Saturday, September 12, 2015

More research on diverging classes going nowhere

“In 2013–14, Harvard Business School (HBS) conducted its third alumni survey on U.S. competitiveness. Our report on the findings focuses on a troubling divergence in the American economy: large and midsize firms have rallied strongly from the Great Recession, and highly skilled individuals are prospering. But middle- and working-class citizens are struggling, as are small businesses."

Isn't that a shock.  Here’s my take, Porter and Rivkin.

1)  The transfers, billions and billions, are not factored in for the lowest income;

2) those transfers often result in a single mom with 2 kids using 5 or 6 of the more popular programs like SNAP, Medicaid, Section 8, EITC, will have twice the income of the new minimum, so even if she wanted a good job, we've disincentivized her from accomplishing anything.

3) Government regulations are killing the very small businesses, maybe in her neighborhood, that would employ her and provide the tax base which would give her and the kids a future.

4) The most recent Obamacare mandates and EPA regulations are hurting the poor and low income the hardest by damaging small businesses, further preventing them from moving up. Beefing up the bridges and roads and stiffening education requirements will hardly undo that damage.

Quickly looking through the report I see the authors suggest more money for public transportation and more money for education and basic skill building.

http://www.hbs.edu/competitiveness/Documents/an-economy-doing-half-its-job.pdf

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