how South Korea has historically managed to avoid Japan-like stagnation. While the Japanese economy slogged through the "Lost Decades" since the early 1990s, the South Korean economy continued its steady growth over the past thirty years, surpassing Japan's PPP-adjusted per capita GDP in 2018, although the two economies have similar structures of being export-oriented and having a bifurcation of highly efficient hyper-modern manufacturing companies existing side-by-side with an inefficient and unproductive service industry.

According to Richard Katz, senior fellow of the Carnegie Council for Ethics of International Affairs, South Korea avoided Japanization by having wages rise along with economic growth, preserving the strength of domestic demand. South Korea's minimum wage is 62% of its median wage; Japan's, only 45%.

"Because domestic private demand is strong, Korea is far less vulnerable to global shocks, even though Korea's trade:GDP ratio is twice Japan's", wrote Katz in Toyo Keizai, a business and finance-focused Japanese publication. "Countries less vulnerable to macroeconomic shocks enjoy faster average growth over the long term."

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National Jobs for All Network
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[NJFAC] S. Korea's minimum wage helped it avoid global shocks

Minimum Wage and How South Korea Avoided Japanization

South Korea's high minimum wage made its export-dependent economy more resilient.

....

The liberal Moon Jae-in 문재인 administration steeply increased the minimum wage, raising it by 41.6% over its five years from 2018 to 2022. The raise provoked outcry from businesses, pushing the conservative Yoon Suk-yeol 윤석열 administration to hold back the minimum wage increase despite high inflation. (See previous coverage, "The Triple Quandary.")

Yet the wage increase, including minimum wage hike, is precisely how South Korea has historically managed to avoid Japan-like stagnation. While the Japanese economy slogged through the "Lost Decades" since the early 1990s, the South Korean economy continued its steady growth over the past thirty years, surpassing Japan's PPP-adjusted per capita GDP in 2018, although the two economies have similar structures of being export-oriented and having a bifurcation of highly efficient hyper-modern manufacturing companies existing side-by-side with an inefficient and unproductive service industry.

According to Richard Katz, senior fellow of the Carnegie Council for Ethics of International Affairs, South Korea avoided Japanization by having wages rise along with economic growth, preserving the strength of domestic demand. South Korea's minimum wage is 62% of its median wage; Japan's, only 45%.

"Because domestic private demand is strong, Korea is far less vulnerable to global shocks, even though Korea's trade:GDP ratio is twice Japan's", wrote Katz in Toyo Keizai, a business and finance-focused Japanese publication. "Countries less vulnerable to macroeconomic shocks enjoy faster average growth over the long term."

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June Zaccone
National Jobs for All Network
http://www.njfac.org

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[NJFAC] Wage Stagnation and Productivity

Wage Stagnation and Productivity: Challenging the Conventional Analysis  By Claudia Fontanari and Antonella Palumbo Jul 7, 2022 Stagnating real wages may have contributed to the slowdown of US productivity

In much of the advanced world, we have witnessed at least three decades of stagnating real wages and massive reductions in the labor share in income.....

The prevailing idea in the literature, it results, is that a combination of market mechanisms and exogenous shocks have made labor (and especially poorly qualified labor) superabundant with respect to other factors and the economy's requirements.[1] Implicit or explicit, the message of the analyses that see the change in distribution as essentially the outcome of market forces is that there is little that policies can do, apart from somehow palliating the worst social consequences of the technological or commercial shocks.

Generally, however, these analyses fail to give an account entirely consistent with the data.

....

The problem of wages and work conditions is now crucial. Higher wages and safer and better jobs would not only re-orient firms towards higher productivity and more efficient organization. They would possibly also represent a serious incentive towards enhanced labor supply, thus easing one of the constraints currently concurring to inflation. The lasting wounds that the regime of low wages inflicts on the economy, in addition to what it entails for the greatest part of society, should be a matter of serious concern.

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June Zaccone
National Jobs for All Network
http://www.njfac.org

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[NJFAC] Inflation can come from business power --Fed. Res Chair. Powell

"The Federal Reserve chair, Jerome Powell, said that sometimes businesses are raising prices just "because they can." He's right. Companies have pricing power when consumers don't have choice. Sometimes this is because demand for consumer staples like toilet paper, toothpaste and hamburger meat is relatively inelastic. If you need a box of diapers, you need a box of diapers. Other times pricing power comes from concentrated market power. In industries like meatpacking and shipping — in which giants have over 80 percent of market share at times — it's easier to take big markups when there aren't major competitors to undercut you."

https://www.nytimes.com/2022/05/05/opinion/us-companies-inflation.html

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June Zaccone
National Jobs for All Network
http://www.njfac.org

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