Tag Archives: Nevada income inequality

GOP Far Away Land: Solutions in Search of Problems

Alien Planet guns

It’s like they live on another planet.  Republican legislators in Carson City appear to be marching to the same off beat drum kit as their Washington, D.C. counterparts.  Have problems with infrastructure? Education? Revenue? Income inequality? Unemployment? The solution is (staccato drum roll) Pass more laws on abortion! Allow more guns everywhere!

The Single Song Sallies of the Nevada GOP are absorbed by these two.  Assemblyman Ira Hansen (R-NV backwater) proposes the following:

“AN ACT relating to abortions; revising provisions regulating an abortion performed on a pregnant woman who is a minor or a ward; requiring notification of a parent or guardian under certain circumstances before a physician performs such an abortion; providing expedited procedures for petitioning a court for judicial authorization to proceed without such notification; providing civil liabilities and criminal penalties; and providing other matters properly relating thereto.”

How this bit of anti-choice legislation addresses employment, economic diversification, educational funding, transportation, infrastructure, local government resources, provisions for mental health services, or any other major issue facing the state is pure conjecture.  The nationwide abortion rate among those under 15 years of age is negligible for the period 1990 to 2007, and abortions for those aged 15 to 18 years has declined from 21,800 in 1990 to 16,200 as of 2007. [CensusCDC]  This decline mirrors the overall decline in teen pregnancies, which in turn is linked to economic considerations, more contraceptives, and more information (read: sex education). [Pew] However, Big Daddy Government Types exemplified by Assemblyman Hansen, won’t be satisfied until every woman has to carry every man’s fetus to term.  And for this, time is being taken from taxation and budget consideration in the Assembled Wisdom.

Meanwhile, Assemblywoman Michele “Take Baking Soda for your Cancer” Fiore (R-NRA) would be happy to attach her Guns Galore amendment to any bit of legislation she can find. [LVRJ]  She lost the vote, 24-18 in the Assembly, but she’ll be back before the end of the session on June 1. [LTN]

What makes coping with single issue ideologues like Hansen and Fiore so frustrating is that Nevada does have some serious issues which need to be addressed.  Education, which was supposed to be the central feature of this legislative session, has some problems. For instance, Nevada schools ranked 50th in “overall state grades,” and 36th in K-12 achievement, 45th in standards and assessments, and 46th in school finance. [leg.state.nv]  The American Society of Civil Engineering grades Nevada a C- in infrastructure.  We “earned” a D+ in dams, and we have 36 bridges which are deemed “structurally deficient.”  The Mental Health Association reports the following in regard to Nevada’s mental health services: “The five states with the highest prevalence of mental illness and the lowest rates of access to care were Louisiana (47), Washington (48), Nevada (49), Mississippi (50) and Arizona (51).”

Speaking to the income inequality issue, Nevada’s not in a very good position in that regard either:  “The states in which all income growth between 2009 and 2012 accrued to the top 1 percent include Delaware, Florida, Missouri, South Carolina, North Carolina, Connecticut, Washington, Louisiana, California, Virginia, Pennsylvania, Idaho, Massachusetts, Colorado, New York, Rhode Island, and Nevada.”

Now, can we please talk about something other than government so small it can fit inside every vagina, and guns galore?

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Filed under abortion, Gun Issues, Mental Health, Nevada legislature, Nevada politics, Women's Issues, Womens' Rights

Spooks, Haunts, and other Scary Things in the Nevada Legislature

Nevada Legislature Scary Things

The GOP controlled Nevada Legislature is haunted. Specters and spooks dog the steps of the members of the Assembled Wisdom, wraiths point toward things of which we must be afraid, very afraid.

We must be afraid of voter impersonation fraud.  The fact that it hasn’t happened doesn’t mean that we ought not to writhe in terror at the prospect.  Speaking of ghosts of elections past, we have Sharron Angle to add her wail to the cries of alarm:

“Former Assemblywoman Sharron Angle, who lost the 2010 U.S. Senate race to Harry Reid, testified for the bill, saying “we do have a voter impersonation problem across the country.”  Anderson asked if she has found examples of voter impersonation in Nevada in her investigations. Angle said no, but that there is “anomalous activity that goes on in Nevada elections that is not easily explained.” [LVRJ]

One might reasonably guess that “anomalous activity” is one of those terms which might be analogous to the Spectral Evidence allowed in the Salem Witch Trials?   However, we might just as well place this within the glossary of meaningless phrases, which while sounding erudite, mean almost nothing, such as “stocks are down on profit taking,” or “there’s lots of cash on the sidelines.” [Ritholtz] Or, such unverifiable and empty notions like “highway miles.”  Or, those gratuitous and equally meaningless phrases which appear in job opening announcements, “self starter,” “team player,” and “highly qualified.”

The point being is that bills like SB 169 (photo ID) are necessary to solve the Republican problem of not being able to win elections if lower income, non-white, young people, and the elderly are allowed to vote.

We must be very afraid of criminals.  Not only must we quake in alarm, according to the GOP Gun Club we must arm ourselves and await the day when we will be called upon to open fire on the evil-doers in our midst. Unfortunately, this serves to remind us that one person who tried this at the Las Vegas Wal-Mart ended up as a victim. [SFgate] No matter, by the lights of the Gun Club we must all be allowed to carry concealed weapons – anywhere – unless maybe not on school grounds.  (AB 148) 

As of 2013 there were 2,790,236 people in the state of Nevada.  There were 16,496 violent crimes reported.  We should put this in some perspective.  First, if we divide the number of violent crimes (victims) by the total population the result is 0.00591.  Shift the decimal to create a percentage and we have 0.59%. [TDC]  Is the likelihood of victimization in a violent crime in Nevada so high that all the dangers associated with carrying a concealed weapon worth the effort? Secondly, there were 163 murders, 1,090 rapes, 5,183 robberies, and 10,060 assaults in Nevada as of the 2013 reporting period.  [TDC]   The numbers don’t suggest a need for a proliferation of arms among ordinary citizens.

But but but… What if the criminals think there will be armed opposition to their nefarious endeavors! That will prevent them from carrying out their heinous designs! Really?  The armed robber already has his or her gun in position, ready to fire. The gun in my purse or holster is going to take a moment to get “into position.” Thus, the obvious outcome is that the robber gets the money, and the firearm.  Then there is the “collateral damage” consideration.  What if the “burglar” isn’t a criminal after all, but some family member who has lost a key?  In public spaces, how does Our Concealed Carry Hero determine if another Concealed Carry Hero is, or is not, a perpetrator of the shooting? The questions go on, but the bottom line is that in the fanciful world of the gun enthusiasts every hero can make practical decisions at 2 in the morning, make every shot count, and insure that every shot is aimed at and will hit the criminal.  It’s a scenario right out of the made for TV melodramas. Legislation should be crafted upon a foundation of facts and rationality, not the fevered imaginings of the frightened.

We must be afraid that someone somewhere is taking money away from us, and that every accumulation of government revenue is robbery, and every public service employee is unworthy.  Those comfortably ensconced in the upper 0.01% of income earners may very well be able to buy all the books they want (therefore there is no need for public libraries) or to spend a vacation on a private island or in a private resort (therefore there is no need for any public parks), and they may elect to spend money on private security, or pay for service firefighting, or pay the tolls on roads and highways, or send the kids to private schools.  When money is no object, other people’s money is little more than a object of attraction. 

Unfortunately, the upper 0.01% has been effective over the last three decades in convincing ordinary people earning $50,000 per year that a public school beginning teacher earning $37,000 is a Pig At The Public Trough.  The median wage of an employee of the State of Nevada is currently $46,590.  Hardly a figure, when agency heads are included, to describe an opulent living.   Yet, public employees are taking fire in this edition of the Legislature.

However, it’s not just the public sector employees who are drawing the attention of the Needy Greedy.   State Senator Joe Hardy (R-Boulder City) wants to repeal the state’s minimum wage.  Hardy’s SJR 6 (pdf) would repeal Nevada’s minimum wage provisions and let the legislature determine if an employer is providing health insurance if the cost is not more than 10% of the employee’s gross taxable income.  Here’s a thought – How about, instead of allowing more employers to pay less than $8.25 per hour, Nevada enacted an increase in the minimum wage? Period.

Want to see fewer people have to rely on housing subsidies to keep roofs over their heads? Raise the minimum wage.  Want to see fewer people have to resort to the SNAP programs? – raise the minimum wage. Want to see fewer individuals have to avail themselves of Medicaid assistance? Raise the minimum wage. 

For too many years we’ve been told the people (including the disabled and the elderly) aren’t working hard enough.  They should get more education (despite the costs and time involved), get more gumption (this in the face of a 5% multi-job rate), work more hours… take individual responsibility!  This is all lovely palaver from the heights, the concepts tend to disintegrate when applied in the real world.  The question could as easily be reversed. For example, the Las Vegas Sands Corporation, with sales and revenue reported as $14.58 billion in 2014, and net income of $2.84 billion, couldn’t spring for more than a paltry $8.25 per hour?  The question ought to be why can’t employers pay more than $10.10 per hour, or a living wage of $15.00?

In the real world most employers do pay more than the minimum already.  Minimum wage workers comprise about 4.7% of the total employed workforce.  The chart shows national trends for minimum wage workers:

Minimum Wage workers

“Leisure and Hospitality,” where have we seen that category before? L&H is the largest employer in the state, accounting for approximately 398,000 jobs earning an average annual wage of $31,600 (net of benefits.)  So, here we sit in a state in which most employees are engaged by a sector most likely to pay earnings at or below the federal minimum wage – and we can’t figure out that those who need housing or SNAP assistance might not fall into those categories if the wages were increased? So, let’s ask again: Why are Nevada employers unwilling to pay wages which would support their employees above the rate at which they are eligible for public assistance?

There are some things about which we should be legitimately concerned, those just don’t seem to have made it into the consciousness of the Legislature’s majority. Here are two examples:

Nevada has an income inequality problem.

“The states in which all income growth between 2009 and 2012 accrued to the top 1 percent include Delaware, Florida, Missouri, South Carolina, North Carolina, Connecticut, Washington, Louisiana, California, Virginia, Pennsylvania, Idaho, Massachusetts, Colorado, New York, Rhode Island, and Nevada.” [EPI] (emphasis added)

This situation is economically unsustainable.  As middle income and lower income earners tighten their belts and shave their budgets, there are simply not enough high income earners to create the demand for goods and services over time.

Nevada has infrastructure issues.  Only in the categories of waste water and solid waste does the state of Nevada get a ‘good’ grade, a B, from the ASCE.  We seem to be handling the excremental elements of our state rather better than our school buildings and our dams.

If the Legislature can move past Guns Galore!, Labor Bashing, and Vote Suppressing, we might want to address these and other pressing issues in the Silver State.

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Filed under Crime Rates, Gun Issues, Nevada economy, Nevada legislature, Nevada politics, Vote Suppression, Voting

It’s The Income Inequality Gap, and it’s stupid

Nevada Income Gap Map We’ve had the following information in hand since last February:

“The average income in Nevada rose just 8.6% between 1979 and 2007, among the lowest increases in the nation. However, most of the state’s residents actually lost money during that time, as average real income dropped by 11.6% for the bottom 99% of earners. For the remaining top percentile of earners, average incomes rose by 164% between 1979 and 2007. As of 2007, the top 1% accounted for 28% of state residents’ total income, the fifth highest percentage in the United States. The gap between the top percentile and other earners has further increased in recent years. Incomes for the top 1% rose by 4% between 2009 and 2011, while incomes for the bottom 99% of earners slipped by a nation-leading 6.7%. Nevada has struggled with high unemployment in recent years, including an average unemployment rate of 11.1% in 2012, the highest in the nation that year.” [24/7WallSt]

Need more? The share of growth captured by the top 1% = 218.5%. The real income growth from 1979 to 2007 was the second lowest in the nation, at 8.6%  The income growth for the bottom 99% of Nevada residents was –11.6%, the 2nd least in the country, and the income growth for the top 1% was 164%, the 24th highest in the country. [24/7WallSt]

If this were a “one off” situation we might dismiss it more causally, but it isn’t.  The change in Nevada household income from the late 1970s to the mid 2000’s shows a 16.8% increase for the bottom 20%, a 19.7% increase for the middle 20%, and the top 20% saw income growth of approximately 58.6%. [CBPP pdf]  So, how much annual income does it take to make it into the top 1% of Nevada’s income earners?

Nevada top 1% From the map shown above, it takes about $306,000 per year to be in the top 1% of Nevada income earners.  And, what is the income inequality ratio in Nevada?

Nevada Income Inquality ratio map The answer is 44.1%, one of the highest in the United States.  The next obvious question is: Why does a widening gap in income by households create a problem?  Hint: You don’t need a degree in finance or economics to figure this one out.  What tends to happen is that in the long run the lower income families tend to stay in the lower income brackets, the top 1% move steadily upward, and it’s the middle class that gets caught in the squeeze.  Economists Saez and Zucman explain:

“Among the fascinating findings of Saez and Zucman is how thoroughly the top 0.1% have shouldered their way past all other households. While their wealth share was soaring, that of the next 0.9% was barely growing, while that of the “merely rich” — those ranking in the top 10% but below the top 1% — actually shrank.

But the real victims of the trend are in the middle class. Saez and Zucman show that the wealth share of the bottom 90% grew from the 1920s through the mid-1980s, from 15% to 36%. Mostly the gain was due to the growth of pensions and of homeownership. Since the mid-1980s, however, middle-class wealth has evaporated, falling to 23% in 2012, about the same level as 1940.” [LATimes]

So what? What if middle income range families are getting the squeeze? To demonstrate that they ARE getting shouldered out of their share of increasing wealth doesn’t necessarily prove the situation is essentially economically negative?  Or does it? The answer is “yes, it does” if we’re talking about the real economy and not the shadow economy of the investment bankers and financialist allies.  For what now may be a record number of times in a single blog, let’s review the calculation of the Gross Domestic Product:

Gross Domestic Product Formula

Once More! The C is for consumer spending. The I is for investment. The G is for government spending. The (X-M) part is the difference between imports and exports. Who has disposable income to spend on goods and services? Who has income to save or invest?  If you guessed that there are more lower and middle income households you’d be right.

As of the 2012 IRS report, there were 144,928,472 household income tax filings. Of these filings 705,029 came from homes in which the annual adjusted gross income was between $500,000 and $1 million. Incomes between $1.5 million and $2  million accounted for 71,874 households, and there were 106,711 filings from households reporting income between $2 million and $5 million. 27,167 homes reported AGI of between $5 million and $10 million, and 17,685 reported AGI over $10 million. [IRS download]

Those 2012 filings of AGI ($500K-$1M) were 4.68% of the total; the next category up were 1.68% of the total filings; the next category composed 0.49% of the total; and the next 0.74%; at the very top the AGI ($5M-10M) comprised o.0187%, and the over $10 million were 0.0122% of the total filings. Now for the practical question: Who is buying more washing machines, television sets, and automobiles?  Who is buying more clothing, gasoline, and groceries?

We can narrow this down to Nevada’s statistics. [IRS download]   There were a total of 1,289,360 filings in 2012. Of these 4,420 were for adjusted gross incomes over $500,000 and 3,300 came from households with over $1 million.  The top bracket filings constituted 0.34% of the total and 0.25% respectively.  Again, who is purchasing consumer goods and services in Nevada?  Facing reality – a household could own one home in Las Vegas, one at Lake Tahoe, and another in Elko County – that’s still only three washing machines, three dryers – we could even toss in a car elevator and the total consumer spending wouldn’t create the DEMAND for goods and services which might be generated from the remaining 99% of Nevada income earners.

This is precisely WHY the Supply Side “Trickle Down” hoax is so pernicious. Continuing to monkey with the tax code by giving tax breaks, tax ‘incentives,’ and tax avoidance tactics to the upper 1% simply means we’ve skewed the numbers by which we measure our own economic growth. It has been, and continues to be, nothing less than a recipe for disaster.

Now, let’s take a look at the I part of the equation. Where is the investment going?  In good old fashioned garden variety capitalism, the “savings” or excess income is Invested in stocks or bonds which corporations can use to expand production, add employees, and use to build facilities or put into research and development – so, what are investment advisors telling their clients in the upper income brackets now?

The “hottest” investments for 2014 were in non-wrap mutual funds (82%) and exchange traded funds (79%). [OnePA]  “The exchange traded funds are like index funds but they can be bought and sold just like shares of common stock.  Whenever an investor purchases an ETF, he or she is basically investing in the performance of an underlying bundle of securities — usually those representing a particular index or sector. Unit Investment Trusts (UITs) are often organized in the same manner. However, the unusual legal structure of an ETF makes the product somewhat unique.” [Invest]  They can be bought and sold like common stocks but the crucial part is that they are NOT common stocks, and the “somewhat unique” structure comes with some tax advantages.  Who could have guessed?  A non-wrap mutual fund is one in which there isn’t a mutual fund advisory program giving the investor access to a big pool at a set annual fee.   Not to put too fine a point to it, but what we have here is a Financialists Day Dream – lots of ‘financial products’ to trade based on “an underlying bundle of securities.” Not reality.  If you were thinking that the I stood for the good old capitalistic categories of fixed investment and changes in business inventories – think again?

And this is the way the income gap expands.  Wage and salary workers face issues of globalization, technological changes, educational and training gaps, and increasing levels of indebtedness, while the top 1% bets on the capacity of the 99% to pay off the debts which have been warehoused, sliced, diced, slung into the Wall Street version of the financial Cuisinart, and traded in the financial markets.

There are no Silver Bullets but there are some things that might help.

  • Tax capital gains at the same rate as any other form of income. People work and get taxed, if ‘money works’ then tax it as well.
  • Close the special tax advantage loopholes which allow ‘investors’ to play with Dark Pools, exotic funds, and other Wall Street creations which serve to minimize Wall Street risk and place the general economy in a volatile financial environment.
  • Don’t fall for simplistic solutions like the Flat Tax, which is simply one more way for the top 1% to get a break while the wage and salary owners continue to pay the freight.
  • Increase the federal and state minimum wages.
  • Increase investment in education and training programs.
  • Encourage union and worker organizations.
  • Encourage American manufacturing with a long term national plan to improve U.S. manufacturing, including the government procurement of items made in America.
  • Avoid trade treaties which impinge on U.S. production, labor, environment, and U.S. sovereignty.

Nor can we assume that any one of these elements will bring Peace and Prosperity – there must be a conscious desire to return to that good old garden variety Capitalism – with an acknowledgement that “financial products” are here to stay – coupled with the encouragement of investment in infrastructure (public and private), production improvements, and research and development.  It’s possible if we can get our noses out of our checkbooks long enough to get a better view of our economic horizons.

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Filed under Economy, Nevada economy