Economy

Gallup: “The majority of Americans continue to enjoy saving money more than spending it, by 62% to 34%. The 2014 saving-spending gap is the one of the widest since Gallup began tracking Americans’ preferences in 2001.”

“If the increases in spending are occurring out of necessity, not desire, and Americans take on more debt or deplete their savings, the picture may not be quite as rosy.”

“Stagnant wage growth and the overall sluggish recovery from the Great Recession perhaps have contributed to decreasing personal savings. While Gallup data indicate a stronger preference to save than to spend, in reality Americans seem to be having difficulty putting together a safety net. This has more than likely contributed to the lingering pessimism about the U.S. economy.”

Gallup: Many working Americans would experience financial peril if they lost their current job, putting pressure on them to find a new job quickly. A substantial minority of U.S. workers say they could go just one week (14%) or one month (29%) before experiencing significant financial hardship if they lost their job.

Implications: “With long-term unemployment a serious problem in recent years, many U.S. workers are not in a position financially to go a month, or even a week, without finding a new job if laid off. That underscores the economic hardship that unemployment of any length can bring on U.S. families, particularly for younger and lower-income workers.”

“Gallup estimates that about 9% of workers are especially vulnerable, in that they think it is at least fairly likely they will be laid off but do not have the financial means to go more than a month without finding new employment.”

Charles Blow explains why “the minimum wage debate resonates so profoundly with so many: We know what it feels like to not have enough money after you’ve busted your body with too-hard work.”

“Raising the minimum wage won’t erase all of the problems of the poor, but it is one component, one rooted in basic dignity and fairness, of a much fairer picture of income inequality and poverty.”

“On some level, is the focus on the minimum wage a political ploy on the part of Democrats? I have no doubt. But that doesn’t drain the proposal of its merit. Much of what occurs in Washington occurs at the intersection of political advantage and earnest intentions, and it has ever been thus. Whenever one side accuses the other of playing politics, the accusation is often laced with an envy of the other’s adroitness.”

“So with the minimum wage, we have an issue that’s both smart politics and compassionate policy.”

“Now, if both sides are playing politics with the minimum wage to some degree, which side would you rather be on: that of the working people, who are struggling to make a living, or that of the politicians determined to block them?”

Eduardo Porter: “It’s hard to overstate the excitement of tech people about what is on the verge of happening to the practice of medicine… A few years ago, this kind of technological development would be treated like unadulterated good news: an opportunity to improve the nation’s health and standard of living while perhaps even reducing health care costs and achieving a leap in productivity that would cement the United States’ pre-eminent position on the frontier of technology.”

“But a growing pessimism has crept into our understanding of the impact of such innovations. It’s an old fear, widely held since the time of Ned Ludd, who destroyed two mechanical knitting machines in 19th-century England and introduced the Luddite movement, humankind’s first organized protest against technological change.”

“In its current incarnation, though, the fear is actually very new. It strikes against bedrock propositions developed over more than half a century of economic scholarship. It can be articulated succinctly: What if technology has become a substitute for labor, rather than its complement?”

Phyllis Schlafly writes in the Christian Post that providing women with equal pay for equal work would deter their chances of finding a “suitable mate.”

She writes: “Another fact is the influence of hypergamy, which means that women typically choose a mate (husband or boyfriend) who earns more than she does. Men don’t have the same preference for a higher-earning mate.”

“While women prefer to HAVE a higher-earning partner, men generally prefer to BE the higher-earning partner in a relationship. This simple but profound difference between the sexes has powerful consequences for the so-called pay gap. Suppose the pay gap between men and women were magically eliminated. If that happened, simple arithmetic suggests that half of women would be unable to find what they regard as a suitable mate.”

Binyamin Appelbaum: “Perhaps you remember the Great Moderation, the comforting term economists pinned on the period of relatively steady growth that began in the early 1980s.”

Jason Furman “argued in an interesting speech on Thursday that the Great Moderation is still in progress. The growth of jobs and economic activity over the last five years has snapped back into the same kind of steady pattern that prevailed before the recession, a pattern documented in the chart below.”

“Economic volatility, on average, is still lower now than in earlier decades.”

“This is a hollow victory for those who championed the idea of a Great Moderation. They saw the trend as evidence that the economy was less likely to experience a dramatic downturn. Mr. Furman is essentially arguing that those economists were right in describing the phenomenon, but not its implications.”

Furman: “The Great Recession certainly does reveal serious limitations of the concept of a Great Moderation … After all, there is no sense in which the recession itself — which witnessed the largest peak-to-trough downturn in G.D.P. on record — was indicative of a more stable economy than in the 1950s or 1960s.”

Damien Paletta: “The Democrats’ approach on wages is now taking shape: raise the minimum wage, expand the EITC, and pressure companies to narrow the wage gap between men and women.”

“The Republican approach on wages has been to call for rolling back regulations they say raise the costs of doing business, and repeal the health care law, which many in the GOP believe is causing companies to cut hours or pay.”

“The wage debate creates a relatively populist opening for both parties. It goes like this: many Americans want more money in their paychecks. Whichever party can offer ways to boost income could end up outperforming at the November elections.”

Jared Bernstein reflects on the latest jobs report and comments on some of the “critical labor market trends that need to be examined more closely.”

“To my mind, the most important labor market question is how much can stronger growth repair the damage to the labor force participation rate.”

“Those of us concerned about these dynamics were happy to see the pop in the labor force participation rate last month, though of course no one should make a big deal out of one-month result like this.”

“Here, however, is an interesting and favorable trend. It’s from the labor force flows data, which tracks people’s monthly movements in and out of employment, unemployment, and not in-the-labor-force (or NILF; remember, if you’re looking for work, you’re unemployed; if you give up the search, you’re NILF). This line shows the share of the population moving from unemployment to NILF, and is thus a driver of the decline in the labor force.”