The unemployment rate has fallen steadily over the last several years, and many have said that the current rate of 4.4 percent means we are back to (or have even dropped below) full employment—meaning that pushing unemployment any lower would cause inflation to accelerate above the Federal Reserve’s preferred 2 percent target. That is why many observers have applauded the Fed’s recent decisions to raise rates, even though the rate hikes occurred before most workers have seen the economic recovery translate into consistently strong nominal wage growth.
The fact is that the headline unemployment rate continues to understate slack in the labor market. Today’s 4.4 percent unemployment rate is associated with a much lower prime-age employment-to-population ratio (EPOP)—the share of the working age population who is actually working—than in the recent past. While there may be reasons other than labor market slack for today’s lagging labor force participation, by looking just at the prime-age EPOP, we can at least eliminate any distortions caused by the wave of retiring baby boomers. The graph below shows that the prime-age EPOP averaged 81.2 percent in the five months the unemployment rate hit 4.4 percent in 1998 and 1999 (including one month in 2001), and 80.5 percent in the four months unemployment hit 4.4 percent in 2006 and 2007. On average, those nine months saw a 2.1 percentage point higher prime-age EPOP (80.7 percent) than the 78.6 percent we see today.
Yesterday, on President Trump’s 105th day in office, House Republicans approved a bill repealing the Affordable Care Act. President Trump celebrated the House passage of the American Health Care Act (AHCA) and stated that he is confident that the measure will pass the Senate. Under the AHCA, 24 million Americans would lose their health insurance coverage. The majority (14 million) would lose coverage as the result of staggering cuts (almost $900 billion over the next decade) to the Medicaid program, which provides health care coverage to low-income Americans. An additional 7 million Americans would lose the coverage they get through their employer. In addition to taking coverage away from millions of Americans, the AHCA would have a significant impact on our nation’s overall economy. Large cuts to Medicaid and the subsidies for those buying health insurance on the ACA exchanges, combined with the AHCA’s tax cuts benefitting the top 1 percent of households, would be a drag on the economy and hurt job growth. Nationally, the job losses would reach 460,000 by 2020 and 1.8 million by 2022.
Earlier in the week, House Republicans voted in favor of legislation that would give employers the right to delay paying any wages for overtime work for as long as 13 months. The deceptively named “Working Families Flexibility Act” (H.R. 1180) would allow private-sector employers to “compensate” hourly workers with compensatory time off in lieu of overtime pay. Contrary to proponents’ claims, the bill does not give employees the right to comp time, it takes away their right to overtime. The legislation forces workers to compromise their paychecks for the possibility—but not the guarantee—that they will get time off from work when they need it.
Everyone who works in the education world—from researchers and policymakers, to teachers and school board members—is familiar with the National Assessment of Educational Progress (NAEP), commonly called the “Nation’s Report Card.” Every two years, scores from the NAEP on reading and mathematics tell us what students across the country and in every state know and can do. NAEP also paints a picture of progress over time in our children’s proficiency in these subjects and the degree to which race- and income-based gaps in educational achievement are narrowing. (For the record, we have continued to make progress on both subjects, and those gaps are narrowing, albeit much more slowly than we want or need them to.)
But even those of us who rely on NAEP, whether for research or policymaking purposes or otherwise, are probably a lot less conversant with other aspects of the assessments. In the past few weeks, the National Assessment Governing Board (NAGB), which oversees and manages NAEP, unveiled two new sets of findings that illuminate key realities relevant to children’s futures and provide important guidance for policy and practice. They could not be more timely.
Last week, the Board hosted an event at the Kennedy Center to discuss the results of the 2016 NAEP arts assessment. Every decade since 1997, eighth graders have been assessed for their skills in music and visual arts, the latter including both what they know about art and how well they can practice it. The good news, if you can call it that, is that our children haven’t lost ground on scores despite major cuts to art programs during the big recession; overall, they have held fairly steady since the last arts NAEP, in 2008.
As we await Friday’s employment report, and the likely bounce back from the disappointing payroll numbers we saw last month, I’m going to take the opportunity to discuss a couple key questions we should ask as the economy continues inching towards full employment. First, are we simply adding jobs or are we adding better-quality jobs? Second, is the recovery reaching all corners of the labor market?
Except for last month, the economy has been adding enough jobs over the last year to not only keep up with population growth but to pull in more workers off the sidelines. These workers come from those who were unemployed—that is, people who have been actively looking for a job—as well as those who were out of the labor force but who we would expect to return as job opportunities get stronger. As those formerly-sidelined workers get added to the employment rolls, there will be fewer workers left out trying to get in. Right now, employers hold the cards when it comes to determining employment conditions because, for the most part, they don’t have to offer better wages and benefits to attract and retain the workers they want—both employers and workers know those would-be workers are out there ready to replace any incumbent who makes wage demands that employers deem excessive.
As we approach full employment, that dynamic should slowly shift. We’ve begun to see evidence of broad-based wage growth in the last year as some amount of bargaining power moves in workers’ favor as the labor market tightens. With fewer workers on the sidelines, employers will have to work a bit harder—offering higher wages and better benefits—to attract and retain the workers they want. That is not to say that we should expect rapid and uncontrolled acceleration in wage growth, which the Federal Reserve fears will set off an inflationary spiral. Instead, upward pressure on wages will likely happen slowly and gradually, perhaps in one sector before others or in one part of the country before others. But, it will not happen at all if the Fed raises rates and slows down or halts the recovery.
A vote in favor of the American Health Care Act (AHCA) today would be a vote to make the vast majority of Americans poorer, less healthy, and more financially insecure. The AHCA would cost 24 million Americans their health insurance coverage. The majority (14 million) would lose it to breathtakingly large cuts (almost $900 billion over the next decade) to the vital Medicaid program. Further, 7 million Americans would lose the coverage they get through their employer if AHCA passes.
Costs would skyrocket for those who still needed coverage in the nongroup market. A 64 year-old making 175 percent of the federal poverty line would pay $12,900 more each year for the health insurance plan’s premiums under AHCA, but would also face deductibles and co-pays that would cost thousands more than they do currently. For the entire nongroup market, out-of-pocket costs after premiums would rise by $25 billion each year by 2026 if AHCA is passed.
On top of this severe degradation of health and financial security, the AHCA would also drag on job growth in coming years. This drag would occur because the AHCA cuts to Medicaid and insurance subsidies reduce growth in economic activity and job creation far more powerfully than the AHCA tax cuts boost this growth. By 2022, this drag could lower employment by 1.8 million unless some countervailing macroeconomic boost neutralized the AHCA job losses. This drag on job growth would felt in nearly every congressional district.
How many jobs could the AHCA cost in your congressional district?: Potential fewer jobs by congressional district due to drag on growth from the AHCA, 2017–2022
|State||District||Representative||2019 potential job loss||2020 potential job loss||2021 potential job loss||2022 potential job loss|
|Alabama||4||Robert B. Aderholt||429||1,108||1,522||1,647|
|Alabama||6||Gary J. Palmer||174||662||974||1,032|
|Alabama||7||Terri A. Sewell||528||1,338||1,827||2,006|
|Arizona||3||Raúl M. Grijalva||2,182||5,606||7,640||8,789|
|Arizona||4||Paul A. Gosar||1,498||3,885||5,310||6,074|
|Arkansas||1||Eric A. “Rick” Crawford||1,085||2,815||3,849||4,390|
|Arkansas||2||J. French Hill||777||2,127||2,941||3,342|
|California||6||Doris O. Matsui||1,351||3,540||4,852||5,517|
|California||18||Anna G. Eshoo||543||21||437||539|
|California||21||David G. Valadao||1,658||4,250||5,793||6,635|
|California||24||Salud O. Carbajal||834||2,405||3,364||3,786|
|California||28||Adam B. Schiff||726||2,332||3,321||3,752|
|California||32||Grace F. Napolitano||1,018||2,643||3,622||4,048|
|California||35||Norma J. Torres||1,202||3,065||4,181||4,719|
|California||38||Linda T. Sánchez||892||2,354||3,239||3,607|
|California||39||Edward R. Royce||549||1,768||2,524||2,809|
|California||44||Nanette Diaz Barragán||1,532||3,886||5,293||5,985|
|California||46||J. Luis Correa||1,262||3,232||4,414||4,960|
|California||47||Alan S. Lowenthal||1,026||2,827||3,919||4,410|
|California||49||Darrell E. Issa||386||1,590||2,349||2,631|
|California||52||Scott H. Peters||258||1,305||1,973||2,201|
|California||53||Susan A. Davis||897||2,469||3,424||3,830|
|Colorado||3||Scott R. Tipton||2,339||6,134||8,395||9,669|
|Connecticut||1||John B. Larson||982||2,879||4,029||4,616|
|Connecticut||3||Rosa L. DeLauro||953||2,768||3,869||4,426|
|Connecticut||4||James A. Himes||145||1,504||2,372||2,784|
|Connecticut||5||Elizabeth H. Esty||853||2,626||3,706||4,249|
|Delaware||Statewide||Lisa Blunt Rochester||1,202||3,381||4,698||5,362|
|DC||Statewide||Eleanor Holmes Norton||303||1,542||2,321||2,691|
|Florida||2||Neal P. Dunn||652||1,696||2,333||2,533|
|Florida||3||Ted S. Yoho||699||1,798||2,469||2,667|
|Florida||4||John H. Rutherford||574||1,563||2,177||2,309|
|Florida||5||Al Lawson, Jr.||907||2,234||3,034||3,319|
|Florida||7||Stephanie N. Murphy||845||2,176||2,998||3,147|
|Florida||10||Val Butler Demings||969||2,462||3,383||3,550|
|Florida||12||Gus M. Bilirakis||639||1,702||2,361||2,492|
|Florida||15||Dennis A. Ross||678||1,773||2,446||2,615|
|Florida||17||Thomas J. Rooney||788||1,953||2,663||2,853|
|Florida||18||Brian J. Mast||807||2,168||3,013||3,155|
|Florida||20||Alcee L. Hastings||1,533||3,616||4,880||5,170|
|Florida||22||Theodore E. Deutch||1,024||2,775||3,868||4,028|
|Florida||23||Debbie Wasserman Schultz||1,120||2,927||4,050||4,207|
|Florida||24||Frederica S. Wilson||1,717||4,082||5,522||5,828|
|Georgia||1||Earl L. “Buddy” Carter||682||1,773||2,439||2,653|
|Georgia||2||Sanford D. Bishop, Jr.||761||1,946||2,660||2,961|
|Georgia||3||A. Drew Ferguson, IV||561||1,512||2,095||2,275|
|Georgia||4||Henry C. “Hank” Johnson, Jr.||918||2,285||3,117||3,348|
|Georgia||10||Jody B. Hice||669||1,736||2,385||2,606|
|Georgia||12||Rick W. Allen||751||1,928||2,640||2,907|
|Idaho||1||Raúl R. Labrador||1,094||2,743||3,743||4,069|
|Idaho||2||Michael K. Simpson||1,084||2,757||3,773||4,113|
|Illinois||1||Bobby L. Rush||1,376||3,656||5,021||5,744|
|Illinois||2||Robin L. Kelly||1,481||3,850||5,264||6,023|
|Illinois||4||Luis V. Gutiérrez||1,593||4,132||5,646||6,464|
|Illinois||6||Peter J. Roskam||9||722||1,202||1,358|
|Illinois||7||Danny K. Davis||1,480||4,271||5,955||6,875|
|Illinois||9||Janice D. Schakowsky||501||1,860||2,701||3,101|
|Illinois||10||Bradley Scott Schneider||377||1,552||2,286||2,609|
|Indiana||1||Peter J. Visclosky||863||2,305||3,173||3,594|
|Indiana||5||Susan W. Brooks||393||1,380||1,994||2,230|
|Kansas||1||Roger W. Marshall||351||959||1,332||1,448|
|Kentucky||3||John A. Yarmuth||3,086||8,156||11,172||12,952|
|Louisiana||2||Cedric L. Richmond||2,632||6,759||9,221||10,510|
|Louisiana||5||Ralph Lee Abraham||2,264||5,834||7,961||9,108|
|Maryland||2||C. A. Dutch Ruppersberger||1,552||4,199||5,784||6,659|
|Maryland||3||John P. Sarbanes||794||2,646||3,780||4,373|
|Maryland||4||Anthony G. Brown||1,042||3,059||4,280||4,929|
|Maryland||5||Steny H. Hoyer||650||2,184||3,123||3,614|
|Maryland||6||John K. Delaney||942||2,987||4,235||4,879|
|Maryland||7||Elijah E. Cummings||1,974||5,499||7,613||8,817|
|Massachusetts||1||Richard E. Neal||1,258||3,365||4,632||5,257|
|Massachusetts||2||James P. McGovern||920||2,630||3,669||4,154|
|Massachusetts||4||Joseph P. Kennedy, III||107||1,098||1,739||1,976|
|Massachusetts||5||Katherine M. Clark||236||1,391||2,126||2,423|
|Massachusetts||7||Michael E. Capuano||1,528||4,261||5,906||6,772|
|Massachusetts||8||Stephen F. Lynch||476||1,774||2,582||2,925|
|Massachusetts||9||William R. Keating||841||2,431||3,398||3,837|
|Michigan||4||John R. Moolenaar||1,184||3,093||4,236||4,814|
|Michigan||5||Daniel T. Kildee||1,340||3,470||4,742||5,414|
|Michigan||9||Sander M. Levin||1,053||2,825||3,896||4,374|
|Michigan||11||David A. Trott||321||1,269||1,866||2,075|
|Michigan||13||John Conyers, Jr.||2,037||5,211||7,098||8,154|
|Michigan||14||Brenda L. Lawrence||1,568||4,192||5,765||6,594|
|Minnesota||1||Timothy J. Walz||715||2,022||2,808||3,253|
|Minnesota||7||Collin C. Peterson||799||2,180||3,007||3,476|
|Minnesota||8||Richard M. Nolan||910||2,448||3,367||3,892|
|Mississippi||2||Bennie G. Thompson||820||2,075||2,830||3,146|
|Mississippi||4||Steven M. Palazzo||520||1,387||1,912||2,132|
|Missouri||1||Wm. Lacy Clay||790||2,035||2,792||3,035|
|Nevada||2||Mark E. Amodei||1,440||3,826||5,256||5,994|
|New Hampshire||1||Carol Shea-Porter||968||2,733||3,805||4,295|
|New Hampshire||2||Ann M. Kuster||952||2,683||3,733||4,227|
|New Jersey||1||Donald Norcross||2,149||5,769||7,932||9,145|
|New Jersey||2||Frank A. LoBiondo||2,418||6,419||8,807||10,153|
|New Jersey||3||Thomas MacArthur||1,004||2,958||4,142||4,753|
|New Jersey||4||Christopher H. Smith||1,532||4,511||6,312||7,292|
|New Jersey||5||Josh Gottheimer||705||2,590||3,757||4,322|
|New Jersey||6||Frank Pallone, Jr.||1,705||4,827||6,706||7,731|
|New Jersey||7||Leonard Lance||189||1,583||2,471||2,887|
|New Jersey||8||Albio Sires||3,348||8,947||12,287||14,218|
|New Jersey||9||Bill Pascrell, Jr.||2,776||7,473||10,280||11,864|
|New Jersey||10||Donald M. Payne, Jr.||3,553||9,339||12,781||14,782|
|New Jersey||11||Rodney P. Frelinghuysen||153||1,411||2,215||2,584|
|New Jersey||12||Bonnie Watson Coleman||1,343||4,101||5,773||6,682|
|New Mexico||1||Michelle Lujan Grisham||3,748||9,795||13,389||15,497|
|New Mexico||2||Stevan Pearce||4,438||11,467||15,636||18,106|
|New Mexico||3||Ben Ray Luján||3,867||10,066||13,748||15,911|
|New York||1||Lee M. Zeldin||132||271||538||695|
|New York||2||Peter T. King||102||237||462||594|
|New York||3||Thomas R. Suozzi||656||531||402||331|
|New York||4||Kathleen M. Rice||240||150||418||576|
|New York||5||Gregory W. Meeks||588||1,737||2,427||2,843|
|New York||6||Grace Meng||459||1,483||2,104||2,476|
|New York||7||Nydia M. Velázquez||1,091||3,203||4,472||5,245|
|New York||8||Hakeem S. Jeffries||1,076||3,019||4,181||4,888|
|New York||9||Yvette D. Clarke||789||2,349||3,287||3,857|
|New York||10||Jerrold Nadler||249||716||1,352||1,735|
|New York||11||Daniel M. Donovan, Jr.||410||1,444||2,074||2,456|
|New York||12||Carolyn B. Maloney||896||501||182||5|
|New York||13||Adriano Espaillat||1,393||3,769||5,183||6,048|
|New York||14||Joseph Crowley||817||2,268||3,135||3,661|
|New York||15||José E. Serrano||2,002||5,192||7,080||8,238|
|New York||16||Eliot L. Engel||114||985||1,533||1,864|
|New York||17||Nita M. Lowey||190||409||807||1,045|
|New York||18||Sean Patrick Maloney||51||691||1,096||1,340|
|New York||19||John J. Faso||374||1,224||1,739||2,051|
|New York||20||Paul Tonko||386||1,302||1,858||2,196|
|New York||21||Elise M. Stefanik||585||1,651||2,289||2,678|
|New York||22||Claudia Tenney||656||1,833||2,536||2,966|
|New York||23||Tom Reed||687||1,922||2,661||3,112|
|New York||24||John Katko||561||1,662||2,324||2,727|
|New York||25||Louise McIntosh Slaughter||590||1,763||2,468||2,898|
|New York||26||Brian Higgins||800||2,219||3,067||3,585|
|New York||27||Chris Collins||250||896||1,290||1,528|
|North Carolina||1||G. K. Butterfield||1,315||3,320||4,522||5,075|
|North Carolina||2||George Holding||878||2,347||3,240||3,580|
|North Carolina||3||Walter B. Jones||985||2,531||3,464||3,852|
|North Carolina||4||David E. Price||948||2,611||3,626||4,016|
|North Carolina||5||Virginia Foxx||1,021||2,677||3,680||4,085|
|North Carolina||6||Mark Walker||847||2,271||3,138||3,465|
|North Carolina||7||David Rouzer||1,090||2,804||3,839||4,256|
|North Carolina||8||Richard Hudson||1,132||2,864||3,904||4,356|
|North Carolina||9||Robert Pittenger||280||1,248||1,867||2,019|
|North Carolina||10||Patrick T. McHenry||1,042||2,674||3,660||4,048|
|North Carolina||11||Mark Meadows||1,148||2,889||3,939||4,349|
|North Carolina||12||Alma S. Adams||1,580||3,951||5,376||5,966|
|North Carolina||13||Ted Budd||612||1,829||2,583||2,814|
|North Dakota||Statewide||Kevin Cramer||934||2,624||3,646||4,151|
|Ohio||2||Brad R. Wenstrup||1,057||2,963||4,111||4,725|
|Ohio||5||Robert E. Latta||957||2,602||3,589||4,122|
|Ohio||10||Michael R. Turner||1,298||3,489||4,800||5,525|
|Ohio||11||Marcia L. Fudge||1,957||5,194||7,124||8,226|
|Ohio||12||Patrick J. Tiberi||655||2,063||2,922||3,364|
|Ohio||14||David P. Joyce||604||1,848||2,607||2,972|
|Ohio||16||James B. Renacci||565||1,673||2,347||2,673|
|Oklahoma||3||Frank D. Lucas||292||823||1,154||1,226|
|Oregon||4||Peter A. DeFazio||3,882||10,040||13,698||15,812|
|Pennsylvania||1||Robert A. Brady||1,262||3,318||4,553||5,160|
|Pennsylvania||6||Ryan A. Costello||163||912||1,393||1,532|
|Pennsylvania||8||Brian K. Fitzpatrick||227||1,013||1,518||1,629|
|Pennsylvania||12||Keith J. Rothfus||417||1,304||1,851||2,067|
|Pennsylvania||13||Brendan F. Boyle||690||1,975||2,761||3,078|
|Pennsylvania||14||Michael F. Doyle||901||2,417||3,330||3,768|
|Pennsylvania||15||Charles W. Dent||574||1,652||2,310||2,581|
|Rhode Island||1||David N. Cicilline||1,736||4,626||6,354||7,303|
|Rhode Island||2||James R. Langevin||1,378||3,700||5,092||5,833|
|South Carolina||1||Mark Sanford||218||754||1,099||1,118|
|South Carolina||2||Joe Wilson||228||682||970||998|
|South Carolina||3||Jeff Duncan||332||845||1,163||1,208|
|South Carolina||4||Trey Gowdy||328||902||1,262||1,300|
|South Carolina||6||James E. Clyburn||426||1,036||1,410||1,472|
|South Carolina||7||Tom Rice||486||1,197||1,637||1,695|
|South Dakota||Statewide||Kristi L. Noem||239||748||1,069||1,128|
|Tennessee||1||David P. Roe||1,049||2,712||3,711||4,181|
|Tennessee||2||John J. Duncan, Jr.||819||2,223||3,074||3,452|
|Tennessee||3||Charles J. “Chuck” Fleischmann||928||2,443||3,354||3,779|
|Texas||7||John Abney Culberson||100||474||869||899|
|Texas||10||Michael T. McCaul||239||946||1,401||1,466|
|Texas||11||K. Michael Conaway||249||820||1,178||1,263|
|Texas||14||Randy K. Weber, Sr.||291||919||1,314||1,404|
|Texas||18||Sheila Jackson Lee||586||1,557||2,154||2,312|
|Texas||19||Jodey C. Arrington||321||910||1,274||1,383|
|Texas||26||Michael C. Burgess||165||771||1,166||1,199|
|Texas||30||Eddie Bernice Johnson||632||1,591||2,176||2,335|
|Texas||31||John R. Carter||288||886||1,263||1,325|
|Texas||33||Marc A. Veasey||758||1,832||2,480||2,681|
|Utah||4||Mia B. Love||610||1,540||2,114||2,208|
|Virginia||1||Robert J. Wittman||156||742||1,125||1,145|
|Virginia||3||Robert C. “Bobby” Scott||448||1,150||1,580||1,693|
|Virginia||4||A. Donald McEachin||406||1,103||1,539||1,593|
|Virginia||5||Thomas A. Garrett, Jr.||440||1,208||1,687||1,762|
|Virginia||8||Donald S. Beyer, Jr.||310||184||547||520|
|Virginia||9||H. Morgan Griffith||434||1,124||1,549||1,644|
|Virginia||11||Gerald E. Connolly||117||486||908||887|
|Washington||1||Suzan K. DelBene||819||2,627||3,732||4,294|
|Washington||3||Jaime Herrera Beutler||1,797||4,732||6,484||7,453|
|Washington||5||Cathy McMorris Rodgers||2,105||5,508||7,534||8,686|
|Washington||8||David G. Reichert||1,217||3,485||4,855||5,584|
|West Virginia||1||David B. McKinley||1,801||4,706||6,435||7,436|
|West Virginia||2||Alexander X. Mooney||1,623||4,284||5,869||6,778|
|West Virginia||3||Evan H. Jenkins||2,121||5,509||7,520||8,701|
|Wisconsin||1||Paul D. Ryan||270||803||1,138||1,187|
|Wisconsin||5||F. James Sensenbrenner, Jr.||147||604||901||925|
|Wisconsin||7||Sean P. Duffy||492||1,244||1,710||1,776|
The nongroup market spending is the net outcome of repealing ACA subsidies and introducing new AHCA tax credits. We take estimates of current health exchange enrollees by the Kaiser Family Foundation (KFF) and apply estimates from Cutler (2017) on the change in enrollment spurred by the AHCA to get a measure of remaining enrollment in nongroup markets by congressional district (CD). We use this measure to allocate the nationwide amount of tax credits estimated by the Congressional Budget Office (CBO). We also provide an age adjustment that estimates higher tax credits going to CDs whose age 18–64 population skews older, reflecting the fact that under the AHCA tax credits are larger for older enrollees. Specifically, we multiply the share of the 18–64 population that is between 30 and 49 by 1.375 and the share that is 50 and over by 1.875, reflecting the greater generosity of tax credits for these populations relative to those received by the under-30 population.
For Medicaid spending we allocate the CBO estimates of Medicaid spending reductions across states by using the Blumberg et al. (2016) estimates of how partial ACA repeal would be borne. Within states, we allocate the incidence of these spending cuts across CDs proportionally to each CD’s share of the population with incomes beneath the federal poverty line.
For tax cuts, we assume 40 percent of the revenue accrues uniformly across CDs, while allocating 60 percent of it proportionally to each CD’s total share of the population with incomes over $150,000.
Output multipliers are 1.4 for the nongroup spending reductions, 2 for Medicaid spending reductions, and 0.4 for the tax cuts. These parameter choices are explained in Bivens (2017). In 2019, we divide the output change by $146,000 to get employment changes, also explained in Bivens (2017). For each year after 2019, we increase this divisor by 1.5 percent, reflecting expected productivity growth over that time.
Source: Author's analysis of U.S. Census Bureau (2013), U.S. International Trade Commission (USITC 2016a), Bureau of Labor Statistics (BLS 2016e), and BLS Employment Projections program (BLS-EP 2014a and 2014b). For a more detailed explanation of data sources and computations, see the appendix.
A Senate vote on House Joint Resolution 66 may come as early as tomorrow. H.R. 66 would put roadblocks in front of states setting up convenient low-cost individual retirement accounts (IRAs) for workers who aren’t covered under an employer-based plan such as a 401(k) or a traditional pension. These plans, sometimes called “Secure Choice” plans, are well advanced in many states, including California, Connecticut, Illinois, Maryland and Oregon. They’re designed to make it easy for workers whose employers don’t offer retirement plans—shockingly, around half of all workers—to contribute to low-cost IRAs through automatic payroll deductions. Workers who stand to benefit are disproportionately low-wage workers and small business employees.
Support for meddling with these useful, if limited, programs tends to split along party lines, though at least one Republican, Senator Bob Corker of Tennessee, has publicly opposed H.R. 66 and a similar bill and others appear on the fence.
Passage of the bill in a GOP-controlled Congress would belie the party’s claim to respect states’ rights. Republicans have historically supported retirement savings accounts, and the state plans only offer a low-cost, hassle-free way for uncovered workers to do something they can do already—contribute to an IRA. So why are some members of Congress trying to derail the state initiatives? They claim to be concerned about workers, but it should come as no surprise that the mutual fund industry is behind H.R. 66, presumably because state plans offering low-cost investment options could serve as a nudge to employers to rethink the high-cost funds they offer in their 401(k)s.
After President Trump’s first 100 days in office, it’s clear that his promises to help the working class were little more than a campaign ploy. His dismantling of Obama-era regulations like the Fair Pay and Safe Workplaces rule and deregulation of the financial industry reveal what he really cares about—lining the pockets of America’s ultra-rich.
Nothing demonstrates his disdain for working people more than his budget proposal. In it, he cuts 31 percent of the Environmental Protection Agency (EPA)’s budget, which ensures people across the country have clean air and water, and 21 percent from Department of Labor programs that provide job training to seniors and disadvantaged youth. Instead of helping working people, Trump’s budget imposes a hiring freeze on crucial federal agencies and calls for many more staff to be laid off from public sector jobs—the largest reduction in the federal workforce since World War II.
The FY 2018 People’s Budget: A Roadmap for the Resistance by the Congressional Progressive Caucus stands in stark contrast to Trump’s budget. The People’s Budget is a plan to actually help working Americans who have felt left behind by an economy rigged against them. Our budget, is a roadmap for the resistance, investing in the progressive priorities and kitchen table issues that matter to real people: infrastructure to create jobs and ensure public safety; education to help our kids reach their full potential; and sustainable energy to protect our precious environment.Progressives in Congress fully want to make investments in our future generations and protect programs that improve the lives of people every day. We believe our budget should strengthen Social Security and Medicare and invest in job growth through infrastructure, education, and research and development, while responsibly reducing our deficits and cutting wasteful spending and redundant programs where they exist.
Does Trump really believe U.S. companies should “Hire American?” Not if he allows Congress to expand the H-2B guestworker program.
On Monday morning, members of Congress in the House and Senate made public the text of omnibus appropriations legislation to fund the U.S. government through September 2017. The legislation includes a “rider” provision that will double the size of the H-2B nonimmigrant visa program, a temporary foreign worker (or “guestworker”) program that brings up to 66,000 migrant workers per year to the United States for up to nine months at a time to perform low-wage seasonal jobs in industries like landscaping, forestry, housekeeping, seafood processing, and construction. The fact that the legislation was unveiled on May Day makes it sadly ironic, because if President Trump signs it without pressuring congressional leaders to remove this H-2B rider, it will become the latest example of Trump’s aggressive anti-worker agenda. There is still a chance that the final version of the bill might not include it, but it’s a longshot unless Trump demands that Republican leaders in Congress take it out.
H-2B visas are sponsored—in other words owned and controlled—by the employers who hire H-2B workers. In practice that means H-2B guestworkers cannot switch employers if they are cheated or abused. For H-2B workers, losing their visa makes them instantly deportable, which is why they often work for low wages in poor conditions without complaining. In addition, EPI research has shown how H-2B wage rules have often allowed H-2B workers to be paid less than local average wage rates for similarly situated U.S. workers, and how H-2B workers earn no more than undocumented workers on average. Moreover, there are numerous cases of litigation, reports in the media, and government audits documenting how migrants employed through the H-2B program are often exploited and robbed by employers, and even are victims of human trafficking. Because U.S. workers are forced to compete with vulnerable H-2B workers, in turn, this degrades wages and working conditions for all workers in major H-2B occupations. Thus, there’s no question that the H-2B program needs major reforms to protect migrant and American workers—but any push to expand H-2B should be made through the regular legislative process and after a full debate in Congress, so that members are accountable for their votes—not as a fly-by-night provision on a must-pass spending bill.
Included in President Trump’s announcement of his tax plan earlier this week is a promise to provide “tax relief for families with child and dependent care expenses”. Without more details about his plan, however, it’s near-impossible to judge, but we make an attempt nonetheless.
Various news outlets and advocates have speculated that Trump’s initial interest in reforming Dependent Care Flexible Spending Accounts (DCFSA) has since shifted to address a more widely utilized tax credit, referred to as the Child and Dependent Care Tax Credit (see here, here, and here).
There are three central questions to ask when facing reforms billed as improving access to effective, high-quality child care and education: (1) Does the policy allow all parents the option to stay home with their infants, newly adopted children, or new foster children? (2) Does the policy relieve the cost burden of early child care and education for low- and middle-income families? (3) Does the policy improve quality by investing in the early care and education workforce?
Given the wording of the president’s plan outline, it would appear his efforts will focus on (2) affordability—by either reforming or expanding the Child and Dependent Care Tax Credit (CDCTC)—while remaining silent on (1) parental leave policies and (3) improving child care quality. Right off the bat, his hint at child care reform misses key components, and we will show you below that improving affordability through current tax programs misses the target.
Relying on the tax system to improve access to affordable, high quality child care has a number of limitations. As a whole, using the tax system to expand access to affordable child care is especially misguided for three key reasons. First, many families do not have the cash on hand each month to pay out-of-pocket and wait for the end of the year’s tax return. Second, not all current tax credits benefiting household with children are refundable, meaning they are useless if a family owes no taxes. Finally, existing tax programs for child care are not well targeted. In a zero sum world of child care subsidies, many families who arguably don’t need assistance are getting a large share of it.
Besides the labor secretary, President Trump will name countless federal officials responsible for advocating for working people. One of the most important agencies to which Trump will nominate officials is the National Labor Relations Board (NLRB), which protects the rights of private sector employees to join together, with or without a union, to improve their wages and working conditions.
On April 25, POLITICO reported that the Trump administration is considering Minneapolis attorney Doug Seaton to fill a vacancy on the NLRB. Seaton is a well-known union-avoidance consultant, otherwise known as a “persuader” or, more accurately, a union buster.
When workers seek to organize and bargain collectively, employers often hire so-called “persuaders” to orchestrate and roll out time-tested, anti-union campaigns. Union-avoidance consultants do exactly what their job titles describe: they help employers keep their businesses union-free, by either defeating union organizing campaigns or assisting with decertification efforts to unseat an existing union.
Tomorrow marks the 100th day of Donald Trump’s presidency. EPI released a report examining President Trump’s actions in his first 100 days in office and their impact on U.S. workers and our economy. The report reveals that Trump’s top priorities include rolling back worker protections, advancing a budget proposal that would dramatically cut funding for the agencies that safeguard worker’s rights, and nominating individuals to key posts—even to the Supreme Court—who threaten workers’ wages, safety, and bargaining power. But, it is important to remember that President Trump did not accomplish this alone—Congress has been instrumental in advancing this agenda.
Congressional Republicans passed each of the resolutions Trump signed blocking much-needed worker protections. Majority Leader Mitch McConnell (R-Ky.), after refusing to allow Senate consideration of President Obama’s Supreme Court nominee, set a new precedent in the Senate in order to confirm a Supreme Court justice with a record of ruling against workers. Yesterday, the Senate confirmed Alexander Acosta to serve as labor secretary, despite the fact that Acosta failed to answer basic questions regarding how he would run the Labor Department.
As we evaluate Trump’s first 100 days in office, we should consider the important role Congress has played in helping the president accomplish his priorities. Because of the Congressional majority, federal contractors who violate labor and employment laws will continue to be rewarded with taxpayer dollars, unemployment insurance applicants will have additional hurdles to navigate in obtaining earned benefits, and workers will be more likely to be injured or killed on the job. The Perkins Project Policy Watch will continue to track the Trump administration and Congress and provide information on how their actions impact on our nation’s workers.
In 2015, 4,836 workers died on the job. That’s nearly five thousand husbands, wives, fathers, and mothers who walked out their door in the morning and never came back home.
April 28 is Workers’ Memorial Day—an international day of remembrance for workers killed, disabled, or sickened by their work. And as highlighted by the AFL-CIO’s 2017 Death on the Job Report, it is also an opportunity to highlight the preventable nature of most workplace deaths and injuries, and a day of action to fight for improvements in workplace safety.
One important way we can honor the memories of our fallen loved ones is by learning from what happened, and enacting laws and regulations to make workers safer in the future. In fact, many workplace safety laws and regulations are passed in memory of workers who died on the job.
Take, for example, the Miner Act of 2006—a mine safety law enacted after the deaths of 21 miners within the first few months of that year. The Senate report explaining the necessity of the enhanced mining safety provisions states that, “these tragedies serve as a somber reminder that even that which has been done well can always be done better.” Or California’s 2016 Workplace Violence Prevention in Health Care regulation, promulgated to protect health care workers against workplace violence after the deaths of a psychiatric technician and a registered nurse who were killed during patient assaults. Documentation supporting the regulation states that, “the deaths of theses health care workers demonstrate the need for better security measures, procedures, and practices.”
The foundational step in enacting new worker safety rules is recording and reporting workplace incidents, because if we don’t know about the problems, we cannot solve them. For example, many people may be surprised that in 2016, the private-sector jobs with the highest rates of injuries included not only tractor-trailer truck drivers and warehouse laborers, but also nursing assistants. And the top five public-sector occupations with the highest rates of injury included sheriff’s patrol officers and firefighters, but also janitors, cleaners, and teacher assistants.
The Occupational Safety and Health Administration (OSHA) is responsible for tracking workplace injuries and illnesses, and issuing new rules and regulations to keep workers safe going forward. But OSHA cannot read minds: it requires employers to record and report injury and illness rates in their workplaces. Yet, many employers evade their statutory recording and reporting duties, sweeping deaths and injuries under the rug to avoid liability. That is one reason why OSHA enacted a recordkeeping rule last year, enhancing its enforcement powers to issue citations and fines to employers who fail to maintain these critical injury and illness records.
Yet, one of the first things President Trump and congressional Republicans did this year was overturn OSHA’s recordkeeping rule, and establish that OSHA can never promulgate a similar rule again unless Congress specifically authorizes it to do so.
So now workers may not only die at work, they could die in vain. Or lose a limb, lose their eyesight, or develop lung cancer from exposure to toxins. And instead of honoring their tragedies by recording and reporting them to learn what we can do better, much if it could all quietly brushed under the rug. Without any evidence of the problems of the past, we can have no solutions for the future.
What will happen next year if, because OSHA’s enforcement powers have been stripped down, workplace tragedies go unreported? Sadly, it’s something we all should think about during this Workers’ Memorial Day. And who knows, one day the person who wakes up, goes to work, and never comes home could be someone you love. Wouldn’t you want their death to mean something? Check the vote count for overturning OSHA’s rule to see if your congressperson or Senator agrees.
Alexander Acosta will not be the secretary of labor that working people need, and for that reason, senators should oppose his confirmation. As Senator Elizabeth Warren said, the test is not whether Acosta is better than Andrew Puzder, a truly abysmal, insulting choice to lead the U.S. Department of Labor (DOL). The test must be whether he will be a strong advocate for working Americans, someone who will use the power of his department to improve their lives. The evidence from Acosta’s confirmation hearings and his past service in the government shows that he will not. The best we might hope for is that he will not politicize the agency and will be a caretaker until an administration that believes in the Labor Department’s mission is elected. That is not enough.
It isn’t even clear that Acosta will be a good caretaker of the agency whose mission is to foster and promote the welfare of the nation’s job seekers, wage earners, and retirees. At Acosta’s confirmation hearing, Senator Maggie Hassan (D-NH) asked whether Acosta would defend the DOL against the draconian 21 percent budget cut called for in President Trump’s preliminary budget. Acosta refused to say he would, despite professing concern about reducing the already tiny number of OSHA compliance officers in New Hampshire. Even Scott Pruitt, who spent years in state government attacking and suing the Environmental Protection Agency (EPA) before his appointment as EPA administrator, cared enough about his mission to publicly oppose the EPA budget sent to Congress by Trump’s Office of Management and Budget. DOL’s Wage and Hour Division has fewer than 1000 inspectors for 7.3 million workplaces, and wage theft is a nationwide epidemic costing workers tens of billions of dollars a year. Yet Acosta would not commit to work to preserve the meager resources devoted to protecting workers from abuse.
Today, President Trump is set to unveil a proposal that serves as his opening bid for the upcoming debate over tax “reform.” Unsurprisingly, the president is proposing straightforward tax cuts for the rich, which will need to be temporary because they will increase the federal budget deficit. It’s being reported that the centerpiece of the proposal is a cut to the rate faced by both corporations and “pass-throughs” to 15 percent, accompanied by the claim that the tax cuts will pay for themselves (“pass-throughs” are businesses that pay no direct taxes but whose owners pay individual taxes on the dividends and other income they receive from the business). There are three important things to note about these proposed changes.
First, they would clearly be a windfall to already-rich households. The incidence of corporate tax cuts falls disproportionately on owners of businesses and other capital, and this type of income is incredibly concentrated at the top, with the top 1 percent alone claiming 53 percent of it in 2013.
Second, these tax cuts will not trickle down. There is simply no payoff to low- and middle-income families from cutting the corporate tax rate. We’ll touch on this more in an upcoming paper, but briefly, corporate tax cuts are terribly inefficient fiscal stimulus relative to nearly any other tax cut or spending increase. And the textbook channel through which they boost long-run growth—boosting savings—will not materialize. The U.S. and global economies are glutted with savings, so boosting incentives to save helps nothing.
How President Trump and congressional Republicans are undercutting wages and protections for working people
We are nearly 100 days into President Donald Trump’s administration, a benchmark that gives us a chance to take stock of what the president and new Congress have accomplished and what their priorities are. We have seen a flurry of activity—from legislation and executive orders, as well as actions taken (or not taken) by the administration—that, sometimes subtly, shift power away from working people and towards corporations and the 1 percent. Some of these actions have been high profile, but others have gone almost unnoticed. Taken together, they undercut wages and protections for working people.
EPI’s Perkins Project tracks actions by the administration, Congress, and the courts that affect people’s wages and their rights at work. Here are the top ten things the president and Congress have done that affect working people. For more, see our Worker Rights and Wages Policy Watch, which is continuously updated with information on the steps taken that affect workers.
Likeliest outcome of tax reform is a deficit-financed tax cut for the rich that will expire in a decade
Undeterred by their failure to repeal the Affordable Care Act (ACA), Republicans look set to move on to the next item in Paul Ryan’s “Better Way” agenda—tax reform. This post helps set the stage for the upcoming tax reform debate and explains why “tax reform” will in the end likely just become a deficit-financed tax cut for the rich and corporations that expires in 10 years—a decade of free money for groups that don’t really need it and a problem for policymakers to deal with in the future.
Understanding why this deficit-financed, 10-year tax cut is the most likely outcome requires some understanding of the “budget reconciliation” process (apologies). Budget reconciliation allows the Republicans to avoid the Senate’s 60-vote threshold for a filibuster, and hence will almost surely be needed to pass any tax cut. To begin the reconciliation process, Congress first passes a budget resolution with topline spending numbers that includes reconciliation instructions. These instruct the relevant committees to make changes to mandatory spending or revenues in order to achieve some budgetary target—for instance, decreasing revenues or the deficit by so-many billion over a specified time period.
Here, Republicans in Congress face a choice. They originally planned to use the fiscal year 2017 budget to repeal the ACA, and so wrote reconciliation instructions that were basically deficit neutral over the 10-year budget window. They could do this because, although repealing the ACA would mean large tax cuts for the top 1 percent, these could be paid-for with cuts to Medicaid and subsidies that helped people afford insurance in the ACA marketplace exchanges. If Republicans wanted revenue-neutral tax reform—perhaps following through on the popular mantra of “broaden the base, lower the rates”—they could simply repurpose those instructions. But this is unlikely to work for them.Read more
President Donald Trump recently told the Wall Street Journal that his administration won’t label China a currency manipulator in a semi-annual U.S. Treasury report that is due this week. Crucially, he has also forwarded no alternative mechanism to deal with the misaligned U.S.-China exchange rate. This essentially means that Trump has turned his back on working Americans who have lost millions of manufacturing jobs since China entered the WTO in 2001, and have experienced growing competition with imports from China and other low wage countries that reduced the wages of all non-college graduates by $180 billion per year in 2011 alone.
In a campaign speech in Monessen, PA last June Trump outlined a 7-step program that he “would pursue right away to bring back our jobs.” In step five, he promised to “instruct my Treasury secretary to label China a currency manipulator,” a commitment he repeated many times last year.
There has been some debate over whether or not the Chinese is currently actively manipulating its currency. What there is no debate over is whether or not the U.S.-China exchange rate is severely misaligned, and that this misalignment costs jobs in U.S. manufacturing. While China has been a net seller of foreign exchange reserves over the past two years (meaning that it has not engaged in direct manipulation over this time), it maintains well in excess of $3 trillion in total reserves, which have a depressing effect on the value of its currency.
H-2A visas by the numbers:
• 165,741: Number of H-2A jobs certified in 2016
• 14%: Increase in H-2A jobs since 2015
• 160%: Increase in H-2A jobs since 2006
• 134,368: Number of H-2A visas issued to workers in 2016
• 167: Average number of days H-2A jobs were certified for in 2016
• Approximately half of H-2A jobs in 2016 were certified in 5 states: Florida, North Carolina, Georgia, Washington, and California
• 7%: Percentage of the crop workforce that H-2A workers represent
The H-2A visa program allows farmers anticipating shortages of U.S. seasonal workers to be certified by the U.S. Department of Labor (DOL) to recruit and employ foreign workers with temporary, nonimmigrant visas. DOL certified 165,700 jobs to be filled by H-2A workers in fiscal 2016, up 14 percent from 145,900 in fiscal 2015.1 The H-2A program in 2016 is two-and-a-half times larger than it was a decade ago in 2006, when 64,100 jobs were certified.Read more
This article was originally posted on Confined Space.
The fact that most OSHA chemical standards are old, outdated and don’t protect workers very well is something that government, labor and industry can generally agree on. There is less agreement, however, on what needs to be done about that problem. But it’s a question that needs to be addressed, as an estimated 50,000 workers die every year from occupational disease, mostly related to chemical exposure, and almost 200,000 are sickened.
Rachel Cernansky, writing in the New York Times today about “America’s Toxic Workplace Rules” asks “Why does the [Labor] department’s Occupational Safety and Hazard Administration allow workers to be exposed to dangerous chemicals at limits far higher than those set for everyone by the Environmental Protection Agency” and what will Trump’s Labor nominee, Alexander Acosta, do about it?
Under current law, employers can give workers time off—paid or unpaid—whenever they want to, for any reason. They can, for example, reward employees who work overtime by giving them unpaid time off at a later date. The employer pays time-and-a-half for the overtime when it’s worked, and then can give an equivalent amount of unpaid time off to repay the employees for the extra time away from their home and family. That’s what a family-friendly employer can do now, with no legislative change required.
But Rep. Martha Roby wants a better, more “flexible” deal for employers. She wants them to be able to withhold the overtime pay until the employee takes compensatory time off (comp time), only paying it out if they can’t agree on a mutually convenient time to take the leave by the end of the year. Roby has introduced a bill, H.R. 1180, “The Working Families Flexibility Act,” to give employers that new right, while pretending to do something for employees.
Why should Rep. Roby stop there? I’d like to propose the “Working Families Super Flexibility Act.” My new bill takes the ideas of H.R. 1180 one step further, providing the greatest possible flexibility to employers and employees. Instead of receiving wages at the time they perform their work, employees can agree to receive credits toward future time off, which will be deposited in a “comp time bank.” The employees will have the freedom to use these credits whenever they want, as long as their employer agrees on the dates for leave. If no mutually convenient time is found before the end of the calendar year, the employees will finally get their earned wages—assuming that the company hasn’t gone out of business (as 400,000 do each year)—and the employer will collect all accrued interest.
The New York Times had an article recently about academics and financial advisers who want to bring back a Baroque-era investment vehicle—the tontine—where an annual dividend is split among surviving investors (the Washington Post had a similar story two years ago). The present-day appeal of the tontine is partly based on its supposed transparency. It’s unlikely, however, that potential investors would be able to accurately predict the payouts they might receive, which would depend on their health relative to that of others in the pool, among other variables. Still, it’s a morbidly interesting excuse to think about insurance markets and innovative retirement schemes.
Gambling on other people’s death isn’t unique to tontines. The AIDS epidemic created a secondary market in life insurance policies, allowing ill policyholders to tap some of their benefits to pay for health care and living expenses. Though this may have served a useful function in a country with inadequate social insurance—especially pre-Obamacare—it’s hard to feel sorry for investors who lost big after the discovery of antiretroviral drugs.
Tontines, like Social Security, traditional pensions, and life annuities, insure against the risk of living longer than expected in retirement. The problem of outliving one’s savings has gotten worse as Social Security benefits have been trimmed back and private sector employers have replaced traditional pensions with 401(k)-style savings plans. In theory, 401(k) savers can insure against longevity risk by purchasing life annuities, but few actually do. There are several reasons for this, starting with the fact that few have significant savings to begin with—a problem exacerbated by current low interest rates that lock annuitants into low annual payments. In addition, potential buyers must navigate complex and tricky insurance markets and face prices driven up by adverse selection and asymmetric information, the classic problem of markets for individual insurance whereby people at greater risk (of living longer, in this case) are more likely to purchase insurance and have an incentive to conceal information to avoid higher risk-adjusted premiums, leading to higher prices for all consumers and a shrinking market
Policy Watch: Amid a busy week, Congress and the president find time to roll back protections for working people
Congress will begin a two-week recess when the Senate concludes its business today. Leading up to today’s adjournment, the Senate spent much of the week focused on Supreme Court nominee Neil Gorsuch’s confirmation. Meanwhile, congressional Republicans found time to hold a legislative hearing on a bill that would provide employers a new right to avoid paying workers for overtime hours when the overtime is worked—letting them hold onto those wages for as long as an entire year. On Tuesday, President Trump’s Department of Labor announced that it will delay implementation of the fiduciary rule until at least June 9, costing retirement savers $181 million this year. And, on Thursday, the administration announced that it would delay enforcement of an Occupational Safety and Health Administration rule limiting workers’ exposure to silica dust, which has been linked to lung cancer. Roughly 2.3 million workers are exposed to silica dust in their workplaces. The rule, which was to be enforced beginning June 23, was projected to provide net benefits of $7.7 billion, annually and would have saved more than 600 lives and prevented more than 900 new cases of silicosis a year.
This week also marked the seventh anniversary of an explosion at the Upper Big Branch Mine in West Virginia killed twenty-nine miners. The Mine Safety and Health Administration concluded that the conditions that led to the explosion were the result of a series of basic safety violations that were entirely preventable. While President Trump offered no official statement commemorating the largest coal mine disaster in 40 years, his actions make clear that, for all of his rhetoric about bringing back lost jobs in the coal mining industry, he is not concerned with something he could actually deliver for miners and their families: making mining jobs safe jobs. Last Friday, his administration announced a proposed delay of a rule aimed at improving the health and safety of miners.
When Congress returns from recess they will deal with the confirmation of President Trump’s nominee to serve as secretary of labor. The position will have a significant impact on this nation’s workers and our economy. Congress will also have to quickly pass a funding measure to keep the government running. Currently, the government is being funded through a temporary spending bill that expires on April 28, 2017. If Congress is unable to pass an additional funding measure, President Trump’s 100th day in office may be the first day of a government shutdown. The Perkins Project Policy Watch will continue to track all of this and provide information on the impact on our nation’s workers.
What to Watch on Jobs Day: The Fed should keep their foot off the brake and let the economy reach genuine full employment
As we eagerly await the March employment numbers from the Bureau of Labor Statistics, I’m going to take a few minutes to set the context from the last month and reiterate why it’s so important to let the economy get to full employment. Although President Trump claimed to have inherited a “mess” of an economy, the fact is that the economy has been slowly but steadily headed ever-closer to full employment for years. Simultaneously, the president has claimed he will enact policies that will see us add 25 million new jobs over the next 10 years. This pace of job growth over a decade is pretty much impossible to envision. But we could in theory see 2-3 years of significantly faster job growth than what has characterized the recent past. Unfortunately, no sign of this theoretical possibility has shown up in the data yet.
As shown in the figure below, payroll employment growth in February came in at 235,000. This is very much in line with what we saw in January (238,000) or in February of 2016 (237,000). While sustained growth at this level is welcome, it is hardly a break with very recent past trends and cannot be rightly attributed to any new policy. EPI’s new autopilot economy tracker examines key labor market indicators to see where our performance going forward either diverges or doesn’t diverge from the trends inherited from recent years. We track payroll employment growth along with the unemployment rate, prime-age employment-to-population ratio, and nominal wage growth.
For decades, early childhood education advocates and the scientists, economists, and philanthropists who back them have been waiting for the federal government to step up to the plate and do what’s responsible, moral, and economically wise: make high-quality early childhood education a reality for everyone. With no indication that this is happening, even less so now, we need to focus on more promising pathways.
A smart path forward might combine adapting high-quality state-level strategies across more states and bubbling up lessons from pioneering districts. The latter help ensure a targeted focus on community-level needs and assets, and some offer timely lessons on how to link early childhood to the elementary years and beyond.
Recent presidents have all expressed support for investments in early childhood education. Still, even the strongest advocate, President Obama, left a legacy that includes higher standards and more funding but far too little of either to ensure all children a strong start. President Trump’s early childhood agenda consists so far of his daughter’s proposal to use tax deductions for the costs of child care to boost resources for the middle-class and wealthy families that can already afford it, while neglecting working-class and poor parents who can’t and expanding the budget deficit. Other policies he has advanced would compound problems for disadvantaged students. His “skinny budget” would strip public schools of key resources and, had the repeal-and-replace of Obamacare passed, it would have deprived millions of children of the physical and mental health care needed to succeed in them.
A recent study that I presented at the 2017 Federal Reserve Community Development Research Conference found that gaps in kindergarten readiness between high- and low-income children are enormous, and that they haven’t budged in the past 10-15 years—highlighting the need for more intensive policy responses. Other, more hopeful findings may point the way. Data from the same study indicate that parents are increasingly doing their part—reading to their children, singing with them, and playing games—regardless of their social class. So even though today’s low-social class parents are poorer and working odd hours at low-wage jobs, they are devoting the time and resources that science indicates are critical for child development.
Once again, a bill promoting comp time is being paraded out by congressional Republicans and will be the subject of a hearing in the House this morning. The bill would allow private sector employers to offer comp time at time-and-a-half in lieu of overtime pay when an employee works more than 40 hours in a week. It is being touted by congressional Republicans as a boon to worker flexibility, but do not be fooled—everything the comp time bill purports to provide for workers is actually already available under the overtime provisions of the Fair Labor Standards Act. The bill only provides a new employer right to avoid paying workers the overtime they have earned.
Here are a couple scenarios to show workers are never better off under the comp time bill.
First, the easy example: consider the very common case of the low- or moderate-wage workers whose paycheck is not enough for them to make ends meet, and who would always prefer to work extra hours to get extra pay. Under comp time, these workers give up their right to overtime earnings in exchange for future time off. This is not what they need or want and they are unambiguously worse off under comp time than overtime.
But what about a worker who doesn’t need or want the overtime pay and prefers the time—are they better off under the comp time bill than under current law which provides overtime pay for working more than 40 hours a week? Nope! At best they are back at neutral.
The Trump administration announced last week that it would sign two executive actions to launch a review of U.S. trade policy. A review of trade policy and its potential to harm U.S. workers is welcome and long overdue. However, the specifics of the review offered by President Trump mean that it is likely to fail to provide any help to American workers, in part because it asks the wrong questions.
The president’s first order requires Secretary of Commerce Wilbur Ross and White House Trade Council to “identify every form of trade abuse and every nonreciprocal practice that contributes to the U.S. trade deficit,” according to the commerce secretary. The report is to be completed within 90 days, with an analysis of the detailed cause of the deficit “by country and major product.” But the trade deficit is not a “product by product” or a “country by country” problem. We know what it is caused by and what should be done about it.
The trade deficit is not a bilateral problem between the United States and individual countries. The U.S. trade deficit is a result of global trade imbalances. There are ten to twenty countries that have developed large, persistent, structural trade surpluses that are distorting trade flows worldwide. The top ten surplus countries are shown in Figure A below. In 2015, these countries, led by China, Germany, Japan, Korea, and Taiwan, had a collective trade surplus of approximately $1.5 trillion. (The figures reported are current account balances, the broadest measure of trade in goods, services and income.) The United States’ current account deficit of $463 billion in 2015 accounted for less than one third of the total surplus accumulated by the big surplus traders. Other countries have also suffered from persistent, structural trade deficits, job losses, and downward pressure on wages, including Great Britain, Brazil, Australia, and Mexico. Attacking the root causes of global trade imbalances will benefit all deficit countries, and not just the United States.
Tuesday, April 4th is Equal Pay Day— the day that marks when a typical woman’s earnings catch up to what a man earned in the previous year. The gender wage gap is a measure of pay disparity between men and women. The research is conclusive: gender wage gaps exist across the wage distribution and among workers of every education level. The median woman worker (that worker in the exact middle of the distribution of women’s wages) is paid 83 cents for every dollar that the median man is paid. Among workers who have a college degree or advanced degree, the gap is even larger, with women being paid only 73 cents on the male dollar. Women of color face dual penalties of racial and gender-based pay gaps; black and Hispanic women are paid only 65 cents and 59 cents on the white male dollar.
Closing the gender wage gap is essential to helping women achieve economic security. We should use all the tools available to combat the factors contributing to pay disparities. Some of these tools include establishing standardized rates of pay, requiring more transparency in compensation data, strongly enforcing antidiscrimination laws, and allowing workers to earn additional benefits such as paid sick and family leave, which help enable workers to balance demands at home and at work.
For the vast majority of women, true economic security and a fair share of the economy’s growth will require combining progress in closing gender-based pay disparities with progress in linking their wage growth to economy-wide productivity growth, a linkage that has been severed in recent decades. The levers that will allow the wages of the vast majority of both men and women’s wages to benefit from overall economic growth include allowing the economy to reach and stay at genuine full employment, and raising labor standards such as updating the minimum wage and the overtime threshold.
Last week, the Perkins Project launched the Worker Rights and Wages Policy Watch, which tracks actions by the Trump administration, Congress, and federal agencies that affect working people and the economy. A review of Policy Watch posts to date shows President Trump and congressional Republicans’ commitment to advancing an agenda that favors corporate interests ahead of workers. Consider their actions just this week: on Monday, President Trump signed into law a measure blocking the Fair Pay and Safe Workplaces Rule which would have helped ensure that federal contracts were not awarded to companies with track records of labor and employment law violations. That same day, the Department of Labor announced a proposed delay of a rule aimed at improving the health and safety of miners.
Meanwhile, while most of the news coverage was focused on House Republicans’ inability to repeal and replace the Affordable Care Act, they have been quietly overturning important worker protections and in the first few months of this session, making it more difficult for federal agencies to enforce labor and employment laws. One of these measures mandates that agencies place compliance cost considerations above all else, relegating the benefits to workers and consumers to secondary status.
The administration has also repeatedly placed corporate interests ahead of workers. In addition to this week’s announcement of a proposed delay of a rule to enhance workplace safety standards for miners, the administration has proposed delaying the implementation of the “fiduciary rule,” which would require financial professionals to act in their clients’ best interests when recommending investment products or strategies to people saving for retirement. The Trump administration’s proposed delay of 60 days will cost workers saving for retirement $3.7 billion.
The Trump administration and congressional Republicans have already taken a number of actions that hurt workers and stack the deck for corporate interests. The Perkins Project Policy Watch will continue to track what they do and provide information on how their actions impact our nation’s workers.
Modern-day Braceros: The United States has 450,000 guestworkers in low-wage jobs and doesn’t need more
On César Chávez Day, lost in all the news about the Trump administration’s criminalization and scapegoating of immigrants and attempts to withhold federal funds from cities with policies that protect immigrants, are the 450,000 low-wage-earning migrant workers employed in the United States through the H-2A, H-2B, and J-1 visa temporary foreign worker programs. Many of the workers in these temporary visa programs are in a precarious situation and vulnerable to abuse and retaliation at the hands of employers and their agents.
These “guestworkers” often arrive in the United States in debt, and are tied to and controlled by their employers. Research shows guestworkers are often paid lower wages than similarly situated U.S. workers, and earn wages similar to those of undocumented immigrant workers. This is reminiscent of the Bracero Program—a large guestworker program in the 1940s, 50s, and 60s that admitted hundreds of thousands of Mexican workers to work temporarily on U.S. farms and in other low-wage occupations—and which César Chávez fought against. Chávez knew that exploited, indentured, and underpaid workers would degrade labor standards for all workers in the United States, including immigrants. After scandals, political pressure, and President John F. Kennedy campaigning against it, the program was terminated in 1964.
Sadly, America has not learned its lesson. The United States is repeating an historical mistake, once again admitting large numbers of guestworkers in low-wage occupations. With the possibility looming that the Trump administration will reduce enforcement and oversight in guestworker programs—which will be further exacerbated if Trump’s proposed 21 percent budget cuts to the Department of Labor (DOL) are enacted—the United States may once again face scandals like the one where the bodies of guestworkers who died in a traffic accident were not immediately claimed, because farm labor contractors and agricultural growers argued over who their employer was.
Over the last several decades, black workers have been offering more to the economy and the labor market to incredibly disappointing results in pay and unemployment. Some have argued that the disparity in wages between blacks and white is the result of white workers working longer and harder than black workers. They blame black workers for racial wage gaps, saying that they should do anything from getting more education to simply working harder. Such explanations minimize the role of racial discrimination on labor market outcomes, while perpetuating racial bias and stereotypes of black workers as unmotivated and lazy.
And the data show they are simply false: hours and weeks worked have increased for both races, with a larger increase for black workers over the last several decades. The increase in annual hours is particularly striking for workers in the bottom 40 percent of the wage distribution, where it has been driven almost entirely by women.
Table 1 provides data on annual hours worked in 1979 and 2015 for workers ages 18–64 years old who report non-zero earnings during the year (so the averages are conditioned on working. In forthcoming research, we explicitly address trends in labor force participation). Work hours include paid vacations and time off, and therefore represent paid hours. The table also presents the percent change from 1979 to 2015 in annual hours, weeks worked, and weekly hours. These data are shown by race and wage fifth, or quintile.