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EconomicPolicyInstitute June 30, 2009

New research from EPI outlines ways to improve early childhood education, collective bargaining in the workplace, and retirement savings plans.

Broader, Bolder Approach to Education
On June 25, The Broader, Bolder Approach to Education campaign recommended a more comprehensive assessment to replace a system narrowly focused around math and science and a widespread practice of “teaching to the test.”

The report, part of an effort to address the link between social and economic status and learning, explains why the No Child Left Behind Act of 2001 placed too much focus on standardized tests to measure student performance. It says that an accurate measure of student achievement must also take into account performance in the arts, physical health and fitness, along with the community institutions that provide early childhood and after-school care. The report was authored by three former assistant secretaries of education: Thomas Payzant, Christopher Cross, and Susan Neuman, as well as EPI research associate Richard Rothstein.

Canada as a model for first-contract arbitration
While many workers are fighting for the right to form unions, a successful union election is often not the end of the battle. In recent years, most U.S. employees who have managed to form new unions have still been unable to bargain first contracts with their employers in a timely way, as companies use stalling tactics to effectively uphold the status quo. One widely advocated solution is first-contract arbitration, which gives a new union or the employer the option of entering binding arbitration when the parties cannot resolve their first collective bargaining session. EPI’s June 25 Issue Brief, First-Contract Arbitration Facts: The Canadian Experience, outlines how this practice is more common in Canada, where it has been used successfully to help union employees win contracts and could be used as a model for win-win bargaining in the United States. The paper, which was co-authored by EPI Vice President Ross Eisenbrey, notes that first-contract arbitration has been used without weakening employers or the overall economy of Canada.

Obama retirement plan fails to address core problems
The current retirement system in the United States is “wasteful, unfair, and ineffective and will leave most Americans at risk of facing a choice between poverty and working into old age,” EPI economist Monique Morrissey wrote in Obama Retirement Plan Falls Short, a June 26 review of the planned reforms indicated in a recent Treasury Department white paper. Morrissey said the plan offers minor tweaks where major overhauls are needed and fails to address some of the core problems with the existing system, including the great risk associated with 401(k)s and IRAs and the decline of employer-provided pensions. While the Treasury report highlights the low personal savings rate of recent years, Morrissey writes, “there is no mention of the role employers have played in shrinking retirement by abandoning pensions and shifting the burden to individuals.”

Unemployment still rising? Don’t blame the stimulus
As economists await new June unemployment data to be released on July 2, EPI President Lawrence Mishel points out that the levels of joblessness this year have far surpassed forecasts from late last year. Mishel notes that the consensus among economists last November was that unemployment would reach 7.7% by the end of 2009. As recently as March, their forecast was for unemployment of 9.2% by the end of the year, a level that was surpassed in May, when nationwide unemployment reached 9.4%. “This is also worth noting when judging the success of the stimulus,” Mishel writes, noting that the stimulus package has prevented unemployment from rising even higher. “When the Obama administration started planning its budget and designing the stimulus, it didn’t fully see the crash course the country was on.”

In a June 26 column, The New York Times’ Bob Herbert addressed the problem of mounting unemployment even after the recession officially ends, and quoted Mishel warning about the impact of widespread unemployment on children. “I believe this is going to leave a permanent scar on a generation of kids,” Mishel says.

Also in the news
A Chicago Tribune story on the trend toward smarter and more cautious shopping also quoted Mishel saying this development boded poorly for a speedy turnaround. “It’s a trend toward people deleveraging their households,” said Mishel. “It augurs, along with the implosion of wage growth, a very slow recovery, when we have one.

As critics of universal health care coverage maintain a reform to the existing system would be prohibitively costly, CNN’s Money Web site set the record straight, citing EPI’s argument that the establishment of a public health care plan would reduce total national health spending over time. Quoting Why a public health insurance option is key to saving costs, published on EPI.org, CNN’s report, Obamacare: Cheaper than you think, stated that independent research “has consistently found that a public plan would save money and result in better health outcomes by providing all Americans regular access to health care.”

From the EPI Blog
Joshua Smith
Myths and Facts About Corporate Taxes, Part 3: Are American Companies’ Profits Trapped Overseas?
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High-income Households Pay a Large Share of US Taxes—But This Doesn’t Make Our Tax System Progressive
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
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