by Ben Lorica (last updated Mar/2012)With the 2012 U.S. Presidential Elections looming, I'm starting to assemble charts that are relevant to discussions in the media. This is a work in progress and I plan to add charts when I come across relevant data.
American Human Development Index (HDI) is a composite score along three dimensions: longevity, access to knowledge, and standard of living. The HDI compiled by the Social Science Research Council "... uses alternate indicators to better reflect the U.S. context and to maximize use of available data."
In the graph below the percentage of uninsured (3-year average from 2008-2010 US Census surveys1) is along the horizontal axis, while the HDI is the vertical axis. I highlighted vertical/horizontal regions that are within one standard deviation of the mean value for a given axis. In addition, I drew (dashed) lines that span the region (mean - sigma) to (mean + sigma). The color of the dots correspond to the current political classification of each state into Red / Blue / Purple.
The Texas model doesn't hold up well under these two metrics. The upper-left region where the percentage of uninsured is low, and the HDI is high, is dominated by Blue states, with Massachusetts leading the way.
(1) A Mar/2011 Gallup survey estimated that 27% of all TX residents were uninsured, compared to 5.3% in MA.establishment of health insurance exchanges -- "marketplaces" where individuals and (small) businesses can purchase comprehensive health insurance plans at affordable rates. In theory this means you can purchase affordable health insurance even if you are unemployed or self-employed or have a pre-existing health condition. However it was left up to the states to establish these exchanges.
The Center on Budget and Policy Priorities recently reviewed what the different states have done towards establishing health insurance exchange. Their PDF report contained two color-coded maps which I reproduced below. If you are among the many Americans left unemployed by the recent recession, and you have a pre-existing health condition, starting 2014 you'll have an alternative to expensive COBRA plans. BUT, you have to reside in a state that has embraced the Obama Health plan. To ease the burden on states, the federal government, through the Department of Health & Human Services, provided states with funding towards the planning, implementation, and operation of health insurance exchanges.
[You can use the drop-down menu to toggle between 2 maps: one gives legislation towards establishment of the exchanges, the other provides a summary of the grants awarded by the federal government to the states. Data is through mid Aug/2011.]
this page. this page. article on the Golden State's economy caught my eye:
"In 2010, for instance, the state spent $6 billion on fewer than 30,000 guards and other prison-system employees. A prison guard who started his career at the age of 45 could retire after five years with a pension that very nearly equaled his former salary. The head parole psychiatrist for the California prison system was the state's highest-paid public employee; in 2010 he'd made $838,706. The same fiscal year that the state spent $6 billion on prisons, it had invested just $4.7 billion in its higher education - that is, 33 campuses with 670,000 students. Over the past 30 years the state's share of the budget for the University of California has fallen from 30 percent to 11 percent, and it is about to fall a lot more. In 1980 a Cal student paid $776 a year in tuition; in 2011 he pays $13,218."How dire is the state of funding for higher education in our largest state? I dug around and found data from the non-partisan Legislative Analyst's Office (LAO):
[From: "California's Fiscal Outlook: The 2011-12 Budget"]
As a result of extended negotiations with the state, both the UC & CSU have flat budgets starting 2011-12. For planning purposes, administrators in both UC/CSU wisely chose the certainty of a flat budget over annual budget negotiations. In an effort to protect the state's higher education system, Jerry Brown has proposed a constitutional amendment that "would require that, beginning in 2014-15, no more than 7% of state General Fund support be spent on CDCR (or any successor state agency) and no less than 10% be spent on UC and CSU."
In the graph below, I compare the stimulus package across critical states: the large states that will determine the popular vote winner, and the few "swing" states that will determine the winner of the 2012 presidential election. In all of these states (except for NJ), 2009-2011 stimulus grants per capita exceeds the 2012 budget shortfall per capita. While the stimulus may have not been big enough to spur growth, at the state level it has made a material difference in softening the blow of the financial crisis. The real problem for Obama in the swing states is the high unemployment rate -- case in point, with an unemployment rate of 13.7%, a state like NV can easily vote Republican in 2012.
a Jul/2010 study by the non-partisan Congressional Budget Office (CBO) that puts the state of Social Security in proper perspective. The magnitude of the deficit is far from out-of-control: over the next 75 years, the program is short around 0.6% - 0.7% of GDP.
"A commonly used summary measure of the system's long-term financial condition is the 75-year actuarial balance - a figure that measures the long-term difference between the resources dedicated to Social Security and the program's costs under current law. The actuarial balance is the value of Social Security's revenues over the 75-year period, discounted to their value in current dollars, plus the current balance in the OASDI trust funds, minus the present value of future Social Security outlays, minus the value of a year's worth of benefits as a reserve at the end of the period. CBO estimates the 75-year actuarial balance to be 0.6 percent of gross domestic product (GDP); that is, under current law, the resources dedicated to financing the program over the next 75 years fall short of the benefits that will be owed to beneficiaries by about 0.6 percent of GDP. That figure is the amount by which the Social Security payroll tax would have to be raised or scheduled benefits reduced for the system's revenues to be sufficient to cover scheduled benefits. In other words, to bring the program into actuarial balance over the 75 years, payroll taxes would have to be increased immediately by 0.6 percent of GDP and kept at that higher rate, or scheduled benefits would have to be reduced by an equivalent amount, or some combination of those changes and others would have to be implemented.In addition, the CBO took 30 widely discussed proposed changes to Social Security and studied their impact on the program. It turns out several of these changes effectively wipe out the long-run (75-year) deficit of 0.7% of GDP. If detractors want to overhaul the system, they need another rationale besides its fiscal health.
The actuarial balance averages the smaller deficits that would occur near the beginning of the projection period and the larger ones that would occur near the end. In 2084, scheduled outlays would exceed revenues by 1.4 percent of GDP."
(1) The actuarial balance is the present value of revenues plus the OASDI trust fund balance at the beginning of 2010, minus the present value of outlays from 2010 to 2084, minus a year's worth of benefits as a reserve at the end of the period, expressed as a percentage of the present value of GDP over the period. OASDI = Old-Age, Survivors, and Disability Insurance; AIME = average indexed monthly earnings; PIA = primary insurance amount; chained CPI-U = chained CPI for all urban consumers; CPI-W = consumer price index for all urban wage earners and clerical workers.Paul Krugman and Ross Douthat, that touched on wages in Texas. In the graph below, I used BLS data for hourly wages as of May/2010. For each one of the 20 most populous states I drew the following:
If you compare TX to other big states (CA, NY, FL, IL, PA), when it comes to median hourly wages, the lone star state exceeds only FL. So as Krugman points out, unless lowering wages and deregulation is what you like, the TX model isn't particularly attractive. Besides in a race to the bottom, "... every state can't lure jobs away from every other state".
Blue Bars => The middle 50% of the distribution of hourly wages, i.e., the region spanning from the first to the third quartile. (See here for a more detailed explanation of the middle 50%.) Red Lines => Median hourly wages. Color-coded circles => The current political classification of each state into Red / Blue / Purple Population in millions (from the 2010 Census)
Rather than statistical tests for wages across states & categories, I wanted a visual representation where states that are similar in terms of median hourly wage across 20+ occupation categories, appear "close" in a chart. Fortunately, there are many options available for projecting high-dimensional vectors onto a plane. I chose two standard methods: Principal Component Analysis (PCA) and Multidimensional Scaling (MDS). In the two-dimensional PCA chart below, states that appear close together have similar median wages across the 20+ occupation categories (the first two principal components accounted for 83% of the variance). In essence these visual representations are a form of compression, where we take distance relationships in a high dimensional vector space and mimic them on a plane. (The color of the dots correspond to the current political classification of each state into Red / Blue / Purple.)
The non-continental states, AK & HI, are outliers, along with DC. There is a cluster of Blue States CA/NJ/MA/NY, while TX appears in another cluster with some Southern states (TX/GA/NC/AL/FL). In general, the Red & Blue states appear to be "separated" in both the PCA & MDS charts.
NOTE: Reproduction & reuse allowed under Creative Commons Attribution.