In a recent column for The New York Times, economist Paul Krugman wrote about the ongoing effects of the Reagan era in the United States. In the opinion piece, he refers to an article written by fellow economist Austin Frakt, who dove into the increase of U.S. health spending from the 1980s. In most developed countries, Frakt writes, health spending coincides with the increase in life expectancy. However, for the US, things took a turn for the worse since the 1980s. Healthcare spending began soaring beyond that of other advanced nations, but without the same benefits in life expectancy. Krugman uses Frakt’s findings and uses them to paint a broader picture: he looks at inequality (by Gini coefficient), household debt relative to income soaring and party polarisation. Each of these categories worsened since the beginning of the 80s: inequality increased, household debt rose and political parties became more polarised. His hypothesis on how this happened?
“A good guess, surely, is that the whole story is connected with the rise of modern movement conservatism”, Krugman writes, “which brought with it unequalizing economic policies, retreat from antitrust, financial deregulation, and more.” (source)
A story in the New York Times on Friday shed light on the relationship between student debt and homeownership in the US. The amount of people under the age of thirty owning a home is hovering near a three decade low, according to statistics from the FED: only 35 percent of people younger than 35 own a home. According to census data, this is down from 41 percent in 1982. At the same time, the nation’s student loan bill has exploded to $1.4 trillion, surpassing credit cards to become the largest source of personal debt outside mortgages. The Federal Reserve Bank of New York researched this development and its conclusion suggests that student debt was responsible for up to 35 percent (again) of the decline in homeownership among people between the ages of 28 and 30 from 2007 to 2015. Moreover, the study says that, if the amount of student debt would’ve stayed at the level of 2001, more than 360,000 people in that age group would have owned a home in 2015. (source)
Bloomberg made an interactive inventory of US companies that shows CEO pay ratios. The absolute outlier is Mattel Inc. which paid its Chief Executive Officer Margo Georgiad $31.3 million in 2017, resulting in a pay ratio of 4,987-to-1. The ratio drops to 1,527-to-1 when excluding the on-off compensation Georgiad received when signing her contract. Also, Mattel’s median employee pay is only $6,271 because most of its workers work in low cost countries. (source)
Last Tuesday was ‘Equal Pay Day’: it marks the number of extra days into 2018 that an average woman (in the US) has to work to earn as much as her male counterpart did in 2017. (In a way, it resembles Earth Overshoot Day.) The internet is flooded by visuals showing the pay gap. The visual above shows how white American women are paid just 80 cents for every dollar earned by men. But African America and Latinas earn even less. It also shows Asian men make slightly more than the average American men. (source)
On April 4th, the Chinese government announced tariffs on 106 products from the US, as a response to tariffs the US government issued on Chinese products the day before. Soybeans are a part of these tariffs, with a levy of 25% slapped on it. The US soybean trade to China is supposedly valued at $12 billion, and thus very important for farmers in the US midlands. As shown in the graph, made by the Washington Post, the soybean prices took an immediate hit and plummeted by more than five percent. One of the interesting effects of this could be that farmers, who usually plant their soy around this point in time, turn away from soy and plant corn instead.