25 years of speaking up for the 99%
Excerpt from Steven Pearlstein’s column in Sunday’s edition of The Washington Post, October 30, 2011:
The Congressional Budget Office came out with an eye-popping report this week showing that the richest 1 percent of households captures 20 percent of the nation’s pre-tax income, up from 10 percent in 1979. During the same period, everyone else’s share — the 99 percent — went down.
But wait a minute? If the CBO report just came out this week, how did the Occupy Wall Streeters know to highlight “the other 99 percent”? Chances are they got it from the Economic Policy Institute, the Washington think tank that this week will celebrate its 25th anniversary.
And it’s not just lefty protesters who turn to EPI for data on wages, income and unemployment. So does just about every economist and economics reporter in the country, whether they agree with EPI’s liberal policy prescriptions or not.
“Really reliable, professional, carefully thought-out,” Kevin Hassett, director of economic policy studies at the conservative American Enterprise Institute, said of EPI’s data and analysis.
Harvard University’s Richard Freeman, arguably the country’s leading labor economist, recalled that he politely declined the invitation to join EPI’s board when it opened in 1986.
The founders — Jeff Faux, Lester Thurow, Robert Reich, Robert Kuttner and Barry Bluestone — were a group of lefty economists and policy wonks who had pried half a million dollars from labor unions and were determined to provide some balance to the one-sided economic debate in Ronald Reagan’s Washington.
“I was very dubious,” Freeman recalled. “I thought they would be excessively political and ideological. It turned out that they were really good at collecting and analyzing data, which people on the right as well as people on the left now rely on.”
I know that until it went online, the latest edition of EPI’s State of Working America was always on my desk, right next to Webster’s Dictionary and the data-filled Economic Report of the President.
It isn’t just the data that give EPI its influence. It’s also its knack for setting and anticipating the agenda.
EPI was worrying about rising income inequality when most Republicans, and many economists, were still claiming it was all just a statistical mismeasurement.
EPI was questioning the whole idea of a “natural rate of unemployment” when then-Federal Reserve Chairman Alan Greenspan and most mainstream economists still believed the only way to prevent inflation was to make sure that 6 percent of workers don’t have jobs.
EPI was worrying about the competitiveness of the U.S. economy long before China had shipped its first container to Wal-Mart.
It was charting the impact of trade on blue-collar wages back when most economists were confident there wasn’t any.
And when most economists were busy touting college education as the antidote to stagnant wages, EPI had the data showing that the wages of college graduates had also begun to flatten out.
With a staff of fewer than 40 and an operating budget of $7 million, EPI now punches well above its weight in Washington, in part by drawing on a network of contributing academics and regional economic think tanks.
In its 25 years, it has had two presidents — Faux, a policy entrepreneur with a felicitous pen and a penchant for industrial policy, and Larry Mishel, a wise-cracking, number-crunching labor economist who was one of Faux’s first hires.
The first big break came in 1988 as Faux and the other EPI founders were fighting an uphill battle to persuade policymakers and the business community that the country was losing its industrial base because of the strategic trade policies of Europe and Japan. Economists back then pooh-poohed the idea, pointing to government data showing no significant change in manufacturing output. But several months after Mishel published a paper saying the Bureau of Labor Statistics was mis-measuring productivity in the sector, the government quietly dropped the series. In Washington’s wonk community, EPI established its statistical street cred.