Productivity and Compensation

If a rising tide is supposed to lift all boats, why have we seen worker productivity rise so much faster than wages? From the 1940s through much of the 1970s, productivity growth and wages followed a generally similar pattern. However, since the 1970s, productivity has been increasing faster than compensation, and some use the gap to argue that we need proactive policies to deal with […]

Trade You Can’t See

A large and growing component of international trade won’t fit in a tanker, container, barge, or crate. In fact, no matter how hard you look, it is nearly impossible to find some of it with your eyes; much of it is lodged in the cranial cavities found between millions of pairs of ears. The United States has long run a trade surplus in the services […]


The recent July 4 holiday marked 241 years since the 13 American colonies separated from England and did so with Mr. Jefferson’s powerful and lyrical prose that made the Declaration of Independence one of the most memorable documents in human history. We often forget, however, that the year 1776 was also marked by another publication that, while anything but inspiring for its tone and resonance, […]

The Importance of Ports

Seaports have been centers of commerce for centuries (millennia, in fact), and they remain crucial to the economy today. Every year, hundreds of billions of dollars’ worth of products move through US ports. Ports generate substantial business activity through their operations, but those benefits are dwarfed by the huge importance of water transportation to other industries. Texas ports are a crucial component of the national […]

The Passing of a Rite of Passage

Having a summer job used to be a rite of passage for teenagers. Changes in economic conditions and preferences are contributing to a decline in the numbers of young people seeking summer work. The implications for both young people and employers are significant. Data from the US Bureau of Labor Statistics (BLS) indicates that teen labor force participation peaked in 1979 at just under 58%. […]

Marking a Milestone

We recently passed a notable milestone in the long process of recovering from the Great Recession: household debt levels have surpassed the peak reached during the recession in 2008. In many ways, this rise in consumer debt is a good sign in that it indicates Americans are feeling optimistic enough to take on additional obligations. Moreover, housing markets and credit conditions have normalized to the […]

Paris Discord

Add another divisive decision to President Trump’s tally: pulling out of the Paris Accord. Depending on your perspective, you may have been horrified or relieved. In either case, more uncertainty has been created. The Paris Accord came out of a 2015 United Nations Climate Change Conference. More than 190 countries participated in the agreement, which involves voluntary reductions in emissions levels. Most countries tied pollution […]

The Paradox of Pandemonium – From “No Drama” to “Total Trauma”

Uncertainty is generally bad for business. Companies function best when conditions are relatively predictable and they can plan accordingly. If firms are anxious about the future, then economic growth will be adversely affected. Obviously, the world is a complex place, and we always have to deal with an unknown future. This is neither new nor unusual. Currently, however, there is an extra measure of uncertainty […]

The High Cost of Cybercrime

The recent outbreak of ransomware “WannaCry” sent tremors through the global economy and brought fears of more to come. In the United Kingdom, the National Health Service network was hit and 16 hospitals lost access to computer files. In France, Renault factories were idled. Phone service in Spain was disrupted, Russia’s second-largest mobile phone provider was affected, ATMs in China went down, and universities in […]

The Big Business of Small Businesses

Small businesses generate substantial economic activity. They cover the spectrum from new tech startup to well-established retailer, and it has long been acknowledged that they are important sources of new jobs (though early studies were overstated). The US Bureau of Labor Statistics (BLS) tracks job gains and losses by firm size. As of the third quarter of 2016, firms with 1-49 employees had contributed 30% […]