Episode Details

The podcast’s audio engineer Josh Crotts joins host Gene Tunny to discuss the recent episode with Professor John Cochrane of the Hoover Institution. Josh shares his queries and comments on the episode, particularly regarding Professor Cochrane's average income and economic growth statistics. He also questions Cochrane’s statement that “The other problem we have is that low-income Americans basically don't work.”. 

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What’s covered in the Bonus episode

• [00:02:03] Delving into economic growth statistics.
• [00:05:26] Women's impact on GDP.
• [00:09:41] Earnings distribution skew.
• [00:13:36] Average income in China.
• [00:16:41] Slowing productivity growth.
• [00:19:19] Low income and food stamps.
• [00:24:27] Xerox and the mouse.

Takeaways

• The importance of accurately interpreting economic data: The episode highlights the need to delve into economic data and understand the different measures and calculations used. 
• The impact of government policies on low-income individuals: The discussion raises the issue of high effective marginal tax rates (due to the withdrawal of government benefits) and how they can create disincentives for low-income individuals to take a higher-paying job or work additional hours. The example demonstrates the challenges those who rely on social programs face.
• The need for nuanced discussions on poverty and work: The episode emphasizes the importance of avoiding generalizations and stereotypes about poverty and work. Many low-income individuals are hardworking and face significant barriers and challenges. Discussions on poverty and work should consider the complexities of individual circumstances and the impact of government policies on incentives and opportunities.

Links relevant to the conversation

Economic growth data sources

• US  Real gross domestic product per capita: https://fred.stlouisfed.org/series/A939RX0Q048SBEA
• US Gross domestic product per capita (i.e. nominal not real/inflation-adjusted): https://fred.stlouisfed.org/series/A939RC0Q052SBEA
• US Census Bureau publication Income in the United States: 2022: https://www.census.gov/library/publications/2023/demo/p60-279.html
• IMF estimates of GDP per capita, current prices, Purchasing power parity; international dollars per capita: https://www.imf.org/external/datamapper/PPPPC@WEO/OEMDC/ADVEC/WEOWORLD
• World Bank estimates of GDP per capita, PPP (current international $) - China: https://data.worldbank.org/indicator/NY.GDP.PCAP.PP.CD?locations=CN
• World Bank estimates of GDP per person employed (constant 2017 PPP $) - China: https://data.worldbank.org/indicator/SL.GDP.PCAP.EM.KD?locations=CN

ABS article on the difference between mean and median earnings in Australia:

https://www.abs.gov.au/statistics/understanding-statistics/guide-labour-statistics/earnings-guide/average-earnings-guide

Articles Josh consulted on the working poor:

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