The worsening U.S. financial crisis has focused attention on EPI’s work and kept economists here busy as they monitor events and provide context for action going forward. Within a few hours of Secretary Paulson’s initial bailout plan announcement, senior economists released a memo that called for greater accountability and transparency. For example, in exchange for the rescue funds, they said, taxpayers should get an equity stake in the distressed companies so that they might eventually recoup some or all of the money. Additionally, the memo advised an overhaul of regulations governing financial institutions.
As the week wore on, CEO pay became an increasingly prominent issue. EPI highlighted its work on executive pay in its biennial publication, The State of Working America. “Not only are U.S. executives paid far better than U.S. workers, they also earn substantially more than CEOs in other advanced countries,” said EPI President Lawrence Mishel, citing the book. Fat paychecks and bonuses have contributed to the increasingly wide income gap between typical U.S. workers and the top 1%.
This week, as Congress voted down one version of the plan and the Senate passed another, Lawrence Mishel, Ross Eisenbrey, and John Irons sought to ensure that the bills address the needs of the middle class. “Regardless of whether that happens, it is critical that the money being thrown at failing financial institutions not constrain our ability to fund essential investments in renewable energy, early childhood education, health care, and infrastructure,” they wrote in a memo. While we wait to see the ultimate fate of the bailout plan, EPI will continue to offer explanation and analysis with an eye on the interests of American workers.
Losing jobs in America
Since the economic downturn began in December 2007, some 600,000 U.S. jobs have been lost, and the national unemployment rate has risen to a five-year high of 6.1%. Clearly unemployment remains a major issue throughout America. Using an interactive map, research assistant Emily Garr showed what states had the highest and lowest unemployment rates, and found that certain regions–like the Pacific West, the Midwest, and the South Atlantic–were in particular trouble. Additionally she showed the number of jobs gained or lost in each state and how many of those jobs were in manufacturing.
More on those manufacturing job losses
The ballooning U.S. trade deficit has corresponded with an accelerating loss of jobs, according to a new analysis by EPI economist Robert Scott. He found that the U.S. non-oil trade deficit displaced jobs in all 50 states and the District of Columbia, adding up to 5.6 million jobs lost or displaced in 2007. This week’s Economic Snapshot showed that no state is immune to the corrosive effect of the U.S. trade deficit. A companion Briefing Paper looked closer at the growing U.S. trade deficits, state-by-state, and examined losses by industries.