Fighting Child Poverty in America

It was heralded as a game-changer for America's social safety net. It dramatically reduced child poverty. But, last month, the enhanced Child Tax Credit — a kind of "Social Security for kids" — expired, and millions of American children sank back into poverty.

In March 2021, President Biden and congressional Democrats revamped the Child Tax Credit as part of the American Rescue Plan. They restructured it, so that parents could get a monthly check from the government. They increased the credit's size, allowing parents to claim as much as $3,600 a year per child, or $300 a month. And they made the credit fully refundable, so that even super-low-income families who don't pay much — or anything — in federal taxes could get it.

For those primarily concerned with ending child poverty, these changes were a resounding success. Scholars at Columbia University found they reduced child poverty by about 30%. Another study found the enhanced program cut household food insufficiency by 26%.

But President Biden's efforts to renew the credit have been thwarted by opposition from Sen. Joe Manchin (D-W.Va.) and congressional Republicans. They disliked how much the program cost and how generous it was, and they worried that it would encourage parents to stop working because it did not have a work requirement.

According to the Tax Policy Center, the beefed-up Child Tax Credit would cost around $225 billion per year (about $100 billion more per year than the original version, which is now back in effect). For context, that's less than a quarter of the annual cost of Social Security, about a third of the cost of Medicare, and about the same as the budget for the Department of Agriculture. A report from the Urban Institute finds that even with the enhanced Child Tax Credit, America spent only about 7% of its federal budget on kids in 2021 — and that is now projected to decline.

As for how many parents stopped working as a result of the enhanced Child Tax Credit, estimates range from about 300,000 to 1.5 million. There are about 50 million working parents in the United States, so even if we accept only the highest estimate, more than 97% of parents continued working after receiving the payments. That makes sense because 300 bucks a month is hardly enough for most families to live on.

The failure of Washington to renew the enhanced Child Tax Credit continues a long tradition in America: Our welfare system has long spent generously on the old, but it has consistently skimped on the young. While America spends about as much, or even more on the elderly than many other rich nations, it spends significantly less on kids. Among the almost 40 countries in the OECD, only Turkey spends less per child as a percentage of their GDP. It's a big reason why the United States has a much higher rate of child poverty than most other affluent countries — and even has a higher rate of child poverty than some not-so-affluent countries.

In a new paper, the economists Anna Aizer, Hilary W. Hoynes, and Adriana Lleras-Muney explore the reasons why the United States is such an outlier when it comes to fighting child poverty. While they acknowledge the reasons are varied and complex, they focus their analysis on one factor: American policymakers, influenced by economists, have dwelled much more on the costs of social programs than their benefits.  TO FIND OUT THE COST OF FOCUSING JUST ON COSTS, CLICK HERE...

Robots Take Jobs

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Robots could take over 20 million manufacturing jobs around the world by 2030, economists claimed Wednesday.

According to a new study from Oxford Economics, within the next 11 years there could be 14 million robots put to work in China alone.

Economists analyzed long-term trends around the uptake of automation in the workplace, noting that the number of robots in use worldwide increased threefold over the past two decades to 2.25 million.

While researchers predicted the rise of robots will bring about benefits in terms of productivity and economic growth, they also acknowledged the drawbacks that were expected to arise simultaneously.

“As a result of robotization, tens of millions of jobs will be lost, especially in poorer local economies that rely on lower-skilled workers. This will therefore translate to an increase in income inequality,” the study’s authors said.

However, if robot installations were boosted to 30% more than the baseline forecast by 2030, researchers estimated it would lead to a 5.3% boost in global GDP that year.

“This equates to adding an extra $4.9 trillion per year to the global economy by 2030 (in today’s prices) — equivalent to an economy greater than the projected size of Germany’s,” the report said.

Regional vulnerabilities
According to the report, the number of robots installed in workplaces in the past four years is the same as the number put to work over the eight years previous.

Approximately every third robot in industry is now installed in China, researchers found, with the world’s second-largest economy accounting for around one-in-five of the global stock of robots.

It was predicted that by 2030, more than 1.5 million jobs would have been lost to robots in the United States. In China, that number was expected to exceed 11 million. Across EU member states, almost 2 million people would lose out on employment because of automation, the report said.

When it came to job losses, the most vulnerable states in the U.S. included Texas, Louisiana and Indiana, with Oregon named the most susceptible to the negative effects of automation.

The regions of Chemnitz, Thuringen and Oberfranken were most vulnerable in Germany, while the Midlands and North West of England were Britain’s most vulnerable regions.  READ MORE...




https://www.cnbc.com/2019/06/26/robots-could-take-over-20-million-jobs-by-2030-study-claims.html