By most conventional measures, America’s economy is booming. But for millions of Americans, it doesn’t feel like a boom. They may be working hard, but they are not getting ahead in the way that the broader economic indicators say they should be. The New York Times’ David Leonhardt writes that this may be because the “conventional measures” of economic health give an inadequate picture of the overall economy.
The main reason is inequality. A small, affluent segment of the population receives a large and growing share of the economy’s bounty. It was true before Lehman Brothers collapsed on Sept. 15, 2008, and it has become even more so since. As a result, statistics that sound as if they describe the broad American economy — like G.D.P. and the Dow Jones industrial average — end up mostly describing the experiences of the affluent.
While most stocks are held by the affluent, many middle-class households have most of their wealth tied up in their home.
That’s why the net worth of the median household is still about 20 percent lower than it was in early 2007. When television commentators drone on about the Dow, they’re not talking about a good measure of most people’s wealth. The unemployment rate has also become less meaningful than it once was. In recent decades, the number of idle working-age adults has surged. They are not working, not looking for work, not going to school and not taking care of children. Many of them would like to work, but they can’t find a decent-paying job and have given up looking. They are not counted in the official unemployment rate.
Leonhardt’s solution: A new, supplementary version of G.D.P that separates the share of national income that flows to the rich, the middle class and the poor.
Louisiana has a budget surplus
Some good news for the state’s finances: Louisiana finished the 2017-18 fiscal year with a budget surplus of at least $300 million. While the numbers aren’t yet final, it marks the second straight year the state took in more tax revenue than it spent. It means Louisiana can continue to replenish its Rainy Day Fund, which was depleted during the economic downturn, and set aside money for things like roads, bridges and paying down retirement debt. The AP’s Melinda Deslatte:
(State Treasurer John) Schroder said his office couldn’t yet pinpoint why the state has the hefty surplus, whether tied to better-than-expected tax collections or some other explanations. Gov. John Bel Edwards’ spokesman Richard Carbo confirmed Louisiana has a surplus, but he said the exact amount won’t be determined until mid-October. “It is premature for the treasurer to be discussing any figure, but we will release more information at a later date,” Carbo said in a statement. Carbo suggested the surplus was “another sign that Louisiana is headed in the right direction” financially. But conservative Republicans said it indicates the Democratic governor exaggerated the need for taxes to plug budget gaps.
Black-owned businesses in Baton Rouge
The number of black-owned businesses in East Baton Rouge Parish nearly doubled between 2007 and 2012, The Advocate’s Terry Jones reports. But that progress is tempered by the fact that black-owned businesses accounted for only about 1 percent of total payrolls in the parish, despite African Americans comprising about half the total population. That suggests many black-owned businesses are sole proprietorships, and that major barriers remain that keep minority-owned businesses from expanding.
But Tre Gradnigo, marketing director for Louisiana Black Business Directory, a marketing service, says the substantial uptick in minority business ownership indicates a generational shift toward financial success within the black community. Many young black entrepreneurs, Gradnigo said, are coloring outside the lines of the traditional picture of a black business owner in Baton Rouge. “Some people think all black businesses are simply car washes and Realtors, but now for pretty much every service or product, there is a black-owned business,” he said.
The debate over ‘holistic admissions’
LSU’s recent announcement that standardized test scores would no longer be used to automatically deny admission to certain applicants touched off a heated debate on newspaper editorial pages. Critics charged that the move amounted to a lowering of standards, which would allow children of the politically well-connected to attend the state’s flagship university. Others caterwauled that it would take away students – and revenue – from their less prestigious campuses. But Nola.com/The Times-Picayune columnist Tim Morris writes that the new policy puts common sense ahead of bureaucracy and provides hope for students who need it:
Kids whose GPA may have suffered because of a natural disaster or a personal loss get another look. A student who made good grades while working a job to support the family but didn’t have a good day on that one shot she had to take the ACT also gets reviewed. And then there was the very real high school valedictorian with a 22 composite on the ACT but a math score that fell just below the requirement. “And we found out that other kids were going to get a rejection letter — one had a 4.35 grade-point average, a 32 ACT — and we’re going to send them a rejection letter because the state of Washington’s core curriculum doesn’t match Louisiana’s.”
Number of the Day
10,551 – Total number of state contracts as of July – a 25 percent drop since July 2016. (Source: Division of Administration via The Advocate)