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EconomicPolicyInstitute June 10, 2009

It is only in the midst of a historically steep recession that losing 345,000 jobs in a single month is taken as a good sign.

EPI economist Heidi Shierholz offered that perspective on the May unemployment data released June 5, which showed far fewer jobs lost last month than during earlier months this year, but nonetheless pushed the unemployment rate up to 9.4% from 8.9% in April.

The Wall Street Journal and many other news outlets quoted Shierholz calling the loss of 345,000 jobs in May “welcome news” following an average monthly loss of 643,000 jobs over the prior six months. But Shierholz also offered more troubling context: Before the current recession, the 0.3% decline in total employment seen in May would have been the second largest monthly decline in a quarter century. Shierholz was also quoted in The Washington Post discussing the problem of long-term unemployment: a record 27% of the nation’s unemployed have been looking for a job for at least six months.

Setting the record straight on General Motors
At a time of widespread job loss around the country, General Motors Corp.’s bankruptcy on June 1 helped shed light on the ongoing loss of well-paying manufacturing jobs and the diminished power of the United Auto Workers (UAW) union. Entry-level wages for UAW workers have fallen dramatically in recent years, to about $14 per hour today, making it more challenging for working families to enter the middle class. A Reuters story discussing the loss of well-paying unionized jobs quoted EPI President Lawrence Mishel explaining how this trend would reverberate throughout the economy. “It’s hard to have an island of prosperity in a sea of diminished prospects,” Mishel said.

And as the ongoing troubles of the U.S. auto industry spurred more debate over the role of the UAW in these companies’ successes and failures, EPI Vice President Ross Eisenbrey provided some enlightening context. In Setting the Record Straight on GM Bankruptcy, Eisenbrey stressed that the wages UAW workers earned were comparable to salaries of non-unionized auto workers, and argued that the lack of comprehensive health insurance in the United States was a factor far more significant than wages in the troubles of GM and Chrysler, which were saddled with massive retiree health care benefits.

EPI paper on aggressive anti-union tactics gets more press
Last month, EPI and the American Rights at Work Education Fund published the paper, No Holds Barred: The Intensification of Employer Opposition to Organizing, by Cornell University scholar Kate Bronfenbrenner, revealing how companies were using increasingly aggressive tactics such as firing workers to prevent them from forming unions. On June 3, Bronfenbrenner published an editorial, A War Against Organizing, in The Washington Post highlighting some of the punitive and threatening tactics that had become commonplace at U.S. companies. Bronfenbrenner studied a random sample of more than 1,000 union elections over a five-year period, and found that 34% of the companies had fired pro-union workers. “There has been a steady decline of workers’ rights in the past several decades,” wrote Bronfenbrenner, who urged Congress to pass “serious labor law reform with real penalties.”

Stealth stimulus
A Stealthy Stimulus, a May 27 Issue Brief by EPI policy analyst Kai Filion, outlined how increases in the minimum wage, in addition to improving workers’ financial security, resulted in increased consumer spending, helping to limit the severity of the current economic downturn. The final increase of a three-step minimum wage hike Congress approved two years ago is set to take effect this July and is expected to generate an additional $5.5 billion in consumer spending over the next year, the report found.

EPI hires new EARN director
EPI is pleased to announce that Doug Hall has been named director of the Economic Analysis and Research Network (EARN), after being an active member of EARN for 10 years. Hall most recently served as director of operations and research for Connecticut Voices for Children, where he played a leading role in work related to family economic security and state tax and budget analysis. He is the author or co-author of eight State of Working Connecticut reports and is an expert on child poverty, the earned income tax credit, and state economic development policies.

Upcoming events
On June 10, EPI Bailout Analysis Project Director Nancy Cleeland will moderate Small Enough to Fail: Community Banks in the Bailout. The event, the first in a series of forums on the financial crisis, will focus on the fate of the nation’s 8,000 independent banks that have been overshadowed in the current economic crisis by a handful of mega-banks deemed “too big to fail.” The forum, at EPI headquarters, will run from 10:00 a.m. until 11:30 a.m.

On June 11, EPI will host a discussion with organizers from Transit Riders for Public Transportation (TRPT) on how transportation policy can better serve low-income, working-class communities of color and protect public health. The event will feature frontline organizers from TRPT, a national campaign working to bring environmental justice and civil rights priorities to the upcoming reauthorization of the Federal Surface Transportation Act (FSTA), and will be hosted in conjunction with the Advancement Project. The discussion, at EPI headquarters, will begin at 10:00 a.m. To RSVP, contact rmendoza@advancementproject.org.

Congressional briefing
On June 11, EPI’s director of Health Policy Research, Elise Gould, will participate in a congressional briefing on the effects of taxing health benefits on different population groups. The briefing is aimed at informing lawmakers about the impact of health care taxes on children and families, low-income and high-income workers, women, retirees, and small businesses. The briefing will be held in room H 137 in the Capitol from 3:00 p.m. to 5:00 p.m. For more information contact EPI’s Christian Dorsey at cdorsey@epi.org.

EPI’S Global Policy Network presents two brown bag discussions
Mexico: So Far from God, So Close to Wall Street*
On June 16, EPI founder Jeff Faux and Manuel Perez Rocha of the Mexican Action Network on Free Trade will discuss Mexico’s current troubles, with an emphasis on the contribution of financial regulation, NAFTA, and other neoliberal economic policies — along with future implications for the United States and Mexico. The event will run from 12:30 p.m. to 2:00 p.m. at EPI’s offices.
(*Nineteenth Century Mexican President Porfirio Diaz is credited with the quotation, “Poor Mexico, so far from God and so close to the United States.”)

Costa Rican challenge to the constitutionality of CAFTA
On June 17, Costa Rican lawyer Roberto Zamora will present a case to the Organization of American States (OAS) challenging the constitutionality of the Central American Free Trade Agreement (CAFTA) and alleging that President Oscar Arias is manipulating the Costa Rican courts. The event will run from 12:30 p.m. to 2:00 p.m. at EPI offices.

Both brown bag lunch discussions are sponsored by EPI’s Global Policy Network. All are welcome, and no RSVP is required. For more information, contact EPI’s Tony Avirgan at tavirgan@epi.org.

More about EPI.org
At the beginning of this year, EPI launched a new Web site designed to highlight our research in connection to the policy and economic news of the day. The site is a useful resource for learning more about the ongoing work of our economists, newly published papers, and upcoming events. The Latest Research section of the site links to recently published papers on topics from unions to health care reform, unemployment, and wage trends. Analysis and Opinion provides additional commentary on relevant economic and policy issues. The site also publishes an Economic Snapshot every week that uses graphics to illustrate the impact of various economic policies such as minimum wages or quick reactions to breaking news such as unemployment data. To stay connected to how the economy is or is not helping working Americans, bookmark www.epi.org.

If there are any topics you’d like to see discussed on our site, please write to us at newsletter@epi.org.

From the EPI Blog
Lawrence Mishel and Will Kimball
The Top 1 Percent of Wage Earners Falters in 2013—Was it a Temporary Event?
Joshua Smith
Myths and Facts About Corporate Taxes, Part 2: Will Congress’s Idea of “Base-Broadening, Rate-Lowering Tax Reform” Fix What’s Wrong With Our Corporate Tax Code?
Ross Eisenbrey
Corporations Are Stealing Your Constitutional Rights: Forced Arbitration Clauses
Lawrence Mishel
Chair Yellen Is Right: Income and Wealth Inequality Hurts Economic Mobility
Ross Eisenbrey
Businesses Agree—It’s Time To Raise the Minimum Wage
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