Education Job Losses Finally Ending?

March 9, 2012 at 1:54 pm

After several years of bad employment news in the education sector, today’s jobs report suggests that school districts are starting to hire again.  But, this good news for students, teachers, communities, and the economy comes with several caveats, as I explain below.

State and Local Payrolls Have Shrunk DramaticallyNew and newly revised data from the Bureau of Labor Statistics (BLS) shows that local school districts added 5,000 jobs in February.  State colleges and universities added 2,000 more.  That’s on top of the 15,000 education jobs added in January, according to BLS’s revised numbers. This is the first time since late 2009 that the nation’s schools have added jobs for two months in a row.

As for the caveats:

First, state and local government employment outside of education, which includes law enforcement, parks, transportation, and so on, fell by 7,000 jobs.  So, even with an increase in education, state and local employment in aggregate was flat.

Second, when it comes to aggregate state and local employment, we still have a long way to go in order to recoup the job cuts of recent years.  States, localities, universities, and school districts have cut 647,000 jobs since overall state and local employment peaked in August 2008 (see graph).

Third, even as the number of state and local employees has fallen, the need for the services they provide has risen.  There are more students in public schools and in public colleges and universities, so these institutions need more personnel just to accommodate the rise in the number of students that they teach.  The number of participants in various public programs has grown as well — as has the entire U.S. population, which relies on states and localities to provide health, transportation, public safety, and other services.

Today’s Jobs Report in Pictures

March 9, 2012 at 9:28 am

Today’s was another solid employment report.  Nevertheless, the economic recovery still has a long way to go to erase the lingering effects of the Great Recession and restore full employment and a healthy labor market.

Below are some charts to show how the new figures look in historical context. Read our statement with further analysis.

See our chart book for more charts.

Things Looking Up at the Top, Down at the Bottom

March 8, 2012 at 3:53 pm

My latest post for US News & World Report juxtaposes two new studies on the nation’s highest- and lowest-income people:

  • A study from Berkeley economist Emmanuel Saez, updating the Piketty-Saez data on income concentration to include data from 2009 and 2010, showed that the top 1 percent’s share of total income — which has surged in recent years to levels last seen in the Roaring Twenties — was on the rise again in 2010, the first full year of the economic recovery.
  • A study from the National Poverty Center showed that the number of extremely poor Americans — those living on less than $2 per person a day—more than doubled between 1996 and 2011, to 1.46 million.

Connecting the dots, I concluded:

So, things are very good and getting better for those at the very top. Meanwhile, extreme poverty has increased significantly at the very bottom. The block-granting of cash assistance in TANF [in the 1996 welfare reform law, which has led to a sharp drop in TANF benefits] appears to be an important factor contributing to the rise in extreme poverty, although SNAP [food stamp] benefits have filled some of the gap.

Doesn’t that make you wonder about the priorities of policymakers who block every effort to restore tax rates at the top to the levels that prevailed in the very strong 1990s economic expansion, while they argue for policies that weaken the safety net by replicating TANF and turning effective programs like SNAP into block grants?

Income Growth at the Top Mostly Occurring at the Tippy-Top

March 8, 2012 at 11:03 am

As our new report on the latest analysis of IRS data by economists Thomas Piketty and Emmanuel Saez shows, the share of before-tax income going to the top 1 percent of households rose in 2010 (the first full year of the recovery), after falling during the Great Recession.

What’s striking is how much of the income growth for the top 1 percent occurred at the very top.

Growth Much Higher for Households at Very Top of Income Distribution

To illustrate this lopsided growth, this chart separates income groups within the top 1 percent.  The top 1 percent in 2010 had incomes above $350,000 and, as a group, enjoyed average income growth of nearly 12 percent from 2009 to 2010.

However, growth for households in the “bottom half” of the top 1 percent — the non-millionaires — was significantly smaller than growth for the multimillionaires at the very top.

Though the bottom half of the top 1 percent could not compete with the multimillionaires when it comes to income growth, we should note that they still did much better than the bottom 90 percent of households in America, whose income failed to grow at all in 2010.  (For reasons discussed in our guide to statistics on income inequality, Congressional Budget Office data provide a better guide to income growth and its distribution in the bottom 90 percent than the Piketty-Saez data, but they are only available through 2007.)

As we have shown, the uneven distribution of economic gains in recent years continues a longer-term trend that began in the late 1970s.  In the generation following World War II, robust economic gains were shared widely, but in recent decades, income growth at the top has rapidly outpaced the rest of the distribution.

It remains to be seen whether this trend will continue in the wake of the Great Recession, but these new data for 2010 hint that it may.

Under $2 a Day in America, Part 3

March 7, 2012 at 5:25 pm

As we have explained, proposals from the President and House Republicans to raise rents on the poorest recipients of federal housing assistance could impose unaffordable burdens on many of them.  Some people might question whether the proposed increases are really that significant:  who couldn’t afford another $20-$25 per month?

Lots of people, as the new study from the National Poverty Center makes clear.

The study reports a 130 percent increase since 1996 in the number of families with children living on less than $2 per person per day.

About 300,000 of these extremely poor families, or about one in five, received housing assistance as of the beginning of 2011, the study notes.  This is consistent with our analysis, based on data from the Department of Housing and Urban Development, that some 330,000 families with nearly 700,000 children — as well as another 150,000 households without children — would face a rent increase under the House proposal.  Even more families would face increases under the President’s proposal.

Let’s take a three-person family that receives federal housing assistance and has a monthly income of $180 (that is, $2 per person per day or $6 per family per day).  If that family pays the current federal $50 minimum rent, the family has about $4.30 a day left after taking out the rent money.  With a rent increase of $25, that family would have about $3.50 a day after taking out the rent money.  At this marginal level of survival, that $0.80 a day reduction can make a big difference in whether a family can afford, say, diapers or the bus fare to a doctor’s appointment.

This study also rebuts the argument from the Administration and House Republicans that rents should go up to reflect inflation since Congress set the $50 minimum rent in 1996.  Yes, rents have gone up in the last 15 years, but incomes at the bottom have not.

As my colleague Jared Bernstein noted recently, a recent Congressional Research Service study found that inflation-adjusted incomes for the bottom 20 percent of the population fell by 6 percent between 1996 and 2006, before the recession did further damage.  And at the very bottom, the new National Poverty Center study shows that during the same period that the minimum rent has been flat at $50, the number of families with children so poor that they will be hurt by a $25 rent increase has more than doubled.

So, while the proposed rent increase may not seem like much to most of us, it would be to hundreds of thousands of our nation’s poorest families.