Month: June 2022

Visualizing the Coming Shift in Global Economic Power (2006-2036p)

Mary Pat Campbell

Link: https://www.visualcapitalist.com/shifting-global-economic-power/

Graphic:

Excerpt:

China is expected to surpass the U.S. by the year 2030. A faster than expected recovery in the U.S. in 2021, and China’s struggles under the “Zero-COVID” policies have delayed the country taking the top spot by about two years.

China has maintained its positive GDP growth due to the stability provided by domestic demand. This has proven crucial in sustaining the country’s economic growth. China’s fiscal and economic policy had focused on this prior to the pandemic over fears of growing Western trade restrictions.

Author(s): Raul Amoros

Publication Date: 13 Jun 2022

Publication Site: Visual Capitalist

15 States Where Older Adults Are Going Back to Work

Mary Pat Campbell

Link: https://www.thinkadvisor.com/2022/06/09/15-states-where-older-adults-are-going-back-to-work/

Excerpt:

Two years after the pandemic hobbled the U.S. economy, pushing up unemployment, Americans are returning to work, including many adults 65 and older, according to new research from MagnifyMoney.

In late April and early May this year, 21.9% of Americans 65 and older were working, up from 19.5% during the same period in 2020. At the same time, the share of U.S. adults who reported that they were retired rose to 17.4% in April and May 2022 from 14.9% two years earlier.

MagnifyMoney found that 25.6% of working older Americans are self-employed, more than triple the rate among working Americans 25 to 39.

The number of working older Americans varies dramatically across the country. In North Dakota, for example, the rate dropped by 11 percentage points over the two-year period, and in Wisconsin by 8.3 points. In contrast, several states saw double-digit increases in employed Americans 65 and older during that period.

Author(s): Michael S. Fischer

Publication Date: 9 Jun 2022

Publication Site: Think Advisor

To Fight Inflation, The Fed Declares War On Workers

Mary Pat Campbell

Link: https://www.levernews.com/the-fed-declares-war-on-workers/

Excerpt:

New inflation data released Friday offered dismal news: Historic price increases aren’t showing any signs of abating, and in fact may be accelerating.

What can be done? Federal Reserve Chairman Jerome Powell has an idea: throw cold water on the hot labor market — perhaps the one bright spot in the current economy.

In fact, Powell recently screamed the quiet part out loud, making clear the largest central bank in the world is in fact an adversary to workers, when he declared that his goal is to “get wages down.”

At a May 4 press conference in which he announced a .5 percent interest rate hike, the largest since the year 2000, Powell said he thought higher interest rates would limit business’ hiring demand and lead to suppressed wages. As he put it, by reducing hiring demand, “that would give us a chance to get inflation down, get wages down, and then get inflation down without having to slow the economy and have a recession and have unemployment rise materially.”

Author(s): Julia Rock

Publication Date: 13 Jun 2022

Publication Site: The Lever

As our entitlements crisis gets closer, a solution moved farther away

Mary Pat Campbell

Link: https://www.washingtonpost.com/opinions/2022/06/09/social-security-medicare-crisis-approaching/

Excerpt:

The annual Social Security trustees report is once again upon us, and this year it actually bears some good news: The projections give us an extra year before the trust fund is exhausted in 2035.

At least, this sounded like good news when I first heard it. Then I remembered that I have been writing about these trustees reports for more than 15 years. When I started, all these projections sounded comfortably far off — we had decades to fix the problem! Now we have 13 years. And in all that time, we have done nothing at all, except watch the date of insolvency advance.

In 2008, it was 2040, and the people likely to be worst affected — those who would be eligible to retire just as the trust fund was exhausted — were 35. Now, the people facing the most disruption are 54, much closer to retirement than to their college graduation.

In the meantime, the politics of fixing America’s old-age entitlements has gotten considerably worse.

Author(s): Megan McArdle

Publication Date: 9 June 2022

Publication Site: Washington Post

The state pension – a creaking centenarian

Mary Pat Campbell

Link: https://cpd180322.pensions-expert.com/

Graphic:

Excerpt:

Separate SPAs for men and women were introduced in 1940 — age 65 for men and 60 for women, with a decision to equalise the SPA for men and women trailed in the 1993 white paper ‘Equality in state pension age’. Now that the same age applies for both men and women, at 66, there is still huge controversy over the notice period and quality of information given to women over the age of 50 on the exact timetables for this change. 

Demography has increasingly put the whole system under strain. Andrew Tully, technical director at Canada Life, warns: “By 2045, the number of people of pensionable age will grow to 15.2mn, an increase of 28 per cent on the level in 2020. The ‘oldest old’ cohort is also increasing, with the number of people aged 85 and over projected to almost double to 3.1mn by 2045. 

“At the same time, the working age population will increase by much less — around 4.5 per cent up by the mid-2030s, but then remaining around that level by 2045. Meanwhile, we are seeing a decrease in the number of children, with those aged 0 to 15 projected to fall by nearly 9 per cent by mid-2030.”

Author(s): Stephanie Hawthorne

Publication Date: 18 March 2022

Publication Site: Pensions Expert

Consumer Price Index, 1913-

Mary Pat Campbell

Link: https://www.minneapolisfed.org/about-us/monetary-policy/inflation-calculator/consumer-price-index-1913-

Excerpt:

The U.S. Bureau of Labor Statistics (BLS) began collecting family expenditure data in 1917 and published its first price indexes for select cities in 1919. In 1921, the BLS published a national consumer price index (CPI), including estimates of the CPI back to 1913. The data and methods starting in 1913 are considered generally compatible through the present day; however, the Minneapolis Fed maintains a separate historical table that includes estimates prior to 1913.

The data below use 1983 as the index (1983=100). This chart uses data from the sole measure of CPI available until 1978, after which it reflects the CPI for all urban consumers (CPI-U). The current year’s inflation figures reflect the most recent quarterly data.

You can use the Minneapolis Fed’s inflation calculator to instantly compare the buying power of past and present dollars. However, you can also use the Annual Average CPI numbers below (center column) to make manual calculations. To find out how much a price in Year 1 would be in Year 2 dollars:

Publication Date: Date Accessed 10 June 2022

Publication Site: Minneapolis Federal Reserve Bank

Providence Voters Approve of $515 Million in Pension Obligation Bonds

Mary Pat Campbell

Link: https://www.ai-cio.com/news/providence-voters-approve-of-515-million-in-pension-obligation-bonds/

Excerpt:

The city of Providence’s pension fund, which is among the most underfunded in the country, just got one step closer to approving $515 million in pension obligation bonds. A majority of voters cast ballots in favor of the mayor’s proposal to issue $515 million in bonds in a non-binding referendum. While the results do not give Mayor Jorge Elorza the authority to issue the bonds, they do help build his case to the state, whose approval he needs to issue the bonds.

…..

Pension obligation bonds are essentially loans that the pension takes out with a fixed interest rate. The hope is that investment returns exceed the interest rate on the bonds, thus allowing the pension fund to increase its funded ratio. However, a recession or investment downturn could lead to the pension losing money on the bonds. Such was the case in Puerto Rico when it issued pension obligation bonds in 2008. While a total collapse like what occurred in Puerto Rico is unlikely to happen in Providence, according to experts,

Public pensions have more than doubled their borrowing this past year, according to S&P Global. In 2020, the S&P rated $3 billion in public pension bond issuances. In contrast, the S&P rated $6.3 billion in public pension bond issuances between January 1 and September 15, 2021. However, as interest rates begin to rise again, bond issuances will likely decrease again.  

Author(s): Anna Gordon

Publication Date: 9 June 2022

Publication Site: ai-CIO

EXECUTIVE EXCESS 2022

Mary Pat Campbell

Link: https://ips-dc.org/report-executive-excess-2022/

Graphic:

Excerpt:

  • Taxpayer dollars are fueling corporations with extreme CEO-worker pay gaps.
    • Of the 300 companies in our sample, 40 percent received federal contracts between October 1, 2019 and May 1, 2022. The combined value of these contracts was $37.2 billion.
    • At these low-wage contractors, the average CEO-worker pay ratio hit 571 to 1 in 2021. Only 6 of the 119 contractors had pay gaps of less than 100 to 1.
  • Policy solutions for runaway CEO pay do exist — and enjoy broad support.
    • Some 62 percent of Republicans and 75 percent of Democrats support an outright cap on CEO pay relative to worker pay.
    • While a hard cap is unlikely, other CEO pay reforms have also gained traction in recent years. These reforms focus on three key areas:
      • CEO pay ratio incentives for federal contractors
      • Excessive CEO pay taxes
      • Stock buyback restrictions and taxes

Author(s): SARAH ANDERSON | SAM PIZZIGATI | BRIAN WAKAMO

Publication Date: Accessed 10 June 2022

Publication Site: Institute for Policy Studies

The CEO-to-Worker Pay Gap Is Climbing to Truly Obscene Levels

Mary Pat Campbell

Link: https://jacobin.com/2022/06/ceo-worker-pay-gap-obscene-levels-lowest-median-wages

Excerpt:

A new report from the Institute for Policy Studies (IPS) analyzes compensation at the three hundred publicly held US corporations with the lowest median wages in 2020. The report, authored by Sarah Anderson, Sam Pizzigati, and Brian Wakamo, finds that the average gap between CEO and median worker pay jumped to 670:1 in 2021, up from 604:1 in 2020. Forty-nine of the firms had ratios above 1,000:1.

Wages at 106 of the firms did not keep pace with the 4.7 percent average US inflation rate last year, and of those, sixty-seven spent resources buying back their own stock, with repurchases totaling $43.7 billion. The biggest buybacks took place at Lowe’s, Target, and Best Buy. As the IPS notes, “With the $13 billion Lowe’s spent on share purchases, the company could have given each of its 325,000 employees a $40,000 raise. Instead, median pay at the company fell 7.6 percent to $22,697.” None of the big-box stores’ retail workers are currently unionized, though there are nascent union campaigns underway at several Target stores.

Of the three hundred companies analyzed by the IPS, 40 percent received federal contracts between October 1, 2019 and May 1, 2022, for a combined value of $37.2 billion. Only six of the 119 contractors had pay gaps of less than 100:1. Maximus, a company that handles federal student debts and Medicare call centers, took in the most federal contracts of any of the firms, with $12.3 billion during the period under consideration. IPS notes that Maximus CEO Bruce Caswell made $7.9 million in compensation, or 208 times the firm’s median income and thirty-six times the salary of the officials who direct the agencies awarding the contracts.

Author(s): Alex N. Press

Publication Date: 7 June 2022

Publication Site: Jacobin

Why For-Profit Workplace Insurance Ruins Workers’ Lives

Mary Pat Campbell

Link: https://jacobin.com/2022/06/victoria-australia-workers-comp-private-insurance

Excerpt:

In Victoria, Australia, a broken workplace injury compensation system is letting workers down. WorkSafe is the state’s institution that regulates industry safety standards and governs workplace injury insurance. However, its workers’ compensation arm, WorkCover, outsources the handling of workers’ compensation claims to private insurance companies that place profit ahead of the health of our communities’ most vulnerable members.

Deprived of a political voice that can stand for them, injured workers report being stalked by private investigators in order to force them back into work before they have recovered. This frequently exacerbates their injuries and triggers new and often debilitating psychological harm. This harassment is most often targeted at workers with long-term injuries or those who are homebound as a result of their injuries.

Recently, however, injured workers from across Victoria have started coming together to campaign for change. Most importantly, they are demanding an end to outsourcing essential social services to private insurance agents who have an interest in cutting workers off from compensation payments as soon as possible. For these efforts to bear fruit, however, it’s crucial to understand the origins of the existing system that prioritizes insurance companies’ profits over injured and sick workers’ health.

Author(s): Reece Gittins

Publication Date: 9 June 2022

Publication Site: Jacobin

A Four-Day Workweek Will Benefit Everyone, But Especially Women

Mary Pat Campbell

Link: https://jacobin.com/2022/03/four-day-workweek-trial-gender-pension-gap

Excerpt:

A four-day week would make it easier to balance life and work responsibilities. This would decrease the pressure on women to drop out of full-time employment and make it easier for others to rejoin full-time employment if they wish. It would also decrease underemployment, lessen the costs of paid childcare, and help level the playing field for unpaid care work by keeping men at home longer.

A recent policy paper published by the Women’s Budget Group comments in regard to a four-day week: “As the marginal worker is usually female, this effect could reduce gender gaps in both employment and income.” As the definition of full-time employment is decreased, more women will surpass the £10,000 a year threshold for autoenrollment and also have higher sustained pension contributions throughout their working life.

Belmont Packaging in Wigan, a company that practices a four-day week, asked its employees how they spend their three-day weekend. One employee said, “It’s like a bank holiday every week. Not exactly like one, because the wife has me doing chores every Friday.” During the early months of the pandemic, when many workers were kept at home, research showed that men took on a greater share of housework and women’s disproportionate burden decreased.

Author(s): James Derry

Publication Date: 25 March 2022

Publication Site: Jacobin

Fewer than 4000 people just approved boosting Providence Rhode Island liabilities by $515 million

Mary Pat Campbell

Link: https://marypatcampbell.substack.com/p/fewer-than-4000-people-just-approved?s=w

Graphic:

Excerpt:

Yes, for over five years now, they’ve been contribution more than 50% of payroll to the pension plan as the full contribution to the pensions.

In the past, they mostly contributed the full requirement, though in some years they didn’t. The requirement used to be less than 50%, but when you short the fund, and when you underperform on investments (which we will see in a bit), that’s expected, right?

So let’s see how the funded ratio has been doing — for all these full payments, the funded ratio must be healthy, correct? [if you didn’t read my excerpts above]

Author(s): Mary Pat Campbell

Publication Date: 10 June 2022

Publication Site: STUMP at substack