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Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary "reading list" which will include very brief summaries (and sometimes longer ones) of why each item has gotten our attention. Suggestions from readers for "reading list" items are gratefully reviewed, although sometimes space limits the number included.
This feature is published every day late afternoon New York time. For early morning review of headlines see "The Early Bird" published every day in the early am at GEI News (membership not required for access to "The Early Bird".).
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Top 10 communities for the highest well-being (Employee Benefit Adviser) This slide show has three states with 2 communities each. And only one community is not south of the Mason-Dixon line.
Middle Class, but Feeling Economically Insecure (The New York Times) Nearly 9 oout od 10 Americans consider themselves to be middle class. This article says that middle class is not only about status but, almost as importantly, also about aspirations. And aspirations today are increasingly problematic, leading to increased stress and anxiety. Research on this topic is discussed today in the members only section. Register for free newsletter to become a member.
Articles about events, conflicts and disease around the world
Most Say Government Policies Since Recession Have Done Little to Help Middle Class, Poor (Pew Research Center) See following articles for more on income and wealth studies. The second graph below shows the extreme asymmetry of class self-perception. Approximately 89% of Americans perceive themselves to be at some level of middle class. Lower class is self-perceived by 10%, which is less than the number living below the poverty line (14.5% in 2013, according to the U.S. Census Bureau). By subtraction, nearly 1/3 of those living below the poverty level consider themselves to be middle class.
How the middle class got screwed: College costs, globalization and our new Insecurity Economy (Marianne Cooper, Salon) This August 2014 article reviews major changes over the most recent decades which have created economic problems for what used to be the "great American middle class". The author cites decline of unions and social safety nets, globalization and the inflation in college costs as three of the factors most impacting the security and prosperity of America's economic anchor. For some data review, see the next two articles.
The Middle Class Is Worse Off Than You Think (Mark Whitehouse, Bloomberg View) When the middle class is defined as a demographic entity rather than an income group some results emerge that show more economic degradation in America than found with in other studies. The demographic "middle class" is:
Whitehouse compares the demographic middle class to the economic middle class and shows the differences vis a vis both income and wealth. This essay is based on a study published by the St. Louis Fed - see next article.
To summarize: The demographic middle class defined here is that group of people here household breadwinner was born before 1974 and has the educational attainment traditionally associated with middle class. Three obvious conclusions from the graphs:
The Middle Class May be Under More Pressure Than You Think (William R. Emmons and Bryan J. Noeth, Federal Reserve Bank of St. Louis) See previous article for background. These authors describe the reason for conducting this study with a demographic frame of reference:
The authors essentially are saying that using a population median for income (or wealth) fails to capture the change of an identified group of people over time because the people in the population median group change over time. See further comment below.
Econintersect: The deficiency in the demographic study is that it compares a changing population group to the entire population. This make interpretation difficult. Here is an example of what we mean: The demographic group studied was born before 1950 in the 1989 data, before 1960 in the 1999 data, before 1965 in the 2004 data and before 1974 in the 2013 data. Every year the demographic group content is changing by including an addition group of breadwinners turning 40 and by losing some geriatric population component which was educationally qualified for the group from (approximately) 20 to 40 years earlier than the new group entering the data set. So this data review is quite interesting but how it should be interpreted is not at all clear. Perhaps the data simply does not exist to do better, but that should not induce us to make the analysis more significant than is warranted.
The word "may" in the title was especially wisely chosen.
Other Economics and Business Items of Note and Miscellanea
Fundamental Disconnect -- Oil Stocks Outrunning Oil Prices (TheStreet) Watch the embedded video in the article.
U.S. Economy Has Lot of Jobs, But Americans Can't Do Them (Reuters, Newsweek) "We interpret the combination of rising job openings and slower hiring as a potential sign of increased mismatch between the needs of employers and the skills of available workers."
The Fed's Complete Misunderstanding of Economics and the Impact of QE (Zero Hedge) The assertion is that zero interest rates are highly deflationary.
The Regulator's Calculation Problem (Library of Economics and Liberty) The author says the regulator cannot know the market as well as the banker who is in it and, since the market is the ultimate arbiter of everything, the regulator cannot regulate effectively. Econintersect: More product of distressingly linear thinking.
5 Second Slow Mo Video Shows What REALLY Happened With Policeman Who Shot Fleeing Man In Back (Washington's Blog) Washington's Blog has contributed to GEI. Author says the cop was simply doing what he had been trained to do and got caught on video or it would have been like many other similar incidents.
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