More than one quarter of the U.S. population lives alone. Per the latest census, single-person households are now the single largest segment of the U.S. population. This is a first.
What a dramatic change from a little more than 30 years ago when only 17% of population lived alone.
Read the rest at this Forbes post.
by Ryan Streeter on July 28, 2014. Follow Ryan on Twitter.
So….there’s been a lot of commentary about the Paul Ryan anti-poverty plan.
Most comment on the merits of the plan. Tyler Cowen, however, raises a good point that others avoid: the block grant proposal begs the question of whether states will innovate well enough to justify the policy. He says that block grant proposals can be “the lazy man’s way” not facing tough questions.
He then says, “I’d like to see a possible plan for just a single state, or better yet, two or three, that is supposed to represent an improvement.”
That’s a really good point. Conservative think tanks and thought leaders who have helped formulate the ideas in Ryan’s plan have not spent much time on this front. The plan would be a lot more effective if innovators at the state level were involved early on to help figure out how a policy would work in practice.
by Ryan Streeter on July 27, 2014. Follow Ryan on Twitter.
My only quibble with this chart is that it doesn’t break down “Employees” into teachers and administrators. My guess is that you’d see an especially strong uptick in administrators driving the employee line.
This is from Paul Ryan’s new anti-poverty proposal (pdf), released last week.
Every parent in every state should be able to view a similar chart for their state. That the spike in spending and overhead doesn’t translate into results should be a discussion around every dinner table in homes with children.
by Ryan Streeter on July 27, 2014. Follow Ryan on Twitter.
It’s been a busy few weeks coupled with some vacation time, so I’ve been away from this for awhile.
What has the trend in household wealth been in the past decade?
This study (pdf) by the Russell Sage Foundation finds that for the median household – i.e., the household above and below which there are an equal number of households – net worth declined from $87,992 in 2003 to $56,335 in 2013 (comparisons in 2013 dollars) – or a decline of 36%.
The authors define household wealth in the standard way: the total value of all financial and real assets minus any debt.
This decline is clearly driven by the collapse in housing values. To drive this point home a bit further, you can see how more affluent households – whose wealth is not tied up primarily in homes but in equities and other assets – have rebounded:
Everyone lost wealth between 2007 and 2009, but the 90th and 95th percentiles were still better off in 2009 than they were in 2003, whereas the 50th percentile was already significantly below where it was in 2003.
These data reinforce the conclusions by some that the American Dream going forward should be bound together more with the capital and other gains that come through entrepreneurship and saving than with homeownership.
by Ryan Streeter on July 3, 2014. Follow Ryan on Twitter.
The new Thumbtack-Kauffman survey of small businesses is out, and once again it finds that regulatory burdens are a huge inhibitor to growth. Even more than taxes.
It’s important to remember this is a survey, so the results are based on impressions of business owners rather than an objective measure. But since perception matters a lot in business attraction and retention, this matters. When Thumbtack combines all the factors from ease of starting a business to taxes to regulations to licensing and so on, here’s how America looks overall (dark orange is best, dark blue worst):
And since small businesses cite regulations as the chief barrier to growth, here is how America looks when rated by regulations alone:
by Ryan Streeter on June 28, 2014. Follow Ryan on Twitter.
Every administration says it plans to reduce unneeded regulations, and yet regulations grow anyway. Why? For one thing, regulatory reform always sounds a little boring and is difficult to convert into a policy agenda that people want to rally around. Second, and probably more importantly, regulations are intertwined with entrenched interests that make change difficult.
Meanwhile, business owners will tell you that federal regulations are increasingly adding costs that discourage investment and hiring.
The relationship between decreased productivity, declining entrepreneurship, and growing regulations is a defining economic issue of our generation.
Here’s probably the best picture of the regulatory trend we’re talking about, courtesy of this Mercatus post:
by Ryan Streeter on June 26, 2014. Follow Ryan on Twitter.
Edward Prescott and Lee Ohanian write today in the WSJ that output would be $1 trillion higher than it is currently if our economy was growing at the historical average. A major factor in this disquieting trend is the falling rate of new business creation.
The creation rate of new businesses, as well as new plants built by existing firms, was about 30% lower in 2011…compared with the annual average rate for the 1980s…The decline affected nearly all business sectors.
Virtually every state has suffered a drop in startups, which suggests that this is a national, and not a regional or state, problem. It may not be surprising that states hit hard by the recession, such as Arizona, California and Nevada, have a 25% to 35% lower rate of startups. But the startup rate in such business-friendly states as Tennessee, Texas and Utah is also down substantially, and in some cases exceeds the declines in the states that suffered most during the recession. Even North Dakota, which has benefited enormously from oil and gas fracking, has a startup rate lower than in the 1980s.
And this matters because:
[T]he country cannot rely on existing companies to boost the economy. Businesses have a life cycle, in which even the largest and most successful reach a stage at which they stop expanding.
The authors go on to suggest policy changes to address this issue, all of which are plausible. The first step, though, is to elevate this issue in the public discussion, as policymakers and the general public are typically not aware of the important relationship between startups and accelerated growth.
by Ryan Streeter on June 22, 2014. Follow Ryan on Twitter.
Sometimes a single data point sums up a multi-faceted trend so well. This excerpt, from the latest ranking of the best manufacturing cities by Joel Kotkin and Michael Shires, summarizes a range of policy, economic, technological, and demographic trends:
Houston, with 255,000 manufacturing jobs, is not yet the country’s largest industrial center; it still lags behind the longtime leaders Los Angeles, with 360,000 manufacturing jobs, and Chicago, home to 314,000. But it is clearly on a stronger trajectory. Since 2008, Houston’s manufacturing workforce has expanded 5% while Los Angeles has lost 13% of its industrial jobs and Chicago’s factory workforce has shrunk 11%.
There was a time when the heavy metal industry you find in Houston today would have seemed unthinkable. But a combination of factors rooted in technology, policy, talent, and capital have made Houston a manufacturing powerhouse.
Kotkin and Shires point out that some traditional midwestern manufacturing hubs have rebounded well, so growth is still quite possible in industrial areas hit hard over the past few decades. For instance
[A]rguably the strongest Rust Belt recovery has occurred in Elkhart-Goshen, Ind., third on our small cities list. Since 2008 Elkhart’s industrial employment — much of it in the recreational vehicle industry — has expanded 30%, one of the most dramatic employment turnarounds of any place in America. Unemployment has fallen to 5% from a recession high of 20.2%.
The authors also point out that the Pacific Northwest has had some surprising growth in manufacturing in some not-so-intuitive places such as the Bay Area and Portland.
Arthur Brooks’ NYT op-ed last week on the importance of fathers in the future work lives of their children was a good read. It also included this important reminder about work and wellbeing, which is relevant as we all continue to try to figure out what is behind our troubled labor market numbers:
The University of Michigan’s Panel Study of Income Dynamics polls thousands of American families, and its 2009 results show that people who feel good about themselves work more than those who don’t. It asks how often the respondents felt so sad that nothing could cheer them up. My analysis of the study showed that people who felt that way “none of the time” worked 10 percent more hours per week than those who felt that way “most of the time.” This holds true when we eliminate people who worked zero hours, so it is not merely that unemployed people are miserable. This doesn’t prove that extra work hours chase away sadness, but it weakens any argument that the cure for the blues is a French workweek.
by Ryan Streeter on June 13, 2014. Follow Ryan on Twitter.
Mark Perry has updated the following map, which is always illuminating.
Overall, the US produced 22.7% of world GDP in 2013, with only about 4.4% of the world’s population. Three of America’s states (California, Texas and New York) – as separate countries – would rank in the world’s top 13 largest economies. And one of those states – California – produced more than $2 trillion in economic output in 2013 – and the other two (Texas and New York) produced more than $1.5 trillion and $1.3 trillion of GDP in 2013 respectively. The map and these statistics help remind us of the enormity of the economic powerhouse we live in. So let’s not lose sight of how ridiculously large and powerful the US economy is, and how much wealth and prosperity is being created all the time in the world’s largest economic engine.