Jobs, the economy, and wealth inequality

[00:00:27]

RICK WEISS: Hello everyone. And welcome to SciLine’s media briefing on jobs, the economy, and wealth inequality. I’m SciLine’s director, Rick Weiss. And for those of you who are not familiar with SciLine, we are a philanthropically funded, editorially independent, entirely free service for reporters. We’re based at the nonprofit American Association for the Advancement of Science. Our mission is basically to make it as easy as possible for you as reporters to include scientist sources and scientifically validated information in your stories, whether those stories are about a topic that has to do directly with science, like about COVID or climate change, or whether those stories are about things going on in your community or, as we’re doing today, things going on in the lead up to an election, where adding some evidence from scientists who have studied these topics can enrich your stories beyond the usual he said she said of political campaigns.

And, in fact, today’s briefing is part of a special series of briefings we’re doing this month. It’s the fifth of six that we are hosting this month all on topics relevant to the lead up to November. We’re doing this because many of the topics that candidates are disagreeing about and talking about during this campaign season, topics like abortion, the impact immigration, are often covered as though they were simply matters of opinion where an anecdote is sufficient, but topics that it turns out, in fact, are being studied by scientists, generally social scientists, quite deeply. And the results of their research can really add a lot of rigor and interest to your stories. So our hope is that, when you write these stories that are pegged to the political campaign, you’ll include, not only what people are saying off the top of their heads, but also what scientists have discovered in the course of their research. Please check out the link that will pop up in the chat area today to look for links to the other briefings that we’ve held in this collection of media briefings for you and to look at those videos and transcripts. A couple of quick logistical details before we get started. We’ve got two panelists today who are going to make short presentations of up to 10 minutes each before we open things up for Q&A. While they’re speaking or afterwards, feel free to insert your question by using the Q&A icon at the bottom of your screen. Make sure you include your name and your news outlet and your question as well as if you want to direct that question to one or the other of our speakers. A full video of this briefing will be up very soon after it ends today in an hour or so, and a transcript will follow a day or two later.

Finally, I’m not going to take the time to give full, long introductions to our speakers, but I want you to know who they are and what they’re going to basically cover. You’ll hear first from Dr. Heather Hill, who is a professor in public policy and management at the University of Washington. She’s going to give us a brief overview of U.S. wealth distribution today, how it’s changed over the last few decades, and will mention something about what research says about the impact of U.S. programs designed to help reduce inequality and increase family economic mobility. And, second, we’re going to hear from Dr. Arne Kalleberg, who is a professor of sociology at the University of North Carolina Chapel Hill. And he’s going to look at the economy specifically through the lens of the U.S. workforce and labor market to deepen our perspective on who’s winning, who’s losing in the current economy, and who’s in best position to do well in the economy that appears to be ahead of us. So with that, let’s just get started and over to you, Dr. Hill.

[00:04:13]

HEATHER HILL: Thank you, Rick, for the nice introduction and for the opportunity to speak today. I’m going to be talking about income and wealth inequality and how it matters to people and communities. And I have three key points that I want to convey. The first is that we are currently living in a period of extreme economic inequality. And the second point I want to make is that that extreme inequality has consequences, not just for those who have insufficient income or wealth, but really for all of us and for our economy. And the third one I want to make is that to be able to address inequality, we really need solutions at both ends of the economic extremes.

Before I provide details and evidence on those points, I want to briefly talk about how I’m using the terms “income” and “wealth” and how we measure inequality. So “income” and “wealth” are closely related terms, and we often use them interchangeably in our daily lives, but distinguishing them is pretty important for understanding inequality and the solutions to inequality. I describe income like the faucet bringing water into your home. It’s the flow of resources into a household’s pocketbook. Income can be spent or saved. And most income for most Americans comes primarily from work earnings. In contrast, wealth is more like a backyard pond. It’s a stock of assets, what you own, and debts, what you owe. And wealth can gain and lose value even without households putting more income into it. So wealth can gain and lose value in fluctuations of the macro economy. For instance, interest rates. But it can also be sold, and it can be gifted across generations. So estimates suggest that roughly a half of all the wealth held by Americans now was inherited. Now, we can look at inequality for either income or wealth in the same way. We line up data on Americans from those with the least resources to the most resources, and then we create groups to compare. And we compare either their average income or average wealth in each of these groups, or we can also look at the share of income or wealth that’s held by a group. And I’m going to be showing you comparisons of the bottom 50 percent, the middle 40 percent, and the top 10 percent.

So let me turn back to my three key points. The first is that we are going through a period of extreme economic inequality. And I say “extreme” in reference to our history as a country and also to a comparison of other countries. It’s very tempting to see inequality as natural or inevitable, and some amount may be, but we’re really seeing levels right now that are unusual. And the interesting thing is most of the rise in income and wealth inequality has happened in just the past 40 years since 1980. So this is a graph that shows you average annual individual income. So this is for individuals, not households. And it shows you three groups. The bottom 50 percent in blue. The middle 40 percent in purple. And the top 10 percent in that bright green. And you can see that the average annual individual income has gone up somewhat for the bottom 50 percent and the middle 40 percent but not nearly as much as the increase that the top 10 percent of income earners in the U.S. has experienced. The pattern for wealth is similar but even more extreme. So now you can see that the values on the left have changed dramatically to millions of dollars. This is the average total individual wealth held between 1980 and 2022. And, again, you can see this dramatic increase such that the average total individual wealth held right now by somebody in the top 10 percent is many hundreds of times higher than the average total individual wealth held by somebody in the bottom 50 percent.

I hope in Q&A we can all talk more about explanations for why this has happened, but right now I want to turn to some facts and consequences. So, what this all means is that wealth and income, but wealth in particular has become much more concentrated in wealthy families in the U.S. It’s estimated that the top 10 percent of wealth holders in the U.S. now own over two-thirds of all the wealth in the country. This extreme level of wealth inequality, especially combined with our high levels of income inequality, is unusual when we compare ourselves to places like Canada, Australia, and most European countries. And an important aspect of wealth inequality is that racial wealth gaps are very large and persistent, particularly gaps between black and white households. And these gaps are true even when we compare households that have the same education levels. We’ll still see that white households have far more wealth than black households.

The consequences of this high level of inequality are both for those who have insufficient income and wealth, but also for all of us and our economy. So we have decades of research that show us that living without enough income, particularly during childhood and even more during early childhood, is associated with poorer health outcomes, school achievement, and economic outcomes all the way into adulthood. We have less evidence about the effects of having no wealth or debt on children and adults, but there is consistent evidence that having less wealth reduces the chances of applying for and completing college. We now have strong evidence that economic mobility has declined in the U.S. And one way to see this is that the likelihood of children born in the 1980s and ’90s ultimately earning more than their parents is much less than what we would have seen for, say the baby boomers or the generation born in the 1950s and ’60s. And, finally, economists have shown that high levels of inequality, like what we have now, are associated with weakened social cohesion, more conflict, and slower economic growth. So how are we doing as a country with policies that are designed to address this inequality? I want to tell you a tale of both positive and negative here. We are quite successful in raising household income at the bottom of our income distribution with a set of national safety net programs. I list here the ones that have proven antipoverty effects. I’m happy to say more about each of them in Q&A and talk about a recent example that we have of very directly reducing child poverty rates during COVID.

So that’s the positive. On the other hand, we have a tax code that encourages wealth concentration at the top, and it has become more that way in the last 10 to 15 years. We do have a progressive national income tax. That is, we tax higher-income families at higher rates than lower-income families. But ultimately we tax wages at higher rates than capital income, income from things like investments and wealth. And one of the clearest ways we can see this is that most estates—even very, very large ones in this country—when wealth is passed across generations, most of those estates are not taxed at all. For each individual we exempt over $13 million in wealth transfer from taxes. We also currently have historically low corporate tax rates. We have a set of tax deductions that I’m happy to talk about that are meant to encourage wealth growth, not necessarily at the top, but they still tend to favor families who already have some wealth. So if we want to think about future opportunities to reduce inequality, we need to think about targeting both the bottom, bringing the bottom 50 percent up, and the top, bringing the top 10 percent down. And I’ll list a number of different possibilities here and some innovations at the state level. The ones that I will highlight is that we have the opportunity to expand tax credits that we know work to bring the bottom 50 percent up in terms of income in particular. But we also need to think about changing our tax structure so that extreme wealth cannot be transferred so easily between generations. And I’m happy to talk about any of these ideas more in Q&A. Thank you.

[00:14:18]

RICK WEISS: Thank you, Dr. Hill. It’s hard to imagine a clearer, more methodical description of the situation and why things are the way they are. Really appreciate that presentation and the very clear slides. Dr. Kalleberg, over to you.

[00:14:32]

ARNE KALLEBERG: Thank you, Rick. I’m going to be talking about the U.S. labor force and workforce in the current period and moving forward. I should say that, when we talk about the labor market, we’re talking about two different things. We’re talking about, on the one hand, the job structure, which is the kinds of jobs that are created and where they’re created, on the one hand. On the other hand, we’re talking about the labor force, which is the individuals that work in the economy, in the labor market.

Currently, there’s 168 million people in the labor force. The unemployment rate is currently is 4.1 percent, which is low by historical averages. Since 1948 the average was about 5.7 percent. It shot up during COVID to about 14 percent, but now it’s come down, and it’s slightly ticking up. Let me give you some characteristics of the current labor market. The first is that it is a service economy. It has been a service economy for quite a while. So currently about 80 percent of the labor force is in services. About 86 percent of the civilian nonagricultural labor force, which means that about less than 10 percent are in manufacturing. We also have what’s known as the knowledge economy in which data, the ability to work with data and the ability to work with people are valued rather than working with machines or with things. And so a concept of soft skills—which are the ability to communicate, to work with teams, to deal with people—are increasingly valued because the service economy does not produce products, but it produces services. Going along with the fact that it’s a knowledge economy, education is the key divider in the labor market. The one key factor that determines whether or not you’re going to be a winner or a loser in the labor market in the contemporary United States is your level of education.

Now, the gap between college grad and high school grad, it’s called the college wage premium, has declined slightly since the COVID pandemic. That’s because the labor market has been increasingly tight, which means that there are many more jobs out there searching for job seekers. So that gives workers some power. So that’s driven the low-wage high school premium up a little bit. But 30 years before COVID, the college wage premium has been increasing. Currently, education is, again, the key factor. About 40 percent of people in the United States who are between 18 to 24 are currently enrolled in college. What’s also, though, increased is nonformal education, vocational education and so on. Vocational programs rose about 16 percent between 2022 and 2023 as people began to realize that, maybe I don’t want to go to college. Maybe I can’t afford it. Maybe it doesn’t make sense. And so maybe I should go to a vocational technical school, which is an easier path for some people to get into the labor force. Another characteristic of the labor market is what’s known as “job polarization.” There’s been an increase in high-wage, high-skilled jobs and an increase in low-wage, low-skilled jobs, and a decline in the middle. The reason for the increase in high-skill, high-wage jobs is because of the knowledge economy, because of technology, because of AI and these kind of things.

The increase in the low-wage sector is due to the fact that, among other things, that there is a large vulnerable population out there who are willing to take low-wage jobs because of lack of alternative. Many of these people are immigrants. Many of them are undocumented immigrants. And because of the low wages and the ability of people to take those jobs, employers are not incentivized to try to replace them with machines. It’s just too expensive. What’s declining in the middle, though, is the kinds of middle-class jobs that built the middle class in the post-World-War Two period. I’m thinking now of the manufacturing and the auto industry, for example, the assembly line workers. Administrative assistants, the middle level of the white collar. Many of these things, many of these jobs have been replaced by technology because they were able to be routinized. But they also have gone away because of the lack of institutional protections in the form of unions that historically have protected workers with relatively low skills. So the idea of not having much education but you have a strong back and are willing to work is really not going to cut it in the current economy.

Another aspect of the labor, of the job structure that people are very concerned about these days is the so-called “gig economy.” The gig economy, in my view, is jobs that are mediated by technology in terms of platforms. We’re thinking Uber and Upwork and so on. We can talk more about this in the Q&A. I just want to point out that gig work has always been with us. It’s always been people who were working on a short-term basis, not working with an employer. What’s different about the new one is the role of technology in mediating the relationship between the job seeker, the customer, and the employer. Though there are some winners in the current economy. Geographically, the winners are people in Texas and the Sunbelt who have seen strong job growth. Much of it is due to factors like low living costs, low taxation, business-friendly policies that attract companies. The losers tend to be the ones, the people on the coasts, the Californias and the New Yorks, which have very high standards of living and which have many regulations that inhibit companies to work there. Industries with high demand would be industries like healthcare, technology, and professional services. They’re experiencing a surge of openings due to the aging population and technological advancement and so on.

In terms of the labor force, just to pick up a little bit about what Professor Hill said, there are gaps between gender and race. The gender gap, men still earn more than women on average. The median gap is about 14 percent for full-time, full-year workers for men versus women. The race gap has declined a little, but it still is pretty high, around 30 to 40 percent. One characteristic of the labor force participation is that for men it is declining slightly. For women it’s still pretty on the upswing. Looking forward, what are some of the projections that we can think about? In terms of the question, who is going to get ahead, it’s going to be those people who have the skills and education and knowledge to take advantage of the new opportunities. AI is the big fad of the day. It is not going to eliminate all jobs. We’re not going to see a jobless future. It’s going to eliminate many jobs, but it’s going to create new ones. What’s important about it, though, to my view is that those people who have the ability to work with AI are going to be the ones that are going to profit. AI’s going to provide people with opportunities to make decisions and so on because AI is going to provide them with a lot of information and communication that was not previously available. The workers that are most likely to benefit are those in growing fields—AI, data science, renewable energy, healthcare, STEM fields. People with the skills to take advantage of these, whether or not that’s obtained through formal education or through vocational school. And people with excellent soft skills, communication skills, teamwork skills, being able to play well with others and so on. The losers are going to be those who have very limited skills so are not able to work with computers and so on. And those people who are unable to move to where the jobs are. Another feature, one of the gifts that COVID has given us is the possibility of remote work.

Now, remote work spiked during the pandemic. It’s come down somewhat, but it’s still on the table. And a lot of companies are realizing that their employees like working from home. I think there are a number of implications of this. One that is particularly intriguing to me is that you can work from anywhere. Why not move to a place with lower living costs? Why not move to a place with low income taxes? For example, so you might see a movement from the blue coast states to the middle of the country, which is now very red. But this might lead to political changes as people move into those and turning them purple. The labor force will also be majority nonwhite in the future. Which means that issues of diversity, equality, and inclusion are increasingly important. And due to immigration, we’re going to see more diversity because the birth rates of immigrants tend to be a bit higher than native Americans and so on. Immigration, of course, is going to play a huge part in the labor force of the future, as it was in the past. But my understanding is there’s been a briefing on that, so I won’t go into that, but we can go into it more in the Q&A. Thanks very much.

[00:25:03]

RICK WEISS: Wow, fantastic introduction and primer on what’s going on labor-wise now and probably into the future. Thank you, Dr. Kalleberg for that. So with that foundation, first, I’ll remind reporters, if you have questions, please submit them through the Q&A icon at the bottom of your screen. We’ll get to those in a moment. But I do like to start these briefings with one question from the moderator, and I will invoke that privilege now. And that’s to ask each of you, as not just experts in your field, but as news consumers yourself, what do you think when you look at the news coverage of stories on the economy? On jobs? On the labor market? Do you see things out there that you are happy to see? That you’re proud to see in journalism and that you want to give a pat on the back to journalists for doing the way they do? Or perhaps do you see things that sort of drive you a little bit nuts when you see them and you’d like to provide a little advice to reporters about how to do things a little bit differently? Dr. Hill, Heather, how about starting with you.

[00:26:04]

HEATHER HILL: Great. Thank you. It’s a great question. Something that I think journalism does really well at both the local and national level is to really tell the stories of individuals and families who are struggling in our economy. And often those stories are far more compelling than any data that I could put up on slides, and I think that’s a really important service to all of us, and journalists do it really well. Something that I’d like to see done better in news coverage is to really connect those stories to the structures of our economy and to the public policies we have and to focus less on kind the individual choices and behaviors in those contexts and more on the constraints and the opportunities that our economy really creates for different people and different groups.

[00:27:09]

RICK WEISS: Great. Thank you. Arne.

[00:27:12]

ARNE KALLEBERG: Well, I’m going to say the same thing. I think that the reporters and news coverage is excellent when it comes to shedding a light on the disparities on poverty, on people in low-wage jobs, and how hard they have trouble meeting their family’s needs and so on. There’s some great personal stories during COVID, but afterwards the coverage of the fight for $15 minimum wage, a lot of goods stuff there. What I would like to see more of those is connecting these personal stories to the structures that society has created and which makes it difficult for them to rise above their situation. An example of this in the news today or now is Mr. Vance, J.D. Vance’s “Hillbilly Elegy,” which was a remarkable story about how a person rose from poverty to become part of the elite. But that’s a tribute to everything, to individual resilience and motivation and so on. The flip side of that is the people who didn’t make it out are losers because they’re lazy and so on. And I would like to see—and that’s an interesting perspective on it, but I think more important for policy purposes is to look at the structural conditions that kept these people down despite their efforts. There are more people than Mr. Vance that tried to get out of Appalachia but couldn’t because of the structural conditions. So I think more focus on that would be helpful.

[00:29:00]

RICK WEISS: Great points. Thank you very much for that. Let’s get into some questions going on. We’ll start with one for you, Heather. Could you say more about exactly those kinds of structures that I think Arne is talking about. You mentioned the SNAP program and other programs that seem to be doing a good job. Can you say more about their role?

[00:29:23]

HEATHER HILL: Sure. Yeah. So I briefly mentioned the three programs where we have the most evidence of antipoverty effects—that is, they reduce poverty—and that’s the Supplemental Nutrition Assistance Program, SNAP, which you may have heard referred to as “food stamps.” It provides subsidies for the purchasing of food to low-income families. The earned income tax credit, an incredibly successful antipoverty program that provides tax credits to low to middle earners through the tax system. And then, of course, Social Security, which is hugely successful in reducing poverty among the elderly. We also saw during COVID a very interesting example where the child tax credit was expand temporarily during COVID to provide more income support to all parents, but with an emphasis on those with insufficient income. And we saw the child poverty rate drop to its lowest level in our country’s history when that program was expanded. And then the program was returned to its normal state because it was a temporary extension, and we saw those child poverty rates go right back up. So we know that those programs work, but they’re, again, just focusing on income and income for those with insufficient income to survive. And so that’s only a piece of the larger puzzle of the structures that are creating inequality.

[00:31:01]

RICK WEISS: Great. Interesting experiment of nature there to prove a program’s value though. Question here for Dr. Kalleberg. You mentioned that education is a key divider in the labor market. Can you talk about a bit more about college versus vocational school versus graduate school? Are there major differences there in terms of job outcomes?

[00:31:21]

ARNE KALLEBERG: Well, I’m going to answer that question, but I want to just add a footnote to what Heather just said. Access to education is a structural problem. People in low-wage jobs would like good jobs, but if there’s no good jobs in the area, they can’t get them. And if they can’t get on the computer, the digital divide, they can’t get that as well. In terms of the education issue, I think it’s being realized that, while education higher education does provide many benefits for many people, it’s not necessarily good for everyone due to costs, due to interests and so on. And so I do see now a shift between formal education and a growing interest in vocational/technical schools to get into jobs that are highly skilled jobs. Manufacturing jobs today are very different from manufacturing jobs 20, 30 years ago. They’re very highly skilled, and the salaries that are commanded by vocational/technical schools often exceed that in graduate schools or colleges as well. So different people could benefit from different things. Vocational training is historically in the United States looked down upon because it is considered to be blue collar, manufacturing, working class. We need to get rid of that cultural label.

[00:33:11]

RICK WEISS: Super interesting. And as the debt of someone heading for a career in academia, I think what you’re saying is true. There’s a lot of manufacturing jobs that are going to pay a lot better than what that Ph.D. is going to pay for. Let’s see. Dr. Hill, a question for you. Can you talk, sorry, you mentioned that a good amount of wealth is inherited. Does this perpetuate a cycle where wealth stays within the same families, ensuring future privilege in those families and future additional income and wealth building within a narrow population?

[00:33:45]

HEATHER HILL: The short answer is, yes. This is a feature of wealth that’s quite different than income. Sometimes people say wealth begets wealth. And that’s particularly true in our system currently, as I mentioned. It would always be somewhat true because, once you have some wealth, it gives you the security to be able to take risks and invest in different ways and build additional wealth, so that relationship would always be there. But because we have a system that allows really large amounts of money to be inherited without any taxes paid back to society, that’s really fostering that snowballing effect. And so you see the difficulty for someone who has no wealth or who faces debt—I didn’t get to talk about this very much. But a huge part of debt right now is student debt, just bridging this back to Dr. Kalleberg’s point. So, college is both necessary for economic success, and it is also right now creating part of the burden that’s really bringing that low end of the wealth distribution down. And that student debt is held much more by students who come from low-income families and students of color. So once you have that debt, it then becomes very difficult to get on solid ground. And think about, for instance, investing a little bit in a retirement account or putting aside a little bit for your child’s college education. So just as the question was—it was worded perfectly—it’s just a cycle that’s hard to unravel, particularly with our current policies.

[00:35:47]

RICK WEISS: And if I can add my own question on top of that. I’m curious because I think a lot of people think it would be natural for—if some people earn a lot of money, of course, they can pass it along to their kids. That’s not really income; it’s just something you brought into your family. But is this the way other countries in the world operate also? Or do other countries or economies actually more regularly tax that sort of wealth distribution?

[00:36:13]

HEATHER HILL: Yeah. I mean, other countries tax wealth distribution or inheritance, but I also would just say we used to tax it. So I mentioned right now you can exempt over $13 million as an individual when you die and pass on those assets to your children or others. You can imagine, if there are two people in a family who pass away in a sequence, that is $26 million that can be passed on. As recently as the 1990s, that exemption was a million dollars. So the current state of policy in which we’re allowing very large sums of money to be passed on is not what we did historically, and it’s not at all what we have to be doing. And you could still allow large inheritances without taxes but just not as large as we’re allowing right now.

[00:37:16]

RICK WEISS: Interesting. Dr. Kalleberg, anything to add on this particular topic?

[00:37:22]

ARNE KALLEBERG: No. No, not really.

[00:37:25]

RICK WEISS: Okay. Got another question for you, though, coming in here. Can you say anything about the youngest generation of workers and their expectations and experiences of work? Is there any evidence that Gen Zer’s bounce around between jobs more often or that they’re demanding higher wages?

[00:37:46]

ARNE KALLEBERG: Well, it’s always been the case that at the beginning of one’s work history one does bounce around. And that’s a good thing because what they’re doing is they’re exploring options before they lock themselves in, before they get responsibility. So Gen Zer’s are doing it. It’s a different kind of job bouncing around because of technology and the ability to explore through Linkedin and other kinds of network mechanisms to explore what’s out there. But the fact that they’re doing that is not terribly new. That’s been the case throughout American history. As far as what they prefer, there’s evidence that young people are concerned not so much with pay, but with finding something that is self-actualizing, that is interesting to them, that’s meaningful and so on. Part of that is growing up in a sort of relatively affluent situation where money is not the key criterion. But, I mean, there are people who were only focused on money. But I do see a willingness to explore noneconomic benefits from work as well.

[00:39:12]

RICK WEISS: Interesting. See a question, and I’ll note it’s from Rachel Spacek from Investigate West. “I’m currently working on a story comparing the minimum wage of two neighboring states. One state has a high minimum wage; the other has the lowest federal minimum wage. Do either of you have tips on how to find the impact of a higher minimum wage for workers?”

[00:39:36]

ARNE KALLEBERG: Card and Krueger. There was a very famous study that was done on exactly this issue when they compared fast-food places. David Card and Alan Krueger were the economists who did it. Heather can expound on that. But basically they found there was not much difference. And the idea that lowering the minimum wage would create more jobs or raising it would reduce jobs was just not supported. And I believe that’s the literature bottom line.

[00:40:09]

HEATHER HILL: Yeah. So there is a large literature, and it’s highly contested in the field of economics. That is, there’s sort of different sides that argue a lot about whether there are no negative effects, as Dr. Kalleberg was saying, or some potential negative effects as firms adjust to the higher cost of workers. The sort of economic theory suggests they’ll pass on some of that cost through price increases or need to cut jobs. So I sympathize with journalists trying to cover this issue actually because economists are very dug in. There’s a ton of studies. It’s easy to find a lot of research. But they’re very dug in, and they’re arguing about relatively small differences based on the sort of technical aspects of how the models are specified. One thing would I recommend is to focus on the most recent literature. There’s quite a bit now on the effects of state and local minimum wages because there’s so many more of them than we used to have. And those potentially have very different dynamics than an increase in the federal minimum wage has. So I would focus there. I will admit I was involved in some of the research on the Seattle minimum wage, and I’m happy to connect people to those studies or to other related literature.

[00:41:41]

RICK WEISS: Great advice. Thank you. Question from Katharine Mieszkowski, a reporter based in California. Given the extreme period of inequality we’re living in, why do you think that things like the estate tax haven’t been more of a political issue in recent years?

[00:41:57]

HEATHER HILL: Yeah. I can give you my theories. I don’t know for sure the answer to this. I think this is a political—a story about political framing on both sides. So the American dream is so central to our cultural narrative and our understanding of who we are. The idea that you can work hard and everyone has the same opportunities. And I think on the right, there’s been a real sort of failure to talk about how those who have extreme wealth, who are really in that top 10 percent—I didn’t even show you the data on the top 1 percent or the top 0.1 percent, which is even more extreme. The folks who are in those groups, as Dr. Kalleberg—it’s sort of the flip of what Dr. Kalleberg was saying earlier. These are not stories primarily of just hard work and the same opportunities. There is certainly some of that. But there’s stories about massive inheritances, stock markets that really favored those who had the money to invest in stocks at a given time, and then these tax policies that really allow for accumulation. So I think on the right, there’s a false connection being made between the American dream and people who have many billions of dollars. And that’s really not the American dream that we should be promoting. On the left, I think there’s really a fear about talking about tax increases. And that fear plays out when it comes up, there’s a lot of backlash from Americans. So I think this is largely about a need for a change in the narrative about what the American dream is and how we can still promote that idea of hard work and opportunity. Actually, we can promote it even better if we think about not having such extreme wealth at the top.

[00:44:23]

RICK WEISS: That’s a really thoughtful answer. I appreciate that. Anything to add there, Arne, on that?

[00:44:28]

ARNE KALLEBERG: No. Not on that one.

[00:44:30]

RICK WEISS: Great. Okay. Question from Mayowa Aina from KNKX public radio in Washington state. Thinking about the upcoming election, dems—yeah, you’re own hometown—dems are running on a very progressive agenda which Republicans are arguing has failed. In addition to the child tax credit, are there any other policies that have been implemented in the last four years that either of you can think of that have been particularly consequential. I’m thinking about legislation like the infrastructure bill, student debt relief and so on. Interesting question. Very relevant to our framing of these briefings today. Arne do you want to start?

[00:45:09]

ARNE KALLEBERG: Sure. I certainly think that the two that were mentioned, the infrastructure bill was in incredibly important. Not only for getting us out of the COVID downturn, but also for the future, for climate change and so on. And I really hope that continues as well as the student relief, which is still contested. But it seems to me that one of the things that struck me during the last four years was the response to COVID. Especially the idea of providing a safety net for people who ordinarily would not have received the safety net. And I’m thinking now of gig workers who basically did not qualify for unemployment insurance and other kinds of benefits. And they were able to, because of the support, they were able to take time out to basically think about what they really wanted to do and had the ability to acquire more skills to put them on a different path. And that I think is a key policy. Now, that stopped, but going forward the idea that the safety net, the benefits that people get from not being able to work or being disabled or being sick is not tied to the specific kind of job you have. I think that is a central theme that needs to be implemented going forward. Yeah. And also the experiments, hasn’t been policy yet, just been experimented in different places with universal, basic income, which has a lot of detractors. But the advantage it does, it does give people the ability to be able to take some risks. And that I think is something to look at going forward.

[00:46:58]

RICK WEISS: Another topic that we at SciLine are looking at and talking to experts about. So for reporters interested in universal basic income, please check out our website for what we’re doing this. Heather, do you want to add anything about what’s happened in the last few years that might be worth—?

[00:47:12]

HEATHER HILL: Yeah. Let me focus on the fact that a lot of innovation is actually happening at the state level, not at the federal level right now. And so let me describe two different areas that relate to what we’ve been talking about today. The first I had on my slide is that states are really innovating around publicly funded savings programs. They can be general savings programs, for instance, the baby bonds idea has been taken up by Connecticut and Washington, D.C. This is a small amount of money that’s put into savings for every child born in a certain state or often for children who are born to lower-income families in a state. And that money can both be contributed to over time by the family, but it also, of course, can grow with interest and with changes in the macroeconomic context. But there’s also more specific ones. Oregon Saves is a new program that set up, publicly funded, automatic enrollment into a retirement savings program for workers in Oregon. So those are really exciting ideas that states have been pursuing. And then the other area where there’s been a lot of state innovation and we need to think about doing it at the federal level as well is in paid family and medical leave programs. So these connect to what Dr. Kalleberg was just talking about. Offering some security for workers that is not tied to their specific job, but is tied to being a citizen and a worker in their community, a resident and a worker in their community. So these are programs in which, if you’re working and you need to take time off to care for an infant, but also to care for yourself or to care for a spouse or parent, you can do so with at least partial wage replacement. And California was the first state to do this in 2004, but we now have 13 states that have paid family and medical leave programs. And there are proposals for federal programs. And it’s worth noting that—because someone asked earlier about comparing us to other countries. We are one of the only countries in the world not to offer a national paid family and medical leave program. So we really are a standout in terms of not providing the security to workers.

[00:49:49]

RICK WEISS: Great. Great advice. Question here from Ellen Rolfes, reporter from Marketplace. Is there any research that examines how the wealth and income of law makers—federal, state, local—prior to taking office impact what policies they champion or pass? Such an interesting question.

[00:50:10]

HEATHER HILL: It is. It’s a great question. I don’t know the answer, but I would love to look into it and get back to you. I think that it’s a really interesting question.

[00:50:25]

ARNE KALLEBERG: I agree. It’s a really interesting question for which I have no answer, but I can think of rich legislators that champion increasing the minimum wage and dealing with low-wage workers. I haven’t seen too many the opposite way because poor people generally don’t get to become legislators. So, but it’s a great topic for research.

[00:50:52]

RICK WEISS: Here’s a question for either of you. Do you have any advice for local journalists on covering the national monthly jobs report, the employment situations summary from the Department of Labor? I love that question. I always wonder what to make of these things and what the story ought to be. Especially if you’re, again, a local reporter not just covering this for some national outlet.

[00:51:15]

ARNE KALLEBERG: Well, of course, you’d want to know what the local jobs picture looks like because that’s what your readers are particularly interested in. I personally do not find the national jobs report all that useful because it often talks about the number of jobs, but not the quality of those jobs. And so if you create part-time, temporary jobs, those count as one. And if you count a full-time good job, that counts as one as well. So I don’t spend a lot of time thinking about what that means really.

[00:51:51]

RICK WEISS: Heather, anything to add about the monthly jobs report?

[00:51:56]

HEATHER HILL: I don’t think so. I think just trying to get the numbers for your local area and maybe agreeing with Dr. Kalleberg that trying to get below the top line number and looking at things like involuntary part-time work, which is an indicator that someone’s working part-time but would prefer to work full-time, looking at people who have left the labor market altogether, who may be discouraged. So these numbers are often sort of below that top line number, and you want to dig down and find those for your area.

[00:52:35]

RICK WEISS: And if you want to know what the numbers are for your own local area or state or region, are those folded into the national report? Or where would reporters turn to for those numbers? Is there a standard department or agency at the local or state level that keeps those kinds of data?

[00:52:54]

ARNE KALLEBERG: Well, each state has an employment security commission or something like that. And so they keep tabs on economic development and the number of jobs that—here in North Carolina, it’s called your employment security commission.

[00:53:11]

RICK WEISS: OK.

[00:53:12]

HEATHER HILL: Yeah.

[00:53:13]

RICK WEISS: Here’s another question that is not designated for one or the other. Can the panelists talk more about the aging workforce and implications of that for the economy?

[00:53:25]

ARNE KALLEBERG: Well, we’re getting older. The birth rate in the United States, as in many other industrial countries, is low. And so we’re getting older. We’re getting older because medicine is getting better and we’re living longer. And that has had huge implications for the labor force. Because of the fact that now the number of people that have to be supported by those who are currently working is growing, which is a problem. But in terms of the kinds of jobs we see in the future one of the occupations that’s going to—one of the fastest growing occupations is healthcare, is home care, care for the elderly. And this is going to be a big issue, it seems to me, because we’re talking about our parents now. We’re talking about ourselves. And the people who are taking care of us tend to be low-wage workers who basically have to take two jobs in order to make a living. And so what do we do about this crisis, which is going to be a crisis of care? And nursing homes have been one way of doing it, but home care seems to be the growing phenomenon. And that’s going to have a huge impact on the kinds of jobs that are going to be available. And what we need to do is incentivize people to do this kind of work and to obtain the skills, because this is hard work. And they need to have the skills and motivation to be able to do these jobs.

[00:55:01]

RICK WEISS: Interesting. So here’s a quick follow-up from me. If the demand is so high for this and the need is so high, why are these still such low-paid positions?

[00:55:12]

ARNE KALLEBERG: Because there is, I think, a vulnerable population that is willing, that has to take these jobs because of lack of alternatives. And so, as long as this vulnerable population exists, if we could somehow deal with the immigration issue in a reasoned way, you’re going to have people that have options. And so, as a result, currently they have to take these jobs because of lack of alternative opportunities.

[00:55:39]

RICK WEISS: All right. We’ve got a couple more questions to get to and just a few minutes left, but I want to just intercede on myself for a moment to remind reporters that, when you do logoff at the end of this briefing, you will see a prompt for a very short, three or four question survey. It takes a half a minute. All of us are tired of surveys, but this really helps us design more briefings for you like this that are providing you what you need, what you want. So I really ask and encourage you to take that half minute and answer a few questions so we can keep giving you high-quality briefings like this one today. I want to try to squeeze in one or two more questions here, and this was addressed to Dr. Hill. Is there variability at the state or local level in income or wealth inequality? And how can reporters find that out?

[00:56:30]

HEATHER HILL: Yes. Great question. There is variability in income inequality, and I know that I have seen a nice map of that recently. And, unfortunately, it’s not, the source is not coming to my mind. But I can find it and share it with SciLine and with you all. So that I know is readily available. I have not seen comparisons of wealth inequality by state. That would be interesting. It may exist, but I have not seen it. And certainly I focused on the safety net that we offer at the national level, but one of the interesting sources of variation in our economic situation across the country is what states choose to do about a safety net beyond the national safety net. And so that varies quite a bit. Something like the earned income tax credit, there’s a national credit available through the IRS. But then a lot of states, not all, but a lot of states have chosen to add a state EITC as well. So there are choices that states are making about programs that are very important and change the context, those structures we were talking about. But I’m sorry I don’t have the sources off the top of my head for those.

[00:57:51]

RICK WEISS: Great. If a reporter wants to follow up with us, we’ll try to mediate that. We’re just about at the top of the hour, so I do like to end these briefings with one last take-home question for these experts. It’s often the pithiest and clearest single message you might hear from us today, reporters. So I want to ask each of our experts just to give one take-home message. If there’s one thing you want reporters covering this topic to walk away with today and really have resonating in their heads, what might that be? We’ve covered so much ground today. Heather, I’ll start with you.

[00:58:28]

HEATHER HILL: Thank you, Rick. My takeaway point is that we are currently experiencing extreme economic inequality that is harmful to our health and our well-being, to our economy and to the American dream of economic mobility.

[00:58:46]

RICK WEISS: That is a nice take-home point. Very clean. Thank you. And, Arne.

[00:58:51]

ARNE KALLEBERG: I will base my point—I have two points. Based on the fact that jobs in the future, as far as we could see, are going to become increasingly unstable and subject to change. They’re going to be dynamic because the world is dynamic with technological change and so on. So as a result of that, two things I think are necessary. One is that individuals need to have the skills and training to be able to adapt to this. This requires lifetime learning. This requires people taking responsibility for their own skill development and so on. So that, they need to do that. But, secondly, we need to provide a safety net that is not tied to the employment structure. America is very unusual in the sense that welfare benefits are delivered through the employer. And that model was a great model during the post-World-War Two period, but is no longer going to be capable of providing security moving forward. And so we need to have a safety net that is given to all people who are all residents, who are all citizens, not because of the jobs they do or the kind of jobs they do, but because they belong to the country.

[01:00:02]

BECKY HAZEN: Hi all. Just to wrap up, I think Rick’s internet might have frozen. But I want to thank our panelists and all of our reporters for joining us today, and we’ll see you next time.