Tag Archives: inequality

How did CEOs do during the pandemic?

Did CEOs take a pay hit like many workers did during the pandemic? The article CEO pay has skyrocketed 1,322% since 1978 by Lawrence Mishel and Jori Kandra (8/10/2021) suggests CEOs did just fine last year. Their chart shows that realized CEO compensation grew during 2020 compared to the average worker.

Details on the metric:

We focus on the average compensation of CEOs at the 350 largest publicly owned U.S. firms (i.e., firms that sell stock on the open market) by revenue. Our source of data is the S&P ExecuComp database for the years 1992 to 2020 and survey data published by the Wall Street Journal for selected years back to 1965. We maintain the sample size of 350 firms each year when using the ExecuComp data.

The realized measure of compensation includes the value of stock options as realized (i.e., exercised), capturing the change from when the options were granted to when the CEO invokes the options, usually after the stock price has risen and the options values have increased. The realized compensation measure also values stock awards at their value when vested (usually three years after being granted), capturing any change in the stock price as well as additional stock awards provided as part of a performance award.

The granted measure of compensation values stock options and restricted stock awards by their “fair value” when granted (Compustat estimates of the fair value of options and stock awards as granted determined using the Black Scholes model).

Well maybe CEO pay just went down less than worker pay and that is why the ratio went up. In table 1, realized pay for 2019 is $20,351,000 with 2020 projected as $24,194,00. There are other graphs in the article and data available for download.

How much debt do students have by race?

The EducationalData.org post Student Loan Debt by Race by Melanie Hanson (6/9/21) has three excellent graphs such as the one copied here. It may not be surprising that Asians have the least debt given Asians have the highest income, but Hispanic and Latino debt is almost identical to White and Caucasian debt yet their income is typically closer to the Black and African American community.  From a statistical standpoint the first bullet in the highlights

Black and African American college graduates owe an average of $25,000 more in student loan debt than White college graduates.

is a bit misleading. Given the skewness of the data (the 17% in the top category for Black and African American) one should also report a median difference, which looks to be closer to around $10,000. Interestingly, in all cases the median debt is below the $39,000, which is manageable college debt in most cases. The question that comes to mind is how much lower would this be if median income increased at the same pace as the stock market or top 1%?

The article has sources but no easily downloadable data set.

 

Who has access to a smartphone or broadband?

The Pew article Mobile Technology and Home Broadband 2021 by Andrew Perrin (6/3/2021) summarizes the results of their smartphone and home broadband survey.

Smartphone ownership (85%) and home broadband subscriptions (77%) have increased among American adults since 2019 – from 81% and 73% respectively. Though modest, both increases are statistically significant and come at a time when a majority of Americans say the internet has been important to them personally. And 91% of adults report having at least one of these technologies.

There are differences between various groups (see their graph copied here):

The share of Americans with home broadband subscriptions has similarly grown since 2019 – from 73% of adults saying they have one in the previous survey to 77% today. There are more pronounced variations across some demographic groups, particularly in differences by annual household income and educational attainment. For example, 92% of adults in households earning $75,000 or more per year say they have broadband internet at home. But that share falls to 57% among those whose annual household income is below $30,000.

There are other graphs in the article and Pew provides a methodology section with access to data.

What is the relationship between COVID-19 deaths, education, and race/ethnicity?

The working paper, from the Harvard Center for Population and Development Studies, Intersectional inequalities in COVID-19 mortality by race/ethnicity and education in the United States, Jan 1, 2020-Jan 31, 2021 by J.T. Chen, et. el. (2/23/2021) contains the graph copied here.

It is interesting to note that within educational categories, Hispanic mortality rates were consistently lower than rates among Non-Hispanic Whites. This suggests that the overall increased mortality rates experienced by Hispanics is driven in large part by their overrepresentation in more disadvantaged education groups. Similarly, for the non-Hispanic Black population, their equivalent mortality rates to Non-Hispanic Whites in the two lowest educational strata, and their only slightly elevated risk in the higher educational strata suggests that it is the inequities in educational distribution that drive the overall higher crude rates among the non-Hispanic Black vs non-Hispanic White populations.

This provides evidence that COVID-19 deaths are connected to education more so than race/ethnicity. This, of course, isn’t causation, as education level is likely a marker for risk factors of COVID-19 such as health habits and employment.

This paper also supplies a nice example of Simpson’s paradox. Graph 1b provides mortality rates per 100,000 by race/ethnicity (157  Non-Hispanic White, 199 Non-Hispanic-Black, 171 Hispanic). By education category the Hispanic population had lower death rates than Non-Hispanic White, but in the aggregate it is the other way around.

What is the connection between life expectancy and education?

The PNAS paper Life expectancy in adulthood is falling for those without a BA degree, but as educational gaps have widened, racial gaps have narrowed by Anne Case and Angus Deaton (3/16/2021) provides an answer. From the abstract:

We construct a time series, from 1990 to 2018, of a summary of each year’s mortality rates and expected years lived from 25 to 75 at the fixed mortality rates of that year. Our measure excludes those over 75 who have done relatively well over the last three decades and focuses on the years when deaths rose rapidly through drug overdoses, suicides, and alcoholic liver disease and when the decline in mortality from cardiovascular disease slowed and reversed. The BA/no-BA gap in our measure widened steadily from 1990 to 2018. Beyond 2010, as those with a BA continued to see increases in our period measure of expected life, those without saw declines.

By 2018, intraracial college divides were larger than interracial divides conditional on college; by our measure, those with a college diploma are more alike one another irrespective of race than they are like those of the same race who do not have a BA.

The appendix has 7 graphs including the one copied here. A few observations: Hispanics with a BA have a greater life expectancy by sex. In fact, a Hispanic female with no BA has a life expectancy similar to that of a White Male with a BA. The gap in life expectancy between Black and White by sex is about the same by BA/no BA (about 1 year in all 4 cases) but the gap between those with a BA and those without is larger.  For example, a Black male with a BA lives almost 3 years longer than a White male without a BA. This is about 2 years for women.  The no BA group has seen decreasing life expectancy, in general, since about 2010, while the BA group has continued with an increasing life expectancy.

I didn’t find the data in the appendix but there is an email to contact an author and they may provide it if you ask.

What is the distribution of global income?

The Our World in Data article How much economic growth is necessary to reduce global poverty by Max Roser (2/15/2021) includes the graph copied here. Note that all countries incomes are adjusted for price differences so it is fair comparison from county to country. It is easy to forget how much wealthier the U.S. is compared to almost all other countries.

The reason why such substantial economic growth is necessary for reducing global poverty is that the average income in many countries in the world is very low: 82% of the world population live in countries where the mean income is less than $20 per day.

There are three other graphs in the article, which is suitable for a QL based course. There isn’t data associated with these particular graphs but there are links at the top of the article with related economic data.

Why did wages grow in 2020?

The EPI article, Wages grew in 2020 because the bottom fell out of the low-wage labor market, by Elise Gould and Jori Kandra (2/24/2021) provides insights into changes in the labor market this past year. Key find:

Wages grew largely because more than 80% of the 9.6 million net jobs lost in 2020 were jobs held by wage earners in the bottom 25% of the wage distribution. The exit of 7.9 million low-wage workers from the workforce, coupled with the addition of 1.5 million jobs in the top half of the wage distribution, skewed average wages upward.

There are seven graphs or tables in the article with the associated data. The last two graphs are of the same type as the one copied here but for the 2000 and 2008 recessions, respectively.

Is this chart misleading?

The U.S. Bureau of Labor Statistics posts the chart (partially) copied here and last updated Sept 2020. An initial look at the graph and we see that the top 5 each have a median pay higher than the median pay in the U.S. (about $35k), but this is based on growth rate. On the other hand, if we look at the number of jobs the top 5 here are predicted to create, Table 1.3 from the BLS, we get 152.2 thousand jobs.  The sixth job on this list, home health and personal care aides, has a below median pay but is predicted to create 1,159.5 thousand jobs. There are 30 jobs listed in table 1.3 and home health and personal care aides represents about 45% of predicted new jobs created on this table. One can download the data in table 1.3 in an xlsx file.

How are the top 0.1% doing?

The EPI article Wages for the top1% skyrocketed 160% since 1979 while the share of wages for the bottom 90% shrunk by Lawrence Mishel and Jori Kandra (12/1/2020) reports:

As Figure A shows, the top 1.0% of earners are now paid 160.3% more than they were in 1979. Even more impressive is that those in the top 0.1% had more than double that wage growth, up 345.2% since 1979 (Table 1). In contrast, wages for the bottom 90% grew only 26.0% in that time.

The top 0.1% go off the chart. There are two other tables of data nd the data for the chart copied here is available.

How many people live in poverty?

It depends on what we mean by poverty.  The World Bank blog post A quarter of the world lives in societal poverty by Marta Schoch, Dean Mitchell Joliffe, & Christoph Lakner (12/2/2020):

Measures of absolute poverty, such as poverty at the US$1.90US$3.20 and the US$5.50 international poverty lines, have the advantage of remaining fixed (in constant dollars), allowing one to measure poverty against the same benchmark over time and across countries. However, when countries set their own national poverty lines, they typically increase the real value of these lines as their economies evolve.

The absolute poverty line  misses the fact that “the ability to participate in society is costlier in richer countries.”  So,

In 2018, the World Bank introduced a Societal Poverty Line (SPL),

The SPL is a hybrid line, combining the US$1.90-a-day absolute poverty line with a relative component that increases as median consumption or income in an economy rises.

The SPL is the max of US$1.90 and US$1+ 0.5*median, where median is the daily median income or consumption per capita in the household survey.

The is more information and other graphs in the article.