It’s almost Thanksgiving! Time to celebrate! In my case, that means writing less and visualizing more, as in charts. So, briefly…
Viewing entries tagged
Poverty and Inequality
So how bad are we doing? Not so bad…yet. For example, upward mobility is alive and well in America. By that I mean most Americans move up the economic ladder from young adulthood to the peak earning years of late middle age, especially those who have graduated from high school, obtained at least some post-secondary training or education and worked mostly full-time. Take a look…
Just what is the American Dream? Depends on who you ask. Here’s a smattering of definitions, as well as some survey data on whether Americans still believe in the Dream, as defined by the survey makers and takers
And from a recent paper by real-estate economist Kholodilin, Konstantin, who has reviewed over 200 rent control studies, dating back decades and spanning six continents:
“The most prominent effects of rent control are decline of rents for controlled dwellings, reduced residential mobility, lower construction, lower quality of housing, higher rents for uncontrolled dwellings, and lower property prices.” - Kholodilin, Konstantin (2025) “The impact of governmental regulations on housing market: Findings of a meta-study of empirical literature”
While US studies often show a negative association, studies in Western Europe, where different labor relations systems are common, frequently find that unions do not depress innovation… An example would be in Denmark, where unions contribute to innovation and competitiveness through the cooperative "flexicurity" model. This model allows employers to hire and fire as needed to adapt to changing market conditions and adopt new technologies quickly, combined with the country’s strong social safety net that provides income security during job transitions, and government-funded training and education programs to help unemployed workers re-enter the workforce.
Based on the experience of OECD countries and the lower estimate given for a U.S. wealth tax by Saez and Zucman., I’m going to assume a wealth tax in the U.S. would bring in around 1.5% of total federal tax revenue on average. Last year the IRS collected close to $5 trillion in tax revenue. $5 trillion x 1.5% = $75 billion.
Note that the entire after-tax income of the top 1% isn’t enough to close the federal deficit gap of $1.55 trillion. Maybe we can squeeze a bit more out of these lemons but it won’t come close to closing the gap.
I recently read some articles claiming Gen Z -Americans born between the late 1990s and the early 2010s - have become “unprecedentedly rich”, an assessment purportedly based on some number-crunching by the Federal Reserve. Turns out that’s not what the Fed found. To quote:
Before all these intervening factors muddled the causal picture, many (especially partisans) offered confident opinions on the impact of TCJA. For instance…
What I find surprising is the sharp rise in public concern about the environment during the pre-Covid Trump administration, despite the administration’s anti-environmental rhetoric, aggressive deregulation and cost-cutting measures. Apparently, the administration’s top-down messaging was unable to override the inclination of Americans to care more about nature when bread-and-butters worries subside.
Why does this matter? Because longitudinal studies have found that students who performed worse in PISA at age 15 are less likely to attain higher levels of education by the age of 25, and are more likely to be out of the labor market entirely, ie, not in education, employment or training. For many, a lifetime of economic hardship and reliance on public services follows.
Part of this performance gap can be explained by socio-economic and language factors, e.g., poverty and lack of fluency in the language used on the tests. I imagine age at immigration matters as well: a person who immigrates as a teenager will likely find school harder in their new country than someone who arrived as a baby. Following this logic, I’d expect second-generation immigrants - born in a country to at least one foreign-born parent - would have little difficulty adapting to a country’s education system and so their PISA scores would reflect this.
Immigrant students often do worse on PISA assessments than non-immigrant students, especially in industrialized countries. However, the performance gap between immigrants and non-immigrants varies considerably across countries. For example…
According the numerous economists and publications, the American economy is booming, yet most Americans polled disagree with that assessment and many say they were better off during the Trump years. What gives?
My progressive friends tend to dismiss these poll results, saying it’s mostly “low-information” Trump supporters who on down on the economy and their opinions don’t matter. That’s because Trump supporters are dumb, deluded and willfully ignorant - per my friends, not me!
Which got me wondering: how do Americans arrive at their opinions of the economy?
“Overall, our cross-country comparison for 10 [developed] countries concludes that the phenomenon of a discrepancy between [official economic indicators] and consumer sentiment is not unique to the United States but is prevalent across multiple countries.” - The Cost of Money is Part of the Cost of Living: New Evidence on the Consumer Sentiment (Bolhuis et al, 2024)
Compared to many European countries, America seems to go rather easy on its high-income taxpayers…Of course, appearances can be deceiving.
What would Make Redlining a Root Cause of the Black-White Homeownership Gap (If It is One), Part III
The gap in Black-white homeownership rates recently reached 30.1% in the U,S. Per Jung Hyun Choi of The Urban Institute, three factors explain around 80% of this gap: difference in Black-white income (31%), marital status (27%), and credit scores (22%).
Andre Perry and David Harshbarger of the Brookings Institute have already crunched those numbers. To quote:
…approximately 11 million Americans (10,852,727) live in once-redlined areas, according to the latest population data from the Census Bureau’s American Community Survey (2017). This population is majority-minority but not majority-Black, and, contrary to conventional perceptions, Black residents also do not form a plurality in these areas overall. The Black population share is approximately 28%, ranking third among the racial groups who live in formerly redlined areas, behind white and Latino or Hispanic residents…While still a tremendously large population, the approximately 3 million Black residents in redlined areas account for just 8% of all non-Latino or Hispanic Black Americans.
Proximate cause (direct cause): Occurs immediately prior to the [outcome of interest]; directly results in its occurrence and, if eliminated or modified, would have prevented the undesired outcome
Root Cause: One of multiple factors (events, conditions or organizational factors) that created the proximate cause and subsequent undesired outcome. Typically multiple root causes contribute to an undesired outcome [my italics].
Root Cause Analysis: A method primarily used to identify the underlying cause of an incident or issue, and more effectively mitigate or prevent future similar incidents.
— So the question for this post is: how would we know whether the historical practice of redlining created a causal pathway that led directly to the current Black-White homeownership gap in the US? In other words, was redlining one of multiple factors responsible for the proximate causes of the Black-White homeownership gap?