[NJFAC] The inability of the bottom 95 percent to generate adequate demand helps explain the slow recovery.

Economic Double Whammy: America's Growing Wealth Divide Is Actually Putting People out of Work

Mounting evidence points to the scary reality that the wealth divide harms the job market.

Some of our recent work suggests that by 2012 the top 5 percent was consuming almost as much, in total, as the bottom 80 percent! ....
Mainstream economists hold that even if most people end up with less money to spend because of inequality, that's ok because other sources of spending, like business investment, will come to the rescue and we'll end up with plenty of jobs.

Our works shows that this is not so. We find that high and rising inequality is now holding back the U.S. recovery from the Great Recession and the lack of purchasing power faced by most people is a job killer not just for a few quarters but also over a number of years. Unemployment may cause wages and prices to fall (or at least rise more slowly), but disinflation and, especially, deflation are not likely to raise total spending. Of course, consumers appreciate lower prices for the things they buy, but lower wages are bad for spending, especially if the household has a fixed mortgage or car payment to meet.

Another important problem is that falling interest rates will not be effective in pushing spending up, at least in a sustainable way. Short-term rates cannot fall much below the near-zero level where they are now. Also empirical evidence implies that low interest rates are not particularly effective at stimulating demand, outside of speculative bubbles like the one we saw in housing prior to the Great Recession.

When prices don't adjust, and monetary policy doesn't cure the demand problem caused by income inequality, we have the potential for persistent, or "secular," demand stagnation — in plain English, a lackluster economy. We argue that this is the current situation in the U.S.....

Here is the paper:

Inequality, the Great Recession, and Slow Recovery   Barry Cynamon & Steven Fazzari

Rising inequality reduced income growth for the bottom 95 percent of the income distribution beginning about 1980, but that group's consumption growth did not fall proportionally. Instead, lower saving led to increasing balance sheet fragility for the bottom 95 percent, eventually triggering the Great Recession. We decompose consumption and saving across income groups. The consumption- income ratio of the bottom 95 percent fell sharply in the recession, consistent with tighter borrowing constraints. The top 5 percent ratio rose, consistent with consumption smoothing. The inability of the bottom 95 percent to generate adequate demand helps explain the slow recovery.

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[NJFAC] Declining Wages in the [Manufacturing] Jobs That Built America’s Middle Class

MANUFACTURING LOW PAY:
Declining Wages in the Jobs That Built America's Middle Class 

Manufacturing jobs were once a ticket to the American middle class, but today these jobs are adding to the nation's low-wage crisis. NELP's latest report, Manufacturing Low Pay: Declining Wages in the Jobs That Built America's Middle Class, tells the story of a rebounding manufacturing sector where jobs are growing again but wages are rapidly shrinking.

Manufacturing workers used to earn wages well above the U.S. average. In the mid-1980s, they earned 50 percent more than the average private-sector worker, but by 2013, they were earning 7.7 percent less. Today, one in four manufacturing workers is paid less than $11.91 per hour. The wage declines are exacerbated by manufacturing firms' increasing reliance on staffing and "temp" agencies to fill factory jobs.

Read more about NELP's report in The New York Times.

from the summary:
"Manufacturing wages now rank in the bottom half of all jobs in the United States.

While in the past, manufacturing workers earned a wage significantly higher than the U.S. average,

by 2013 the average factory worker made 7.7 percent below the median wage for all occupations."

from the National Employment Law Project

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[NJFAC] Does it pay for firms to invest in their workers’ wellbeing?

Does it pay for firms to invest in their workers' wellbeing?

Alex Bryson, John Forth, Lucy Stokes 17 November 2014

It is generally agreed that firms can improve their employees' wellbeing through improvements in job quality – but is it in their economic interests to do so? This column reports research showing that satisfied employees and higher productivity go together. Analysis of the British Workplace Employment Relations Survey finds that employee job satisfaction is positively associated with workplace financial performance, labour productivity, and the quality of output and service.

....

Psychologists, economists, and others know a great deal about the determinants of individuals' wellbeing, and one key element is what they do in their working life. One recent study found that work was among the worst activities for people's momentary happiness – just above being sick in bed, in fact (Bryson and MacKerron 2013). But other studies indicate much depends on what type of job you do and how that job is designed by the employer.

....

The link between wellbeing and performance

There is empirical evidence linking employees' wellbeing to their individual performance. For example, greater subjective wellbeing feeds through to individuals' performance in the labour market (Judge et al. 2001, Lyubmirsky et al. 2005). There is also recent evidence of a causal link between increased wellbeing and improved worker productivity, at least in a laboratory experiment setting (Oswald et al. 2014). But the empirical evidence at the organisation level is extremely sparse.

Perhaps the most compelling evidence of a link comes from a survey of manufacturing in Finland, which found that mean workplace job satisfaction was independently associated with subsequent value-added per employee. A one point increase (on a six-point scale) in the average level of job satisfaction among workers at the plant increased the level of value-added per hour worked two years later by 3.6 percentage points, after controlling for other factors. This estimate rose to 9 percentage points in a two-stage estimation approach designed to account for unobserved establishment-level heterogeneity (Bockerman and Ilmakunnas 2012).

Our BIS report is the first study for Britain of the link between employee wellbeing and firm performance. Analysing the nationally representative 2011 Workplace Employment Relations Survey (WERS), we find that those workplaces with rising employee job satisfaction also experience improvements in workplace performance, while deteriorating employee job satisfaction is detrimental to workplace performance.

Employee job satisfaction is positively associated with workplace financial performance, labour productivity, the quality of output and service, and an additive scale combining all three aspects of performance. Workplaces experiencing an improvement in non-pecuniary job satisfaction – whether measured in terms of the average level of satisfaction in the workforce, or measured in terms of an increase in the proportion 'very satisfied' or a reduction in the proportion 'very dissatisfied' – also experience an improvement in performance.

These findings are consistent with the proposition that employers who are able to raise employees' job satisfaction may see improvements in workplace profitability (financial performance), labour productivity, and the quality of output or service.....

Concluding remarks

These are encouraging findings, but the scope of the analyses has not allowed us to explore the processes that could have been instrumental in forging the link between employee wellbeing and workplace performance. Further work is required to develop insights into how employers can facilitate the positive outcomes revealed in this study.

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[NJFAC] Number of billionaires doubled since financial crisis; inequality spirals out of control--Oxfam

Number of billionaires doubled since financial crisis as inequality spirals out of control – Oxfam

Posted by Sarah Dransfield Senior Press Officer 29th Oct 2014

Failure to tackle inequality will leave hundreds of millions trapped in poverty unnecessarily

Rising inequality could set the fight against poverty back by decades, Oxfam warned today as it published a new report showing that the number of billionaires worldwide has more than doubled since the financial crisis. 

The report, Even it Up: Time to End Extreme Inequality, details how the richest people in the world have more money than they could spend in several lifetimes while hundreds of millions live in abject poverty. The richest 85 people - who Oxfam revealed in January have the same wealth as the poorest half of the world's population - saw their collective wealth increase by $668 million every day over the last year. That's almost half a million dollars every minute.

Oxfam is calling on governments around the world to Even it Up by taking action to level the playing field by implementing policies that redistribute money and power to ensure the poor benefit more directly. Governments should follow a seven point plan to stem the rising tide of inequality - including clamping down on tax dodging and investing in universal, free health and education.

The report, endorsed by the Bank of England Chief Economist Andrew Haldane, Graça Machel, Professor Jeffrey Sachs and Nobel prize- winning economist Joseph Stiglitz among others, is the opening salvo of a new Oxfam campaign, also called Even it Up, to push world leaders to turn rhetoric into reality and close the gap between rich and poor.

Mark Goldring, Oxfam's Chief Executive, said: "Inequality is one of the defining problems of our age. In a world where hundreds of millions of people are living without access to clean drinking water and without enough food to feed their families, a small elite have more money than they could spend in several lifetimes.

"The consequences of extreme inequality are harmful to everyone - it robs millions of people of better life chances and fuels crime, corruption and even violent conflict. Put simply, it is holding back efforts to end poverty.

"Governments around the world have been guilty of a naive faith that wealth going to those at the top will automatically benefit everyone. That's not true - it is their responsibility to ensure the poorest are not left behind."

In addition to tackling tax dodging and investing in public services, Oxfam is calling on governments to:

-     Introduce equal pay legislation and promote economic policies to give women a fair deal

-     Agree a global goal to tackle inequality

-     Introduce minimum wages and move towards a living wage for all workers

-     Share the tax burden fairly, shifting taxation from labour and consumption towards capital and wealth

-     Ensure adequate safety-nets for the poorest, including a minimum income guarantee.

Oxfam's report says that the number of billionaires in the world more than doubled to 1,645 between 2009 and 2014; evidence that whilst those at the top have recovered quickly from the financial crisis, the benefits of economic growth are not being shared with the vast majority.

As an illustration of the extent of extreme inequality in the world today, Oxfam calculated that if you were to tax billionaires just 1.5% of their wealth over $1bn it could raise $74bn a year, enough to fill the annual gaps in funding needed to get every child into school and to deliver health services in the world's poorest countries. Since 2009, at least one million women have died in childbirth due to a lack of basic health services and around the world 57 million children are currently missing out on school.

There are 16 billionaires in Sub-Saharan Africa living alongside the 358 million people in extreme poverty, and in South Africa inequality is now greater than it was at the end of apartheid. If African countries continue on their current growth trajectory with no change in levels of income inequality, then it is estimated that the continent's poverty rate won't fall below 3 percent - the World Bank's definition of ending poverty - until 2075.

.....

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[NJFAC] 7 countries where Americans can study at universities, in English, for free (or almost free)

David Swanson says in Counterpunch, "The Washington Post is advising people on which foreign nations to go to college in for free — nations that both tax wealth and invest between 0 and 4 percent of the U.S. level in militarism." Here is the article he mentions::

7 countries where Americans can study at universities, in English, for free (or almost free)

By Rick Noack October 29 Washington Post

Since 1985, U.S. college costs have surged by about 500 percent, and tuition fees keep rising. In Germany, they've done the opposite.

The country's universities have been tuition-free since the beginning of October, when Lower Saxony became the last state to scrap the fees. Tuition rates were always low in Germany, but now the German government fully funds the education of its citizens -- and even of foreigners.

Explaining the change, Dorothee Stapelfeldt, a senator in the northern city of Hamburg, said tuition fees "discourage young people who do not have a traditional academic family background from taking up study.  It is a core task of politics to ensure that young women and men can study with a high quality standard free of charge in Germany."

What might interest potential university students in the United States is that Germany offers some programs in English -- and it's not the only country. Let's take a look at the surprising -- and very cheap -- alternatives to pricey American college degrees.

Germany

Germany's higher education landscape primarily consists of internationally well-ranked public universities, some of which receive special funding because the government deems them "excellent institutions." What's more, Americans can earn a German undergraduate or graduate degree without speaking a word of German and without having to pay a single dollar of tuition fees: About 900 undergraduate or graduate degrees are offered exclusively in English, with courses ranging from engineering to social sciences. For some German degrees, you don't even have to formally apply.

In fact, the German government would be happy if you decided to make use of its higher education system. The vast degree offerings in English are intended to prepare German students to communicate in a foreign language, but also to attract foreign students, because the country needs more skilled workers.

Finland

This northern European country charges no tuition fees, and it offers a large number of university programs in English. However, the Finnish government amiably reminds interested foreigners that they "are expected to independently cover all everyday living expenses." In other words: Finland will finance your education, but not your afternoon coffee break.

France

There are at least 76 English-language undergraduate programs in France, but many are offered by private universities and are expensive. Many more graduate-level courses, however, are designed for English-speaking students, and one out of every three French doctoral degrees is awarded to a foreign student.

"It is no longer needed to be fluent in French to study in France," according to the government agency Campus France. The website studyportals.eu provides a comprehensive list of the available courses in France and other European countries.

Public university programs charge only a small tuition fee of about 200 dollars for most programs. Other, more elite institutions have adopted a model that requires students to pay fees that are based on the income of their parents. Children of unemployed parents can study for free, while more privileged families have to pay more. This rule is only valid for citizens of the European Union, but even the maximum fees (about $14,000 per year) are often much lower than U.S. tuition fees. Some universities, such as Sciences Po Paris, offer dual degrees with U.S. colleges.

Sweden

This Scandinavian country is among the world's wealthiest, and its beautiful landscape beckons. It also offers some of the world's most cost-efficient college degrees. More than 900 listed programs in 35 universities are taught in English. However, only Ph.D programs are tuition-free.

Norway

Norwegian universities do not charge tuition fees for international students. The Norwegian higher education system is similar to the one in the United States: Class sizes are small and professors are easily approachable. Many Norwegian universities offer programs taught in English. American students, for example, could choose "Advanced Studies for Solo Instrumentalists or Chamber Music Ensembles" or "Development Geography."

But don't expect to save money in Norway, which has one of the world's highest costs of living for expats.  And be careful where you decide to study. "Winters in general are quite different in different parts of the country, with the north having hard, arctic winters, and the southwest mostly having mild, wet average European winters," the Norwegian Center for International Cooperation in Education notes.

Slovenia

About 150 English programs are available, and foreign nationals only pay an insignificant registration fee when they enroll. Slovenia borders Italy and Croatia, among Europe's most popular vacation destinations. However, Times Higher Education, a weekly magazine based in London, did not list one Slovenian university in its recent World University Ranking.

Brazil

Buildings line Copacabana beach where Christ the Redeemer towers the city in Rio de Janeiro, Brazil, Friday, May 16, 2014. (AP Photo/Hassan Ammar)

Some Brazilian courses are taught in English, and state universities charge only minor registration fees. Times Higher Education ranks two Brazilian universities among the world's top 400: the University of Sao Paulo and the State University of Campinas. However, Brazil might be better suited for exchange students seeking a cultural experience rather than a degree.

"It is worth remembering that most of USP activities are carried out in Portuguese," the University of Sao Paulo reminds applicants on its website.

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