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EconomicPolicyInstitute February 10, 2012

EPI continues to draw attention to the nation’s jobs crisis, economic inequality, and the spread of anti-worker policies.

EPI on the jobs crisis

After last week’s better-than-expected employment figures, top media outlets—including NBC Nightly News, New York Times, Los Angeles Times, CNNMoney, National Journal, McClatchy, International Business Times, and Daily Kosturned to EPI to ascertain when America’s families will start to feel the progress.

  • During last Friday’s edition of NBC Nightly News, EPI labor economist Heidi Shierholzsaid the country needs many more jobs reports like last week’s—and better—before the millions of unemployed workers will notice improvement.

  • The New York Times’ Paul Krugman expressed similar sentiments in Monday’s column, “Things Are Not O.K.”:

“That said, our economy remains deeply depressed. As the Economic Policy Institute points out, we started 2012 with fewer workers employed than in January 2001 — zero growth after 11 years, even as the population, and therefore the number of jobs we needed, grew steadily. The institute estimates that even at January’s pace of job creation it would take us until 2019 to return to full employment.”

  • To National Journal’s Michael Hirsh, Shierholz iterated the severity of the last recession’s impact on the labor market, saying, “We have never seen unemployment this high for this long.” Jobless rates have exceeded 8 percent for exactly 36 months, or three years—compared with 27 months during the recession of the early ’80s.
  • To The Los Angeles Times’ Don Lee, Shierholz emphasized that while January’s employment report was a welcome surprise, it should not be seen as a surefire sign of sustained progress. “It was out of context with other things we’ve been seeing, so we can’t be confident that this is the new state of things,” said Shierholz.
  • Timothy Noah of The New Republic used EPI’s research to explain why talk of cutting unemployment benefits is premature:

“Heidi Shierholz of the Economic Policy Institute, a liberal nonprofit, weighs in with the news that right now would be a uniquely terrible time to cut unemployment benefits. That’s because the share of the unemployed who have been out of work for more than six months is 42.5 percent. That’s 25 percentage points higher than it was before the 2007-2009 recession, and about what it’s been for the past two years.”

More jobs available to job seekers

Tuesday’s release of the job-seekers ratio (the ratio of unemployed workers to job openings) by the Bureau of Labor Statistics provided more signs that the labor market is gradually improving, with the number of job openings increasing by 258,000 in December. While there are 13.1 million unemployed workers, the number of job openings now totals 3.4 million, for a ratio of 3.9-to-1—an improvement from the November ratio of 4.3-to-1. By comparison, the highest this ratio ever got in the early 2000s downturn was 2.8-to-1.

What does construction have to do with it?

This week’s Economic Snapshot showed the construction industry is not to blame for the country’s high unemployment rate. The bursting of the housing bubble and the need to shift unemployed construction workers into new fields (which takes time and training) are frequently pinpointed as the main culprits. However, higher than average construction-sector unemployment is only responsible for a trivial portion of the overall rise in unemployment between 2007 and 2011—and is not what now prevents unemployment from falling more rapidly.

While there were severe job losses in construction and construction still has very high unemployment, construction unemployment did not fuel the rise of unemployment to 10 percent and it does not explain why it currently exceeds 8 percent. There would be very high unemployment even if we could set aside the high unemployment of construction workers. To begin to solve the jobs crisis, we need more job openings and more jobs in nearly every sector. And a wide array of policies can make that happen, including monetary policy, housing policy, fiscal policy and exchange rate policy.

EPI provides essential research on the nation’s troubling economic inequality

This week,The New York Times’ Paul Krugman, in a series of posts on his blog, The Conscience of a Liberal, rebutted flawed conservative talking points that diminish the severity of today’s income inequality. In a post on Sunday, Krugman said, “You could not imagine a similar level of statistical dishonesty from, say, The Nation, or Washington Monthly, or EPI.” He then used EPI’s research and graphs throughout the week and in today’s column to show how less-educated Americans are falling further and further behind.

EPI exposes the negative effects of right-to-work laws

While last week’s Super Bowl in Indianapolis helped focus attention on the negative impact right-to-work (RTW) laws could have on Indiana’s economy, the issue remains a topic of contentious debate. As other states, particularly New Hampshire, consider adopting similar legislation, not only are workers’ rights at stake, but so is the health of state economies.

In Right to Work: A Failed Policy, A New Hampshire Update, political economist Gordon Lafer builds upon his earlier research and provides an overview of new evidence that RTW laws have failed as economic development strategies—and explains why RTW would likely harm New Hampshire.

Media outlets such as The Rachel Maddow Show, The American Prospect, and Think Progress, have consistently looked to EPI for reliable facts and statistics explaining the economic effects of right-to-work legislation.

  • Television host Rachel Maddow used an EPI graph to dispute the spurious job-creation rhetoric of proponents of right-to-work laws.
  • From The American Prospect: “Only one state has passed right to work since NAFTA: Oklahoma in 2001. (Before that, the most recent was Idaho in 1985.) About a year ago, Lafer and economist Sylvia Allegretto published a report for the Economic Policy Institute exploring just what had happened in the decade since Oklahomans got their ‘right to work.’ The results weren’t pretty.”

EPI on the Hill

On Wednesday, EPI macroeconomist Josh Bivens presented the findings from his report, The “Toxics Rule” and Jobs: The job-creation potential of the EPA’s new rule on toxic power-plant emissions, before the Subcommittee on Energy and Power of the House Committee on Energy and Commerce.

In the report, EPI macroeconomist Josh Bivens finds that the Environmental Protection Agency’s finalized national standards on mercury, arsenic, and other toxic air pollutants from power plants will have a slightly positive impact on job growth, generating roughly 117,000 jobs by 2015. In this update of an earlier study that analyzed the likely job impacts of the proposed version of the toxics rule, Bivens explains the “toxics rule” would primarily benefit the economy through large improvements to health and quality of life, while also having positive job-creation effects.

“The current job market slump is not a reason to delay the implementation of the final toxics rule,” said Bivens.  “In fact, the troubled economy is a good reason to implement it quickly.”

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