On Jan. 1, nearly a million workers in 10 states will see the value of their paychecks preserved against inflation. Workers in Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont, and Washington are protected each year by automatic indexing of their state’s minimum wage. Indexing links the value of the state minimum wage to inflation so that as prices go up, so does the amount that minimum-wage workers must be paid. Low-wage workers in Rhode Island will also see a small boost to their incomes in 2013 thanks to a one-time increase in their state’s minimum wage that was enacted this past June.
Table 1 summarizes the increases taking place on New Year’s Day. They range from 10 to 15 cents, with the exception of the 35 cent one-time increase in Rhode Island. Across these 10 states, roughly 855,000 workers will be directly affected, meaning that they currently earn a wage between the existing minimum and the new minimum. Another 140,000 workers with wages just above the new minimum are also likely to see a small raise as employers adjust their overall wage ladders to reflect the higher wage floor. These wage increases translate into an additional $290 million in new wages for low-wage workers, with average increases in annual pay ranging from $190 in Missouri to $510 in Rhode Island.
For a low-wage worker, these increases are a vital protection against rising costs. In states without indexing (more…)
As International Migrants Day passes and 2012 comes to a close, it’s a good time to reflect on a number of impressive victories guest workers won this year against employers who exploited, abused, trafficked and robbed them. Although these legal battles have been inspiring, most employer abuses of guest worker programs and guest workers themselves occur with impunity. Even when guest workers have their day in court, the victories are sometimes just moral ones and the victims are not made whole financially. Overall, the guest worker issues litigated in American courts this year are somber reminders that many employers are using these programs to erode labor standards.
The employer abuses that have been exposed and confirmed through court proceedings—and the judgments that vindicated foreign guest workers in 2012—occurred across visa categories and skill levels. The following are some examples:
- On Dec. 17, a federal jury in California awarded a group of 350 Filipino teachers $4.5 million in damages for the economic exploitation they suffered at the hands of their labor recruiter. The teachers came to the United States through the H-1B visa program for college-educated workers, and according to the American Federation of Teachers, the Filipino teachers paid their recruiter “about $16,000—several times the average household income in the Philippines (more…)
With headlines like “Boehner drops effort to avoid ‘fiscal cliff’” saturating the Internet today, a little clarification is sorely needed: Speaker of the House John Boehner’s (R-Ohio) so-called “Plan B” may have been many things, but it was certainly not a plan to avoid an austerity-induced recession in 2013—which is what people should be talking about, anyway, when they refer to “avoiding the fiscal cliff.” The plan would have mitigated less than one-third of the pending fiscal drags from the various components of the fiscal obstacle course (our preferred alternative to the doubly-misleading “cliff” metaphor). For the millionth time: The fundamental challenge facing policymakers is that budget deficits closing too quickly in the next couple of years will kill the anemic economic recovery, so the pace of deficit reduction must be moderated. But Boehner’s failed plan was instead fixated on accelerating the pace of deficit reduction relative to current policy.
Boehner’s Plan B consisted of two bills. The first, the Spending Reduction Act of 2012 (H.R. 6684), which narrowly passed 215-209 yesterday, would replace scheduled sequestration spending cuts for fiscal year 2013 to the Department of Defense budget with deeper sequestration cuts to nondefense discretionary spending as well as a host of mandatory spending cuts, including: (more…)
In the interest of cobbling together random listicles to drive traffic to our website continuing our efforts to educate everyone about the good and bad of economic policy and analysis, here’s our list of some of the silliest economic ideas of 2012. There is a strong fiscal theme to these, which is predictable, as the “fiscal cliff” is one of the most written-about, yet least well-understood, economic policy issues in recent memory.
First, all the bad ideas about the so-called “fiscal cliff”:
- The problem posed by the “fiscal cliff” is one of too much debt
- The “cliff” is a big monolith that we either go over or we don’t
- The “cliff” is mostly about the upper-income Bush tax cuts
- The economy goes over the “cliff” on Jan. 1
- The debt ceiling is one of the issues that must be resolved in debates about the “cliff”
- Resolving the “cliff” requires a deal on long-term debt reduction
- Financial markets will punish us for not striking a grand bargain to defuse the “cliff”
Ideas not directly about the “cliff,” but still bad and still related to fiscal policy:
- You can’t tax the rich enough to make a dent in the deficit
- Raising the Medicare eligibility age is a good idea for deficit reduction
- Switching to a “chained” consumer price index to calculate the Social Security cost-of-living-adjustment (COLA) is a technical improvement
- Contractionary fiscal policy might actually not be contractionary
- Only defense spending and tax cuts provide a boost to the economy
- We’ll “turn into Greece” if we don’t reduce deficits
And just because even non-fiscal issues can lead to bad economic ideas, we introduce two hardy perennials of non-fiscal related economic myths:
If House Republican leaders John Boehner and Eric Cantor act like Thelma and Louise and drive their convertible over the “fiscal cliff,” some of the only victims in the early weeks of 2013 will be the 2 million unemployed Americans currently receiving Emergency Unemployment Compensation. They will have a hard landing when Congress suddenly cuts them off from the unemployment insurance checks that are temporarily paying their bills and keeping a roof over them and their families.
Unlike in some previous budget fights, the current law says that no benefits will be paid beyond Dec. 28; there will be no phase-down for those who have been unemployed for more than 26 weeks. One week, they receive unemployment insurance—the next, they won’t. And hundreds of thousands of others who would have become newly eligible for EUC in 2013 will receive nothing once their regular state benefits are exhausted.
This will also have an immediate effect on the economy, as both EPI economists Heidi Shierholz and Larry Mishel, and the Congressional Budget Office have shown. Ending $30 billion in EUC payments will remove $48 billion of economic activity from the economy, and take 300,000 to 400,000 jobs along with it.
A number of commentators, including my colleague Algernon Austin, have pointed out that a proposed cut in the Social Security cost-of-living adjustment (COLA) would disproportionately affect blacks and Hispanics. Proponents have countered that blacks and Hispanics are more likely to qualify for Supplemental Security Income (SSI), a means-tested program managed by the Social Security Administration that could be exempted from the COLA cut.
While it’s true that blacks and Hispanics are more likely to qualify for SSI benefits, exempting SSI from the COLA cut wouldn’t change the fact that blacks and Hispanics still rely on Social Security for a larger share of their incomes than whites. SSI, while a critical lifeline for some, is a much smaller program, representing just 17 percent of the benefits blacks and Hispanics receive from both Social Security and SSI together (calculations are based on tables 3.C7A and 3.C8 in the 2011 Social Security Administration’s Annual Statistical Supplement, which exclude children under 15).
Not only does Social Security represent a greater share of black and Hispanic income, but black and Hispanic beneficiaries tend to be younger than white beneficiaries, with a greater likelihood of receiving disability and survivor benefits (see previously cited tables and this Social Security Administration fact sheet). Disabled beneficiaries and others receiving benefits over long periods face the steepest cuts from the proposed COLA cut. Among retirees, the worst hit will be women across racial and ethnic groups as well as Hispanics, due to longer life expectancies.
The New York Times is reporting that President Obama is backing off his pledge to allow the Bush tax cuts on income more than $200,000 ($250,000 for couples) to expire, instead proposing to only allow the tax cuts on income above $400,000 to expire. Though not quite as bad as House Minority Leader Nancy Pelosi’s preemptive cave last summer in proposing to shift the threshold from $200,000 to $1 million, this is still a really bad idea.
Beyond the revenue loss, it’s simply ridiculous to claim that households making up to $400,000 are “middle class”; as we’ve shown before, even households up to the $200,000–250,000 threshold probably shouldn’t be considered “middle class.” Yes, it’s notoriously hard to pin down an exact definition of “middle class,” but it is clearly intended to characterize households that fall roughly in the middle of the income distribution. Yet, as the below graph shows, all the thresholds mentioned above include households whose income falls well outside the area where most households are concentrated.
This isn’t surprising. More than 87 percent of taxpayers make less than $100,000 a year, according to IRS data, and the average household makes roughly $50,000 a year. This means that households making between $200,000 and $400,000 are making between four and eight times what most American households earn. Stretching the definition of “middle class” to include households with more than $200,000 is to render the term meaningless.
An undercover documentary report recently aired on France’s public television station found disturbing new evidence that the living and working conditions of the factory workers making the iPhone 5 are grim. The new report adds to the overall picture described in Polishing Apple: Fair Labor Association gives Foxconn and Apple undue credit for labor rights progress; optimistic reports that reforms at Foxconn, which assembles the iPhone 5 for Apple, are going swimmingly are entirely premature.
- Many workers are living in unfinished dorms that have no elevators, electricity, or running water.
- Eight workers living in dorms with electricity were killed in a fire caused by workers plugging electronic devices into overloaded circuits, according to the reporters’ translation of a safety speech given by a Foxconn supervisor.
- Student workers are still being forced to work there, including (more…)
One of the unfortunate side effects of the political dysfunction that has increasingly gripped the nation’s capital is a habit of lurching from one crisis to the next rather than taking time to do a bottom-up assessment of the effectiveness of current policy.
The Bush tax cuts are a great example of this. Republicans want to extend all of the Bush tax cuts, while Democrats generally support extending the tax cuts for only the bottom 98 percent of households. But few end up debating whether these tax cuts are actually optimal policy, and if perhaps a better replacement exists.
This is unfortunate, because the Bush tax cuts are pretty poor policy; in a decade of existence, they have accomplished none of the goals they were intended to achieve. In fact, judging the Bush tax cuts based on their economic impact, distributional impact, and cost, they have been an outright disaster.
Under practically any measure, the economy performed exceedingly poorly in the years following the Bush tax cuts. Of the 10 economic expansions since 1949, the economic expansion from 2001 to 2007 ranks last (more…)
Here are a few links that EPI’s research team clicked through today:
- “Social Security Checks Enter the Debate” (New York Times)
- “Boehner’s Plan B Fails; Inmates Running Asylum” (New York Magazine)
- “After Recession, More Young Adults Are Living on Street” (New York Times)
- “Study: D.C. third-graders have not improved in math, reading since 2007” (Washington Post)
As my colleagues have shown, the “chained” cost-of-living adjustment for Social Security being discussed between President Obama and House Speaker John Boehner is a cut to benefits. The AARP Public Policy Institute’s report, Social Security: A Key Retirement Income Source for Older Minorities, helps us to think about how this cut might affect different racial groups.
Nearly one-in-five (18.7 percent) of the Hispanic elderly lives in poverty. For African Americans, the rate is one-in-six (17.1 percent) (Figure A). A cut to Social Security benefits runs the risk of significantly increasing these rates.
Latinos and blacks tend to have lower lifetime earnings and this fact results in lower levels of Social Security income. But it is also the case that these groups have less wealth and therefore depend on Social Security more. Figure B shows that roughly one-in-four Latino (25.4 percent) and black (26.3 percent) Social Security beneficiaries rely on Social Security for 100 percent of their income. For these individuals, Social Security cuts will hurt the most.
On International Migrants Day, remember that guest worker programs aren’t the solution for immigration reform
Although few in the United States have heard about it, Dec. 18 is known around the world as International Migrants Day. It began in part as a way to commemorate and remind governments to adopt the International Convention on the Protection of the Rights of All Migrant Workers and Members of their Families, an international treaty created to protect the basic human rights of those who cross international borders—whether by choice or by force—in search of a better life. But it is also a day to recall the economic contributions of immigrants, by reminding us that most immigrants in the United States are workers—workers who toil alongside their native-born counterparts on agricultural lands, in factories, and in engineering labs. On this International Migrants Day, I am particularly hopeful that positive reforms to our immigration system may soon be enacted—reforms that will benefit and protect both immigrant and U.S. workers alike—thanks to the renewed discussions on comprehensive immigration reform that are taking place among the public, the media, on Capitol Hill and in the White House. And these discussions finally include skeptics, who until recently, considered legalization of the vulnerable unauthorized immigrant population to be unthinkable.
However, my optimism is tempered by the disturbing and uninformed comments being made by traditionally anti-worker sources like (more…)
If news reports are accurate, the worst part of the tentative budget deal reportedly being hashed out between President Obama and House Speaker John Boehner is a proposed cut in the cost-of-living adjustment (COLA) for Social Security. This is a travesty, not least because Social Security is required by law to operate in long-term balance and therefore does not belong in budget talks ostensibly aimed at reducing long-term budget deficits.
We at EPI and our allies in the Strengthen Social Security coalition have written at length about the downsides of a COLA cut. It would have the biggest impact on the oldest retirees, who are often the poorest retirees. It would disproportionately affect disabled beneficiaries, including veterans, many of whom will see the cut cumulate over decades. And it would break the pledge made by many would-be Social Security reformers to shield current retirees, who cannot retroactively save more for retirement.
Let no one be fooled by the pretense that this is a technical adjustment. If COLA cut advocates truly believed that the chain index was more accurate (and the current measure inappropriately provided a real benefit increase over time), there would be no talk of a “birthday bump” to temporarily offset the cut after 20 years.
A lower “chained” COLA is supposed to better account for consumers’ ability to substitute cheaper goods and services in response to price increases. But Social Security beneficiaries spend a greater share of their incomes on necessities such as rent and utilities, so it is not even clear that the current measure understates the ability of beneficiaries to make such adjustments.
Even if it does, it is unlikely that a chained measure that also accounted for beneficiaries’ greater spending on out-of-pocket medical expenses would produce cost savings. The Bureau of Labor Statistics produces an “experimental” index, the CPI-E, which roughly tracks the spending of elderly consumers and has risen faster than the current measure. But neither the current index nor the CPI-E are based on the actual spending patterns of Social Security beneficiaries. Along with some 300 other Ph.D. economists and social insurance experts, we think the Bureau of Labor Statistics should construct one. In the meantime, leave the COLA alone.
If reports are correct, Congress and President Obama are currently considering resolving the fiscal showdown by, among other things, cutting Social Security benefits through changing the cost of living adjustment. It is ridiculous. It is outrageous.
Historically, Social Security, defined-benefit (DB) pensions, and private savings successfully formed the foundation of middle-class retirement security. But DB pensions have declined in the private sector: only 18 percent of workers are covered, compared to nearly 40 percent in 1980. And since the early 80s, stagnant wages have caused the net worth of the bottom 60 percent of households to decline; the typical household approaching retirement age has less than the equivalent of two years’ worth of income saved in a retirement account—if they have retirement savings at all. Social Security remains the most reliable and effective part of the nation’s provision of retirement security, and for many households, retiree benefits averaging less than $15,000 a year are their sole source of income.
Our current deficits largely stem from the economic downturn, the Bush tax cuts, overseas wars, an unpaid-for expansion of prescription drug benefits, and a failure to control the excesses and abuses of the financial industry. In fact, over the last few decades, Social Security was running a surplus, providing cover for ill-advised revenue and spending decisions that Republicans now refuse to rescind. And over the long run, Social Security is legally prohibited from adding to the deficit.
So why are Republicans insisting that resolving the fiscal showdown include Social Security benefit cuts? (more…)
Earlier this week, we released the old-school version (i.e., printed book instead of website) of The State of Working America, 12th Edition. All things economic that are not “fiscal cliff” related are having a hard time getting a public hearing these days, which is understandable. But we think that The State of Working America really should be a required reference for anybody writing about fiscal policy debates.
A key point we at EPI have tried to make over and over again in fiscal discussions is that approaching these issues only within the framework of “spending” and “revenues”—with no sense of the broader economic context— will lead to all the wrong questions being asked and solutions being offered. And The State of Working America provides this crucial broader context.
Take the debate over taxes, particularly tax rates on the highest-income households. The first thing the data in SWA help illuminate is just how modest the changes currently under discussion are, and how low taxes paid by the highest-income households are in historical perspective. For the top 0.1 percent, for example, the average effective federal tax rate in 2011 is only about half as high as it was in 1970, and the changes under discussion would only give these rates the gentlest nudge (see the effect of these cuts starting in 2000) back towards these 1970 rates. (more…)
Here’s a sampling of links that EPI’s research team found insightful today:
- “A ‘fiscal cliff’ deal is near: Here are the details” (Wonkblog)
- “Conservatives complain Sandy bill includes millions in unrelated spending” (On The Money)
- “Assimilated by the Peterson Borg” (Paul Krugman)
- “Black jobless rate is twice that of whites” (Washington Post)
- “The Great Manufacturing Skill-Shift Labor Shortage: Hard to See” (Employment Policy Research Network)
- “A Giant Statistical Round-up of the Income Inequality Crisis in 16 Charts” (The Atlantic)
By now, it’s (finally) becoming well-recognized that the term “fiscal cliff” confuses more than it clarifies. The worst problem with it is that it presents the sharp fiscal contraction baked into current law for 2013 as a single monolith, when in fact it’s the result of a bunch of separable tax increases and spending cuts. Given that our previous effort at renaming the “cliff” clearly failed, I now officially nominate “à la carte austerity” as a new entry.
A second problem with the “cliff” metaphor is that it carries the strong implication that if this à la carte austerity is not solved by Jan. 1, then economic chaos will ensue. This is clearly wrong. If nothing is done to address the fiscal contraction throughout the entire first half of next year, then yes, the economy will re-enter recession. But we will not be slammed back into recession Jan. 2 if this isn’t solved by then. I should note one important caveat to this: fiscal austerity will be very “cliffy” indeed for about two million of the most vulnerable Americans, as extended unemployment benefits will see a hard cutoff by the end of December. So if policymakers are trying to manage this situation with maximum efficiency and compassion, it seems that extending the longer unemployment benefits is an obvious place to start, even if other elements of the à la carte austerity are not solved. Yes, I’m not holding my breath either. (more…)
The American Immigration Council (AIC) has a new blog post that makes some troubling claims regarding certain aspects of the H-1B guest worker program. In her piece, “Lawsuit Uncovers USCIS’ Double Standards in H-1B Program,” AIC attorney Emily Creighton discusses what she believes to be the significance of a number of revealing internal documents AIC obtained from U.S. Citizenship and Immigration Services (USCIS) through a Freedom of Information Act (FOIA) request and subsequent litigation. I admire and applaud the lawyers at the AIC’s Legal Action Center for their hard work to force the release of the documents, because the action has brought another element of much-needed transparency to the flawed and much-abused H-1B guest worker program for temporary foreign workers with at least a college degree. However, the conclusions Creighton draws regarding AIC’s new discoveries are off the mark.
Creighton describes the substance of her findings:
According to fraud referral sheets [obtained from USCIS], a fraud investigation may be triggered when a business asks for an H-1B employee if the business has a combination of the following characteristics: 1) a gross annual income of less than $10 million, 2) fewer than 25 employees, or 3) has been in business for fewer than 10 years.
In her opinion, this means (more…)
Ease of doing business in U.S. and record corporate profits contradict Chamber’s regulatory complaints
After years of hearing the Chamber of Commerce and certain other business groups complain about the regulatory burden government imposes, far too many Americans (and politicians) are probably convinced that regulations are excessively burdensome to businesses. Not so, according to two important new pieces of information.
First, after examining 185 nations on 10 key factors, the World Bank’s latest “Ease of Doing Business” study ranks the U.S. No. 4 overall and No. 1 among the 25 largest economies. In the words of the World Bank, “A high ranking on the ease of doing business index means the regulatory environment is more conducive to the starting and operation of a local firm.” Unlike so many business trade associations and lobbyists, the World Bank recognizes that the regulatory environment includes many rules that enhance and protect business activity, and the U.S. ranks especially high in protecting investors, enforcing contracts, and getting credit.
A second fact that contradicts business complaints about burdensome regulations is that corporate profits, which were $1.75 trillion in the third quarter of 2012, are at an all-time high (higher as a percent of GDP than at any time in our history). That corporate America’s bottom line is doing extraordinarily well should, at a minimum, make one skeptical of the seemingly endless studies by business groups which somehow find that regulations are damaging them.
That leads to the central question: Given that the U.S. has one of the most welcoming regulatory environments in the world, why aren’t U.S. businesses creating more jobs instead of hoarding the historic profits they’ve accumulated? The answer, as most economists know, is slack demand. Without customers able and willing to spend, businesses won’t invest. The solution is the same as it was at the start of the recession: because financially squeezed consumers can’t spend and businesses won’t, it is the responsibility of the federal government to make large enough investments in infrastructure and human capital to lift the economy and protect our future prosperity.
The Wall Street Journal’s owner and editors hate unions, so it is no surprise that the newspaper published an editorial on Tuesday gloating over Michigan’s enactment of “right-to-work” legislation to ban contracts between labor unions and employers that require all employees covered by the contract to pay union dues or their equivalent. The editorial is so full of untruths, half-truths and right-wing extremist ideology that a full response would wear out both author and reader. But let’s take a brief look at how the 1 percent defends this ugly attack on employee rights and economic security.
The heart of the editorial is the contention that right-to-work-for-less laws are good for workers, families and state economies, which it supports with various pseudo-scientific studies, including one by the Taxpayers Protection Alliance that—ludicrously—claims the typical Michigan family of four would have had annual income $54,224 greater in 2008 if Michigan had enacted a right-to-work-for-less law in 1977. In 2008, median income for a family of four was about $78,000, so the Journal is proposing that it would have been roughly $132,000! Curiously, only four states had median household income over $100,000 in 2008, and not one was right-to-work-for-less. (more…)
Here’s some reading material for you from items EPI’s research team skimmed through today:
- “State Trends in Premiums and Deductibles, 2003–2011: Eroding Protection and Rising Costs Underscore Need for Action” (Commonwealth Fund)
- “Dems hold the middle ground. GOP is on fringe.” (The Plum Line)
- “Right to Work” Isn’t a Civil Right. But Unionizing Should Be” (New Republic)
- “Former Bank of England Official Criticizes British Policies” (Economix)
- “Sheldon Adelson: ‘I’m Basically a Social Liberal‘” (Washington Wire)
- “AIG WRAP-UP: Treasury Sells Final Shares of AIG Common Stock, Positive Return on Overall $182 Billion AIG Commitment Is Now $22.7 Billion” (Treasury Department)
Here’s some thought-provoking content that EPI’s research team enjoyed reading today:
- “The Real Long-Term Budget Challenge” (Economix)
- “The Conventional Wisdom Re Growth is Unwise” (Jared Bernstein)
- “It’s Official: Austerity Economics Doesn’t Work” (New Yorker)
- “What Does the New Community Reinvestment Act (CRA) Paper Tell Us?” (Rortybomb)
- “A failure of leadership: Snyder’s about-face on right-to-work betrays voters” (Detroit Free Press)
This month, the National Council of La Raza’s (NCLR) Monthly Latino Unemployment Report focuses on the important issue of underemployment. “Underemployment,” as The State of Working America states, is “a more comprehensive measure of slack in the labor market than unemployment.”
The book goes on:
Underemployment includes workers who meet the official definition of unemployment as well as: 1) those who are working part time but want and are available to work full time (“involuntary” part timers), and 2) those who want and are available to work and have looked for work in the last year but have given up actively seeking work (“marginally attached” workers). While this is the most comprehensive measure of labor underutilization available from the Bureau of Labor Statistics, it does not include workers who are underemployed in a “skills or experience” sense (as in, say, a mechanical engineer working as a barista).
African Americans generally have the highest rates of underemployment among the major racial and ethnic groups. However, for much of 2009, Latinos had a slightly higher rate. This year, the Latino underemployment rate has averaged about 20 percent, while the black rate has averaged about 23 percent, and the white rate about 12 percent.
NCLR’s report also pulls apart the underemployment rate to examine the rate of involuntary part-time work. The share of workers who want full-time work but only have part-time work out of all workers is another important measure of hardship. Many of these individuals are struggling to make ends meet.
If one examines this involuntary-part-time rate from Nov. 2011 to Oct. 2012, Latinos have the highest rate. The share of Latino workers who only have part-time work but desire full-time work is 10.3 percent. For blacks, it is 7.7 percent, and for whites it is 5 percent. We need much stronger job creation to put these part-time workers in full-time jobs.
Here’s some of the interesting content that EPI’s research team browsed through today:
- “The Forgotten Millions” (Paul Krugman)
- “Bills Placing Limits on Unions Advance in Michigan Legislature” (New York Times)
- “Underemployment: The Real Jobs Crisis: Monthly Latino Employment Report” (National Council of La Raza)
- “Degree Inflation? Jobs That Newly Require B.A.’s” (Economix)
- “The Effects of Health Reform on Small Businesses and Their Workers” (Urban Institute)
- “Taxing Businesses Through the Individual Income Tax” (Congressional Budget Office)
- “The Gospel of Wealth Fails the Inequity Test in Primates” (Scientific American)
Among the U.S.-born, black women had the strongest birth-rate decline from 1990 to 2010, according to a recent report from Pew Social and Demographic Trends. The birth rate—the number of births per 1,000 women aged 15 to 44—declined 29 percent for blacks, 25 percent for Asians, 21 percent for Hispanics, but only 5 percent for whites.
In 1990, the black birth rate was 26.1 points higher than the white rate. In 2010, it was only 4 points higher. If this trend continues, the black birth rate will soon equal the white rate.
Michigan’s Republican-controlled House and Senate forced through “right-to-work” legislation on Thursday, making the Great Lakes State the latest battleground over worker rights. The move, of course, comes after recent GOP-led anti-union measures were passed in Wisconsin and Indiana. Michigan stands to join 23 other states with RTW laws, which make it illegal for collective bargaining agreements to require nonunion employees to pay fees (even though these nonunion employees get all of the same benefits as their unionized peers under negotiated contracts). Since the actual effect of RTW laws is to restrict workers’ rights—by making it illegal for them to enter voluntary contracts with unions to collect union dues—the name is misleading. Even more misleading, however, are claims that these laws boost a state’s economy.
RIGHT-TO-WORK 101: Why These Laws Hurt Our Economy, Our Society, and Our Democracy
Union members and their supporters are well aware of RTW’s consequences, which is why (more…)
A vital goal of economic policy should be to raise the living standards of the millions of American households who have seen their wages and living standards stagnate or decline over the last few decades. Fundamental to this is an economy that produces good, well-paying jobs. The biggest obstacle to this, currently, is the jobs crisis driven by a shortfall in aggregate demand. Additional factors though, written into our current policies, mean that even when the economy does recover, there is no reason to believe that the jobs it produces will actually be well-paying jobs.
The New York Times business section ran a story yesterday on low-wage workers and declining unionization rates, making the key points that:
- We are neither building an economy in which most workers earn enough to adequately support their families nor are we sufficiently using government tools to help subsidize the lower class
- The decline in unionization rates is adding to the woes of low-wage workers (more…)
It’s true that the fiscal cliff poses a significant threat to the economy if left completely unaddressed deep into 2013. But although the two most well-known components of the cliff (which is better described as a “fiscal obstacle course”) are the expiration of the Bush tax cuts and the sequestration cuts, neither scheduled change poses nearly as large a danger to the economy in the immediate future as a failure to raise the debt ceiling.
Last year, President Obama allowed congressional Republicans to hold the economy hostage by refusing to raise the debt ceiling until their demands to cut spending were met. Obama eventually agreed to cut roughly $2 trillion in spending, including $800 billion from the discretionary spending caps and $1.2 trillion from the sequester (which includes discretionary and some mandatory spending). This set a dangerous precedent that the minority party could use the debt ceiling to extract policy concessions from the majority.
FULL ANALYSIS FROM EPI: Budget battles in the lame duck and beyond
Appearing to recognize this dangerous precedent, the president has now proposed defusing the debt ceiling by allowing any president to raise the debt ceiling, with only a two-thirds vote in Congress able to prevent the increase. This is a positive development, as are (more…)
The American public wants Congress to get the economy moving and create jobs. Rightly so, given 7.9 percent unemployment and 23 million workers underemployed. So why is Speaker of the House John Boehner focused on something else? Why, for example, does he support continuing the Bush tax cuts for the very rich, which do almost nothing to boost the economy, and oppose continuing Emergency Unemployment Compensation for the long-term unemployed, which is a proven job creator, in addition to being financial life support for millions of families?
Extending just the upper-income Bush tax cuts would boost GDP growth by 0.1 percentage point, increasing nonfarm payroll employment in 2013 by only 102,000 jobs—far less than one-tenth the impact of continuing the temporary ad hoc stimulus measures. Continuing EUC would do three times as much in terms of GDP growth and support 300,000 to 400,000 jobs. In terms of jobs created per dollar of budget deficit, EUC is more than five times as effective as the Bush income tax cuts for the wealthy. Combine them with the Bush estate tax cuts and they are one-seventh as effective as EUC. (more…)
Business groups and their allies, including New York Mayor Michael Bloomberg and various non-profit advocacy organizations, have been arguing for years—without real evidence—that the United States is losing a race to attract the world’s best and brightest young scientists, engineers, computer techies and mathematicians. In a report entitled, Immigration of Foreign Nationals with Science, Technology, Engineering, and Mathematics (STEM) Degrees, Ruth Wasem of the Congressional Research Service (CRS) recently reviewed the statistics regarding these highly skilled migrants and concluded: “The United States remains the leading host country for international students in science, technology, engineering, or mathematics (STEM) fields.” The United States has been and continues to be extraordinarily welcoming to foreign students, and especially to those in the STEM fields. CRS reports that the number of foreign graduate students in the STEM fields increased by 50 percent since 1990:
“The number of full-time graduate students in science, engineering, and health fields who were foreign students (largely on F-1 nonimmigrant visas) grew from 91,150 in 1990 to 148,923 in 2009, with most of the increase occurring after 1999. (more…)