News & Commentary

September 16, 2013

The Washington Post reports that the gap between the unemployment rates for the highest- and lowest- income American families is the largest it has been in a decade. The unemployment rate for families earning less than $20,000 per year is greater than 21 percent, while the unemployment rate for families earning more than $150,000 per year is 3.2 percent (a level that is generally regarded as full employment). The staggering unemployment rate for low-income families can be explained in part by the increase in middle-income workers who have been pushed into lower-wage jobs, displacing lower-income workers.

The Los Angeles Times notes that an increasing number of Americans are identifying themselves as “lower class.” One survey found that, in the past year, a record 8.4% of Americans categorized themselves this way. For decades, most Americans have seen themselves as “middle class” or “working class.”

In more local news, the Los Angeles Times observes that both businesses and organized labor won big victories in the California legislature at the end of the 2013 legislative year. Employers’ triumphs included tax breaks for job development. Meanwhile, labor secured a two-step increase in the minimum wage (which will reach $10 an hour in 2016).

The New York Times reports that yesterday was the deadline for management to settle a lockout of Minnesota Orchestra players. Nevertheless, both management and the players seem willing to continue negotiations.

The Washington Post reports that D.C. Councilmember and mayoral candidate Tommy Wells plans to introduce a bill that would raise the minimum wage in D.C. to $10.25 an hour.

The Post also profiles a bakery and catering business in Chantilly, Maryland, that hires many disabled workers; two-thirds of the bakery’s employees have intellectual disabilities.

An editorial in the Wall Street Journal suggests that the AFL-CIO’s decision to offer membership to non-union members is an acknowledgment that unions are placing increasing emphasis on their political activities. The piece also argues that, there is a “great contradiction” at the heart of the modern, political labor movement: “Its progressive agenda does little or nothing for workers in the private economy and often directly harms them.”

In the New York Times, Paul Krugman urges the Federal Reserve’s Open Market Committee not to announce a “taper” — a slowing of the pace at which the Federal Reserve buys long-term assets. Krugman argues that, in the face of uncertainty about when a taper should be announced, the Fed should acknowledge that announcing a taper too late would probably be less harmful than announcing it too early; while announcing a taper too late could cause (modest) inflation, announcing it too soon would cause significant increases in unemployment.

In international news, the Washington Post discusses a confrontation between riot police and school guards who were striking outside a ministry in central Athens. Across Greece, labor unions are gearing up for a series of public sector strikes over job cuts. Meanwhile, the Wall Street Journal observes that workers in the Eurozone suffered a decrease in real wages as second-quarter wage growth lagged behind the rate of inflation.

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