Tuesday, January 31, 2012
Median Weekly Earnings by Age, Race and Ethnicity, Sex
The Editor's Desk, a publication from the U.S. Bureau of Labor Statistics (BLS), summarized a report on weekly earnings of wage and salary workers in the fourth quarter of 2011. The size of the gap between men and women in median weekly earnings varied by age, race and ethnicity, but at every level, men out-earned women.
Monday, January 30, 2012
Economic Desperation Breeding More Ponzi Schemes?
The Economist's daily chart highlights the growing number of exposed--and investigated--Ponzi and fraud schemes in the U.S., and the magazine suggests that the weak economy may be the cause. It writes that "lean economic times...make get-rich-quick schemes more tempting, and desperation breeds gullibility." And those schemes that do exist are often more easily exposed during tough economic times, "when it becomes clear who has been swimming naked."
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Debunking Myths About Food Stamps
In a recent article, the Chicago Tribune aimed to debunk popular misconceptions about trends in welfare spending and the welfare recipient population, issues that "the Republican presidential race has brought...to the forefront." Reporter Dawn Turner Trice wrote, "When it comes to welfare, perceptions have often trumped reality."
The article provides fact-based commentary on political strategies regarding welfare, including the following:
The article also quotes Michael Dawson, director of the Center for the Study of Race, Politics and Culture at the University of Chicago, regarding Republican efforts--specifically, those of Newt Gingrich--to bring up welfare as an issue, as saying: "It's a tired tactic but one that's sometimes effective in mobilizing white racial resentment."
The article provides fact-based commentary on political strategies regarding welfare, including the following:
- "Though blacks are disproportionately represented among food stamp recipients, far more whites receive such assistance. When recipients identified themselves by race in 2010, 34 percent were white, 22 percent were black and 16 were percent Hispanic, the Agriculture Department said."
- "Food-stamp spending has indeed increased under Obama, but its steady climb began under President George W. Bush."
- "The Center on Budget and Policy Priorities, a nonpartisan think tank, said anti-poverty programs make up about 20 percent of the federal budget, and that's been true over the last three decades when both Republicans and Democrats have been in power."
- "Among the big social safety net expenditures in 2011 are Medicaid ($274 billion) and refundable tax credits, including the earned income tax credit ($102 billion). Food stamps ($71.8 billion) and cash assistance ($6.9 billion) constitute just 2.2 percent of the federal budget, but they pack a bigger wallop when it comes to public perceptions."
The article also quotes Michael Dawson, director of the Center for the Study of Race, Politics and Culture at the University of Chicago, regarding Republican efforts--specifically, those of Newt Gingrich--to bring up welfare as an issue, as saying: "It's a tired tactic but one that's sometimes effective in mobilizing white racial resentment."
Friday, January 27, 2012
Cultural Inequality in the U.S.
In a recent Wall Street Journal article, Charles Murray discusses the emergence of what he refers to as “cultural inequality” in the U.S. since the 1960s. According to Murray, this cultural inequality is a result of the formation of a “new upper class” and “new lower class” that no longer share an “American way of life.” Among the qualities that Murray uses to define this so-called American way of life are marriage, male employment, religion and marital births. The interactive graphic from the article shows statistics relating to all of these items for people aged 30-49 that are defined as upper middle class (“with at least a college education working in managerial jobs or high-status professions”) and working class (“with no more than a high school education in blue-collar, low-skill or service jobs”) from the 1960s/1970s and the 2000s. The data seem to support Murray's concept of a new cultural inequality in the US, as more members of the working class appear to have fallen away from the “American way of life” than members of the upper middle class over the last 4 or 5 decades. For example, while the marital rate of the upper middle class have fallen from 94% to 83% since 1960, the marital rate of the working class plummeted from 84% to 48% over the same time period. A similar trend can be seen in the rest of the graphic, with the working class experiencing a larger percentage increase in males with jobs working fewer than 40 hours per week and a larger percentage increase in those calling themselves non-religious. Last call for ICPSR Research Paper Competition entries!
The deadline for the ICPSR Research Paper Competition for undergraduate and graduate students is this coming Tuesday, January 31. For prizes, forms, and details, see http://www.icpsr.umich.edu/ icpsrweb/content/ICPSR/prize/ index.html
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Thursday, January 26, 2012
Causes of Stress in Regions of the U.S.
The American Psychological Association recently released the 2011 results of their annual nationwide survey, “Stress in America.” One portion of the report discusses the causes of “somewhat/very significant” levels of stress reported in each region of the United States in which those surveyed were asked to indicate the level of stress each of the listed sources of stress caused in their lives. Overall, money, work, and the economy were the largest causes of stress with 75%, 70% and 67% reporting that each respective factor was a cause of “somewhat/very significant” levels of stress. Among the four regions, those on the East Coast reported the most stress caused by money (80%), work (74%), and relationships (66%). Those in the Midwest reported the most stress caused by the economy (72%) and personal health concerns (59%). Southerners, on the other hand, reported the most stress from family responsibilities (62%) and health problems affecting family members (65%). Westerners reported the lowest amount of stress caused by everything except for work, where it reported slightly more stress than those in the South (69% and 67% respectively). Wednesday, January 25, 2012
U.S. Projected to Decrease Foreign Oil Dependence
On Monday, the U.S. Energy Information Administration
released the Annual Energy Outlook 2012 Early Release. This report provides projections for the U.S.
energy markets under the assumption that current energy laws and regulations
stay fairly unchanged. This information
can be used to discuss the current state and trends of the energy market for
the ultimate goal of analyzing and identifying necessary changes in energy
policies, rules, and regulations moving forward.
The AEO report presented a projected decrease in dependence
on foreign oil in the United States.
Figure 1 from the AEO is shown below and illustrates the anticipated closing
gap between U.S. fuel consumption and domestic fuel supply. At its peak in 2005, 60% of fuel consumed in
the U.S. was imported. This percentage
decreased to 49% in 2010, and the EIA believes this trend will continue until
2035 when foreign fuel will constitute only 36% of fuel consumed in the United States. This trend is due to increased domestic fuel supply
from growth in domestic oil production as well as limited increases in
consumption due to increased use of biofuels, moderate growth in the
transportation industry’s demands, and higher fuel economy standards in
vehicles.
Monday, January 23, 2012
U.S. is Now a Net Exporter of Oil
Bloomberg reports that the U.S. now exports more oil products than it imports. During 2011, America’s exports of
gasoline, diesel fuel, and other products exceeded imports of those products by
an average of 439,000 barrels each day.
The last time America was a net exporter of oil was in 1949, and 2011
marks the first year in which crude oil output rose above 2 billion
barrels. In its analysis of the
oil sector, Citigroup Inc. proclaims North America as “the new Middle East”
with regards to energy production this decade. Citigroup points to increased
oil production in Canada and Mexico as the basis for this claim, and they
additionally believe this jump in production will be sustainable in the coming
years.
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Saturday, January 21, 2012
A Look at the Top 1% Shows Shift to Finance, Stability Within its Ranks and High Political Engagement
The Economist took a look at the top one percent and "the changing complexion of America’s rich." It highlighted Mitt Romney as a reflection of this change, because "the wealthiest 1% of Americans not only get more of the pie," but also because "they are increasingly creatures of finance." There have been wealthy presidential candidates before, but Romney represents "the first candidate from the world of high-octane finance."
The Economist writes of the shift to finance, "According to an analysis of tax returns by Jon Bakija of Williams College and two others, 16% of the top 1% were in medical professions and 8% were lawyers: shares that have changed little between 1979 and 2005, the latest year the authors examined (see chart). The most striking shift has been the growth of financial occupations, from just under 8% of the wealthy in 1979 to 13.9% in 2005. Their representation within the top 0.1% is even more pronounced: 18%, up from 11% in 1979." A graphic from the New York Times also focuses on the occupational distribution of the top one percent.
Also indicative of the shift to finance, it appears that the wealthiest of the wealthy are now employed in financial occupations, a change from years past. "[Steve] Kaplan [of the University of Chicago] and Joshua Rauh of Northwestern University note that investment bankers, corporate lawyers, hedge-fund and private-equity managers have displaced corporate executives at the top of the income ladder. In 2009 the richest 25 hedge-fund investors earned more than $25 billion, roughly six times as much as all the chief executives of companies in the S&P 500 stock index combined."
What does a household in the top one percent make? "The average household income of the 1% was $1.2m in 2008, according to federal tax data." But The Economist notes, "The ultra-rich skew that average upwards: admission to the 1% began at $380,000 in 2008." Of course, income is not the only measurement of wealth: "Measured by net worth, rather than income, the top 1% started at $6.9m in 2009, according to the Federal Reserve, down 23% from 2007."
The Economist cites Mr. Kaplan, who argues that the move to finance largely accounts for the growth in the wealth gap. "Updating a series developed by Thomas Piketty and Emmanuel Saez, Mr Kaplan notes that the share of income going to the 1% reached an 80-year high of 23.5% in 2007, only to sink to 17.6% in 2009 as the financial markets deflated (see chart). The trend is even more pronounced for the top 0.1%, whose share of total income rose to 12.3% in 2007 but sank to a still disproportionate 8.1% in 2009."
Research indicates that inequality in the U.S., as measured by the share of total income that goes to the top one percent of earners, has grown faster than in other countries. The Economist surmises that among other factors, this development could be resulting from "the relatively large role of the financial sector in English-speaking countries...[as] even more of the top 1% work in finance in Britain than in America."
Chances are that if you are born wealthy, you are likely to retain your wealth as an adult: "Membership in America’s 1% is relatively stable; three-quarters of the households in the percentile one year will still be there the next. Although the proportion shrinks over time, one study found that the vast majority of the top 1% were still in the richest 10% a decade later." The reason for this is fairly straight-forward: "rich parents tend to produce rich kids." Their children go to college and graduate institutions at a disproportionately high rate; "According to Gallup, 72% of the 1% have a college degree, and half have a postgraduate degree; those are two to three times the proportion of the other 99%." Numbers also indicate, "The 1% are more likely to be married and to have children."
And if you're born wealthy, it's likely that you'll marry someone from a similar economic background. "The rich also increasingly marry people like themselves. Mr Bakija and his co-authors found that between 1979 and 2005, the share of spouses of the 1% who had blue-collar or 'miscellaneous' service-sector backgrounds declined slightly, from 7.9% to 6.4%. The share of spouses who worked in finance, property and law rose from 3.5% to 8.8%."
Individuals in the top one percent are likely to be politically active, and although their political preferences are somewhat "eclectic," they tend to lean toward the Republican party. "Politically, Gallup polls find that the 1% are more likely than the 99% to identify themselves as Republicans (33% to 28%) and less likely to be Democrats (26% to 33%)." They rate the budget deficit as their central concern, and unemployment as their second; the other 99 percent of Americans prioritize these concerns in the reverse order.
The Economist writes that individuals in the top one percent "are far more politically engaged than the average 99-percenters," citing a study which showed that "68% make campaign contributions, nearly half had contacted a member of Congress and a fifth had solicited contributions on behalf of a candidate."
How would individuals in the top one percent describe themselves? Often, it is difficult to locate an answer: "Most of the 1% prefer not to talk about their good fortune."
The Economist writes of the shift to finance, "According to an analysis of tax returns by Jon Bakija of Williams College and two others, 16% of the top 1% were in medical professions and 8% were lawyers: shares that have changed little between 1979 and 2005, the latest year the authors examined (see chart). The most striking shift has been the growth of financial occupations, from just under 8% of the wealthy in 1979 to 13.9% in 2005. Their representation within the top 0.1% is even more pronounced: 18%, up from 11% in 1979." A graphic from the New York Times also focuses on the occupational distribution of the top one percent.
Also indicative of the shift to finance, it appears that the wealthiest of the wealthy are now employed in financial occupations, a change from years past. "[Steve] Kaplan [of the University of Chicago] and Joshua Rauh of Northwestern University note that investment bankers, corporate lawyers, hedge-fund and private-equity managers have displaced corporate executives at the top of the income ladder. In 2009 the richest 25 hedge-fund investors earned more than $25 billion, roughly six times as much as all the chief executives of companies in the S&P 500 stock index combined."
What does a household in the top one percent make? "The average household income of the 1% was $1.2m in 2008, according to federal tax data." But The Economist notes, "The ultra-rich skew that average upwards: admission to the 1% began at $380,000 in 2008." Of course, income is not the only measurement of wealth: "Measured by net worth, rather than income, the top 1% started at $6.9m in 2009, according to the Federal Reserve, down 23% from 2007."
The Economist cites Mr. Kaplan, who argues that the move to finance largely accounts for the growth in the wealth gap. "Updating a series developed by Thomas Piketty and Emmanuel Saez, Mr Kaplan notes that the share of income going to the 1% reached an 80-year high of 23.5% in 2007, only to sink to 17.6% in 2009 as the financial markets deflated (see chart). The trend is even more pronounced for the top 0.1%, whose share of total income rose to 12.3% in 2007 but sank to a still disproportionate 8.1% in 2009."
Research indicates that inequality in the U.S., as measured by the share of total income that goes to the top one percent of earners, has grown faster than in other countries. The Economist surmises that among other factors, this development could be resulting from "the relatively large role of the financial sector in English-speaking countries...[as] even more of the top 1% work in finance in Britain than in America."
Chances are that if you are born wealthy, you are likely to retain your wealth as an adult: "Membership in America’s 1% is relatively stable; three-quarters of the households in the percentile one year will still be there the next. Although the proportion shrinks over time, one study found that the vast majority of the top 1% were still in the richest 10% a decade later." The reason for this is fairly straight-forward: "rich parents tend to produce rich kids." Their children go to college and graduate institutions at a disproportionately high rate; "According to Gallup, 72% of the 1% have a college degree, and half have a postgraduate degree; those are two to three times the proportion of the other 99%." Numbers also indicate, "The 1% are more likely to be married and to have children."
And if you're born wealthy, it's likely that you'll marry someone from a similar economic background. "The rich also increasingly marry people like themselves. Mr Bakija and his co-authors found that between 1979 and 2005, the share of spouses of the 1% who had blue-collar or 'miscellaneous' service-sector backgrounds declined slightly, from 7.9% to 6.4%. The share of spouses who worked in finance, property and law rose from 3.5% to 8.8%."
Individuals in the top one percent are likely to be politically active, and although their political preferences are somewhat "eclectic," they tend to lean toward the Republican party. "Politically, Gallup polls find that the 1% are more likely than the 99% to identify themselves as Republicans (33% to 28%) and less likely to be Democrats (26% to 33%)." They rate the budget deficit as their central concern, and unemployment as their second; the other 99 percent of Americans prioritize these concerns in the reverse order.
The Economist writes that individuals in the top one percent "are far more politically engaged than the average 99-percenters," citing a study which showed that "68% make campaign contributions, nearly half had contacted a member of Congress and a fifth had solicited contributions on behalf of a candidate."
How would individuals in the top one percent describe themselves? Often, it is difficult to locate an answer: "Most of the 1% prefer not to talk about their good fortune."
Friday, January 20, 2012
Negative Press Coverage Plagues Front-Runner Romney
According to the Pew Center's Project for Excellence in Journalism, Mitt Romney is receiving more negative press coverage than at any other point in the GOP race. Romney, who won the Iowa caucus and New Hampshire primary, will compete against remaining GOP candidates in South Carolina's primary on Saturday.
According to Pew's analysis, this increase in negative coverage for Romney may reflect opponents' efforts to attack the current frontrunner through negative advertisements. In particular, negative discourse regarding Romney revolved around his career at Bain Capital. According to an article on the Politics and Government Blog of the New York Times, GOP candidate opponent Newt Gingrich described Romney's work at Bain as "rich people figuring out clever legal ways to loot a company."
According to the same report, Ron Paul is currently receiving more positive coverage than any other candidate. Almost half of the coverage of Ron Paul over the past week has been positive; according to the report, Paul has been described in many press accounts as "having little chance of winning the nomination."
Of all GOP candidates, Rick Perry currently is criticized the most, with his negative coverage nearly double his positive coverage. Coverage of President Obama from January 9, 2012 to January, 15, 2012 included fewer positive mentions than any of the GOP candidates. Only 10% of coverage regarding Obama was positive. These data come from an analysis of more than 11,000 news websites and mentions on Twitter.
According to Pew's analysis, this increase in negative coverage for Romney may reflect opponents' efforts to attack the current frontrunner through negative advertisements. In particular, negative discourse regarding Romney revolved around his career at Bain Capital. According to an article on the Politics and Government Blog of the New York Times, GOP candidate opponent Newt Gingrich described Romney's work at Bain as "rich people figuring out clever legal ways to loot a company."
According to the same report, Ron Paul is currently receiving more positive coverage than any other candidate. Almost half of the coverage of Ron Paul over the past week has been positive; according to the report, Paul has been described in many press accounts as "having little chance of winning the nomination."
Of all GOP candidates, Rick Perry currently is criticized the most, with his negative coverage nearly double his positive coverage. Coverage of President Obama from January 9, 2012 to January, 15, 2012 included fewer positive mentions than any of the GOP candidates. Only 10% of coverage regarding Obama was positive. These data come from an analysis of more than 11,000 news websites and mentions on Twitter.
New Paper Finds Global Abortion Rate Stalling
The Economist's daily chart yesterday focused on a recent paper from The Lancet that "estimate[s] the number of safe and unsafe abortions in 2008." Because some countries under-report abortions, tracking them is not a simple task. Perhaps for this reason, the number of safe and unsafe abortions worldwide has only been successfully tracked twice before, in 1995 and 2003. When the 2008 data is compared with these other data points, changes corroborate findings from the World Health Organization and the Guttmacher Institute that indicate "that the global abortion rate has stalled."
The Economist writes of the abortion rate: "It fell precipitously in the 1990s, but recently the rate has not budged, barely dipping from 29 abortions per 1,000 women (aged 15 to 44) in 2003 to 28 abortions per 1,000 women in 2008." During this interval of time, the "geography of abortions has also shifted. In 2008, 86% of abortions were
in the developing world, up from 78% in 1995. The share of unsafe
abortions rose as well, from 44% in 1995 to 49% in 2008." Currently, "Eastern Europe has the highest abortion rate in the world, at 43 per 1,000."
Interestingly, the level of legal restriction on abortions does not appear to limit their frequency. The Economist notes, "Laws that restrict abortion did not seem to lower the number of
procedures. On the contrary, restrictive laws were associated with
higher rates."
Thursday, January 19, 2012
Gingrich Surging in South Carolina
Nate Silver unequivocally answers a question he posed yesterday--does Newt Gingrich have momentum in South Carolina?--in his FiveThirtyEight blog post today: "Yes, Mr. Gingrich does have momentum — and a lot of it." He writes, "Six different South Carolina polls have been released so far today, and they show a split in their results." Three of them, automated polls by Rasmussen Reports, Public Policy Polling and InsiderAdvantage, "have Mr. Gingrich in the lead...by margins ranging from 2 points to 6 points."
The polls strongly indicate that Mr. Gingrich's performance at the Monday debate has contributed to his rise in the polls. Marist for NBC News, one of the more traditional polls conducted by live interviewers, "showed Mitt Romney leading by 10 percentage points." But when Marist "split its results," it appeared that the debate did indeed give Mr. Gingrich some momentum with South Carolina voters. Mr. Silver writes, "Mr. Romney’s lead was smaller — 5 points — in the post-debate sample." Further, the aforementioned automated polls that show Mr. Gingrich in the lead "were conducted on Wednesday, after the debate and the qualified endorsement Mr. Gingrich received from Sarah Palin."
The FiveThirtyEight forecast model suggests that Mr. Gingrich is, in fact, gaining significant momentum. According to Mr. Silver, "The model now shows a virtual tie in the race, with Mr. Gingrich projected to get 34 percent of the vote and Mr. Romney 33.6 percent and each candidate having about a 50 percent chance of winning."
Most of Mr. Gingrich's gain, however, does not appear to be connected to a drop in the polls for Mr. Romney. Mr. Silver notes, "Mr. Gingrich has gained ground in the polls more than Mr. Romney has lost it. Two days ago, our forecast had Mr. Gingrich with 22.6 percent of the vote, so he has gained about 11 points since then. Meanwhile, Mr. Romney’s projection has declined less than 3 points — to 33.6 percent from 36.1 percent — over the same interval."
So where is Mr. Gingrich getting his new projected votes? According to Mr. Silver, "Mr. Gingrich’s gains have come from Rick Santorum and Rick Perry (who dropped out of the race today and endorsed Mr. Gingrich), as well as from undecided voters." Mr. Silver does go on to acknowledge that automated polls, because they usually do not call cell phones and "also generally have lower response rates than traditional polls," may not be the best source.
For now, Mr. Silver anticipates that the Saturday primary could yield a number of different results. He writes: "Our research shows that high levels of volatility and disagreement in the polls make polling aggregation methods less reliable. In other words, the margin of error on the forecast is especially high, enough so that either Mr. Romney or Mr. Gingrich could emerge with a clear victory by the time that the vote takes place on Saturday."
The polls strongly indicate that Mr. Gingrich's performance at the Monday debate has contributed to his rise in the polls. Marist for NBC News, one of the more traditional polls conducted by live interviewers, "showed Mitt Romney leading by 10 percentage points." But when Marist "split its results," it appeared that the debate did indeed give Mr. Gingrich some momentum with South Carolina voters. Mr. Silver writes, "Mr. Romney’s lead was smaller — 5 points — in the post-debate sample." Further, the aforementioned automated polls that show Mr. Gingrich in the lead "were conducted on Wednesday, after the debate and the qualified endorsement Mr. Gingrich received from Sarah Palin."
The FiveThirtyEight forecast model suggests that Mr. Gingrich is, in fact, gaining significant momentum. According to Mr. Silver, "The model now shows a virtual tie in the race, with Mr. Gingrich projected to get 34 percent of the vote and Mr. Romney 33.6 percent and each candidate having about a 50 percent chance of winning."
Most of Mr. Gingrich's gain, however, does not appear to be connected to a drop in the polls for Mr. Romney. Mr. Silver notes, "Mr. Gingrich has gained ground in the polls more than Mr. Romney has lost it. Two days ago, our forecast had Mr. Gingrich with 22.6 percent of the vote, so he has gained about 11 points since then. Meanwhile, Mr. Romney’s projection has declined less than 3 points — to 33.6 percent from 36.1 percent — over the same interval."
So where is Mr. Gingrich getting his new projected votes? According to Mr. Silver, "Mr. Gingrich’s gains have come from Rick Santorum and Rick Perry (who dropped out of the race today and endorsed Mr. Gingrich), as well as from undecided voters." Mr. Silver does go on to acknowledge that automated polls, because they usually do not call cell phones and "also generally have lower response rates than traditional polls," may not be the best source.
For now, Mr. Silver anticipates that the Saturday primary could yield a number of different results. He writes: "Our research shows that high levels of volatility and disagreement in the polls make polling aggregation methods less reliable. In other words, the margin of error on the forecast is especially high, enough so that either Mr. Romney or Mr. Gingrich could emerge with a clear victory by the time that the vote takes place on Saturday."
Compared With OECD Countries, Latin America Trails in Effort to Reduce Poverty, Inequality
The Economist recently summarized a report by the OECD which supports findings that "compared with rich countries, Latin American countries still fall short" in the fight to "reduce poverty and inequality." Even within the OECD, which The Economist recognizes as "a club of mostly rich countries," it is a Latin American country, Chile, which performs the worst in these efforts.
The report, according to The Economist, identifies Chile as the OECD's "most unequal member." (Although Brazil is shown in the visual, it is not an OECD country). Further, Chile "also finished third from the bottom, ahead only of Mexico and Israel, in relative poverty, measured by the share of the population earning less than half the median income."
The Economist notes, "Governments can reduce poverty and inequality through taxes and cash transfers." It argues that Chile does not effectively reduce poverty or inequality because of deficiencies in these areas. In Chile, "Government spending on health, education and social policies is low, around 16% of GDP; the OECD average is around 27%." And that's not Chile's only problem: "Tax evasion by corporations and individuals alone is estimated to cost the government some 2.5% of GDP."
The Chilean government has introduced a program, Ingreso Ético Familiar, aimed at fixing these problems. But The Economist points out that "the new cash transfer programme only targets the extreme poor." So how could these problems in Chile be better targeted? The Economist suggests, "More efficient and progressive taxes would raise revenues and reduce inequality." Looking forward in Chile, The Economist notes, "Better job opportunities and higher quality education are needed to improve labour productivity and boost growth."
The report, according to The Economist, identifies Chile as the OECD's "most unequal member." (Although Brazil is shown in the visual, it is not an OECD country). Further, Chile "also finished third from the bottom, ahead only of Mexico and Israel, in relative poverty, measured by the share of the population earning less than half the median income."
The Economist notes, "Governments can reduce poverty and inequality through taxes and cash transfers." It argues that Chile does not effectively reduce poverty or inequality because of deficiencies in these areas. In Chile, "Government spending on health, education and social policies is low, around 16% of GDP; the OECD average is around 27%." And that's not Chile's only problem: "Tax evasion by corporations and individuals alone is estimated to cost the government some 2.5% of GDP."
The Chilean government has introduced a program, Ingreso Ético Familiar, aimed at fixing these problems. But The Economist points out that "the new cash transfer programme only targets the extreme poor." So how could these problems in Chile be better targeted? The Economist suggests, "More efficient and progressive taxes would raise revenues and reduce inequality." Looking forward in Chile, The Economist notes, "Better job opportunities and higher quality education are needed to improve labour productivity and boost growth."
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Wednesday, January 18, 2012
For First Time, China's Urban Residents Outnumber Rural
The Economist's daily chart focuses on the movement of China's people into urban areas. At the end of 2011, and according to data from the National Bureau of Statistics, 1.35 billion, or 51.3 percent of China's residents lived in cities, meaning that for the first time the country's "city-dwellers now outnumber its rural residents." According to The Economist, as recently as "1980 less than a fifth of China’s population lived in cities, a smaller proportion than in India."
In the ten years that followed, the Chinese government "remained wary of free movement, even as it made its peace with free enterprise." It "sought industrialisation without urbanisation," only to ultimately realize that "it could not have one without the other." And although the percentage of city-dwellers is on the rise, it seems that the Chinese government's wariness toward urban development has slowed the movement of its citizens to cities. The Economist notes, "Even now, its ratio of city-dwellers is, if anything, low for an economy at its stage of development."
In the ten years that followed, the Chinese government "remained wary of free movement, even as it made its peace with free enterprise." It "sought industrialisation without urbanisation," only to ultimately realize that "it could not have one without the other." And although the percentage of city-dwellers is on the rise, it seems that the Chinese government's wariness toward urban development has slowed the movement of its citizens to cities. The Economist notes, "Even now, its ratio of city-dwellers is, if anything, low for an economy at its stage of development."
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Tuesday, January 17, 2012
Fed Apparently Blindsided By Financial Crisis
A recent Wall Street Journal article discusses documents released Thursday that contain transcripts from closed-door Fed meetings during 2006. These transcripts include statements made by Fed chairman Ben Bernanke and other Fed officials, including Timothy Geithner (President of the Federal Reserve Bank of New York at the time and now U.S. Treasury Secretary), that suggest that they were more or less blindsided by the magnitude and speed at which housing prices would decline and the resulting financial crisis. The following image from the article shows housing sales and the share of mortgages on which payments are past due by 90 days or more from 2001 to 2011. Each graph indicates the two dates (labeled 1 and 2) during which the meetings that were included in the recently released documents occurred in 2006, in addition to comments made at those meetings by Bernanke and Geithner. As the first graph shows, U.S. sales of existing homes was slightly down at roughly $6.3 million from its peak in 2005 of over $7 million at both meetings. They had not yet started on the rapid decline that began almost immediately after the second meeting and ultimately resulted in sales lower than $4 million by 2009. Similarly, the second graph shows that the share of mortgage payments overdue by more than 90 days were up slightly during both meetings but had not yet began on the rapid climb from roughly 1% in 2007 to 5% in 2010. Furthermore, the comments of the Fed, Geithner, and Bernanke included alongside the graphs suggest a major lack of foresight on all of their parts (most notably Bernanke’s prediction that a “soft landing” was the “likely scenario”). As the article points out, the release of these documents may have been particularly ill-timed for the Fed with criticism mounting against it, as illustrated by Ron Paul’s “end the Fed!” chant after the New Hampshire primary. However, at least one former Fed governor whose statements were included in the transcripts, Susan Bies, came out unscathed with her warnings of the risks of mortgage-backed securities and household debt during one of the 2006 meetings.
Deadline alert for ICPSR Research Paper Competition
Two weeks from today, January 31, is the last day that entries into the ICPSR Research Paper Competition for undergraduate and graduate students will be accepted. For prizes, forms, and details, see http://www.icpsr.umich.edu/icpsrweb/content/ICPSR/prize/index.html
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Monday, January 16, 2012
3.2 Million Job Openings in November
A report from the U.S. Bureau of Labor Statistics (BLS) shows that there were 3.2 million job openings in November, unchanged from October. This is still below the 4.4 million job openings that were recorded when the recession officially started in December 2007, though it exceeds by one million the number of openings in July 2009, which was "the most recent trough for the series." According to the report, "The number of job openings has increased 30 percent since the end of the recession in June 2009."The report notes, "Several industries saw increases in the number of job openings over the year, while the number of job openings decreased for finance and insurance, professional and business services, and federal government. The Midwest and South regions had increases in the number of job openings and the West experienced a decline over the year."
The BLS Editor's Desk further summarizes, "There were 2.8 million job openings in private industry. Within private industry, there were 87,000 job openings in construction, and 606,000 in education and health services."
Friday, January 13, 2012
Early Polls Show Romney's Lead in South Carolina Shrinking
Nate Silver of the FiveThirtyEight blog writes that the first South Carolina GOP primary poll contradicts his earlier prediction that Mitt Romney would increase "his modest lead in the South Carolina polls once his victory in New Hampshire was reflected in the surveys there." Instead, the poll, an automated survey from InsiderAdvantage, "shows Mr. Romney’s lead contracting in South Carolina," though Silver "urge[s] a lot of caution in interpreting it."
The poll "was conducted on Wednesday and shows Mr. Romney with 23 percent of the vote, just 2 points ahead of Newt Gingrich at 21 percent. The poll has Rick Santorum and Ron Paul tied for third place at 13 percent, with Jon M. Huntsman Jr. having moved ahead of Rick Perry for fifth place."
But Silver is not completely sold on InsiderAdvantage. He writes, "InsiderAdvantage has a mixed track record and rates fairly poorly in the FiveThrityEight pollster ratings, which is one reason to interpret these numbers with some care. In addition, Matt Towery, the head of InsiderAdvantage, formerly served as the head of Mr. Gingrich’s political organization from 1992 until Mr. Gingrich left Congress."
Silver does note, however, that "another polling firm that rates more highly, Public Policy Polling, said in a series of Twitter messages that it has also detected a tight race between Mr. Romney and Mr. Gingrich in South Carolina, with little evidence of favorable momentum for Mr. Romney following his New Hampshire victory."
Negative early news for Romney in South Carolina is partially offset by early polling in Florida, however. Silver writes: "Confusing matters further is that a poll of Florida, from Rasmussen Reports, did show some gains for Mr. Romney. The poll, conducted on Wednesday, showed Mr. Romney with 41 percent of the vote there, better than he has done in any prior survey of the state. The poll also showed Mr. Gingrich’s numbers on the decline." Silver predicts that "if the initial results from South Carolina and Florida are confirmed by other pollsters, they would suggest that Florida could play a backstop role for Mr. Romney, in somewhat the same way that New Hampshire did for him relative to Iowa."
However, at this stage Silver suggests that we wait before attaching much weight to the early poll results from either South Carolina or Florida.
The poll "was conducted on Wednesday and shows Mr. Romney with 23 percent of the vote, just 2 points ahead of Newt Gingrich at 21 percent. The poll has Rick Santorum and Ron Paul tied for third place at 13 percent, with Jon M. Huntsman Jr. having moved ahead of Rick Perry for fifth place."
But Silver is not completely sold on InsiderAdvantage. He writes, "InsiderAdvantage has a mixed track record and rates fairly poorly in the FiveThrityEight pollster ratings, which is one reason to interpret these numbers with some care. In addition, Matt Towery, the head of InsiderAdvantage, formerly served as the head of Mr. Gingrich’s political organization from 1992 until Mr. Gingrich left Congress."
Silver does note, however, that "another polling firm that rates more highly, Public Policy Polling, said in a series of Twitter messages that it has also detected a tight race between Mr. Romney and Mr. Gingrich in South Carolina, with little evidence of favorable momentum for Mr. Romney following his New Hampshire victory."
Negative early news for Romney in South Carolina is partially offset by early polling in Florida, however. Silver writes: "Confusing matters further is that a poll of Florida, from Rasmussen Reports, did show some gains for Mr. Romney. The poll, conducted on Wednesday, showed Mr. Romney with 41 percent of the vote there, better than he has done in any prior survey of the state. The poll also showed Mr. Gingrich’s numbers on the decline." Silver predicts that "if the initial results from South Carolina and Florida are confirmed by other pollsters, they would suggest that Florida could play a backstop role for Mr. Romney, in somewhat the same way that New Hampshire did for him relative to Iowa."
However, at this stage Silver suggests that we wait before attaching much weight to the early poll results from either South Carolina or Florida.
Data in Review: The Price of Movie Tickets
Why do all movie tickets cost the same? Movie tickets don't fluctuate in price
according to supply and demand. Blockbuster sellouts and movie flops all
sell for the same price. To explain this occurence, an article from The Atlantic briefly explains the history of movie prices, demonstrating that during
the first half of the twentieth century, movie tickets used to cost
different amounts depending on their actors and popularity. Since this time, the system gradually shifted so that ticket prices from the
1970s onwards have been generally uniform across movies.
The line graph depicts how theater attendance fluctuates through the year. Christmas is shown as the high point of the year in terms of ticket sales, while the time periods directly following Easter and Labor Day see relatively low ticket sales.
The chart does have a few shortcomings, however. The article fails to tell us the data's source. We do not know whether the graph is plotting the data from a single theater, or from an aggregate of theaters of over the course of a year. We also don't know when the data were collected. The article doesn't communicate what year or years the data come from, and there is no caption or title to further explain these details. It is also unclear what the unit of measurement is. Does 12% average weekly attendance convey the proportion of seats that are filled in a theater? Does 4% attendance during a given week represent how much that this specific week accounts for in the year's attendance?
Though displaying several trends on one set of axes, the second graph is significantly clearer. The graph shows tickets per capita and the average price of a ticket from 1929 through 2001. Unlike the first graph, the axes are well labeled and they clarify the unit of measure. Although the bar chart and trend graph are superimposed on each other, they utilize the better part of the chart area. Unfortunately, the chart does not include the source of the data or a title, both of which would further clarify the the meaning of the information being represented. It would also be useful to articulate whether admissions prices are adjusted for inflation, a factor that is necessary to take into account when looking at such a large time span.
The line graph depicts how theater attendance fluctuates through the year. Christmas is shown as the high point of the year in terms of ticket sales, while the time periods directly following Easter and Labor Day see relatively low ticket sales.
The chart does have a few shortcomings, however. The article fails to tell us the data's source. We do not know whether the graph is plotting the data from a single theater, or from an aggregate of theaters of over the course of a year. We also don't know when the data were collected. The article doesn't communicate what year or years the data come from, and there is no caption or title to further explain these details. It is also unclear what the unit of measurement is. Does 12% average weekly attendance convey the proportion of seats that are filled in a theater? Does 4% attendance during a given week represent how much that this specific week accounts for in the year's attendance?
Though displaying several trends on one set of axes, the second graph is significantly clearer. The graph shows tickets per capita and the average price of a ticket from 1929 through 2001. Unlike the first graph, the axes are well labeled and they clarify the unit of measure. Although the bar chart and trend graph are superimposed on each other, they utilize the better part of the chart area. Unfortunately, the chart does not include the source of the data or a title, both of which would further clarify the the meaning of the information being represented. It would also be useful to articulate whether admissions prices are adjusted for inflation, a factor that is necessary to take into account when looking at such a large time span.
Thursday, January 12, 2012
Obama Loses Latino Approval with Rise in Deportations
The majority of Latinos in the United States oppose the way in which the Obama administration is addressing the deportation of illegal immigrants, according to a survey conducted by the Pew Hispanic Center.
Foreign-born Hispanics are much more likely than native-born Hispanics to be aware of the increase in deportations since Obama assumed office. Whereas 55% of foreign-born Hispanics were aware of this trend, only 25% of native-born Hispanics were. Awareness of the increase in deportations is most prevalent among Hispanic individuals who have greater chances of being deported. Almost three-quarters of Hispanic immigrants who do not have United States citizenship or a green card, a population with a high risk of being deported, are aware that deportations have increased under the Obama administration.
Since 2009, under President Obama, deportations have increased to an annual average of 400,000. This represents a 30% increase in annual average of deportations since the second term of the Bush administration and is almost double the annual average of deportations during the first term of the Bush administration.
A vast majority (81%) of the 11.2 million immigrants in the United States without authorization are of Hispanic origin. Individuals of Hispanic origin constitute an even larger percentage of deported unauthorized immigrants, with 97% of those deported in 2010 identifying as having Hispanic origin.
Not all Latinos are cognizant of the increase in deportations during Obama's presidency. A little over a third of Latinos polled (36%) responded that the Bush administration deported about the same number of immigrants as the Obama administration deports currently. Fewer than half of the Latinos polled reported knowledge of the increase in deportations under the Obama administration; 41% claimed that deportations had increased during Obama's presidency.
Those who disapprove of Obama's policy are likely to be those who are aware that deportations have increased under the Obama administration.
Wednesday, January 11, 2012
Countries Compared on Nuclear Security
The Economist ranked 32 countries according to nuclear security, measured by their ability to safely contain nuclear material which could potentially be used in the creation of nuclear weapons. The 32 countries included are those which possess over one kilogram of the type of nuclear material used to construct weapons. The nuclear security index was developed by the Economist Intelligence Unit and the Nuclear Threat Initiative. According the the Nuclear Threat Initiative, measures of nuclear security include "indicators in physical protection, control and accounting, personnel and security infrastructure, security during transport and response capabilities." Countries with nuclear weapons tend to rank lower on nuclear security due to the fact that they are in possession of larger quantities of nuclear materials. Britain received a higher score on the nuclear security index than any other country known to possess nuclear weapons.Ranking Countries by Misery Index
On Monday, The Economist published their 2011 "Misery Index", which is determined by a given country's rate of unemployment and inflation. The Economist ranked 92 countries on this index, with Macedonia displaying the highest level of misery due to instability following the death of President Gligorov. Qatar's combined unemployment and inflation rates of roughly 2.5% earned it the lowest level of misery in The Economist's study. Tuesday, January 10, 2012
Record-High Percentage of American Independents
Gallup’s party identification poll found that the percentage
of American identifying as independents hit a record high in 2011. Gallup cites "the sluggish economy, record
levels of distrust in government, and unfavorable views of both parties" as
causes for this record. These results,
however, closely mirror recent results in the year directly preceding a
presidential election year. Spikes in
independent political affiliation also occurred in 1995, 1999, 2003, and 2007.
As in most years since 1988, Democrats outnumber
Republicans, 31% to 27%. When measuring
party identification including independent leanings, however, those identifying
as Republican or leaning Republican constituted 45% of respondents, equaling
the 45% responding as Democrat or leaning Democratic. Though Democrats and Democratic leaners led
by one percent in 2010, this gap is significantly smaller than Gallup’s poll results
since 2004. Says Gallup: "If national
conditions and the political environment do not change appreciably…independent
identification – even if it declines – will probably remain on the higher end
of what Gallup has measured historically."
New Study Shows Teachers--and Test Scores--Matter in the Long-Term
A new study by three economists suggests that elementary- and middle-school teachers who help increase their students' standardized-test scores have a significant, positive and lasting impact on those students' lives in the long term. Their influence extends beyond academics, as good teachers also mean "lower teenage-pregnancy rates and greater college matriculation and adult earnings," writes the New York Times. The study tracked the lives of 2.5 million students over 20 years, "allowing for a deeper look at how much the quality of individual teachers matters over the long term."
Although the economists set out to challenge the use of value-added ratings, which according to the Times "measure the impact individual teachers have on student test scores," researchers ultimately found that "controlling for numerous factors, including students’ backgrounds...the value-added scores consistently identified some teachers as better than others, even if individual teachers’ value-added scores varied from year to year." They concluded that "using value-added scores would lead to fewer mistakes, not more."
And the positive effect of teachers who increased student test scores was striking. The Times notes, "Replacing a poor teacher with an average one would raise a single classroom’s lifetime earnings by about $266,000, the economists estimate. Multiply that by a career’s worth of classrooms." The researchers surmise that the same results would be obtained by replacing an average teacher with an excellent teacher: "Given the difficulty of finding, training and retaining outstanding teachers...the difference in long-term outcome between students who have average teachers and those with poor-performing ones is as significant as the difference between those who have excellent teachers and those with average ones."
The positive effect of an excellent teacher on one individual student is less impressive than that teacher's potential impact on the entire class taken together, of course. "All else equal, a student with one excellent teacher for one year between fourth and eighth grade would gain $4,600 in lifetime income, compared to a student of similar demographics who has an average teacher. The student with the excellent teacher would also be 0.5 percent more likely to attend college." Still, "students with top teachers are less likely to become pregnant as teenagers, more likely to enroll in college, and more likely to earn more money as adults."
The study will likely add fuel to the value-added score debate, as many people--and teachers' unions--"say that isolating the effect of a given teacher is harder than it seems, and might unfairly penalize some instructors." The researchers of this study are firmly on the other side: "The authors argue that school districts should use value-added measures in evaluations, and...remove the lowest performers." One of the researchers, Harvard Professor John N. Friedman, was quoted in the Times as saying, “The message is to fire people sooner rather than later.”
Although the economists set out to challenge the use of value-added ratings, which according to the Times "measure the impact individual teachers have on student test scores," researchers ultimately found that "controlling for numerous factors, including students’ backgrounds...the value-added scores consistently identified some teachers as better than others, even if individual teachers’ value-added scores varied from year to year." They concluded that "using value-added scores would lead to fewer mistakes, not more."
And the positive effect of teachers who increased student test scores was striking. The Times notes, "Replacing a poor teacher with an average one would raise a single classroom’s lifetime earnings by about $266,000, the economists estimate. Multiply that by a career’s worth of classrooms." The researchers surmise that the same results would be obtained by replacing an average teacher with an excellent teacher: "Given the difficulty of finding, training and retaining outstanding teachers...the difference in long-term outcome between students who have average teachers and those with poor-performing ones is as significant as the difference between those who have excellent teachers and those with average ones."
The positive effect of an excellent teacher on one individual student is less impressive than that teacher's potential impact on the entire class taken together, of course. "All else equal, a student with one excellent teacher for one year between fourth and eighth grade would gain $4,600 in lifetime income, compared to a student of similar demographics who has an average teacher. The student with the excellent teacher would also be 0.5 percent more likely to attend college." Still, "students with top teachers are less likely to become pregnant as teenagers, more likely to enroll in college, and more likely to earn more money as adults."
The study will likely add fuel to the value-added score debate, as many people--and teachers' unions--"say that isolating the effect of a given teacher is harder than it seems, and might unfairly penalize some instructors." The researchers of this study are firmly on the other side: "The authors argue that school districts should use value-added measures in evaluations, and...remove the lowest performers." One of the researchers, Harvard Professor John N. Friedman, was quoted in the Times as saying, “The message is to fire people sooner rather than later.”
Monday, January 9, 2012
Student Paper Competition deadline approaching
There's still time! Deadline for ICPSR's student paper competitions is January 31, 2012: http://www.icpsr.umich.edu/icpsrweb/content/ICPSR/prize/index.html
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Obama Starts New Year with 46% Job Approval
Gallup polling in early January finds that President Obama's job approval rating is at 46 percent, an improvement over most data since August 2011, when his approval typically scored in the low 40 percent range. Obama recorded "monthly approval averages of 41% in August, September, and October, and 43% in November and December." According to Gallup's Jeffrey M. Jones, "The current 46% rating for Obama, based on Jan. 2-4 polling, is one
percentage point below his recent high three-day averages of 47% in Dec.
29-Jan. 3 and Dec. 21-23 tracking." The rating is still lower than last January, however, when Obama averaged 49 percent approval over the month.
Jones writes, "Obama's approval rating will be a critical indicator of his re-election chances this year. If he can sustain higher approval ratings through early November, his odds of winning a second term will increase." Historical data has shown "that all presidents since Eisenhower with approval ratings above 50% have won re-election easily." More recently, "George W. Bush was re-elected in 2004 with 48% approval at the time of the election." But Obama would not have to fall very far for Jones to anticipate trouble: "If Obama's approval rating reverts to the low 40% range, he would have a difficult time defeating a Republican in a two-candidate race."
Jones identifies independents as a key group Obama must target if he hopes to increase his approval rating. "Currently, 81% of Democrats, 42% of independents, and 10% of Republicans approve of Obama. By comparison, last January, when he had an overall monthly average of 49%, Obama's approval rating was 83% among Democrats, 47% among independents, and 13% among Republicans."
One potential reason for the modest uptick in Obama's rating this month "could be the improvement in Americans' economic confidence in recent days." But Jones says " it is unclear whether that will last." Further, "January brings challenges for Obama to maintain higher approval ratings, given that much of the political focus will be on the Republican nomination contest, with the GOP candidates seeking to point out Obama's shortcomings as president in order to help their chances of winning the nomination."
Obama does, however, have the State of the Union address January 24, which according to Jones presents "a unique opportunity for him to directly state his case for re-election to Americans."
Jones writes, "Obama's approval rating will be a critical indicator of his re-election chances this year. If he can sustain higher approval ratings through early November, his odds of winning a second term will increase." Historical data has shown "that all presidents since Eisenhower with approval ratings above 50% have won re-election easily." More recently, "George W. Bush was re-elected in 2004 with 48% approval at the time of the election." But Obama would not have to fall very far for Jones to anticipate trouble: "If Obama's approval rating reverts to the low 40% range, he would have a difficult time defeating a Republican in a two-candidate race."
Jones identifies independents as a key group Obama must target if he hopes to increase his approval rating. "Currently, 81% of Democrats, 42% of independents, and 10% of Republicans approve of Obama. By comparison, last January, when he had an overall monthly average of 49%, Obama's approval rating was 83% among Democrats, 47% among independents, and 13% among Republicans."
One potential reason for the modest uptick in Obama's rating this month "could be the improvement in Americans' economic confidence in recent days." But Jones says " it is unclear whether that will last." Further, "January brings challenges for Obama to maintain higher approval ratings, given that much of the political focus will be on the Republican nomination contest, with the GOP candidates seeking to point out Obama's shortcomings as president in order to help their chances of winning the nomination."
Obama does, however, have the State of the Union address January 24, which according to Jones presents "a unique opportunity for him to directly state his case for re-election to Americans."
Sunday, January 8, 2012
U.S. Poor Less Likely to Rise Ranks than Poor in Comparable Countries
Jason DeParle of the New York Times highlights a troubling development: The country of the frequently cited--and much lauded--American Dream is struggling to provide opportunities for economic mobility to its poorest citizens. America is falling behind comparable countries, and "Americans [today] enjoy less economic mobility than their peers in Canada and much of Western Europe."
As Occupy Wall Street and the recession that helped bring about the movement's rise gain the public's attention, even the political right has started to acknowledge the seriousness of class differences. The Times comments: "Liberal commentators have long emphasized class, but the attention on the right is largely new."
DeParle identifies deep poverty and problems in the educational system as two central reasons for America's failure to sufficiently provide the necessary opportunities for social mobility. According to DeParle, the former "leaves poor children starting especially far behind," while "the unusually large premiums that American employers pay for college degrees...increases the importance of family background and stymies people with less schooling."
He cites a project led by Swedish economist Markus Jantti, one that DeParle says "found that 42 percent of American men raised in the bottom fifth of incomes stay there as adults. That shows a level of persistent disadvantage much higher than in Denmark (25 percent) and Britain (30 percent) - a country famous for its class constraints."
As Occupy Wall Street and the recession that helped bring about the movement's rise gain the public's attention, even the political right has started to acknowledge the seriousness of class differences. The Times comments: "Liberal commentators have long emphasized class, but the attention on the right is largely new."
DeParle identifies deep poverty and problems in the educational system as two central reasons for America's failure to sufficiently provide the necessary opportunities for social mobility. According to DeParle, the former "leaves poor children starting especially far behind," while "the unusually large premiums that American employers pay for college degrees...increases the importance of family background and stymies people with less schooling."
He cites a project led by Swedish economist Markus Jantti, one that DeParle says "found that 42 percent of American men raised in the bottom fifth of incomes stay there as adults. That shows a level of persistent disadvantage much higher than in Denmark (25 percent) and Britain (30 percent) - a country famous for its class constraints."
Evidence that upward mobility is harder to come by may be especially bad news for the political right, which often responds to liberal complaints of economic inequality by pointing at the high mobility rate. DeParle writes: "While liberals often complain that the United States has unusually large income gaps, many conservatives have argued that the system is fair because mobility is especially high, too: everyone can climb the ladder." Now, however, "evidence suggests that America is not only less equal, but also less mobile."
A comparison with Canada, a country closer to the United States in its culture and demographics, is similarly discouraging. "Miles Corak, an economist at the University of Ottawa, found that just 16 percent of Canadian men raised in the bottom tenth of incomes stayed there as adults, compared with 22 percent of Americans. Similarly, 26 percent of American men raised at the top tenth stayed there, but just 18 percent of Canadians."
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