what went wrong blog

What we're reading - October 21, 2011

Friday, October 21st, 2011 

Here's what Kat Aaron, What Went Wrong's project editor, was reading this week:

Portrait Kat Aaron

This week, I’ve been reading about the 1 percent and about the poor. The Census Bureau released a brief (pdf) this week mapping the percentages of people living in poverty by state, and the geographic concentration of poverty is pretty stark. You can almost draw a straight line across the bottom third of the country, and that's where all the states with poverty rates over 16 percent are. What’s also striking is how few states have less than 11 percent of people living in poverty. The map in the census brief is worth checking out, just to see the geographic distribution.  

Census also released a brief (pdf) showing the percentages of people receiving public assistance by state, and the changes between 2009 and 2010. It turns out that the states (or districts, or territories) with the highest percentages of people receiving public benefits are Alaska, California, Maine, Michigan, Vermont, Washington, Puerto Rico and D.C. It’s worth noting that the numbers don’t include benefits like food stamps or health benefits, just Temporary Assistance to Needy Families money. 

On the other side of the income and wealth gap, I spent some time this week playing with tools that allow readers to calculate where they stand in the American economy. The New York Times Bucks Blog linked to a tool on Kiplinger, where you can plug in an income and find out whether you’re in the 1 percent, the 53 percent, or some other point in the economic hierarchy. As the Times asks:

The persistent Occupy Wall Street movement has taken on the debate over rising income inequality, with its notion of 99 percent of the population being exploited by a wealthy 1 percent.

Doesn’t that make you a little bit curious, about where your income — and tax burden — places you, in comparison to the rest of your fellow citizens?

Why yes, yes it does. You can find out how you rank here

I also spent some time absorbing the breakdown of who, exactly, is among the 1 percent, thanks to the Roosevelt Institute’s Mike Konczal. He tracked down a paper that explores the occupations of the wealthiest Americans:

Rortbomb Chart of One Percent Earners

As Konczal writes: 

It boils down to managers, executives, and people who work in finance. From the paper: “[o]ur findings suggest that the incomes of executives, managers, supervisors and financial professionals can account for 60 percent of the increase in the share of national income going to the top percentile of the income distribution between 1979 and 2005.”

For fun, there are more than twice as many people listed as “Not working or deceased” than are in “arts, media, sports.” For every elite sports player who earned a place at the top of the income pyramid due to technology changes and superstar, tournament-style labor markets that broadcast him across the globe, there are two trust fund babies.

Finally, I spent some time playing with an interactive infographic, posted by Fast Code Design, which lets you see how your tax dollars were spent last year. (The image below is just a screengrab from Fast Code; for the full interactive, click here.)

Fast Company Tax Data Viz

That chart, it turns out, was one visualization of many, created as part of Google and Eyebeam’s Data Visualization Challenge. The full set of award-winning tax-related interactive is online, and they’re both pretty and informative. I think my favorite is the runner-up, called Every Day is Tax Day, which breaks down your 8-hour working day into a clock, showing how much of each day is spent funding which agencies. Fair warning: It’s depressing. 

And these stories caught the eye of Michael Lawson, one of our reporters:

Portrait Michael Lawson

Health care costs are on the rise and we’re getting less for our money, according to the LA Times. A rapidly aging population is considered part of the increase in costs. I was alarmed by polling from Gallup, reported by the Wall Street Journal, that shows that fewer than 20 percent of U.S. workers are fit and healthy.

Just 1 in 7 U.S. workers is of normal weight without a chronic health problem, according to Gallup polling data, and it could be costing the economy more than $153 billion a year in lost productivity from increased sick days.

Gallup polled more than 100,000 full-time workers, and found that two-thirds of the work force is either overweight or obese and nearly half are both overweight and have at least one chronic health problem. The numbers on obesity are calculated using self-reported height and weight, which means the numbers could be even higher. Studies have shown that people tend to underestimate their weight and overestimate their height.

Even among those of normal weight, chronic conditions are prevalent, as nearly 60 percent of those workers report a continuing health issue. Chronic health problems included having ever been diagnosed with a heart attack, high blood pressure, high cholesterol, cancer, diabetes, asthma, or depression; and recurring physical pain in the neck or back or knee or leg in the last 12 months.

What will these statistics bring us down the line? Care for chronic diseases is 75 percent of health-care spending.  The Affordable Care Act institutes a public health fund intended to expand access to preventative services and education in states. The law also makes many preventative services free of charge for those who are insured. However, as unemployment has remained high and companies cut costs, the number of uninsured Americans has risen, adding greater pressure on an already unhealthy population.

The United Auto Workers recently reached agreements with U.S. automakers that would add 10,000 jobs over the next four years. The deal, which in some cases brings production to the U.S. from Canada and Mexico, also is possible because of lower wages. According to CBS Marketwatch, this could mean more options for consumers in the affordable car market.

Key to this change is a lower wage structure for newer employees, allowing them to be paid $14 to $16 an hour (eventually rising to $19.28), instead of the full $28-an-hour standard UAW wage. This two-tier system was first put into place during the government bailout and bankruptcy of General Motors and Chrysler; the union is now extending it to Ford.

The earlier two-tier agreement paved the way for the current deal by providing for U.S. manufacture of the just-introduced Chevrolet Sonic .The Sonic is being produced at General Motors’ Orion Assembly Plant in Michigan under a previous union deal, with 40 percent of workers there getting the lower-tier wage; until now, automakers believed they had to build low-priced subcompact cars abroad to maintain profitability.

Henry Ford famously built his company with this idea that his workers would be able to afford a Model T. But those days seem long gone. As one of the commenters points out, Ford's second-tier workers may not be able to afford the cars they build today.

What Went Wrong

Donald Barlett and James Steele are revisiting America: What Went Wrong, their landmark 1991 newspaper series, in a new project with the Investigative Reporting Workshop. Over the next year, the project team will examine how four decades of public policy has shaped America's ongoing economic crisis.


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