Half of Americans want a major overhaul to the US economy, Pew says

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  • Half of Americans believe the US economy needs “major changes” or to be “completely reformed.”
  • People largely backed job training but were less supportive of universal basic income, Pew said.
  • Support for economic reform was far more common among liberals than conservatives, Pew added.
  • See more stories on Insider’s business page.

As the US enters a new normal, half of its population is ready for an economy that’s starkly different from that which came before.

About 40% of surveyed Americans believe the economy “needs major changes” as it emerges from the coronavirus pandemic, according to a Pew Research report published Thursday. One in 10 Americans said they saw a need for the country’s economic systems to be “completely reformed.”

PEW
Source: Pew Research Center

Conversely, only 12% of the US sees no need for economic change. Roughly 38% said the country’s economy needs only “minor” changes.

Pew conducted a survey across the US, UK, France, and Germany from November 10 to December 23. More than 4,000 adults across the four countries responded.

When asked which potential economic policies should be instituted, three-quarters of surveyed Americans said it’s “very important” that the government provide more job and skills training for workers. Nearly half of respondents deemed an increase of government benefits to the poor as “very important,” and 44% said it’s critical the government contribute to affordable housing.

About 45% said it’s very important for lawmakers to lift taxes on the wealthy. President Joe Biden proposed such tax hikes to cover the costs of his upcoming American Families Plan, which includes funds for universal pre-K, paid family and medical leave, and an extended child tax credit. The White House has said it won’t lift taxes on households earning less than $400,000 per year.

Only 31% of Americans characterized universal basic income as “very important,” making it the least supported of the five potential policies. Still, that marks a shift from discussions a decade ago, when universal basic income lingered on the fringes of progressive economic policy.

Support for economic reform was far more common among left-leaning respondents. More than three-quarters of US adults on the left said the country needs a complete overhaul or major changes, according to Pew. That compares to just 32% of right-leaning respondents and 46% from moderates.

Support of stricter government regulation received a more mixed response. Half of surveyed Americans said it’s generally bad for society if the government regulates business, while 46% said such regulation is good. That differs from responses in Europe, where the majority of residents in the UK, France, and Germany supported business regulation.

Even if major economic changes remain years away, Americans are largely optimistic as the country rebounds. Roughly 78% of US respondents said they have either “somewhat good” or “very good” chances at improving their standard of living. Only 7% said they have “very bad” chances, and 11% said their odds are “somewhat bad.”

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54 million people fell out of the global middle class last year as the K-shaped recovery went international

Brooklyn food pantry coronavirus
People line up outside a food pantry in Brooklyn on Nov. 12, 2020.

  • Roughly 54 million people fell out of the global middle class during the pandemic recession, Pew data shows.
  • About 152 million people sank into the lower-income class or into poverty, reversing years of improvement.
  • Poorer economies saw the biggest losses, adding to the global recovery’s K-shaped trend.
  • See more stories on Insider’s business page.

As economies turn toward reopening and recovery, the coronavirus’ economic toll is coming into focus. The picture is incredibly bleak.

The distribution of COVID-19 vaccines presents a clear end to the pandemic, but new data from the Pew Research Center suggests that returning to pre-pandemic unemployment levels is only the first step toward a full rebound. The firm estimates that 54 million more people fell out of the global middle class in 2020 than would have had the pandemic not emerged.

The classification includes people who live on $10 to $20 a day, or those who earn roughly $14,600 to $29,200 a year. That spread straddles the US poverty line and is well below median earnings in advanced economies.

That decline would’ve been larger had China, which is home to more than one-third of the world’s middle class, not avoided a recession, Rakesh Kochhar, senior researcher at Pew, said. Still, growth in that country has slowed significantly as it faces obstacles to vaccinating its huge population.

Separately, about 152 million people fell from the global upper and middle class into the lower class and poverty. Pew’s definition of global poverty encompasses those living on less than $2 a day, or earning less than $2,920 a year for a family of four.

Like other aspects of the economic downturn, the pandemic’s negative effects have driven an uneven, K-shaped recovery. Middle-class dropouts were most concentrated in South Asia, East Asia, and the Pacific, as those regions saw growth in that cohort stall well before the pandemic hit. The increase in those classified as “poor” was primarily seen in India and Sub-Saharan Africa, reversing years of progress and plunging the regions into new economic pain, Kochhar said.

The regional disparities reflect observations made by the International Monetary Fund in its latest economic projections. The organization expects emerging-market and low-income economies to “suffer more significant medium-term losses,” as they lack the fiscal firepower to power a stronger recovery. Countries with large dependencies on the tourism industry also risk prolonged downturns, the IMF said.

“Recoveries are diverging dangerously across and within countries,” wrote Gita Gopinath, chief economist for the IMF.

At the same time, data collected by Bloomberg show wealthier countries vaccinating 25 times faster than the world’s poorest nations. Advanced economies snapped up doses throughout the fall, creating a shortage that further inflames the recovery’s K-shaped trend.

To be sure, the pandemic only exacerbated trends seen for many years. Most of the world’s population landed in either the low-income or poor groups before the health crisis, while high-earners made up the smallest group. Yet the virus’s damage to service jobs, which are primarily staffed by minorities, low-earners, and women, widened the gaps.

That’s not to say progress can’t be made. The global middle-class population grew by 54 million people annually on average from 2011 to 2019. The pandemic only erased a year of gains at that pace.

Poverty, however, jumped by 131 million people in 2020 after falling at an average annual rate of 49 million people, according to Pew. The setback signals that, at the pre-pandemic pace of improvement, it will still take years to rebound.

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Only a third of Americans think Biden’s stimulus bill is too big, survey finds

joe biden
President Joe Biden.

  • A Pew survey found that only a third of Americans think Biden’s stimulus bill is too big.
  • While Republican lawmakers oppose the size of the bill, the majority of Republican voters support it.
  • Regardless of party affiliation, lower-income households support the size; some say it’s too low.
  • Visit the Business section of Insider for more stories.

President Joe Biden’s stimulus bill is expected to reach its final vote on Wednesday, and according to a recent survey, only a third of Americans think the bill is too big.

Since it was first introduced, Republican lawmakers have argued that the stimulus bill Democrats have pushed through using reconciliation is too costly, and a group of Republican senators even proposed a counter-stimulus bill that was a third the size of Biden’s. But according to a survey released on Tuesday from the Pew Research Center, the majority of Americans don’t see an issue with the size of the bill.

“As the House of Representatives prepares to give final approval to the Biden administration’s $1.9 trillion coronavirus relief package, a sizable majority of US adults (70%) say they favor the legislation,” the survey said. “Only about three-in-ten (28%) oppose the bill, which provides economic aid to businesses, individuals and state and local governments.”

Here are the main findings of the survey:

  • 82% of Americans in lower-income households favor the bill, compared to 60% of upper-income households;
  • 63% of lower-income Republicans favor the bill, compared to the 25% of upper-income Republicans;
  • And 41% of Americans say the proposed spending on the bill is “about right,” with 46% of upper-income Americans saying it spends too much and 37% of lower-income Americans saying it spends too little.

The survey also found that 94% of Democrats support the bill, with 56% saying the spending is appropriate.

Despite the partisan divide in Congress, Insider previously reported on multiple findings from the past month that suggested broad public – and Republican – support for Biden’s stimulus package. For example, a Morning Consult/Politico poll from February 24 found that 60% of Republicans support the bill, and some provisions in the bill, like the $1,400 stimulus checks, have garnered Republican support.

In addition, Biden and progressive lawmakers have pushed to ensure the measures in the stimulus bill will aid those most hit by the pandemic, including lower-income Americans. A new analysis from the Tax Policy Center found that the stimulus will give the poorest Americans a 20.1% income boost after taxes, and the Pew survey found that regardless of party affiliation, those in lower-income groups approved of, or wanted to see more, spending.

“Reflecting the income pattern among all Americans, within both partisan groups, those with lower incomes are more likely than those with higher incomes to say the proposed spending on the economic bill is not enough,” the survey said.

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