Halftime in America

A little heavy handed, perhaps, but I found this a lot more compelling than the actual game.

Rich Man, Poor Man: Charting the Income Gap

As these charts show all too clearly, not everyone is hurting equally as the country deals with the recession. (If it's not clear, click on the charts to enlarge them.) Of course, this is probably old news for anyone who has spent time in Flint, but it's worth repeating in an era of massive budget cuts.

The Great Recession and the slump that followed have triggered a jobs crisis that been making headlines since before President Obama was in office, and that will likely be with us for years," Zachary Roth reports. "But the American economy is also plagued by a less-noted, but just as serious, problem: Simply put, over the last 30 years, the gap between rich and poor has widened into a chasm."

Lucky for me, that time span pretty much covers my entire working life.

Really?

Here's something you don't hear every day, or year, or decade...

G.M. to rehire Flint workers.

Working (or not) for a Living in The Great Recession

Apparently, some jobs just aren't worth it, even during the Great Recession.

In typical blog fashion, Flint Expats has hovered around a ton of issues related to workers, employment trends, compensation and economics without ever attempting to pull it all together into one neat package. (We've done a much better job providing an over-arching treatment of Flint bars and lounges. Yee haw!) Well, I'm not going to try and and adopt a holistic approach with this post, but I did run across two items today that seem to provide a lot of insight into U.S. employment trends in a short amount of space. I know that this is a very unrigorous approach that will no doubt be shredded in the comment section, but just consider these two bits of info:


First, here's a heart-warming graph that charts the ratio of CEO pay to average worker pay. It only goes up to 2005, but you get the idea. In 1965, U.S. CEOs in major companies earned 24 times more than an average worker. By 2005, the CEOs were making 262 times the average worker. (Click to enlarge.)

Second, check out Daniel Gross's great piece in Slate on the growing dissatisfaction of workers who actually have a job:

The economy has been growing for a year, and corporate profits have surged—Standard & Poor's estimates that profits of the constituents of the S&P 500 rose nearly 52 percent in the second quarter of 2010 from 2009. Much of that impressive profit growth has been driven by the remarkable gains in efficiency and productivity that corporate America has notched since the recession took hold. Last year, productivity—the ability to produce more with less—soared 3.5 percent, up from 1 percent in 2008 and 1.6 percent in 2007. Yes, companies embraced the Gospel of Cost Cutting with missionary zeal—printing on both sides of the paper, eliminating bottled water, turning off the lights. But most of the gains came straight out of payroll. Companies slashed salaries and curtailed benefits, all while asking shell-shocked veterans to pick up the slack for downsized colleagues. Even as business has picked up, companies have been extremely slow to hire; the private sector has added just 630,000 jobs so far this year. And when it comes to wages and benefits, corporate America's bean counters could make Scrooge blush. Many of the firms that slashed pay or cut 401(K) matches haven't restored them even though their balance sheets are in [good] health.

The Looming Pension Crisis

There's been a lot of discussion of the inability of cities and states to fulfill their pension obligations. Shrinking cities like Flint are especially hard hit by legacy costs that just keep getting bigger while city revenues get smaller every year. Ron Lieber of The New York Times puts the looming national crisis into perspective...and it's not pretty:

There’s a class war coming to the world of government pensions.

The haves are retirees who were once state or municipal workers. Their seemingly guaranteed and ever-escalating monthly pension benefits are breaking budgets nationwide.

The have-nots are taxpayers who don’t have generous pensions. Their 401(k)s or individual retirement accounts have taken a real beating in recent years and are not guaranteed. And soon, many of those people will be paying higher taxes or getting fewer state services as their states put more money aside to cover those pension checks.

At stake is at least $1 trillion. That’s trillion, with a “t,” as in titanic and terrifying.

Flint Meet Oakland...You Two Have So Much in Common

Flint, meet your long-lost cousin from the West Coast. Her name is Oakland. She lives in California.

Robert Gammon of The East Bay Express reports:

At times, Oakland feels like ground zero for the Great Recession. The city is grappling with alarmingly high rates of unemployment and foreclosure. The economic downturn also has crippled the city's budget. Since the housing bubble burst, Oakland has lost about 20 percent of its annual tax revenues, or about $100 million a year. The city council made huge cuts last year, but is now facing another $30 million budget hole, and is talking seriously about laying off 200 cops — or about one-quarter of Oakland's police force.

The one bright spot in Oakland has been the substantial drop in violent crime in the past eighteen months. But a massive layoff of police officers threatens to reverse that promising trend. Police Chief Anthony Batts told the Oakland Tribune that he has serious concerns about cutting so many officers and how it will affect crime fighting in Oakland. But the city council may have no choice — unless the well-paid members of Oakland's police officers' union agree to start contributing to their own pension plan.

Oakland awarded the union its generous benefits, which include the ability to retire at age fifty with nearly full pay for life, at a time of relative prosperity. The council figured that over-the-top pension benefits would help the city attract and retain quality officers when unemployment was low and the competition for cops was fierce. But in a time of record joblessness, it's clear that Cadillac pensions are not only unnecessary, they're foolish.

Medicaid Cuts Hit Home

Kevin Sack of The New York Times reports:

It has not taken long for communities like Flint to feel the downstream effects of a nationwide torrent of state cuts to Medicaid, the government insurance program for the poor and disabled. With states squeezing payments to providers even as the economy fuels explosive growth in enrollment, patients are finding it increasingly difficult to locate doctors and dentists who will accept their coverage. Inevitably, many defer care or wind up in hospital emergency rooms, which are required to take anyone in an urgent condition.

Housing Crisis: Paying Homeowners to Leave

How many Flintoids will line up to take advantage of this? David Streitfeld of The New York Times reports:

In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: paying some of them to leave.

This latest program, which will allow owners to sell for less than they owe and will give them a little cash to speed them on their way, is one of the administration’s most aggressive attempts to grapple with a problem that has defied solutions.

More than five million households are behind on their mortgages and risk foreclosure. The government’s $75 billion mortgage modification plan has helped only a small slice of them. Consumer advocates, economists and even some banking industry representatives say much more needs to be done.

The Auto Town Ambassador

Louis Uchitelle of The New York Times profiles Edward B. Montgomery today. The executive director of the White House Council on Automotive Communities and Workers has made several trips to Flint, and Mayor Dayne Walling is quoted in the article:

On his travels he has helped to channel millions of dollars from the stimulus package and other government pools. He does not know, he says, just how many millions. At many of the stops, particularly in Ohio, which went for George W. Bush in 2004 and just barely for Obama in the last presidential election, there is an implicit political message in this largess. It goes something like this: Stick with the president and the Democratic Party, and while we cannot bring back mass production with its large-scale employment, we can help you in the transition to other sources of income and jobs.

“What they are doing is all well and good,” said Daniel Luria, research director of the Michigan Manufacturing Technology Center. “But if you are one of the people in distress, what you really want is a national manufacturing strategy that insures that the share of what is made here does not continue to fall.”

Mr. Montgomery describes that thinking as unwarranted interference in the private sector, and counterproductive. “The question of whether you should order private companies to locate in these communities; that is not a prescription for success,” he said.

His approach has produced results that are hard to measure. He has visited Flint, Mich., for example, three times in the last year, and the unemployment rate remains above 25 percent. On the other hand, several hundred additional people are enrolled in job training as a result of stimulus money that Mr. Montgomery steered to Flint, according to the mayor, Dayne Walling. In addition, the Environmental Protection Agency is moving more quickly than it otherwise would have, the mayor said, to clear former factory sites for other commercial use.

“That was a thicket that Montgomery’s people helped us to navigate,” the mayor said.

Green Shoots for Michigan

To help temper the discouraging unemployment numbers, UM-Flint professor of economics and finance Mark J. Perry comes to the rescue with a statistical glimmer of hope for Michigan.

The Geography of a Recession

They don't call it the Great Recession for nothing.

If you'd like to get very depressed before the Super Bowl, check out The Decline: The Geography of a Recession by Latoya Egwuekwe, an interactive map that charts unemployment data. The saddest part is that the rest of the country basically turns into Michigan over the course of three years.

Thanks again Duane "Perfect Attendance" Gilles for cheering us up on a Sunday morning.

Bank Failures

Is this as scary as it sounds, or is it not such a big deal in today's economy?

The New York Times reports:

As the economy has soured -- with unemployment rising, home prices tumbling and loan defaults soaring -- bank failures have cascaded and sapped billions out of the deposit insurance fund. It now stands at its lowest level since 1993, $13 billion as of the first quarter.While losses on home mortgages may be leveling off, delinquencies on commercial real estate loans remain a hot spot of potential trouble, FDIC officials say. If the recession deepens, defaults on the high-risk loans could spike. Many regional banks hold large numbers of them.

The Housing Liberation Movement

The house on Jane Ave. where squatter Gordan Yoesting died in a fire last October. (Photo by Bruce Edwards/The Flint Journal)

With an abundance of vacant housing, the Flint area has been fertile ground for squatters seeking shelter in homes they don't own.

"It's (happening) a lot more out there than people want to know about," Mt. Morris Township Supervisor Paul Long told The Flint Journal's Shena Abercrombie last fall.

"And where are they going to go? The shelters are full. We don't see a whole bunch of people sleeping in the grates because they're finding these homes."

Agreed Dan Kildee, county treasurer and head of the Land Bank: "It's been a problem, and it's increasing because we're getting more structures in tax foreclosures than we've ever had before."

Now John Leland of The New York Times is reporting that advocacy groups are coordinating organized squatting efforts in response to the foreclosure crisis.

Michael Stoops, executive director of the National Coalition for the Homeless, said about a dozen advocacy groups around the country were actively moving homeless people into vacant homes — some working in secret, others, like Take Back the Land, operating openly.

In addition to squatting, some advocacy groups have organized civil disobedience actions in which borrowers or renters refuse to leave homes after foreclosure.

The groups say that they have sometimes received support from neighbors and that beleaguered police departments have not aggressively gone after squatters.

All this seems like another reminder that the Great Recession is giving large swaths of the country a taste of what Flint has endured for decades.

Beer Tax

Cities, counties and states are jacking up fees to shore up their budgets during the Great Recession, according to The New York Times. Winter Haven, Florida, for example, is charging at-fault drivers for the cost of responding to an accident. A proposed Ohio budget includes numerous fee hikes, including a five-fold increase in the cost of a livestock license. The governor of Wisconsin wants to triple the cost of an elk hunting license, even though there aren't enough elk to even have a hunting season.

"Such cash-per-crash ordinances tend to infuriate motorists, and they often generate bad press, but a lot of cities are finding them hard to resist," writes David Segal. "With the economy flailing and budgets strained, state and local governments are being creative about ways to raise money. And the go-to idea is to invent a fee — or simply raise one."

Closer to home, a state-appointed task force is recommending a higher beer tax to fund Michigan's child-welfare system and raise money for abuse and neglect prevention programs. Go here for a state-by-state comparison of current excise taxes on beer.

Here's a rundown of Flint's current license and fee structure, which includes a $7 fee to operate a condom machine and a $176 fee to open a pool hall with up to four tables. It'll cost you $73 for each additional table.

UPDATE: Würstside Warlørd has left a new comment on your post "Beer Tax":

Only in Flint would operating a firing range cost less than the numerous oppressive fees for teen dances. Heck, even a coney cart will cost you more.
With the cruel "Going Out Of Business" fee why isn't Flint swimming in cash? Should've upped it to at least $100.00.

Here are some good ones:

FIRING RANGE & SHOOTING GALLERY- 70.00
GOING OUT OF BUSINESS(30 days)- 50.00
ICE CREAM CARTS/CONEY CART- 160.00 vehicle/ 80.00 cart
MECHANICAL DEVICE OPERATOR- 130.00
MUSIC MACHINE- 30.00
PARKING LOT 11-25 SPACES- 114.00
PARKING LOT 250-350 SPACES- 164.00