Marketplace of Ideas
The summer doldrums may be upon us, but that’s no reason not to keep up with the economic news:
- “Gross domestic product alone cannot alone measure quality of life,” says NPR in its report on the OECD’s Better Life Index. The four-year-old measure of well-being tracks four million respondents in 180 countries, asking questions about 11 hard-to-quantify concepts such as “work-life balance” and “life satisfaction.” Others topics, such as jobs, income, education, and health, are more straightforward. At the website for the index, users can see how 36 countries stack up with all 11 topics ranked equally—Australia comes out on top—or set their own rankings. The United States is top-ranked for income but earns low marks for work-life balance, life satisfaction, and civic engagement. The U.S. is middling in the jobs department, where the rating is affected by job security and the long-term unemployment rate as well as overall employment and earnings. In past years, the Economist has reworked the OECD data to create rankings for the top and bottom 10 percent of the population for each nation. In that measurement, the top decile in the U.S. had the highest ranking of all nations in 2013, but the U.S. also had the widest gap between the top and bottom deciles.
- Jobs created since the Great Recession pay 23 percent less, on average, than jobs lost during the recession. That’s according to a report released this week by the United States Conference of Mayors. The report estimates that this shift corresponds to $93 billion in lost wages. In additional to lower paychecks, post-recession jobs have other shortcomings: Many are part-time, and the hours are erratic due to the increased use of automatic scheduling software. These new technologies often result in short notice on schedule changes, huge variation in hours from week-to-week, and tight shifts, where workers might have to close late one night only to return a few hours later for the opening shift. The New York Times this week spotlighted the struggles of one mother trying to make ends-meet with a part-time job at Starbucks, which uses such software. The story illustrated how hard it can be for workers to get ahead when erratic work schedules make it difficult to arrange child care and impossible to commit to a regular class schedule to advance their educations. In response to the exposé, Starbucks has announced that it will adjust its scheduling policies to foster “stability and consistency” for its workers, but it is just one of many companies that have come to rely on automatic scheduling software in the last few years.
- The U.S. economy may not look great, but Europe looks like a disaster. Germany and Italy both reported declines in GDP for the second quarter, while France stagnated for the second consecutive quarter and the overall euro zone economy was dead in the water. “It’s fairly clear that the euro zone recovery is coming apart at the seams,” said one analyst. “I think we’re still in a depression that began six years ago,” added another. Some have blamed the European Central Bank for a weak policy response to the problems plaguing the euro zone, but ECB President Draghi says poor economic performance “has nothing to do with monetary policy. It’s mostly the lack of structural reforms.” Germany is often credited with leading the way on such reforms, but even it is struggling after what many see as a weather-related blip up in growth early this year. Are sanctions with Russia over Ukraine to blame? Not yet, seems to be the consensus, but that’s a good reason not to be optimistic about growth prospects.
[Photo via FT.com]