NEWSWIRE: 7/1/19

  • The latest results from the annual American Time Use Survey spotlighted the challenges of working women, who are spending more hours at work and fewer hours at leisure. The gap in average number of hours worked per day is closing between women and men as women continue to take on the bulk of household obligations, all of which is coming at the expense of their downtime. (The Wall Street Journal)
    • NH: The year-to-year changes in this BLS time survey show lots of noise, and the overall changes are not dramatic. See the first three charts below: They show women spending a bit more time working and a bit less time at leisure; and they show the reverse for men. Women continue to do a lot more "household activities" (let's not call it "work" here to avoid confusion). Sleep time, interestingly, seems to be rising for both men and women over the last decade. Which is good news for insomniacs. (See "America's New Public Health Crisis: Lack of Sleep.")
    • Still, the longer-term trend by gender is unmistakable: Women are working more relative to men. Women's rate of labor-force participation (LFP) reached an all-time peak around 2000, at 60%, and has since been gradually declining, to 57% today. So their LFP has dropped by 3 percentage points--a big contrast to the earlier postwar era in which it was almost constantly rising. But men's LFP has meanwhile dropped twice as fast, from 75% in 2000 to 69% today. So men's LFP has dropped by 6 percentage points.
    • In absolute terms, then, women's work effort has reversed direction. But relative to men, women's work effort has continued to increase. (See fourth chart below.)
    • Generationally, the biggest force behind declining women's LFP after 2000 was the trend among Gen-X married women to quit employment if they could afford to. Having a career was a status symbol for the Boomer super mom--but no longer for the you-gotta-be-kidding Gen-X mom. What has been pushing the other way since the GFC are Millennial women. They are marrying later, having kids later, and working more: Women ages 25-34 are today 2 percentage points more employed today than they were in 2007. Men ages 25-34, meanwhile, are 2 percentage points less employed today than they were in 2007.
    • The WSJ story says nothing about another long-term time trend that I find fascinating--and that is the inverting work-hours gap between rich and poor. Traditionally, and throughout most of history, less-affluent or what we used to call "working class" people worked longer hours than average (per day or per week or per year) and more-affluent or what we used to call "leisure class" people worked fewer hours than average. As recently as the 1950s or 1960s, the factory worker or bricklayer or janitor worked substantially longer hours than the banker or manager or professor.
    • No longer. The BLS survey confirms that today, the likelihood of being "employed" on any given day rises with education and income--and that the hours worked per day generally rises as well. Analysis of CPS data from IPUMS also shows that annual hours of work is directly correlated with annual earnings. Some research also shows that inequality of pay within a profession or job category (e.g., there are high-paid and low-paid managers) is also linked to longer work hours. (See chart five and six below.)
    • When did this inversion occur? Probably in the 1970s and early 1980s. Why did it occur? Maybe a combination of greater overall affluence combined with rising inequality between high- and low-paid work. Higher-paid work for everyone usually causes everyone to work less and substitute leisure for work. (This is why work hours tend to decline in all economies as overall living standards rise.) But higher-paid work for some but not others raises the risk of not working long hours--and it also raises the reward for working long hours, since your earnings can buy more in terms of low-status labor hours. Some economists argue that higher inequality explains why average working hours have declined much less since 1950 in the United States than in most European economies. (See the last chart below.)
    • One final note. The BLS survey shows that the typical adult spends less than 3 hours per day watching TV. That's nowhere near the 4-hour-plus figure recorded by Nielsen. Indeed, the Nielsen estimate that Americans spend an average of over 11 hours per day engaged in some sort of audio, visual, or digital activity seems incredible given Americans' limited leisure hours--unless many of these hours are happening while sleeping or at work.

Women Are Working More and Relaxing Less. NewsWire. - July01 chart2

Women Are Working More and Relaxing Less. NewsWire. - July01 chart3

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  • In 2018, the number of births in Japan fell to a new low while the number of deaths hit a new postwar high. The country’s annual natural population decline, which is now around 440,000 people, is likely to exceed half a million annually in the decade ahead. (The Japan Times)
    • NH: Japan has recovered from its rock-bottom total fertility rate (TFR) of 1.26 back in 2005. But its TFR in 2018 (1.42) is still very low. And despite the best efforts of Prime Minister Shinzō Abe, it has slid backward slightly over the last few years.
    • More importantly, Japan's TFR has been beneath replacement for 44 years (since 1974), much longer than any other country. In demography, momentum over time is everything. If Japan wants to stop its population decline, it either needs to push its fertility rate significantly above replacement (2.1) and keep in there for many years or it needs to a big boost in immigration.
    • Neither of these outcomes is likely. Many demographers doubt that Abe will be able to reach his TFR goal of 1.8 by 2026, which still isn't high enough. And Japan's longstanding aversion to assimilating foreigners will limit Abe's goal to raise immigration. Last year, net immigration reached an all-time high of 165,000--which pushed the foreign-born up to a record 1.8% of Japan's population. Compare this with the United States, with net immigration of roughly 1 million last year and with the foreign-born comprising 13.7% of the U.S. population. Maybe higher fertility and higher immigration together will stop the population decline, but even in combination, we're looking at a goal that may be twenty years away.
    • Things could be worse, of course. Take a look at South Korea, whose TFR (at barely 1.1) is tied with Hong Kong and Singapore (both no more than city-states) for the world's lowest. What's more, South Korea's rapidly rising life expectancy is expected to lead the world by 2030. Immigration? Yes, as in Japan, it's rising. But also as in Japan, most of South Korea's immigrants are from other Southeast Asian countries, nearly all of which are eventually projected to encounter population decline. Hmm, something illogical here: Inter-Asian migration can't be a solution for all of these countries.

Women Are Working More and Relaxing Less. NewsWire. - July01 chart13

  • Pride Month has come and gone, but brands’ embrace of the LGBTQ community is here to stay. A new piece reflects on just how thoroughly America has transformed on gay rights through the lens of a once-unthinkable business deal: Walmart partnering up with Ellen DeGeneres. (Bloomberg Businessweek)
    • NH: Amazingly, Ellen DeGeneres is now worth nearly half a billion dollars--not yet quite at the Oprah level, but she's getting there. She's younger and (arguably) even nicer, more wholesome, more family-friendly than Oprah. 
  • Another day, another report claiming that the Boomers ruined everything, but this time with a twist: The cause was too many regulations. Author and economist Lyman Stone argues that increased regulation, high incarceration rates, and growing debts have led to widespread institutional stagnation. (American Enterprise Institute)
    • NH: We've seen lots of tirades against Boomers recently (see "Fourth Turning Political Mood Turns to Populist Left and to Populist Right"). And most of these tend to reflect a progressive world view: What's wrong with Boomers, basically, is that they've cut taxes, run up debt, deregulated everything, shrunk government, and enabled the wealthy and old to devour the poor and young.
    • Here's an anti-Boomer tirade with a conservative twist--what you might expect from the American Enterprise Institute. What's wrong with Boomers, writes Lyman Stone, is that they've over-regulated everything and allowed the government to grow too big. Boomers have thereby stifled economic dynamism, with the end result being--and yes here he comes to the same conclusion--that the wealthy and old devour the poor and young.
    • Stone points out that the per-GDP size of the U.S. public-sector spending has grown, not shrunk, on the Boomer watch. Total tax revenue, on the other hand, has remained roughly constant. So if there is one "cause" of growing public debt, it's more spending. Stone also identifies four areas of rampant over-regulation: education; real-estate zoning; labor credentialing; and over-incarceration.
    • All these cases are well argued, though IMO education and real-estate zoning are by far the worst culprits. I would add others. For example, why doesn't Stone add health-care, an industry transformed by dysfunctional regulation into a black hole of negative productivity growth? Or how about overpatenting and anti-competitive IP? As for over-incarceration, well, that problem is diminishing on a rather predictable schedule (see "The Politics of Falling Crime").
    • Stone makes a persuasive case. Yet if we dig a bit deeper, there's probably not a huge difference between the perspective of the left and the right. Many on the left agree with Stone about the negative impact of over-regulation, especially when it gives an upper hand to powerful incumbents. And many on the right would have to concede that, even if there is more public spending today, less of it is allocated to any public purpose--that is, goes anywhere but benefits to individuals (mainly seniors) and debt service. In a book I wrote with Pete Peterson back in 1988, I argued that America was transforming into a "libertarian welfare state." It turns out that was a fairly prescient call. Public spending is large and growing state (hence "welfare"). But the claimants on public spending are increasingly entitled individuals (hence "libertarian") who think they "own" their benefit.
    • Finally, Stone argues that Boomers have made the American economy less creative and less dynamic. Amen to that. U.S. economists across the board--in both Berkeley and Chicago--are now discussing declining business dynamism as a structural challenge. (See "Declining Business Dynamism: A Visual Guide.")
  • Soon-to-be-wed Millennials are forgoing traditional gifts and instead asking for help with down payments, honeymoons, and student loans. While the KitchenAid mixer continues to be the most-requested gift on the registry site Zola, the second is an Airbnb gift card. (The Washington Post)
    • NH: To some extent, sure, we can attribute this trend to the triumph of "experiences" over "things" among Millennial consumers. (See "The Immaterial World.")  But let's also confront another fact: Compared to earlier generations, Millennials are marrying at an older age and (typically) after already cohabiting for several years. So we are not, as a rule, talking about jobless and penniless newlyweds who have not yet furnished a common household. For Millennials, marriage is more a capstone than a cornerstone. They're not setting out in life. They're setting into life. (See also "The New Millennial Prenup.")
  • Take heart, boomerang kids: According to a recent survey, the age it becomes embarrassing to live with your parents is 28. Only 16% of 22- to 28-year-olds say it’s embarrassing in your early 20s, which is down 7% just in the past two years alone. (TD Ameritrade)
    • According to the latest Policy Mood survey, public support for liberal policymaking has reached a 60-year high. The 2018 estimate, which aggregates the results from several national surveys on the role of government, taxation, and regulation, just edges out the previous high point from 1961. (Vox)
      • NH: Following the recent Democratic candidate debates, The Wall Street Journal's editorials have been roasting the huge leftward lurch of nearly all the candidates. Single payer, free college, a debt jubilee, universal basic income, a jacked-up minimum wage, a wealth tax, a "Green New Deal," a war on monopolies... the list just goes on and on. These conservative journalists just can't believe their good luck. Isn't all this talk of "socialism" just a gift from God to Donald Trump? Doesn't it give this unpopular president a good chance he might just win after all?
      • Judging by the standards of earlier postwar elections, indeed it may. But what if those standards have changed? What if the public has already moved as leftward as the Democratic candidates? In that case, the GOP may be in for real trouble. That's the bottom line of this Policy Mood survey, recently updated by public opinion guru Jim Stimson. Not only does it show the public leaning much more to the left than any year since the "Great Society" heyday of the early 1960s, but it also shows a shrinking margin of error in its measure.
      • The WSJ editorial board are probably reasoning that U.S. voters, just after electing a president as right-leaning as Trump, couldn't possibly go for someone as "socialist" as Sanders or Warren. IMO, they don't understand the new American political spectrum. It no longer runs from left to right. It runs from moderate/centrist to radical/action. And right now the public doesn't want centrism, it wants action. We're seeing the same dynamics in Europe: The center-right and center-left parties are both shrinking. (See "Most French Citizens Disapprove of Macron.")
      • Keep in mind that's how Trump beat out all the other high-church conservatives in the 2016 primaries. Trump was the populist bull in the China shop. He was the wrecking ball. And even voters who disliked him welcomed his promise of creative destruction. Now it's the Democrats turn to learn the lesson of 2016. The WSJ made fun of Elizabeth Warren--calling her "Grim Lizzy"--for her "dire" description of America's dysfunction in last week's debate. But isn't she too just learning from the Donald? Trump's Inauguration speech depicted a sad, depleted, and rusted-out nation--"this American carnage"--just waiting to be rescued by a "righteous" leader. Grim Lizzy is just following suit.
      • The 2020 outcome will surely be influenced by how the economy is performing next year. But keep in mind that one in eight Americans who voted for Bernie Sanders in 2016 later ended up voting for Donald Trump. If anywhere near the same share who voted for Trump in 2016 ends up voting for Sanders or Warren in 2020, Trump's re-election will be in serious trouble.

    Women Are Working More and Relaxing Less. NewsWire. - July01 chart9

    • Investors are flocking to think tanks in hopes that understanding Washington will help them weather an increasingly volatile environment. The rise of Trump, surging support for populism, and Democrats’ embrace of ever-leftward policies are among the factors leaving Wall Street feeling more uncertain than ever. (Bloomberg Businessweek)
      • NH: Partisan conflict is heating up. So is global policy uncertainty. (See two charts below.) Understandably, Wall Street feels nervous and wants a better read on the upcoming political landscape. Bloomberg notes that "investors who got blindsided in 2016 are starting to wonder if another, potentially less market-friendly phase of populism might be in store." Firms that used to reach out to political consultants on the Labor Day before the next presidential election are reaching out now--well over a year before the 2020 vote.

    Women Are Working More and Relaxing Less. NewsWire. - July01 chart10

    Women Are Working More and Relaxing Less. NewsWire. - July01 chart11

    • The multigenerational housing trend is still going strong, with a new wave of  custom-designed homes popping up from Amsterdam to Melbourne. Forget granny flats out back: These examples are architecturally striking and offer a generous amount of space and privacy for three generations. (The New York Times)
      • NH: Yes, multigenerational living is finally going upmarket. These designer homes now attract cutting-edge architects and top-dollar customers.
    • A recent WSJ piece explores the various ways the South’s economy is falling behind. The region has the highest unemployment rate, the lowest labor-force participation rate, and the lowest per capita income, in part thanks to policies that once helped energize the economy but are now constraining growth. (The Wall Street Journal)
      • NH: As a percent of the U.S. average, per-capita income in southern states rose steadily from the middle of the Great Depression in the 1930s all the way up to the GFC in 2009. And then... it began falling again. Why is the economic gap between the South and the other states, which had been closing for so long, now re-opening?
      • One reason is the shock of globalization, which hit low-skilled manufacturing regions the hardest. This is a problem because for decades the South had based much of its rising prosperity on precisely that--low-skill, low-wage factories. The Midwest has also suffered in recent years for the same reason. The South is also America's most rural region. And this is a problem, because rural counties have been lagging behind other counties in economic (and population) growth ever since the 1980s. (See "Hard Times in Rural America.") And unlike rural counties in the west, the south doesn't possess the sort of pristine wilderness that might attract affluent retiring Boomers. (See "Rural and Small Towns Thriving.")
      • Texas and Florida, which continue to thrive and grow, are the only major exceptions to this theme of decline--mainly because they are the only southern states with many thriving urban centers. Texas has five of them (Dallas-Ft Worth, Austin, Houston, San Antonio, and El Paso). Texas and Florida are also exceptional, for southern states, in their attention to quality higher ed and their cultivation of high-tech industry.

    Women Are Working More and Relaxing Less. NewsWire. - July01 chart12


    Don’t Understand Your Neighbor? Stop Reading the News. According to the latest study from More in Common, Democrats and Republicans imagine that almost twice as many people on the other side hold extreme views than actually do. Democrats, for instance, estimate that only half of Republicans believe racism still exists in America. In reality, 79% do. Republicans, meanwhile, think that half of Democrats believe that most police are bad people. The actual share is 15%. Ironically, the study also found that the institutions intended to better inform us seem to be doing the opposite: The more news Americans consume, the more distorted their perceptions are. The worst-skewing offenders are conservative sources like Breitbart News and HotAir. More education also widens the perception gap—but only among Democrats, not Republicans. Democrats who didn’t finish high school are three times more accurate than in assessing the views of Republicans than Democrats with a postgraduate degree—likely because the more educated Democrats become, the less likely they are to have Republican friends.