Upload
others
View
6
Download
0
Embed Size (px)
Citation preview
Global Lessons for Inclusive Growth
Jason Furman Chairman, Council of Economic Advisers
May 7, 2014 Remarks at The Institute of International and European Affairs (IIEA)
Dublin, Ireland
Figure 1: 29 OECD Countries Grew Over the Four Quarters of 2013, Up From 20 in 2012
1 Source: National sources; CEA calculations.
0
5
10
15
20
25
30
00:Q1 02:Q1 04:Q1 06:Q1 08:Q1 10:Q1 12:Q1
Number of OECD Countries GrowingNumber (based on year-over-year real GDP growth)
Figure 2: After Rising Strongly From 1950-1980, Income Growth Has Slowed or Even Reversed
2 Note: Ireland data is based to 1943=1950=100 and missing for 1944-1974. U.K. and Canada series have breaks in 1990 and 1982, respectively. Australia is indexed to 1951=100. Source: World Top Incomes Database; CEA calculations.
4
1950 1960 1970 1980 1990 2000 2010
United States
United Kingdom
Canada
Australia
France
Ireland
Growth in Real Average Income for the Bottom 90 PercentIndex, 1950=100 (log scale)
100
200
300
400
600
800
Figure 3: Long-Term Income Challenges in the United States Can Be Seen in Multiple Data Sources
3 Source: World Top Incomes Database; U.S. Census Bureau; CEA calculations.
4
1950 1960 1970 1980 1990 2000 2010
Two Measures of Real Income Growth for the United StatesIndex, 1950=100 (log scale)
100
200
300
400
500
Median Family Income(U.S. Census Bureau)
Average Income for Bottom 90% of Tax Units
(World Top Incomes Database)
Figure 4: U.S. Total Factor Productivity Has Rebounded But Still Falls Below the Postwar Period
4 Source: Bureau of Labor Statistics; CEA calculations.
0.00
0.25
0.50
0.75
1.00
1.25
1.50
1.75
2.00
2.25
2.50
1950 1960 1970 1980 1990 2000 2010
Growth in U.S. Total Factor ProductivityAnnual percent change
1953–1973:1.7 percent per year
1974–1995:0.4 percent per year
1996–2012:1.2 percent per year
15-year centered moving average
Figure 5: Productivity Growth Fell in Many Advanced Economies But Picked Up in the United States
Source: Conference Board; CEA calculations. 5
0
1
2
3
4
5
6
7
8
1950 1960 1970 1980 1990 2000 2010
Germany
France
Italy
Ireland
United States
15-Year Centered Moving Average of Annual Labor Productivity Growth
Percent per year
Figure 6: Productivity Growth and Average Bottom 90% Income Across Countries
Note: See notes on slide 2. Source: Conference Board; World Top Incomes Database; CEA calculations. 6
4
1950 1960 1970 1980 1990 2000 2010
United StatesIndex, 1950=100 (log scale)
100
200
300
400
500
75
600700800
Labor Productivity
Real Average Earnings for Bottom 90%
4
1950 1960 1970 1980 1990 2000 2010
United KingdomIndex, 1950=100 (log scale)
100
200
300
400
500
75
600700800
Labor Productivity
Real Average Earnings for Bottom 90%
4
1950 1960 1970 1980 1990 2000 2010
FranceIndex, 1950=100 (log scale)
100
200
300
400
500
75
600700800
Labor Productivity
Real Average Earnings for Bottom 90%
4
1950 1960 1970 1980 1990 2000 2010
CanadaIndex, 1950=100 (log scale)
100
200
300
400
500
75
600700800
Labor ProductivityReal Average Earnings
for Bottom 90%
4
1950 1960 1970 1980 1990 2000 2010
AustraliaIndex, 1950=100 (log scale)
100
200
300
400
500
75
600700800
Labor Productivity
Real Average Earnings for Bottom 90%
4
1950 1960 1970 1980 1990 2000 2010
IrelandIndex, 1950=100 (log scale)
100
200
400
600
75
800
1000
1300
Labor Productivity
Real Average Earnings for Bottom 90%
Figure 7: Share of Total, Labor, Capital Income Accrued to Top 1% (Piketty & Saez Data)
Source: Piketty & Saez (2013); CEA calculations. 7
0
50
100
150
200
250
300
350
1970 1980 1990 2000 2010
Share of Total, Labor, Capital Income Accruing to Top 1%
Index, 1970 = 100
Share of Total Income
Share of Labor Income
Share of Capital Income
Table 1: Capital Income Inequality Contributes More to Overall Inequality Towards the Upper End of the Income Distribution
Source: Piketty & Saez (2013); CEA calculations. 8
Top 10% Top 1% Top 0.1% Top 0.01%
Income Excluding Capital Gains
1970-2010 (Piketty-Saez) 83% 68% 53% 39%
1980-2010 (Piketty-Saez) 71% 54% 59% 35%
1990-2010 (Piketty-Saez) 64% 51% 53% 37%
Income Including Capital Gains
1970-2010 (Piketty-Saez) 80% 63% 47% 33%
1980-2010 (Piketty-Saez) 67% 50% 52% 30%
1990-2010 (Piketty-Saez) 61% 45% 44% 30%
Increase in Income Share Accounted for by Inequality Within Labor Income
Note: Values for any given year calculated as a centered three-year moving average.
Figure 8: The Rise in Inequality in the United States Has Coincided With a Decline in Union Membership
Source: World Top Incomes Database; Economic Policy Institute. 9
0
10
20
30
40
50
60
1915 1925 1935 1945 1955 1965 1975 1985 1995 2005
U.S. Union Membership and Top 10% Income SharePercent
Top 10% Income Share
Union Membership
Rate
Figure 9: Wealth in the United States Has, Over the Long Term, Remained Steady Compared to Europe
Source: Piketty (2014); CEA calculations. 10
0
100
200
300
400
500
600
700
800
1870 1890 1910 1930 1950 1970 1990 2010
National Capital in the United States and Europe
Percent of national income
United States
Europe
Figure 10: The Labor Share of Income Began To Decline in 2000
Source: Bureau of Labor Statistics; CEA calculations. 11
50
52
54
56
58
60
62
64
66
68
1950 1960 1970 1980 1990 2000 2010
Labor Share in the Nonfarm Business SectorPercent
2013:Q4
1947-2000 average
Figure 11: Many OECD Countries Enroll Nearly All Their Four Year Olds in Pre-School; in the United States, Only 78% Are Enrolled
Note: Data for Canada as of 2010. Source: OECD. 12
0
10
20
30
40
50607080
90
100
Enrollment Rates at Age 4 in Early Childhood and Primary Education
Percent (2011 unless noted)
Figure 12: Most OECD Countries Currently Invest a Small Share of GDP in Transportation Infrastructure
Note: Data for Switzerland, Hungary, Japan, Portugal and Denmark as of 2010. Data for Belgium as of 2009. Data for Greece and Ireland as of 2007. U.S. figures updated to 2013 based on OMB data. Source: OECD; U.S. Office of Management and Budget; CEA calculations. 13
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Investment in Inland Transportation InfrastructurePercent of GDP (2011 unless noted)
Figure 13: The United States Was One of the Pioneers of Tax Incentives for Business R&D, But Has Since Fallen Behind Other Countries
Note: Data for Belgium, Ireland, Australia, Spain and Chile as of 2010. Source: OECD. 14
0.00
0.05
0.10
0.15
0.20
0.25
0.30
Tax Incentives for Business R&DPercent of GDP (2011 unless noted)
Figure 14: With a $10.10 Minimum Wage, the United States Would Be in the Middle of the Range Across the OECD
Note: Data as of 2012. Source: OECD. 15
0
2
4
6
8
10
12
14
16
18
Minimum Hourly Wage2012 US$ per hour