America’s lowest-earning workers are enjoying higher wage growth than top earners, after taking into account the effects of the recent bout of high inflation.
Since 2020, real wages for the bottom 10 per cent of the workforce have returned to their pre-pandemic level. In contrast, top earners and those on average incomes have taken a substantial hit once the effect of price growth is taken into account.
According to a paper by the National Bureau of Economic Research, real hourly earnings for the lowest earners rose by 6.4 per cent between January 2020 and September 2022.
Wages for America’s lowest earners were already growing before 2020, suggesting that this can be partially attributed to trends seen before the pandemic, such as increases in states’ minimum wage laws. However, the NBER report also found that increases in wages for the lowest earners also occurred in states without minimum wage laws after 2020.
According to the Federal Reserve Bank of Dallas, the growth has coincided with a tightening of the labour market in the wake of the “Great Resignation”, when large numbers of low-paid workers quit their jobs during the pandemic citing reasons such as low pay, child care issues and dissatisfaction with prospects.
Our other charts of the week . . .
2022 was the second-warmest year on record in Europe, at 0.9C above the recent average (1991-2020), according to a report released by Copernicus, the earth observation programme. Globally, 2022 was the fifth warmest year at between 0.25C and 0.3C above the recent average.
The past five years have seen European temperatures average 2.2C higher than the pre-industrial average, already far above the 1.5C target set in the Paris Agreement in 2015.
“The 2022 report highlights alarming changes to our climate, including the hottest summer ever recorded in Europe,” Carlo Buontempo, director of the Copernicus Climate Change Service, said at the release of the organisation’s European state of the climate report.
“Local understanding of the dynamics of climate change in Europe is crucial for our efforts to adapt, and to mitigate the negative impact these changes have on the continent,” he continued.
As the annual US filing deadline approaches, most Americans are bothered by the amount of tax they pay.
People from upper- and middle-income households, Republicans and those aged 30-64 are especially likely to say they pay more than their fair share in taxes to the federal government according to a survey by the Pew Research Center.
Americans have become increasingly likely to complain that their taxes are too high, even though tax rates have generally been falling, from 20.7 per cent in 2016 to 20.4 per cent in 2022 according to a report for the US Joint Committee on Taxation. This is the highest share since at least 1997, the earliest year in which Pew collected this data.
The overall tax burden — all taxes as a share of gross domestic product — is low in the US relative to other rich countries, though this average is affected by the country’s relatively low corporation tax and social contributions.
Despite being less fuel-efficient, wearing out roads faster and — research suggests — increasing the severity of pedestrian traffic collisions, the world likes big cars.
Nowhere more so than in the US and Canada, where two-thirds of new cars sold are SUVs and the average car weighs in at more than 1,750kg, about as much as a hippopotamus.
Larger, heavier vehicles are not the most popular choice in all high-income countries, however. In Japan, the average car weighs two-thirds of those in the US and sales of SUVs are eclipsed by the ‘Kei’ micro car, which makes up a third of new car sales.
US President Joe Biden launched his re-election campaign on Tuesday despite low net approval ratings. Polling compiled by RealClearPolitics show the Democratic president’s job approval steadily declined after taking office, reaching a low in August following a summer of rising gas prices and inflation. However, it has since shown slow improvement.
His ratings mirror those of former president Donald Trump at the same point in his presidency. They have both lagged behind former president Barack Obama’s approval ratings throughout his presidency.
Biden, who will be 82 when sworn in if re-elected, will run alongside vice-president Kamala Harris, despite having a -16 per cent net approval rating with more than 54 per cent of Americans holding an unfavourable opinion of her, according to RealClearPolitics polling averages.
Joanna S Kao
News media outlets face a wave of job cuts. In the past week staff cuts have hit ABC News’ data-driven website FiveThirtyEight, Vice Media Group announced lay-offs across its news business and the Vice News Tonight programme was cancelled.
Earlier this month BuzzFeed decided to shut its news division and reduce its workforce by 15 per cent. In February News Corp announced plans to reduce headcount by 5 per cent, about 1,250 positions, by the end of the year.
North American and UK news companies have announced more than 3,000 redundancies in the first quarter of 2023, according to data compiled by the Press Gazette.
News organisations began to downsize in mid-2022 in response to declining advertising revenue and high prices for energy and some raw materials.
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