Government
The Big Myth on Inequality: It Just Happened
The standard line in policy circles about the soaring inequality of the last four decades is that it is just an unfortunate outcome of technological change….
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The standard line in policy circles about the soaring inequality of the last four decades is that it is just an unfortunate outcome of technological change. As a result of developments in technology, education is much more highly valued, and physical labor has much less value. The drop in relative income for workers without college degrees is unfortunate, and provides grounds for lots of hand wringing and bloviating in elite media outlets, but hey, what can you do?
Manufacturing plays a central role in this story, since it had historically been the major source of high-paying jobs for workers without college degrees. Manufacturing jobs offered a pay premium of almost 17.0 percent in the 1980s. This had fallen sharply by the start of the last decade, and had largely disappeared in more recent years.
This decline in the wage premium has coincided with a plunge in unionization rates in manufacturing. Close to 20 percent of manufacturing workers were unionized at the start of the 1980s. In 2021 just 7.7 percent of manufacturing workers were unions, only slightly higher than the private sector average of 6.1 percent.
The media endlessly hits us with the line that this is just an unfortunate outcome of technological progress. Washington Post columnist Catherine Rampell gives us the latest rendition this morning. The highlight is this graph showing that manufacturing had been seeing a steady decline in employment shares for the six decades from 1950 to 2010.
This is the basic, “nothing to see here” story.
There is another graph that shows a very different story. The graph below shows employment in manufacturing not as a share of total employment, but in absolute numbers. This one gives a very different picture.
From the start of 1970 to the middle of 1998 manufacturing employment has only a modest decline. There are cyclical ups and downs, but total job loss over this 28-year period was about 800,000, from 18.4 million in 1970 to 17.6 million in 1998, a decline of 4.4 percent.
However, the story becomes very different over the next decade. From the middle of 1998 to December of 2007, manufacturing lost almost 4 million jobs. This means that, after seeing a drop in employment of just 4.4 percent over 28 years, manufacturing saw a decline in employment of more than 22 percent in less than a decade. That looks like there is something to see here. (It lost another 2 million jobs in the Great Recession, which began in December of 2007.)
The item to see in this graph is the explosion in the trade deficit in this decade, with the deficit on goods peaking at more than 6.0 percent of GDP during this period. In short, a huge increase in the trade deficit coincided with a massive and unprecedented loss in manufacturing jobs. Can we hear again how those workers are stupid for blaming trade for their problems?
It Took More than Trade to Screw the Country’s Workers
But trade is not the whole story of the upward redistribution of the last decade. We also made government granted patent and copyright monopolies longer and stronger. We also encouraged the financial sector to become bloated, giving big paychecks to Wall Street types at the expense of the rest of us. And, we have a corrupt corporate governance structure which allows CEOs and other top management to line their pockets and rip off the companies they work for. And, we also made sure that highly paid professionals, like doctors and dentists, are protected from the same sort of competition that their less educated counterparts face.
This is the topic of Rigged [it’s free]. It’s also the focus of a video series I recently did with the Institute for New Economic Theory, How to Unf*ck America. (Coming soon to a theater near year.)
Perhaps what is most striking about the inequality just happened story is how deeply ingrained it is among people in policy circles. When we make policy decisions that are virtually guaranteed to redistribute income upward, the implications for inequality do not even get raised.
At the start of the pandemic the government paid Moderna $450 million to develop a coronavirus vaccine. It then paid another $450 million for its large-scale phase 3 testing. We then gave Moderna control over the intellectual property associated with the vaccine. The result was that we got at least five Moderna billionaires.
More recently Congress passed the CHIPS Act, which will involve tens of billions of dollars of subsidies to manufacturers of semiconductors and other cutting-edge products. Again, there seems to have been no debate about who will own the intellectual property.
Naturally, it will be the companies that get the contracts. This is like paying a company to build a factory and then letting them keep the factory. Oh well, as a consolation prize we will get more opportunities for rich liberals to whine about inequality.
Rampell’s colleague, Andrew Van Dam, had a piece a couple of weeks back that inadvertently showed how inequality is just taken for granted in policy circles. The highlight was where Van Dam gave us the “optimistic” view of how the increased globalization of many higher end jobs (jobs where people can work remotely) would turn out.
“Many economists are optimistic that American workers will land on their feet amid a gradual transition from a world in which they compete with a few dozen locals for each new job to one in which they compete with a few million professionals worldwide. But economists were optimistic about Y2K-era globalization as well, and it seems wise to keep a wary eye on the possible downside.”
Okay, let’s get out eyes on the ball here. How is it “optimistic” that the pay of more educated workers is not depressed as a result of international competition, as happened when their less-educated counterparts were subjected to international competition with low-cost labor?
As Rampell rightly points out in her piece, protecting domestic manufacturing means higher prices for manufactured goods. These higher prices are paid by everyone, which is a bad story when it comes to getting people to buy electric cars and solar panels. Getting these items from lower cost labor, whether from foreign sources, or domestic labor that has to take pay cuts due to competition, is good for consumers.
So why wouldn’t Van Dam see it as an optimistic story that we can get everything from accounting and legal services to medical consulting, at much lower cost due to increased international competition? Sure, our accountants, lawyers, and doctors would get lower pay, but this will mean lower prices for consumers and more economic growth. How could any self-respecting policy wonk see this as a bad thing?
As a practical matter, I am sympathetic to many of the points Rampell makes. Since the manufacturing wage premium has largely disappeared, it doesn’t make sense to put a major focus on getting back manufacturing jobs. (The politics may argue otherwise.)
But, if we want to improve the situation of less-educated workers in our economy, we have to reverse the ways we have structured the market to redistribute so much income upward. Unfortunately, this is a topic that is largely not considered suitable for discussion in the Washington Post and other elite media outlets.
The post The Big Myth on Inequality: It Just Happened appeared first on Center for Economic and Policy Research.
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Government
Low Iron Levels In Blood Could Trigger Long COVID: Study
Low Iron Levels In Blood Could Trigger Long COVID: Study
Authored by Amie Dahnke via The Epoch Times (emphasis ours),
People with inadequate…
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Authored by Amie Dahnke via The Epoch Times (emphasis ours),
People with inadequate iron levels in their blood due to a COVID-19 infection could be at greater risk of long COVID.
A new study indicates that problems with iron levels in the bloodstream likely trigger chronic inflammation and other conditions associated with the post-COVID phenomenon. The findings, published on March 1 in Nature Immunology, could offer new ways to treat or prevent the condition.
Long COVID Patients Have Low Iron Levels
Researchers at the University of Cambridge pinpointed low iron as a potential link to long-COVID symptoms thanks to a study they initiated shortly after the start of the pandemic. They recruited people who tested positive for the virus to provide blood samples for analysis over a year, which allowed the researchers to look for post-infection changes in the blood. The researchers looked at 214 samples and found that 45 percent of patients reported symptoms of long COVID that lasted between three and 10 months.
In analyzing the blood samples, the research team noticed that people experiencing long COVID had low iron levels, contributing to anemia and low red blood cell production, just two weeks after they were diagnosed with COVID-19. This was true for patients regardless of age, sex, or the initial severity of their infection.
According to one of the study co-authors, the removal of iron from the bloodstream is a natural process and defense mechanism of the body.
But it can jeopardize a person’s recovery.
“When the body has an infection, it responds by removing iron from the bloodstream. This protects us from potentially lethal bacteria that capture the iron in the bloodstream and grow rapidly. It’s an evolutionary response that redistributes iron in the body, and the blood plasma becomes an iron desert,” University of Oxford professor Hal Drakesmith said in a press release. “However, if this goes on for a long time, there is less iron for red blood cells, so oxygen is transported less efficiently affecting metabolism and energy production, and for white blood cells, which need iron to work properly. The protective mechanism ends up becoming a problem.”
The research team believes that consistently low iron levels could explain why individuals with long COVID continue to experience fatigue and difficulty exercising. As such, the researchers suggested iron supplementation to help regulate and prevent the often debilitating symptoms associated with long COVID.
“It isn’t necessarily the case that individuals don’t have enough iron in their body, it’s just that it’s trapped in the wrong place,” Aimee Hanson, a postdoctoral researcher at the University of Cambridge who worked on the study, said in the press release. “What we need is a way to remobilize the iron and pull it back into the bloodstream, where it becomes more useful to the red blood cells.”
The research team pointed out that iron supplementation isn’t always straightforward. Achieving the right level of iron varies from person to person. Too much iron can cause stomach issues, ranging from constipation, nausea, and abdominal pain to gastritis and gastric lesions.
1 in 5 Still Affected by Long COVID
COVID-19 has affected nearly 40 percent of Americans, with one in five of those still suffering from symptoms of long COVID, according to the U.S. Centers for Disease Control and Prevention (CDC). Long COVID is marked by health issues that continue at least four weeks after an individual was initially diagnosed with COVID-19. Symptoms can last for days, weeks, months, or years and may include fatigue, cough or chest pain, headache, brain fog, depression or anxiety, digestive issues, and joint or muscle pain.
Government
Walmart joins Costco in sharing key pricing news
The massive retailers have both shared information that some retailers keep very close to the vest.
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As we head toward a presidential election, the presumed candidates for both parties will look for issues that rally undecided voters.
The economy will be a key issue, with Democrats pointing to job creation and lowering prices while Republicans will cite the layoffs at Big Tech companies, high housing prices, and of course, sticky inflation.
The covid pandemic created a perfect storm for inflation and higher prices. It became harder to get many items because people getting sick slowed down, or even stopped, production at some factories.
Related: Popular mall retailer shuts down abruptly after bankruptcy filing
It was also a period where demand increased while shipping, trucking and delivery systems were all strained or thrown out of whack. The combination led to product shortages and higher prices.
You might have gone to the grocery store and not been able to buy your favorite paper towel brand or find toilet paper at all. That happened partly because of the supply chain and partly due to increased demand, but at the end of the day, it led to higher prices, which some consumers blamed on President Joe Biden's administration.
Biden, of course, was blamed for the price increases, but as inflation has dropped and grocery prices have fallen, few companies have been up front about it. That's probably not a political choice in most cases. Instead, some companies have chosen to lower prices more slowly than they raised them.
However, two major retailers, Walmart (WMT) and Costco, have been very honest about inflation. Walmart Chief Executive Doug McMillon's most recent comments validate what Biden's administration has been saying about the state of the economy. And they contrast with the economic picture being painted by Republicans who support their presumptive nominee, Donald Trump.
Image source: Joe Raedle/Getty Images
Walmart sees lower prices
McMillon does not talk about lower prices to make a political statement. He's communicating with customers and potential customers through the analysts who cover the company's quarterly-earnings calls.
During Walmart's fiscal-fourth-quarter-earnings call, McMillon was clear that prices are going down.
"I'm excited about the omnichannel net promoter score trends the team is driving. Across countries, we continue to see a customer that's resilient but looking for value. As always, we're working hard to deliver that for them, including through our rollbacks on food pricing in Walmart U.S. Those were up significantly in Q4 versus last year, following a big increase in Q3," he said.
He was specific about where the chain has seen prices go down.
"Our general merchandise prices are lower than a year ago and even two years ago in some categories, which means our customers are finding value in areas like apparel and hard lines," he said. "In food, prices are lower than a year ago in places like eggs, apples, and deli snacks, but higher in other places like asparagus and blackberries."
McMillon said that in other areas prices were still up but have been falling.
"Dry grocery and consumables categories like paper goods and cleaning supplies are up mid-single digits versus last year and high teens versus two years ago. Private-brand penetration is up in many of the countries where we operate, including the United States," he said.
Costco sees almost no inflation impact
McMillon avoided the word inflation in his comments. Costco (COST) Chief Financial Officer Richard Galanti, who steps down on March 15, has been very transparent on the topic.
The CFO commented on inflation during his company's fiscal-first-quarter-earnings call.
"Most recently, in the last fourth-quarter discussion, we had estimated that year-over-year inflation was in the 1% to 2% range. Our estimate for the quarter just ended, that inflation was in the 0% to 1% range," he said.
Galanti made clear that inflation (and even deflation) varied by category.
"A bigger deflation in some big and bulky items like furniture sets due to lower freight costs year over year, as well as on things like domestics, bulky lower-priced items, again, where the freight cost is significant. Some deflationary items were as much as 20% to 30% and, again, mostly freight-related," he added.
bankruptcy pandemic trumpGovernment
Walmart has really good news for shoppers (and Joe Biden)
The giant retailer joins Costco in making a statement that has political overtones, even if that’s not the intent.
Share this:
As we head toward a presidential election, the presumed candidates for both parties will look for issues that rally undecided voters.
The economy will be a key issue, with Democrats pointing to job creation and lowering prices while Republicans will cite the layoffs at Big Tech companies, high housing prices, and of course, sticky inflation.
The covid pandemic created a perfect storm for inflation and higher prices. It became harder to get many items because people getting sick slowed down, or even stopped, production at some factories.
Related: Popular mall retailer shuts down abruptly after bankruptcy filing
It was also a period where demand increased while shipping, trucking and delivery systems were all strained or thrown out of whack. The combination led to product shortages and higher prices.
You might have gone to the grocery store and not been able to buy your favorite paper towel brand or find toilet paper at all. That happened partly because of the supply chain and partly due to increased demand, but at the end of the day, it led to higher prices, which some consumers blamed on President Joe Biden's administration.
Biden, of course, was blamed for the price increases, but as inflation has dropped and grocery prices have fallen, few companies have been up front about it. That's probably not a political choice in most cases. Instead, some companies have chosen to lower prices more slowly than they raised them.
However, two major retailers, Walmart (WMT) and Costco, have been very honest about inflation. Walmart Chief Executive Doug McMillon's most recent comments validate what Biden's administration has been saying about the state of the economy. And they contrast with the economic picture being painted by Republicans who support their presumptive nominee, Donald Trump.
Image source: Joe Raedle/Getty Images
Walmart sees lower prices
McMillon does not talk about lower prices to make a political statement. He's communicating with customers and potential customers through the analysts who cover the company's quarterly-earnings calls.
During Walmart's fiscal-fourth-quarter-earnings call, McMillon was clear that prices are going down.
"I'm excited about the omnichannel net promoter score trends the team is driving. Across countries, we continue to see a customer that's resilient but looking for value. As always, we're working hard to deliver that for them, including through our rollbacks on food pricing in Walmart U.S. Those were up significantly in Q4 versus last year, following a big increase in Q3," he said.
He was specific about where the chain has seen prices go down.
"Our general merchandise prices are lower than a year ago and even two years ago in some categories, which means our customers are finding value in areas like apparel and hard lines," he said. "In food, prices are lower than a year ago in places like eggs, apples, and deli snacks, but higher in other places like asparagus and blackberries."
McMillon said that in other areas prices were still up but have been falling.
"Dry grocery and consumables categories like paper goods and cleaning supplies are up mid-single digits versus last year and high teens versus two years ago. Private-brand penetration is up in many of the countries where we operate, including the United States," he said.
Costco sees almost no inflation impact
McMillon avoided the word inflation in his comments. Costco (COST) Chief Financial Officer Richard Galanti, who steps down on March 15, has been very transparent on the topic.
The CFO commented on inflation during his company's fiscal-first-quarter-earnings call.
"Most recently, in the last fourth-quarter discussion, we had estimated that year-over-year inflation was in the 1% to 2% range. Our estimate for the quarter just ended, that inflation was in the 0% to 1% range," he said.
Galanti made clear that inflation (and even deflation) varied by category.
"A bigger deflation in some big and bulky items like furniture sets due to lower freight costs year over year, as well as on things like domestics, bulky lower-priced items, again, where the freight cost is significant. Some deflationary items were as much as 20% to 30% and, again, mostly freight-related," he added.
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