On Tuesday, August 19, the Coalition on Human Needs is once again hosting a webinar to help advocates and analysts prepare for the release of annual data from the Census Bureau about poverty, income, and health insurance in the U.S. The webinar will take place from 2:00 - 3:30 (EST) on the web, and feature Jared Bernstein of the Economic Policy Insitute, Douglas Hall, Acting Managing Director of Connecticut Voices for Children, Deborah Weinstein, Executive Director of the Coalition on Human Needs, and will be moderated by Ellen Teller, Director of Government Affairs, Food Research and Action Center.

If you are not familiar with CHN's webinar or the annual data release of poverty information from Census, here's a bit of information about what you can expect if you sign up and participate. The webinar will help you:

* to find and understand national numbers and the findings for your state when they're released on August 26
* to see accurate trends over time; whether your state fares better or worse than the national average
* to compare the new data (from 2007) with what we know about the economic woes of 2008, and
* how to talk about the new findings to help build the growing movement for a national commitment to dramatically reduce U.S. poverty.

To sign up to participate and for more information, see CHN's webinar webpage.

The Bureau of Labor Statistics (BLS) released data for inflation and real earnings this morning, while the Labor Department reported on unemployment insurance claims for the past week.

Inflation: Consumer prices continue their steep advance as prices jumped 0.8 percent in July, pushing the annualized rate to 10.6 percent (yikes!). The jump in consumer prices was largely driven by food and energy, and when those items are subtracted inflation clocks in a high, but not scary, 3.5 percent. BLS Release: Consumer Price Index: July 2008 Commentary: Dean Baker at CEPR
Real Earnings: Workers' pay took a hit in July as real average weekly earnings fell by 0.8 percent. The 0.3 percent increase in average hourly earnings couldn't keep up with the 0.3 decrease in aerage weekly hours and the 0.9 percent in prices. BLS Release: Real Earnings in July 2008
Unemployment Insurance Claims: Last week, 450,000 workers claimed unemployment insurance for the first time -- 10,000 fewer than the previous week. The four-week moving average of initial jobless claims rose to 440,500, an increase of 19,500 from the previous week's revised average of 421,000. Workers who continue to collect unemployment insurance advanced to 3,417,000, an increase of 114,000 from the previous week. Department of Labor Release: Unemployment Insurance Weekly Claims Report Commentary: Andrew Samwick at Capital Gains and Games

The OMB Watch Fiscal Policy Program is looking for an intern for the fall of 2008. Yup, that's right. This is your chance to get in on the ground floor at one of the most dynamic nonprofit watchdog groups in Washington, DC. We're looking for energetic undergraduate or graduate students who have excellent writing, critical thinking, and communications skills, and who are dedicated to public policy and government accountability (see current intern Josh at right for example).

The internship is unpaid, but you'll have the chance to gain first hand experiences and take on significant responsibilities related to a number of different aspects of policy analysis in DC. Plus, you'll get a chance to write for the BudgetBlog - what could be better?

Interested? Learn more about the position and how to apply.

The Labor Department released its weekly unemployment insurance (UI) claims data this morning.

• 455,000 workers filed first-time UI claims last week, a jump of 7,000 from the previous week. The number of claims last week had not been seen since March 2002.
• The four-week average for new UI claims moved up to 419,500, a five-year high
• The number of continuing claims rose to 3,311,000, also a five-year high

AP: Jobless claims hit highest point since March 2002

Writing in the New York Times, Stephanie Strom brings yet another instance of how corporations and their enabling political benefactors have clearly had their way with the tax code.

Organizations, including the American Red Cross and Catholic Charities, have complained that the current tax deduction for use of a personal car while performing volunteer services for charities was too low at 14 cents a mile. That is compared with 58.5 cents a mile for corporate employees who use their cars for business purposes.

Simply inexcusable.

And on Wednesday, four senators plan to announce a proposal to reset the charitable mileage deduction to 70 percent of the corporate deduction.

Seventy percent? Way to even out the disparity, clowns.

Tax breaks are inserted into the tax code as a means of either encouraging certain behavior or restoring fairness to a perceived inequity. That the use of personal vehicles for business deserves a tax break of some four times that of charitable use indicates that, as a society, we either 1) believe personal vehicles should be used way more for business than for charity (free market, baby!) or 2) that it would be really unfair for people who use their personal vehicles for charity work to see a tax break equal to those who use them for business.

Put to a vote, it's hard to see how either of these options would win in a citizen ballot initiative. Common decency would forbid it. One wonders, then, what sort of conditions foster this kind of shameful disparity in the tax code.

Photo by Flickr user genericstrasse used under a Creative Commons license.

Former Clinton Labor Secretary and current UC Berkeley professor Robert Reich really nails it on his blog today:

But even an adequate stimulus package will offer only temporary relief this time, because this isn't a normal downturn. The problem lies deeper. Most Americans can no longer maintain their standard of living.

...

The heart of the matter isn't the collapse in housing prices or even the frenetic rise in oil and food prices. These are contributing to the mess but they are not creating it directly. The basic reality is this: For most Americans, earnings have not kept up with the cost of living.

Reich then goes on to explain that, since the 1970s, facing stagnating wages, American families sent women into the workforce to supplement family income, then families worked longer hours, and finally they relied on borrowing -- through credit cards and equity in their homes -- as a means to increase their standard of living. And now that the last source of wage supplement has dried up, the recession that we're headed for will require a ground-up fix, rather than a temporary (and marginal) boost to family income.

Growing inequality, where the gains from increasing productivity have accrued mainly to the wealthy, is ultimately harming the nation's economy. Economists and policy makers can no longer duck the inequality issue with a "well, life isn't fair" attitude: Inequality bears directly on the ability of the economy to sustain and improve the standard of living for all Americans. The economy, after all, does not exist to protect and extend the fortunes of the fortunate.

Image by Flickr user incendiarymind used under a Creative Commons license.

Jobs data released this morning show that the economy continued to a seven-month trend of shedding jobs. July's bottom-line job-loss number was mitigated by an increase of 25,000 government jobs; private sector employment dropped by 76,000. Since January, the economy has lost 463,000 jobs.

The unemployment rate also moved upward from 5.5 percent to 5.7 percent. In the past year, the unemployment rate has rise 1.0 percent as 1.6 million workers have become unemployed.

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The federal minimum wage will increase to $6.55 per hour today, the second bump that is part of a law passed last year to increase the wage to $7.25 by next summer (see this story in the Atlanta Journal-Constitution). As the AJC correctly points out, the increase will have a significant impact in Georgia, but for more than half the states, it won't do much because the federal government is woefully behind the curve:

Yet in 30 states, Thursday's change is a yawner: They already have higher wage floors — the highest being California and Massachusetts at $8 an hour and Washington at $8.07 an hour.

In Georgia, the new floor matters: About 210,000 Georgians work for the minimum wage, according to a 2006 study by the Georgia Policy and Budget Institute. About 461,000 others, while making a little more than the minimum, would also likely get a boost because of the change, the GPBI said.

For a full-time worker, Thursday's $28-a-week raise would mean a year's pay of $13,624. That is below the official poverty line for a family of three — and about one-third of the Georgians affected by the change are parents, according to the GPBI.

Nationally, it is estimated that 2.1 million workers will receive a long-overdue pay increase today, but for a family of three, a minimum wage earner will still be well below the federal poverty line.

Related Articles:
OurFuture.org: The Next Minimum Wage Fight
Jonathan Tasani: The Minimum Wage: A Disgrace and a Scandal
EPI: Guide to the Minimum Wage

Joint Economic Committee ranking member Jim Saxton (R-NJ) musters moral fibre to stand up for the downtrodden richest one percent among us to lament the growing burden that increasing shares of income are placing upon this voiceless group. It's true: According recently-released IRS data, while the richest one percent of taxpayers (as measured by adjusted gross income) saw their share of income grow from 20.8 percent to 22.1 percent from 2000 to 2006, they also saw their share income taxes climb from 37.4 to 39.9 in that same time.

Meanwhile, those lucky duckies in the bottom 50 percent of income earners -- those earning less than $31,987 -- had their share of the tax load lifted. From 2000 to 2006, when they saw their share of income decrease from 13.0 percent to 12.5 percent, those earners in the lower half of the income distribution were sticking it to the upper half as they reduced their share of the overall income tax burden from 3.9 percent to 3.0 percent.

Fear not, one-percenters! You can look forward to a lighter income tax burden after Thursday, when the minimum wage skyrockets to $6.55. It won't be long before they catch up to your average hourly income of $660 and share equally in your tax burden.

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The Bureau of Labor Statistics has issued a pair of data sets indicating that workers are still not seeing real (i.e. inflation adjusted) increases in pay.

Yesterday's Real Earnings report, based on data from the payroll reports of private nonfarm establishments of earnings of both full-time and part-time workers holding production or nonsupervisory jobs, shows:

Real average weekly earnings fell by 0.9 percent from May to June after seasonal adjustment...Average weekly earnings rose by 2.8 percent, seasonally adjusted, from June 2007 to June 2008. After [adjusting for inflation], average weekly earnings decreased by 2.4 percent.

Today's release of data on full-time workers, based on a "survey of households in which respondents are asked, among other things, how much each wage and salary worker usually earns," also reflects a weak economy:

Median weekly earnings of the nation's 107.1 million full-time wage and salary workers were $719 in the second quarter of 2008....This was 4.2 percent higher than a year earlier, compared with a gain of 4.4 percent in the Consumer Price Index for All Urban Consumers (CPI-U) [i.e. inflation] over the same period.

President Bush today:

The growth [of the economy] is lower than we would have liked, but it was growth nonetheless.

GDP is not the only thing that is growing.

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The Center on Budget and Policy Priorities has once again released an analysis of state government budget health, and the news continues to deteriorate. In their lastest analysis, they rank all 50 states according to changes in three main economic indicators - employment, poverty, and housing foreclosures. The report finds:

States across the country have projected budget shortfalls totaling at least $48 billion for 2009. To meet their balanced budget requirements, they are being forced to raise taxes and/or cut expenditures — both of which reduce overall demand and thereby weaken the impact of the recent federal stimulus package. Federal fiscal relief would limit the need for such actions.

CBPP argues pretty convincingly that because the states that are showing the most economic problems are the same ones that are having budget issues, fiscal relief for state budgets would go a long way to improving econonmic conditions. Good stuff. Maybe Congress should consider this, huh?

CBPP: ECONOMIC DATA CAN BE USED TO TARGET STATE FISCAL RELIEF EFFECTIVELY

The Fiscal Policy Team and Congress both return to action this week with a number of fiscal policy issues to be tackled during the next five weeks. Below is a rundown of issues coming up soon, with most of the action happening in the Senate:

• Debate continues between Senate Democrats and Republicans over whether to offset the cost of a popular package of tax breaks called the "extenders." The latest development is that Senate Republicans are now challenging Democrats to offset the cost of the package with spending cuts rather than other tax increases. BNA ($)
• The Senate will also resume work on a bill to stave off a cut in payments to Medicare physicians by giving them the same reimbursement levels they had during the first six months of this year. Senate Republicans, who blocked legislation before the July 4 recess by one vote, have agreed to take up the legislation again this week after intense pressure from outside groups, particularly the American Medical Association. AMA Statement, AMA Television Ads
• Legislation to help people hurt by the mortgage crisis was also blocked before the holiday recess by Sen. John Ensign (R-NV), who wanted to have an amendment added to the bill to give tax cuts to encourage the production of renewable energy. The Senate plans to take another crack at that bill this afternoon.
• The appropriations season is well under way in Washington, but not much has been accomplished. With only about 10 weeks left until the start of the new fiscal year, neither the House nor Senate has approved any appropriations bills yet. After a old-fashioned temper-tantrum in the House appropriations committee before the July 4 holiday, prospects for completion of even one appropriations bill by Congress this year seems less and less likely.
• Finally, the Government Accountability Office has a new report out showing the weapons systems currently being developed by the Department of Defense will cost an astronomical $1.6 trillion to complete, of which $335 billion will be needed in the next five years. Yikes! Washington Post

Happy Fourth of July!
Just wanted to let our loyal BudgetBlog readers know we're going on a short hiatus next week. With Congress heading out of town for a short summer recess and the upcoming Fourth of July holiday next week, the Fiscal Policy team is heading out of town in order to escape the heat for some well-deserved vacation. This means, though, that the BudgetBlog will be dormant next week.

But don't despair. Craig and I will return in one short week on July 7 to continue to bring you all the news, gossip, information, and analysis on federal fiscal policy you've come to expect.

Hope everyone has a safe and festive Independence Day next week - be careful with those fireworks.

Yesterday's suspension vote in the House to extend unemployment insurance benefits by at least 13 weeks fell short of the required a two-thirds supermajority by a mere three votes -- perhaps attributable to the eleven members who did not vote.

This afternoon, the House voted again on the proposal as a stand-alone bill and, guess what? It passed precisely by a two-thirds, i.e., veto-proof, margin.

As Speaker Pelosi mentioned in a statement following today's vote, the bill does not only help the nation's unemployed workers, but the rest of us:

Extending unemployment benefits has the potential to help the entire American economy. According to the Congressional Budget Office, it is one of the most cost-effective and fast-acting ways to stimulate the economy because the money is spent quickly. For every $1 spent on unemployment benefits generates $1.64 in new economic demand.

The measure passed with support from 49 Republican House members, who bolted the Bush line opposing the bill, contained in yesterday's veto threat.