The state & inequality

Imagine a tax system in which the first £10,000 of income is tax-free, the next £40,000 is taxed at 20%, and incomes above £50,000 are taxed at 50%.

Yesterday Arin Dube gave a testimony at the Senate HELP committee hearing on minimum wage and indexation. His written testimony is almost 20 pages long, but the one page executive summary included below notes the key points on inequality, employment, turnover and frictions, prices, poverty, and complementarity with EITC. [There is also a video of the hearing.] Executive Summary

Today, the U.S. Census Bureau released their report on Income, Poverty, and Health Insurance Coverage in the United States in 2011. As we continue to fight back from the worst economic crisis since the Great Depression, the Income, Poverty and Health Insurance Coverage report released today provides further evidence of how critical it is that we implement policies that benefit and create security for struggling families and our middle class—and not just the wealthiest Americans.  Today’s report shows that while too many American families are still struggling, the nation’s poverty rate fell and the percentage of Americans with health insurance coverage rose in 2011. It is clear that had President Obama not taken swift and aggressive action to grow our economy and create jobs, today’s report would have shown much higher poverty rates, lower incomes, and a greater share of the population without health insurance.  Though our poverty rate remains unacceptably high, this report shows that the poverty rate ticked down in 2011 after rising for several years in the wake of the Great Recession. Poverty fell for all age groups, including children, elderly, and non-elderly adults. A key reason for this decline was that 2.2 million more people had full-time jobs last year, in part because unemployment fell by 0.9 percentage points from December 2010 to December 2011. Government programs also continued to provide a vital safety net. 

While the dismal news of endlessly rising food stamp recipients in the US seems to be glossed over by most of the media because, well, stock markets are at all-time highs, in Britain, things are becoming increasingly awful. As the FT reports, the number of people receiving emergency food rations has surged from 130,000 to almost 350,000 in the past year.

Ian Fletcher claims here that "Free Trade Isn't Helping World Pov

Wage inequality is falling. This is one message from yesterday’s Annual Survey of Hours and Earnings.

Sunder and Left Futures do a good job of rebutting Blair’s claim that Labour lost the election because it was insufficiently New Labour. But there’s something to add.