The Economic Policy Institute has released the advanced version of The State of Working America, 2008/2009; full version will be available Jan. 2009.

Described as the "most comprehensive independent analysis of the U.S. labor market" by the Financial Times, the 11th edition shows that the business cycle that started in 2001 will be one for the record books....Prepared biennially since 1988, The State of Working America scrutinizes family incomes, jobs, wages, unemployment, wealth, poverty, and health care coverage, describing the economy's effect on our nation's standard of living.

Staying with our current theme of taxes and corporate America, let me direct your attention toExecutive Excess 2008: How Average Taxpayers Subsidize Runaway Pay -- a report from Institute for Policy Studies and United for a Fair Economy.

On Wednesday, I wrote that even though it's wrong to simply state that two thirds of corporations do not pay corporate income taxes, heavy criticism can be leveled at the tax code because it's rigged such that a lot of profits escape taxation. This IPS/UFE report takes aim at tax laws that encourage stratospheric executive compensation while costing some $20 billion annually.

The report notes that 30 years ago, the average American CEO was paid some 30 to 40 times that of the average American worker. In 2007, however, CEOs were compensated at a rate 344 times greater than that of the average worker. While the explosion in the pay gap has many causes, federal tax law has played role. And, aside from abetting obscene executive pay, the $20 billion in forgone revenue could be put to other uses.

All subsidies involve trade-offs. Each time we allow executives and their employers to avoid paying taxes they would otherwise owe, we reduce government's capacity to deliver needed services that taxpayers and their families would otherwise receive.

Tax subsidies for excessive executive pay represent a particularly indefensible waste of government resources. At the moment, no serious observer of the American scene is arguing that top business executives, as a group, earn too little in compensation. So why then should government, in any manner, be encouraging corporations and investment firms to pay their executives even more?

GDP
The Bureau of Economic Analysis released its preliminary estimate of second quarter GDP growth. The BEA estimates that the economy grew at annualized rate of 3.3 percent in the second quarter. This estimate is a bit higher than the advance figure of 1.9 percent, which the BEA released a month ago. The final second quarter GDP number will be released on Sept. 26. In the first quarter of this year, real GDP grew at a 0.9 percent rate.

The acceleration in real GDP growth in the second quarter primarily reflected a larger decrease in imports, an acceleration in exports, an acceleration in PCE, a smaller decrease in residential fixed investment, and an upturn in state and local government spending that were partly offset by a larger decrease in inventory investment.

Unemployment Insurance Claims
Also released today were unemployment insurance claims. The Labor Department estimates that in the week ending Aug. 23, 425,000 new unemployment insurance claims were made. The figure is 10,000 fewer than the previous week and reduces the four-week moving average of initial claims from 446,250 to 440, 250. The number of continuing claims rose by 64,000 to 3,423,000.

(Source: Center on Budget and Policy Priorities, "Average Income in 2006 Up $60,000 for Top 1 Percent of Households, Just $430 for Bottom 90 Percent")

After a discussion about federal tax policy and income inequality, Steven Pearlstein strikes the right chord on where the discussion on inequality should be focused. As much as the distributional consequences of the tax code matter, there's still the nagging problem of pre-tax income inequality. Despite major advances in worker productivity over the past 40 years, workers have seen only a sliver of that economic gain.

The reality is that the market's tilt toward unequal outcomes is now so strong that you can't just rely on a progressive tax code to counteract its effects. To do that, it may be necessary to forgo some of those additional tax cuts for the middle and professional classes to pay for increased spending on early childhood education, state colleges and universities, and expanded public health programs. It may be necessary to "tinker" with the markets just a bit by indexing the minimum wage to overall income growth, using the antitrust laws to bust up oligopolies like those on Wall Street and making it possible once again for workers to unionize without fear of losing their jobs. It may even be necessary to slow the pace of further globalization.

There's a good debate to be had on all of these ideas -- every one involves economic risks and trade-offs. But there is no debating that markets are doing a lousy job of distributing the benefits of economic growth and that another decade of stagnant wages and runaway inequality is unacceptable.

No larger point here, I just wanted to flag this for interested readers.

You can read Income, Poverty, and Health Insurance Coverage in the United States: 2007 here.

Good news for income, not so great news for poverty, and mixed news for health insurance coverage. Here are a few highlights copy and pasted from the report:

• Real median household income increased 1.3 percent between 2006 and 2007, from $49,568 to $50,233 the third annual increase in real median household income.
• Real median earnings of both men and women who worked full-time, year-round rose between 2006 and 2007, following 3 years of annual declines. Men's earnings increased by 3.8 percent to $45,113, women's by 5.0 percent to $35,102. The 2007 female-to-male earnings ratio, 0.78, is an all-time high

• The official poverty rate in 2007 was 12.5 percent, not statistically different from 2006
• In 2007, 37.3 million people were in poverty, up from 36.5 million in 2006.

• Both the percentage and number of people without health insurance decreased in 2007. The percentage without health insurance was 15.3 percent in 2007, down from 15.8 percent in 2006, and the number of uninsured was 45.7 million, down from 47.0 million
• The number of people with health insurance increased to 253.4 million in 2007 (up from 249.8 million in 2006). The number of people covered by private health insurance (202.0 million) in 2007 was not statistically different from 2006, while the number of people covered by government health insurance increased to 83.0 million, up from 80.3 million in 2006.

U.S. Census Bureau: Income, Poverty, and Health Insurance Coverage in the United States: 2007

Today has been a slow day in an already slow month in fiscal policy in Washington, DC, but the Center on Budget and Policy Priorities (CBPP) issued a very helpful report leading up to the release of poverty, income, and health insurance data from the U.S. Census Bureau next Tuesday. The report is a guide to what to look for in the Census release and how to assess whether economic growth is reaching low- and middle-income families.