A paper released by the Federal Reserve Bank of San Francisco on July 1 looked at the effect on jobs from last year’s fiscal stimulus. It found that the estimated multiplier is large and statistically significant. Construction employment was 18.4 percent higher as of May than would have been that case without the stimulus package.
A July 1 report from Gallup found that underemployment (the unemployed plus those working part-time but desiring full-time work) has fallen to 18.3 percent in June from 20.3 percent in March.
On June 30, Pew reported that 55 percent of all adults in the labor force say that since the Great Recession began 30 months ago, they have suffered a spell of unemployment, a cut in pay, a reduction in hours or have become involuntary part-time workers.
On June 23, the Census Bureau released new data on capital expenditures by businesses between 1999 and 2008. A key finding is the decline in spending on equipment and the rise in spending on structures. The former fell from 69.4 percent of all business capital spending in 1999 to 58.9 percent in 2008, while the latter rose from 30.6 percent to 41.1 percent.
On June 22, the Bureau of Labor Statistics reported that at the end of 2009, 40 percent of the unemployed were classified as long-term unemployed (out of work for 27 weeks or more), by far the highest percentage recorded since data on long-term unemployment began being collected in 1948.
On June 15, University of Texas economist James Galbraith criticized the idea that national security necessitates deficit reduction. Foreign ownership of Treasury securities is not a meaningful threat, he says.
In a June study from the NBER, it is shown that special interests in the mortgage industry substantially increased their campaign contributions to members of Congress with large numbers of subprime borrowers.
In another June study, CUNY economist Ryan Edwards shows that one third to one half of the total cost of wars is paid long after the end of conflicts in the form of medical and other benefits to veterans and their dependants.
On May 18, economists Susan Dudley and Melinda Warren published a new study on the budgetary cost of federal regulatory agencies. They estimate spending in FY2011 at $59 billion and federal employment of 284,000 persons. Since FY2000, regulatory spending has risen 75 percent in real terms. The vast bulk of the increase, however, results from transportation security programs, which account for 100,000 of the staffing increase.
A May study from the Institute for the Study of Labor looks at the impact of deflation on the minimum wage. Based on Japanese data, the authors find that the resulting rise in the real minimum wage mainly reduced employment among low-skilled, middle aged women.
Bruce Bartlett is an American historian and columnist who focuses on the intersection between politics and economics. He blogs daily and writes a weekly column at The Fiscal Times. Read his most recent column here. Bartlett has written for Forbes Magazine and Creators Syndicate, and his work is informed by many years in government, including as a senior policy analyst in the Reagan White House. He is the author of seven books including the New York Times best-seller, Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy (Doubleday, 2006).
Previous posts:
July 1: Focus on Economics
June 30: Focus on International Economics
June 29: Focus on Fed and Inflation
June 28: Focus on China
