Thursday, February 21, 2013

Ultra Rich Pulling Away From Everyone Else

In 2011, 4.48 percent of all income in the United States was captured by the top 0.01 percent of Americans — a group of less than 16,000 households (or “tax units” in IRS parlance). That’s actually down from a peak of 6.04 percent in 2007. Of the top 10 years for the top 0.01 percent, eight have come since 2000; the other two were 1928 and 1929, right before the Great Depression.
The average member of the top 0.01 percent made $23,679,531 in 2011; the cutoff for membership in the group was $7,969,900. That’s a good deal less than 2007, when the average member of the group made $38,016,760. For comparison, the average member of the bottom 90 percent made $30,437 in 2011 and $35,173 in 2007.
Until the 1970s, the bottom 90 percent had actually seen its income grow more than any other income group. The income gap was shrinking. But the ultra-rich quickly reversed that trend. In 2007, the top 0.01 percent had an average income almost seven times that of 1917; the average income of the bottom 90 percent had barely tripled. The country has grown more unequal, not less, since then.

The Mythological Skills Gap

Beyond the anecdotes of local employers, the Wisconsin and Milwaukee labor markets show no statistical evidence of a skills shortage:
Wages: If Wisconsin employers were encountering a shortage of skilled labor, wages would be going up, but in Wisconsin real wages have declined since 2000. By contrast, in states such as North Dakota and Wyoming, where there really is demand for and a shortage of skilled labor, caused by a boom in the energy sector, real wages have jumped by double digits since 2000. Wisconsin wage "growth" also lags the national rate, another sign that there is no labor shortage here. 
Hours: In contrast to states with tight labor markets such as North Dakota, there is no evidence that Wisconsin employers are adding hours to their existing workforce, to compensate for an alleged skilled labor shortage. Average weekly hours worked in Wisconsin are down 4.3 percent compared to 2000. 
Occupational Projections: Although promoters of the skills gap idea claim that the skills requirements of future jobs will vastly outstrip the skills and education of Wisconsin workers, occupational projections for the state reveal that 70 percent of projected openings through 2020 will be in jobs requiring a high school diploma or less. 
Underemployment and Workforce Overqualification: In reality, Wisconsin and Milwaukee suffer from the opposite of a skills gap: an economy that generates too few quality jobs and a labor market that is characterized by the underemployment and overqualification of skilled and educated workers. 25 percent of Milwaukee's retail salespersons hold college degrees (up from 11 percent in 2000); 60 percent of Wisconsin's parking lot attendants have had some post-secondary education. The "job gap" has created a skills mismatch of sorts in the Wisconsin and Milwaukee labor markets, but it is the inverse of the one commonly put forward: it is a mismatch of too many highly educated workers chasing too few "good jobs." 
Rising Human Capital: Contrary to skills gap rhetoric, educational attainment has increased dramatically in Wisconsin and Milwaukee over the past decades. Nearly 90 percent of Milwaukee's adult population holds a high school diploma (up from 50 percent in 1970), and 31 percent hold at least a bachelor's degree (up from 11 percent in 1970). Gains in UW-Milwaukee The Skills Gap and Unemployment in Wisconsin 6 educational attainment have occurred for all racial and ethnic groups. All data point to consistently rising human capital formation in Wisconsin and Milwaukee.

Sunday, February 17, 2013

Ratings Robbers

Investing In Infrastructure

The Impact Of Current Infrastructure Investment On America's Future
Other Reports

Walker's Revenue Plan - Sell Off The State

Walker Seeks Sale Of Power Plants
Gov. Scott Walker is seeking to sell off hundreds of millions of dollars in power plants or other state assets to help pay some of the borrowing he is proposing as part of his two-year $6.4 billion transportation plan unveiled Friday.
I'm sure this will work out as well as Walker's other privatization plans.

Walker Costing Wisconsin More

Taxpayers Pay More Under Walker Medicaid Plan
If the federal government keeps its current commitments, Gov. Scott Walker's plan for avoiding a full expansion of the BadgerCare program under the federal health care law would cost Wisconsin taxpayers roughly $250 million more through 2020, under preliminary estimates by the Legislature's nonpartisan budget office.
In addition to lower state costs, the full expansion of the Medicaid health program would also cover tens of thousands more people than the Republican governor's proposal...
"It's clear that Governor Walker has chosen an option that will cover fewer people and cost the state more in this budget and through 2020. His option would cost us a quarter of a billion dollars more (than a full expansion)," said Rep. Jon Richards (D-Milwaukee), who requested the memo...
The Fiscal Bureau estimated that a full Medicaid expansion would cost the state $67 million more through 2020 than it would to keep the state's current programs in place without change. Walker's proposal would cost the state $320 million more through 2020.

Saturday, February 16, 2013

America Updated

Republicans Punishing The Poor

Walker's Boondoggle Emporium

Jason Stein and Patrick Marley, of the Journal Sentinel, recently wrote, "Scott Walker wants to invest nearly $100 million to build a faster system to track jobs data, tie technical school and university funding to filling high-demand professions and require nearly 76,000 people to train for work to collect food stamps."

Don't we already have job tracking systems? Employment-wanted ads? Guidance counselors? Advisors? Internships? Consultants? Private headhunters? Employment centers? Or does this have more to do with Walker wanting to have his own [duplicitous] metric(s) for job tracking so he can [falsely] claim he is actually creating jobs?

Will professions (and the degrees related to such) deemed to not be "high demand" simply no longer be taught? Also, how can schools (and their curriculum) possibly predict the exact worker-skill needs of the mobile, evolving, ever-changing economy (and the many sectors and businesses in it)?

During this period of high unemployment, Walker really wants to get tough on food stamp users? Yes, this exorbitant gravy-train must stop. And, what exactly does he plan on training them for? If there were jobs available, they'd be working. Yet another solution looking for a problem.

Surely some training responsibility must fall onto the actual employer (as was common practice until the job training and workforce development shams were implemented in the 1980s). What ever happened to businesses training their own workers? Or, how about just telling the businesses to pay prevailing wage rates to attract workers to the jobs?

Walker's proposals (as highlighted by the article) sound seemingly laudable, but they are so vague that they are realistically just meaningless rhetoric.
For state universities, Walker is proposing awarding $20 million for programs that help the economy, develop a skilled workforce and make higher education more affordable...
Walker's budget would also seek to increase the number of doctors and dentists in Wisconsin.
Yes, an educated, skilled workforce is a good thing. And, more doctors and dentists sound good, too. But we actually need citizens with insurance and/or money who can actually go to a doctor or a dentist. Plus, this would also mean more students would need to be able to afford medical and dental school.

For a guy that supposedly wants smaller government, Walker sure does like creating new committees and/or departments. As part of his Wisconsin educational system overhaul, Walker would like to, "Create a four-person state Office of Skills Development to coordinate the scattered worker-training systems of the state and adapt them to the needs of employers."

How much better would the job prospects (and future) of Wisconsin be if Scott Walker hadn't refused over $800 million in funding for upgrading the Hiawatha train? Now, for needed upgrades to the line (plus possible Talgo lawsuit claims), rather than being covered by the $800+ million Federal grant, it could cost the State of Wisconsin over $100 million.
Taken together, state taxpayers' share of the Hiawatha capital costs that would have been covered by the federal grant could total as much as $99 million, significantly more than the $30 million they would have paid for 20 years of operating costs on the Milwaukee-to-Madison segment.
The platitudes and bromides Walker (and Republicans, in general) spews are just that, sweeping generalizations which are too loosely operationalized to be actionable and/or too idiotically simplistic to be taken seriously as well-planned, thoughtful proposals.

For Further Reading:
Government Spends More On Corporate Welfare Than Social Welfare
Employers Whose Workers and Their Dependents are Using State Health Insurance ProgramsWalmart Is The Largest Food Stamp Recipient

Weekend Reading: U.S Postal Service

Background On The $15.9 Billion Loss By The Postal Service
Do We Really Want To Live Without The Postal Service?
Why We Must Rescue The U.S. Postal Service From The Brink Of Death

Weekend Reading

The Hoax Of Entitlement Reform
How Effective Is The Safety Net?
Minnesota's Mining Not An Economic Panacea
No, Marco Rubio, Government Did Not Cause The Housing Crisis 
Privatizing Roads, Bridges, Schools and Energy Grids?
U.S. Corporations Squeezing Even More Money Out Of Employees

Weekend Reading: Sport Subsidies

Enjoy The Super Bowl! After All, You're Footing The Bill
Money-Wise, Stadiums & Super Bowls Don't Benefit Cities
The Sports-Industrial Complex Is Bleeding America Dry

Saturday, February 9, 2013

There Is No Alternative

Should we just go ahead and pencil in the Republicans (again) as being against aid for New Englanders, which will most assuredly be needed after the most recent storm?

'Behemoth' Storm Leaves 650K Without Power In New England

And, I'm sure this is one of those times where a certain "thing," which is happening as we speak, isn't the most opportune time to discuss said topic. Climate changing, not the time to talk about climate change. Rash of gun violence, not the time to talk about guns. Natural occurrences shutting down whole regions of a supposedly advanced nation, not the time to talk about those utilities, transportation systems, and other basic infrastructure.

It would be too easy, and simple, to just employ a large public works program to alleviate our unnecessarily high unemployment whilst simultaneously upgrading infrastructure, modernizing utilities, greening public buildings, improving public transportation entities and options, burying power lines, implementing more sustainable energy sources, and numerous other upgrades, long overdue in the U.S.  

Sadly though, no. Not going to happen.

Tax cuts to the rescue! 


State/Local Versus Private-Sector Workers

State/Local Versus Private Sector Workers 
Putting aside job security, the calculations show that state/local benefits nearly offset the private sector wage premium, but compensation in the public sector is 4 percent less than that in the private sector
Key findings:
  • State and local workers have a wage penalty of 9.5 percent.
  • Pension contributions and retiree health insurance help close the gap.
  • Total compensation for public sector workers is about 4 percent less than that in the private sector.

Just wondering why these studies (like the one above) - the ones where academics actually look at the numbers and report on such - rarely are discussed in the Milwaukee Journal Sentinel. Every anecdotal story and "gut" feeling was paraded out in their reporting during Scott Walker's vilifying of public workers. The claims of excessive pay, overly generous benefits, etc. This was all reported as a given, a known fact.

It was, and is, nothing of the sort. Studies refuted it then, and they still refute it now.

Public workers are a bargain. Private workers doing the same work would cost you (at least) 4% more.


Sunday, February 3, 2013

Beware Of The Economic Development Hucksters

It's really tough keeping track of all the debunked and disproven economic development ideas the power-brokers of Wisconsin keep trying to sell the public.

Delta Center Needs To Be Expanded Soon To Compete With Other Cities

The list of investment black-holes proposed for Wisconsin is growing - charter school expansion, venture capital, stadiums, convention centers, etc.

Heywood Sanders' research regarding convention centers has found:
To cities the lure of the convention business has long been the prospect of visitors emptying their wallets on meals, lodging, and entertainment, helping to rejuvenate ailing downtowns.

However, an examination of the convention business and city and state spending on host venues finds that:

The overall convention marketplace is declining in a manner that suggests that a recovery or turnaround is unlikely to yield much increased business for any given community, contrary to repeated industry projections. Moreover this decline began prior to the disruptions of 9-11 and is exacerbated by advances in communications technology. Currently, overall attendance at the 200 largest tradeshow events languishes at 1993 levels.

Nonetheless, localities, sometimes with state assistance, have continued a type of arms race with competing cities to host these events, investing massive amounts of capital in new convention center construction and expansion of existing facilities.Over the past decade alone, public capital spending on convention centers has doubled to $2.4 billion annually, increasing convention space by over 50 percent since 1990. Nationwide, 44 new or expanded convention centers are now in planning or construction.

Faced with increased competition, many cities spend more money on additional convention amenities, like publicly-financed hotels to serve as convention "headquarters." Another competitive response has been to offer deep discounts to tradeshow groups. Despite dedicated taxes to pay off the public bonds issued to build convention centers, many—including Washington, D.C and St. Louis—operate at a loss.
Ronald Wertz, writing for the Federal Reserve Bank of Minneapolis, discovered:
Current research indicates that stadiums and arenas have a particularly bad track record when it comes to delivering on promises of community economic windfalls...
"As market size decreases, the strength of that [economic development] argument becomes shaky," Kaatz said, mainly because smaller markets often do not draw a significant number of visitors from outside the region. Nonetheless, smaller markets continue to use the argument, which Kaatz said "is a reflection of the fact that the whole [convention center] phenomenon has been generated from larger cities, and the argument has filtered down to smaller cities."
A University of Wisconsin-Milwaukee (UWM) Center For Economic Development study explained:
Whatever the original economic folly of Miller Park and the Midwest Airlines Center, what’s done is done: both facilities exist and will certainly operate for the foreseeable future. For the purposes of this study, there is no point in reopening a historical debate about whether public dollars should have been spent on these facilities. However, down the road, as part of a city strategy to build a chimerical tourist industry in Milwaukee, taxpayers once again may be called upon to provide public funding for an expanded convention center, or perhaps a new arena for a local professional sports team. Such expenditures should be scrupulously avoided: tourism has been a losing economic development strategy for Milwaukee as a whole, and for the inner city, tourism investments have represented a huge “opportunity cost’ of funds that could have been invested in inner city economic renewal.
Marc Levine, UWM professor, wrote in the Journal Sentinel:
In that vein, consider Milwaukee's signature initiatives over the past decade: Miller Park, the Midwest Airlines convention center, the Grand Avenue mall make-over and the "Initiative for a Competitive Milwaukee."
All were heavily promoted by the MMAC and GMC, which lobbied for massive public spending on these projects chiefly on the grounds that they would be prodigious job generators. 
Well, the results are in - and Milwaukee's employment decline over the past decade speaks volumes on the job-generating efficacy of the business community's pet projects. 
What's more, these projects soaked up millions in public dollars that could have been devoted to more productive, employment-generating investments.

False Choice

The usual suspects are out stumping for expanding school choice and vouchers.

Instead Of Lifting Residency Requirement, Let's Expand School Choice

Walker Presses Case For Expanding School Choice
School choice includes voucher programs, in which the government helps pay for tuition at private schools, including religious schools.
Tough Decisions Lie Ahead For Wisconsin's School Voucher Program
Voucher advocates have long desired an increase to the $6,442 per-pupil allotment taxpayers spend on children in participating private schools; they want at least equal funding to public charter schools, which receive $7,775 per-pupil. MPS state aid is $7,723, but with local funding the per-pupil amount is closer to $10,000, according to MPS Chief Accountability and Efficiency Officer Bob DelGhingaro.
Bringing the voucher schools into an accountability system that systematically identifies and weeds out perennially low performers is something that has gotten more attention lately. The new state report card system for Wisconsin's public schools was not obligated to include the 112 private voucher schools, and the data systems those schools use (or in some cases, don't have) do not jibe with the systems used by public schools that report to the Department of Public Instruction.
If we actually look at the data, we find that there is little difference between voucher school students and Milwaukee Public School students. Researchers at the University of Arkansas found, "City property taxes go up for each student who uses a voucher, compared to what would be the case if that student went to MPS, while state income taxes go down, as do property taxes in most of the rest of the state."

Diane Ravitch, lead debunker of all things voucher-related, elaborated in The Myth of Charter Schools:
Known as the CREDO study, it evaluated student progress on math tests in half the nation’s five thousand charter schools and concluded that 17 percent were superior to a matched traditional public school; 37 percent were worse than the public school; and the remaining 46 percent had academic gains no different from that of a similar public school. The proportion of charters that get amazing results is far smaller than 17 percent.Why did Davis Guggenheim pay no attention to the charter schools that are run by incompetent leaders or corporations mainly concerned to make money? Why propound to an unknowing public the myth that charter schools are the answer to our educational woes, when the filmmaker knows that there are twice as many failing charters as there are successful ones? Why not give an honest accounting?
According to University of Washington economist Dan Goldhaber, about 60 percent of achievement is explained by nonschool factors, such as family income. So while teachers are the most important factor within schools, their effects pale in comparison with those of students’ backgrounds, families, and other factors beyond the control of schools and teachers. Teachers can have a profound effect on students, but it would be foolish to believe that teachers alone can undo the damage caused by poverty and its associated burdens...
It bears mentioning that nations with high-performing school systems—whether Korea, Singapore, Finland, or Japan—have succeeded not by privatizing their schools or closing those with low scores, but by strengthening the education profession. They also have less poverty than we do. Fewer than 5 percent of children in Finland live in poverty, as compared to 20 percent in the United States. Those who insist that poverty doesn’t matter, that only teachers matter, prefer to ignore such contrasts.
Most recently, Ravitch wrote in the Journal Sentinel:
Milwaukee's choice program is a failure. There are now three separate systems - the public schools, with about 80,000 students; the voucher schools, with about 23,000 students, and the charter schools, with about 20,000 students. There is very little difference among the three sectors in terms of student achievement...
19% of the students in the Milwaukee Public Schools have disabilities, compared to somewhere between 7% and 14.5% in the voucher schools.
It is inefficient to run three separate school systems. Not only does it triplicate costs, but it divides civic energy. All the people of Milwaukee should work together to build a school system that meets the needs of all the children. 
Twenty years of experience with choice in Milwaukee demonstrates that it is not effective or efficient to run three school systems. It does not meet the needs of children.
For Further Reading:
Vouching For Delusion
The Myth of The Milwaukee Miracle
Charter School Riddles

Weekend Reading

What If Obama Spent Like Reagan?