Sunday Morning Links

This and that for your Sunday reading.

- Alex Morris writes about the barriers between the U.S.' working class and any hope of financial stability and security:

In 1960, the annual average health care costs in America were just $146 per person; in 2016, that figure had risen to $10,348. Over the past few decades, the cost of attending a four-year public college has risen more than 200 percent, which helps explain why Americans now have $1.4 trillion of student-loan debt. The median home value also rose dramatically, from around $3,000 in 1940 (or around $30,000 in inflation-adjusted terms) to more than $200,000 today. And for those who can’t afford to own, renting is problematic as well: A 2017 report by the National Low Income Housing Coalition determined that there is now literally nowhere in America where a minimum-wage worker can afford to rent a two-bedroom apartment.

Meanwhile, as costs have risen, the relative amount of money that many American workers earn has gone down. From the early Seventies until 2017, productivity (the amount of goods and services created in an hour of work) has grown by almost 77 percent, but the inflation-adjusted amount workers are paid for that productivity has only grown by about 12 percent (by way of comparison, from the late 1940s to the early 1970s, compensation rose by about 90 percent). Increased productivity expands the economy, driving certain prices up, which means that the cost of living has been rising faster than incomes for more than 40 years. “That’s kind of all you need to know,” says Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities. “It’s not so much that people are worse off as much as that they haven’t kept up.”

Though certainly, they’ve tried. Much of the (paltry) growth in household income over the past 40 years has occurred because — often out of necessity — people are simply working more. What Bernstein has seen is that “families have had to work harder, work longer hours, spend more time in the job market, send more people to work in order to keep from falling behind.”
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(T)he shift from a manufacturing to a service economy has had an effect, since service work — scrubbing toilets, flipping burgers, running day cares rather than doing something that produces a tangible product — is somehow viewed as “lesser” and therefore commands a lower rate. But all of these explanations would make more sense if the economy overall were suffering. It isn’t. Only its workers are.

And that’s happened, not because of economic forces beyond our control, but rather because government and corporate choices have been made that prioritize the wealth of a few people over the welfare of the many. The perverse incentives of tying executive pay to the price of stock have transformed the American worker from a stakeholder into merely an expenditure, from someone whose cultivation and training benefit the company into a mere line item for the next quarter. “Something like 80 percent of officers admit that they would forgo an investment in their company that has long-term benefits if it meant missing that quarter’s earnings,” says Rick Wartzman, author of The End of Loyalty: The Rise and Fall of Good Jobs in America. “It’s disturbing stuff. And the effects are just profound.”

- Sarah Jaffe points out the dangers of allowing a single corporation to exercise the type of overwhelming influence on political decision-makers that Amazon has been able to assemble. Allie Conti muses about the superior results if public money were used to reduce student debt rather than to enrich corporate giants. And Laura Bliss discusses how big box stores are using the overbuilding encouraged through municipal tax breaks to argue they should never have to pay their fair share in property taxes.

- Andrew Jackson reviews Adam Tooze's Crashed as a useful look at the causes and effects of the 2008 economic meltdown. And Maureen Dowd comments on the lasting fallout of the U.S.' choice to avoid any consequences for the architects of inequality and financial meltdowns.

- Mariana Mazzucato discusses the importance of building an economy to generate lasting collective value, not merely to allow for financial profits to be extracted in the short term.

- Finally, Jacob Bastian and Maggie Jones examine (PDF) the net cost of the U.S.' earned income tax credit, finding that it nearly pays for itself even based on immediate returns to the public purse alone before accounting for other improvements in health and well-being. And Lindsay Tedds identifies some of the problems with Doug Ford's plan to replace scheduled wage increases for all lower-income workers with a gimmicky tax scheme.