Tuesday, June 17, 2014

Wages, it's all about wages and labor's share

How do we explain how a place like Dallas, Texas, with its booming economy, continues to grow poorer and poorer at the bottom? 

Conventional wisdom would have us believe that a growing, vibrant economy--like we enjoy in Dallas--would begin to cut into the poverty rate in our city. 

But, it's just not happening. 

Why? 

Read on: 

Growth Has Been Good for Decades.
So Why Hasn’t Poverty Declined?
The surest way to fight poverty is to achieve stronger economic growth. That, anyway, is a view embedded in the thinking of a lot of politicians and economists.
 
“The federal government,” Paul Ryan, the House Budget Committee chairman, wrote in The Wall Street Journal, “needs to remember that the best anti-poverty program is economic growth,” which is not so different from the argument put forth by John F. Kennedy (in a somewhat different context) that “a rising tide lifts all boats.”
 
In Kennedy’s era, that had the benefit of being true. From 1959 to 1973, the nation’s economy per person grew 82 percent, and that was enough to drive the proportion of the poor population from 22 percent to 11 percent.
 
But over the last generation in the United States, that simply hasn’t happened. Growth has been pretty good, up 147 percent per capita. But rather than decline further, the poverty rate has bounced around in the 12 to 15 percent range — higher than it was even in the early 1970s. The mystery of why — and how to change that — is one of the most fundamental challenges in the nation’s fight against poverty.
 
Read the entire article here.
 
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