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EconomicPolicyInstitute July 3, 2008

Millions will be helped
After months of campaigning by EPI and allied groups, Congress finally enacted a 13-week extension of unemployment benefits in all 50 states and the District of Columbia. The veto-proof June 27 vote is expected to help more than 3 million unemployed workers who otherwise would have exhausted their benefits over the next nine months, and to provide a needed boost to hard-hit local economies. The vote also signals an understanding by members of Congress that the current economic downturn is serious and requires ground-level intervention.

EPI started agitating for the extension in December, when talk of a recession was just emerging. Since then, the Institute has been at the forefront of the campaign, with staff members providing testimony, giving media interviews, writing op-eds and blogs, and conducting research showing that rates of long-term unemployment were already high enough to warrant action. Benefits run out after 26 weeks in most states.

In early June, two weeks before the final vote, EPI urged its email subscribers to contact members of Congress. As EPI Vice President Ross Eisenbrey wrote in the alert, it was time to stop blaming the jobless for their plight. “There are now only 3.7 million job vacancies but 8.5 million unemployed looking for work,” Eisenbrey noted. “The fault is not with the jobless; the problem is a failing economy and the government’s failure to turn it around.”

Fix retirement before Wall Street does
Teresa GhilarducciEPI board member and New School professor Teresa Ghilarducci presented at the Institute on Tuesday a passionate argument for reforming the shaky U.S. retirement system, when she presented her new book, When I’m Sixty-Four: The Plot Against Pensions and the Plan to Save Them. Ghilarducci has crafted an alternative retirement plan, called the Guaranteed Retirement Account (GRA), which guarantees 70% income replacement for all retirees based on a combination of Social Security, pensions, and government-mandated private accounts. Some funding would come from the closing of current tax breaks for 401(k) plans. The GRA is the foundation of EPI’s plan for retirement reform, part of its Agenda for Shared Prosperity. Ghilarducci lamented the continuing abandonment of company pensions and the move to push people to work longer. “We should not go back to an America where retirement is only for the rich,” she said. She added that Wall Street lobbyists are pushing hard for reforms that would benefit brokers and the wealthy. “If we don’t do something,” she said, “something worse is going to happen.”

Poverty worse than stats show
EPI senior economist Jared Bernstein explains how an alternative measure of poverty does a better job of reflecting reality than the official federal statistic in this week’s Economic Snapshot. The chart compares the two measures and illustrates how the alternative measure, which incorporates recommendations of the National Academy of Sciences, shows higher and faster-growing poverty rates.

Woe is the economy
The latest employment numbers released on Thursday provided another dose of bad news, showing June to be the sixth straight month of recorded job losses. As Jared Bernstein writes in his monthly analysis, unemployment remained at 5.5%, and the meager growth in wages was overrun by inflation. “The weak bargaining power of most workers means they are subject to pressures from three sides: declining jobs and hours, slower hourly wage growth, and faster price growth. This punishing combination is lowering their living standards and is surely behind the historically very low readings on consumer confidence.”

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Recovery Is Nowhere Near Accomplished, and the Fed Shouldn’t Tighten Policy Until It Is
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Congress Again Rewards Tax Dodgers with a Tax Cut
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