Princeton University professor Alan Krueger dives deep into the problem of long-term unemployment in a new paper to be presented Thursday at the Brookings Institution. He calls people who have been out of a job for six months or more an “unlucky subset of the unemployed” who exist on the margins of the economy -- with faint hope of returning to productivity. Here are five takeaways from his paper, co-authored with Judd Cramer and David Cho of Princeton.
Raising the minimum wage is so hot right now. President Obama, of course, proposed increasing the federal minimum from $7.25 to $9 an hour, and indexing it to inflation thereafter, in this year's State of the Union address. Rep. George Miller (D-CA) and Sen. Tom Harkin (D-IA) introduced legislation to established a $10.10 an hour minimum. The Center for American Progress's massive economic growth plan calls for setting the minimum at one half the average wage for production and non-supervisory workers; at the current average, that means a minimum of $10.04 an hour. A recent report from the New America Foundation's Michael Lind includes a long argument for the superiority of the minimum wage to other means of raising wages, like the Earned Income Tax Credit.
It is exceedingly rare for a White House chief economist to give a speech on rock-and-roll. But Alan Krueger is scheduled to do just that Wednesday evening at the Rock & Roll Hall of Fame in Cleveland. His talk there (a text was made available in advance) is a terrific window into how the music business explains the forces shaping our collective economic fortunes.
"Remember, anyone who attacks our Medicare proposal without offering a credible alternative is complicit in the program's demise," wrote Rep. Paul Ryan (R-Wis.) in the Wall Street Journal.
This is a key argument Republicans use to deflect criticism of their health-care plans. It's classic politics of conviction: You might not like what they've proposed, but at least they've proposed something. As Treasury Secretary Timothy Geithner used to say, "plan beats no plan."
In his latest post analyzing fourth quarter gross domestic product data, White House chief economist Alan Krueger offers a chart that tells you most of what you need to know about the U.S. economy circa 2013.
Through 2008 and 2009, it shows, the private sector in the United States was contracting on a huge scale. Consumer spending, business investment and residential investment all were plummeting. At that time, government spending soared, both from the fiscal stimulus package enacted at the start of 2009 and automatic increases in social welfare programs that kick in when the economy is weak, like unemployment insurance benefits.
On Friday morning, Alan Krueger, the Princeton economist who is on leave serving as chairman of the White House Council of Economic Advisers, gave a speech at the Center for American Progress on the causes and consequences of inequality. Excerpts here, full speech here. On Thursday night, I spoke with Krueger about the speech, his past as an inequality skeptic, and Rep. Paul Ryan’s allegation that the Obama administration is looking for “equality of outcomes.” A lightly edited transcript follows.
This morning, Alan Krueger, the chairman of the President’s Conuncil of Economic Advisers, gave a speech on inequality at the Center for American Progress. Prepared remarks here. Charts here. These are the parts that caught my eye:
- “I used to have an aversion to using the term inequality. The Wall Street Journal ran an article in the mid-1990s that noted that I prefer to use the term ‘dispersion’. But the rise in income dispersion – along so many dimensions – has gotten to be so high, that I now think that inequality is a more appropriate term.”
- “As the Congressional Budget Office noted in a recent report, the top 1 percent of families saw a 278 percent increase in their real after-tax income from 1979 to 2007, while the middle 60 percent had an increase of less than 40 percent.”