Stuff you should know (to Win Arguments and Influence Nutjobs!) - PowerPoint PPT Presentation

Stuff you should know (to Win Arguments and Influence Nutjobs!) Santa Clara, CA Sylvia A. Allegretto Center on Wage & Employment Dynamics University of California, Berkeley

Econ 101 (in very colorful but not so pretty pictures)  This is a man made mess  This presentation will either…  put you to sleep  or piss you off  Ayn Rand is popping bennies & partying like it’s 1929!  Greenspan didn’t know banks wouldn’t regulate themselves…what?  Have you seen Inside Job!!  We’re screwed without big changes Allegretto Council 57, 2011

The only deficit that matters… 2% CA 2 0 0 1 CA 1 9 9 0 0% 0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 -2% -4% US today ( as of Aug. ’1 1 ) -5 .0 % or -6 .8 m illion -6% CA today! ( as of Aug. ’1 1 ) -8% -7 .5 % or -1 .1 m illion -10% Source: Sylvia Allegretto’s analysis of Current Employment Statistics data. Allegretto Council 57, 2011

The rich are getting richer! Trickle up economics 1983-2009 0.5 41.5% 40.2% 0.4 0.3 0.2 10.2% 9.8% 0.1 5.7% 0 -1.4% -2.0% -4.1% -0.1 Lowest Lower Middle fifth Upper Next 10% Next 5% Next 4% T op 1% fifth (0- middle (40-60) middle (80-90) (90-95) (95-99) (99-100) 20) (20-40) (60-80) Source: Allegretto 2011 “The State of America’s Wealth 2011” Allegretto Council 57, 2011

Work Vs. a call to your broker Taxes on Investments Are Historically Low 40% 35% op Capital Gains Tax Rates 30% 1945 25.0% 25% 20% T 15% 2011 15.0% 10% Source: Citizens for Tax Justice

What/Who is to Blame for State Budget Gaps? The Housing Bust & the Great Recession!!! Allegretto Council 57, 2011

CEOs of Bell. Robert Rizzo, former city manager of Bell, California, was making $787,638 per year in that position. Allegretto Council 57, 2011

Educational attainment of California’s workers 4 0 % Private sector w orkers 3 4 % 3 5 % State & local governm ent 3 0 % w orkers 2 4 % 2 5 % 2 2 % 2 1 % 2 0 % 2 0 % 1 7 % 1 5 % 1 3 % 1 2 % 1 2 % 1 1 % 9 % 1 0 % 5 % 3 % 0 % Less than high High School Som e College Associates Bachelors Advanced school degree degree degree* Source: Allegretto & Keefe CWED Brief October 2010. Allegretto EARN 2011

Comparison of CAs public vs. private sector earnings and total compensation 2.00% Annual Earnings 1 .0 7 % Annual Total Com pensation 0 .8 9 % 1.00% 0 .0 1 % 0.00% -1.00% -2.00% -3.00% -4.00% -5.00% -6.00% -7.00% -7 .5 5 % * -8.00% -7 .7 7 % * * -7 .8 6 % * * -9.00% State & Local Governm ent State Governm ent Local Governm ent Note: **1% and *5% significance levels. Allegretto Council 57, 2011 Source: Allegretto & Keefe CWED Brief October 2010.

80 Number of State and Local Government 70 Employees Per 1,000 Residents 60 50 The States With The Lowest Public 40 Union Density 30 The States With The Highest Public Union Density 20 10 0 Source: U.S. Census Bureau and the U.S. Bureau of Labor Statistics Allegretto 2011

18% 16% 15.2% 14.7% 14.4% 14.5% 14% Share of State and Local Workers 12% 14.6% Aug-11 10% 8% 6% 4% 2% 0% 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 Source: U.S. Bureau of Labor Statistics, Current Employment Statistics Allegretto 2011

140 State and Local Workers Per 1,000 Residents 120 100 80 60 40 20 0 0 10 20 30 40 50 60 70 80 Public Union Density Source: U.S. Census Bureau and the U.S. Bureau of Labor Statistics Allegretto 2011

H ∏ ∑ = β + ± Χ ξ + β + λ ⋅ + ϕ ⋅ + + ε ln Gap ln House unemp edu ln hrs st 0 1 st ist > 0 h < < ∞ where : 0 R > ∞ ∏ ϕ ≅ lim . 271 and b α > φ **this is a joke!!** Allegretto Council 57, 2011

The Housing Bust Specifications (1) (2) Controls: Public sector union density coeff 0.245* 0.114 se (0.097) (0.082) House price decline coeff -- -0.561** se -- (0.11) Set of union dummy variables N N Adjusted R 2 0.096 0.421 Note: **1% and *5% significance levels. FHFA State house price change 2005-10. Allegretto Council 57, 2011 Unionstats.org 2009 public sector union density. Union effects from AFSCME compiled data.

Largest Shortfall on Record Last Recession 2002 2003 2004 2005 2009 2010 2011 2012 2013 Total state budget shortfall in each FY, in billions -$40 -$45 -$46** -$75 -$80 -$103* -$110 -$130* -$191 *Reported to date ;** Preliminary Allegretto 2011 Source: Center on Budget and Policy Priorities 2011

What the hell has been going on? The “Free Market” is BS rhetoric

“I am trying to enjoy the fruits of my labor...” ~Lucinda Williams 450.0 400.0 Productivity 350.0 I ndex ( 1 9 7 3 = 1 0 0 ) 300.0 250.0 Average hourly compensation 200.0 150.0 Average hourly wage 100.0 1947 1951 1955 1959 1963 1967 1971 1975 1979 1983 1987 1991 1995 1999 2003 2007 Allegretto Council 57, 2011

Widening wedge of wage inequality 140.0 95th Guys 130.0 90th 80th 120.0 I ndex ( 1 9 7 3 = 1 0 0 ) 110.0 50th 100.0 10th 90.0 20th 80.0 70.0 1973 1977 1981 1985 1989 1993 1997 2001 2005 2009 Source: Economic Policy Institute’s analysis of CPS data Allegretto Council 57, 2011 downloaded from stateofworkingamerica.org

Widening wedge of wage inequality 170.0 95th 90th 160.0 Galz 150.0 80th I ndex ( 1 9 7 3 = 1 0 0 ) 140.0 130.0 50th 10th 120.0 20th 110.0 100.0 90.0 80.0 1973 1977 1981 1985 1989 1993 1997 2001 2005 2009 Source: Economic Policy Institute’s analysis of CPS data Allegretto Council 57, 2011 downloaded from stateofworkingamerica.org

The not so invisible hand 15.9% Bottom 90 percent 36.4% 9.4% T op 0.1 Next 5 percent percent 57.5% Next 4 percent 19.1% Rest of top 1 percent 21.1% Source: EPI analysis of Piketty & Saez 2009. Allegretto Council 57, 2011

The Dow ain’t gonna save you 100% 90% Top 1% 80% 70% 60% 50% Next 9% 40% 30% 20% Next 10% 10% Middle 20% Next 20% Bottom 40% 0% 1989 1992 1995 1998 2001 2004 2007 Source: Allegretto 2011. Allegretto Council 57, 2011

A question of ideology… A century of change in reverse:  Unions leveling the playing field  Progressive tax structure  Investments in education  Workers’ compensation  Unemployment Insurance  Social security & Medicare  Child labor laws  Pension plans & dignity in retirement  Employer provided health care Allegretto 2011

Oh, Oh, Oh, Oh just like a YoYo ~The Osmonds 1971 smash hit #3 Billboard Hot 100!  Rise & fall on merit or luck  Doubling down on free market ideals  Dismantling of public services & goods  Shrinking social & worker safety nets  Anti-labor sentiment & regulation  Erosion of workers rights Shifting the tax, health care & retirement  burden to workers  Vilified public sector workers & government Allegretto 2011

The U United C Corpora porations tions rica? of America? A Plutocracy of the 1%, by the 1%, for the 1%