Thursday, October 17, 2019

White Working Class Is in Decline

The white working class is declining not only as a share of the total U.S. population but also in absolute numbers, according to a Federal Reserve Bank of St. Louis analysis.

Today, only 40 percent of Americans aged 25 or older are white working class (defined as non-Hispanic Whites aged 25 or older without a four-year college degree). This is much lower than the 71 percent share of the population this group accounted for in 1975. During the past four-plus decades, the nonwhite working class (Hispanics, Blacks, and other minorities without a four-year degree) and non-Hispanic White college graduates have been growing. Each of these groups is now 25 percent of the population, up from 15 and 12 percent in 1975, respectively. The remaining 10 percent of the population is accounted for by nonwhites with a four-year college degree, up from 1 percent in 1975.

Social and demographic change explains the decline of the white working class—the growing share of non-Hispanic Whites who are earning a college degree and the rapid growth of minority populations relative to the non-Hispanic White population. "Whatever the cause," conclude the researchers, "the decline of this group will undoubtedly continue to have lasting economic and social consequences for the U.S."

Source: Federal Reserve Bank of St. Louis, The White Working Class: National Trends, Then and Now

Wednesday, October 16, 2019

Men's Earnings: Explaining Differences in Trajectory

Why do some workers enjoy rising incomes over their career while other workers can't seem to make any gains? That question was posed by researchers at the Federal Reserve Bank of New York. They examined W-2s and self-employment income of men at ages 25 and again at 55 to see how their earnings grew over the decades. For the median worker, real annual earnings grew 60 percent. But workers below the 20th percentile in earnings had lower earnings at age 55 than they did at age 25. Meanwhile, those in the top 1 percent saw their earnings increase by a factor of 27.

The researchers found several differences in the labor force experience of low- and high-income workers that could affect the earning trajectory of men over their career...
  • low-income workers lose their jobs more frequently
  • low-income workers have longer spells of unemployment
  • low-income workers are less likely to be contacted about alternative job opportunities 
Although high-income workers receive more alternative job offers than low-income workers, they are less likely than low-income workers to switch jobs. "Even though high earners are solicited more often, these solicitations do not always translate into job-to-job switches," say the researchers. "In fact, top income earners are much less likely to switch jobs. While we do not know the particular reason for this behavior, it can be the result of either the earner already having a high-paying job or the current employer responding to the risk of losing its worker."

Source: Federal Reserve Bank of New York, Liberty Street Economics, Job Ladders and Careers

Tuesday, October 15, 2019

Transportation Costs in Metros and States

Nationally, the average household devotes 16 percent of its expenditures to transportation (vehicle purchases, finance charges, insurance, repairs, gasoline, public transportation, etc.). But in the Detroit metropolitan area, residents spend a larger 19 percent of their budget on transportation. Just as housing costs vary across the country, so do transportation expenses. Here is transportation's share of average household spending in selected metropolitan areas...

Transportation as a share of average household spending, 2017–18
Detroit: 19.3%
Phoenix: 19.0%
Dallas: 16.8%
Miami: 16.3%
Houston: 15.9%
Baltimore: 15.8%
Chicago: 13.2%
Boston: 12.0%
New York: 12.0%
San Francisco: 11.3%

According to a Bureau of Labor Statistics' analysis of the first state-level spending data ever teased from the Consumer Expenditure Survey, the average Texas household devotes 20 percent of its budget to transportation. This is significantly greater than the 16 to 17 percent of the budget devoted to transportation by households in the metro areas of Dallas and Houston. Transportation consumed 15 percent of the average household's budget in California and 14 percent in New York state, higher than the share devoted to transportation by households in San Francisco (11 percent) or the New York metro (12 percent).

Source: Demo Memo analysis of the Bureau of Labor Statistics' Consumer Expenditure Survey

Monday, October 14, 2019

Death Rate Much Lower for Married People

Married people have strikingly lower death rate than the never-married, divorced, or widowed, according to a report by the National Center for Health Statistics. Take a look at the number of deaths per 100,000 population in 2017 by marital status...

Age-adjusted death rate by marital status in 2017
   779.6 for the married
1,368.8 for the divorced
1,443.6 for the never married
1,656.9 for the widowed

The age-adjusted death rate of married people was 43 percent lower than the death rate of the divorced in 2017. It was 46 percent lower than the death rate of the never married, and 53 percent lower than the death rate of the widowed.

One factor that leads to the lower death rate for the married is self-selection, with healthier people more likely than the less healthy to be married. Another factor is the benefit of living with someone who has your back, urging you to go to doctor appointments, take your pills, and eat right. A third factor leading to higher death rates for the single, divorced, widowed, is the stress surrounding the single life, marital breakups, and the death of a spouse.

Source: National Center for Health Statistics, Mortality among Adults Aged 25 and over by Marital Status: United States, 2010–2017

Thursday, October 10, 2019

Student Loans: How Much Is Owed?

Americans owe nearly $1.5 trillion in student loan debt, more than they owe for auto loans or credit card debt. But what is the maximum amount owed by individual borrowers? That's what the Federal Reserve Bank of St. Louis wanted to figure out. To investigate, Fed researchers used Equifax Consumer Credit Panel data, calculating the maximum loan balance for each borrower between 2000 and 2018, adjusted for inflation.

The median student loan balance is $24,899, according to the findings. But there is great variation in the amount borrowed. More than 20 percent of borrowers owe more than $50,000, and 5 percent owe nearly $100,000 or more. Here are student loan balances by percentile of borrowers...

Student loan balances
20th percentile: $9,703
40th percentile: $19,125
60th percentile: $31,312
80th percentile: $54,497
95th percentile: $99,025
99th percentile: $135,472

Source: Federal Reserve Bank of St. Louis, Are Students Borrowing Too Much? Or Too Little?

Wednesday, October 09, 2019

Number of Workers Aged 75-Plus Will Double

The median age of the labor force is projected to rise by another 0.6 years between now and 2028—from 41.9 in 2018 to 42.5 in 2028, according to recently released projections by the Bureau of Labor Statistics. It doesn't sound like a big deal.

But it is a big deal. The incremental increase in the median age masks dramatic shifts in the labor force by age group as the large baby-boom generation gets older and labor force participation rates among older workers rise. Take a look at the 10-year change projected for the labor force by age...

Percent change in labor force by age, 2018 to 2028
Total labor force: 5.5%
Aged 16 to 24:    -6.1%
Aged 25 to 34:     0.5%
Aged 35 to 44:   13.9%
Aged 45 to 54:    -1.1%
Aged 55 to 64:    -1.3%
Aged 65 to 74:   50.8%
Aged 75-plus:  104.9%

Only one age group under age 65 will gain a significant number of workers during the decade ahead. Meanwhile, the number of workers aged 65 or older will grow 61 percent. The BLS projects a 51 percent increase in the number of workers aged 65 to 74, and a doubling in the number of workers aged 75 or older. Not only are aging boomers inflating the older population, but the labor force participation rate of older workers is projected to climb as well. Among workers aged 65 to 74, the labor force participation rate is projected to climb from 27.0 to 32.5 percent. (For perspective, only 17.7 percent of the age group was in the labor force in 1998.) The labor force participation rate of people aged 75 or older is projected to rise to 12.1 percent, up from 8.7 percent in 2018. (In 1998, only 4.7 percent of the age group was in the labor force.) Workers aged 65 or older will account for 9.4 percent of the labor force in 2028, up from 6.2 percent in 2018.

Because there will be little or no growth in the number of younger workers in the decade ahead, expect businesses with expanding workforces to turn to older workers to fill positions.

Source: Bureau of Labor Statistics, Employment Projections

Tuesday, October 08, 2019

Profiles of Violent Death

There were 65,000 violent deaths in the United States in 2016, according to the CDC. The 62 percent majority were suicides, followed by homicides (25 percent), deaths of undetermined intent (11 percent),  legal intervention (1 percent), and unintentional firearm deaths (fewer than 1 percent). The legal intervention category is defined as "deaths caused by law enforcement and other persons with legal authority to use deadly force in the line of duty, excluding legal executions."

The CDC analyzed the circumstances surrounding the violent deaths that occurred in 32 states in 2016. In those states, there were 23,630 suicides, 10,336 homicides, 515 legal interventions, and 295 unintentional firearm deaths. The CDC examined the demographics of the victims  (age, sex, race), the method of death (firearm, sharp instrument, drowning, etc.), the location of death (house/apartment, street, etc.), and precipitating circumstances (depression, intimate partner problem, job problem, crime in progress, and so on).

Looking at the most likely scenario for each type of violent death, here are their profiles...

Suicide: A non-Hispanic White (83 percent) man (77 percent) aged 35 to 64 (52 percent) shot (49 percent) or hung (28 percent) himself in his house/apartment (74 percent) because he was depressed (74 percent). He did not leave a suicide note (66 percent), nor did he disclose to others his suicide intent (76.5 percent).

Homicide: A Black (56 percent) man (79 percent) aged 20 to 34 (46 percent) was shot (74 percent) in his house/apartment (47 percent) by an acquaintance/friend (27 percent) during an argument (32 percent).

Legal intervention death: A non-Hispanic White (50 percent) man (96 percent) aged 25 to 44 (59 percent) was shot (96 percent) in a house/apartment (38 percent) or on the street (28 percent). He had a drug problem (26 percent) or mental illness (21 percent). He had a weapon (73 percent).

Unintentional firearm death: A non-Hispanic White (59 percent) man (86 percent) aged 15 to 24 (35 percent) was in his house/apartment (74 percent), playing (35 percent) with a handgun (63 percent) when he unintentionally pulled the trigger (23.5 percent).

Source: CDC, Surveillance for Violent Deaths—National Violent Death Reporting System, 32 States, 2016

Monday, October 07, 2019

Median Household Income Rises in August 2019

Admit it. It was a disappointment when the Current Population Survey's 2018 median household income estimate, released by the Census Bureau last month, was no higher than the 2017 median, after adjusting for inflation. No need to worry. We already know how things will turn out. The median has been rising month after month during much of 2019, according to Sentier Research, whose Current Population Survey-based estimates track the economic wellbeing of households on a monthly basis. 

Median household income climbed 1.3 percent between July and August 2019, after adjusting for inflation, Sentier reports. The $65,976 August median was 3.4 percent higher than the median a year earlier in August 2018. "Real median household income continued to display an upward trend over the past 12 months," says Sentier's Gordon Green. "We have seen a strong positive trend in real median annual household income, which is encouraging."

Sentier's Household Income Index for August 2019 was 106.8 (January 2000 = 100.0). 

Source: Sentier ResearchHousehold Income Trends: August, 2019

Thursday, October 03, 2019

Work Schedule Surprises

Many workers do not know their work schedule much in advance, according to the American Time Use Survey, making it difficult to organize child care arrangements or plan doctor visits.

Percent distribution of workers by how far in advance they know their work schedule
19% know less than one week in advance
16% know one to two weeks in advance
10% know two to four weeks in advance
55% know four or more weeks in advance

Among workers without a high school diploma, nearly one-third (31 percent) do not know their work schedule even a week in advance.

Source: Bureau of Labor Statistics, Job Flexibilities and Work Schedules Summary

Wednesday, October 02, 2019

25% of Workers Sometimes Work from Home

Remember when computers and the internet were going to revolutionize the world of work? The ability to work remotely would solve all sorts of social and economic problems—allowing parents to care for young children, saving workers the time and expense of commuting, and lowering the cost of office space for employers. We're still waiting...

Wage and salary workers by work-at-home status, 2017–18
Total wage and salary workers: 100.0%
Workers who occasionally worked at home: 24.8%
Workers with days worked exclusively at home: 14.7%
Workers who worked exclusively at home at least one day per week: 8.0%

While 25 percent of wage and salary workers occasionally worked at home during the 2017–18 time period, according to the American Time Use Survey, many were just finishing up office work after hours. Only 15 percent of wage and salary workers spent a day working exclusively from home, and just 8 percent worked at home exclusively at least one day per week.

Why haven't computers and the internet created a sizable work-at-home labor force? Parents found out it was too hard to manage child care and job duties at the same time. Workers discovered face time at the office was worth the hassle of the commute. Employers grew weary of remote management. For whatever reason, working at home has not turned out to be as popular as once predicted. Of those who occasionally worked at home in 2017–18, the 56 percent majority did so primarily for personal reasons—it was their preference, they were trying to fit work in with personal or family needs, or they wanted to reduce commuting costs. But a substantial 43 percent worked at home primarily out of necessity—they had to catch up on work, their employer required it, or bad weather kept them at home.

Source: Bureau of Labor Statistics, Job Flexibilities and Work Schedules—2017–2018 Data from the American Time Use Survey

Tuesday, October 01, 2019

50% Increase in Householders Aged 65 to 74

Since 2010, the number of households headed by people aged 65 to 74 has expanded by 50 percent, according to the Census Bureau's Current Population Survey. This increase accounts for most of the decade's household growth—6.5 million of the 11.0 million increase in households between 2010 and 2019. The number of households headed by people aged 55 to 64 and 75-plus also grew faster than average. Householders aged 55 or older now head nearly half (45 percent) of the nation's households, up from 39 percent in 2010.

Three age groups lost households between 2010 and 2019. The biggest loss occurred among 45-to-54-year-olds. There were 2.8 million fewer householders aged 45 to 54 in 2019 than in 2010 as the small Generation X passed through the age group.

Numerical (and percent) change in households by age of householder, 2010 to 2019
Total households: 11,041,000 (9.4%)
Under age 25:           –34,000 (–0.5%)
Aged 25 to 34:       1,354,000 (7.0%)
Aged 35 to 44:        –149,000 (–0.7%)
Aged 45 to 54:      –2,800,000 (–11.3%)
Aged 55 to 64:        3,785,000 (18.6%)
Aged 65 to 74:        6,517,000 (49.5%)
Aged 75-plus:         2,369,000 (19.6%)

Source: Census Bureau, Current Population Survey Income Data Tables