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EconomicPolicyInstitute June 25, 2010

Millions of unemployed workers stand to lose their unemployment insurance (UI) benefits as a result of Congress’ failure to approve a measure that would maintain extended benefits, beyond the standard 26 weeks, to long-term unemployed workers.

As of June 19, 903,000 workers had lost their benefits because of Congress’ failure to act. That number is set to rise to more than 2 million workers by July 3. To provide an ongoing reminder of the growing number of people who are falling through the safety net at a time that long-term unemployment is at record highs, EPI has posted a running count on our Web site of the number of workers who have lost UI benefits.Visit EPI.org for a weekly update.

As Economist Heidi Shierholz noted in her latest analysis of monthly unemployment data, nearly half of all unemployed workers have been unemployed for more than six months and would have exhausted their standard 26 weeks of unemployment insurance.

China still needs to revalue its currency
As Senior International Economist Robert Scott has shown in his research, a major factor contributing to the imbalanced trade between China and the United States is China’s manipulation of its currency, which has kept the price of Chinese exports artificially low. Although China recently pledged to adopt more flexible currency policies, Scott said that would not be sufficient to ensure that the Chinese yuan will increase in value.

In an analysis published on EPI.org, U.S. Jobs Depend on China Revaluing its Currency Now, Scott stressed that Chinese currency manipulation has cost the United States at least 1 million jobs, and that China has a long track record of not allowing its currency to rise significantly unless it is faced with the threat of real trade sanctions.

“The world economy cannot afford to wait another three years for China to revalue, nor can we depend on China’s central bank to act responsibly,” Scott wrote. “Congress must set a firm target and deadline for China to achieve a 40% revaluation of its currency.”

Nine years of dismal wage growth
A new analysis of wage trends for high school and college graduates by EPI President Lawrence Mishel shows that wages have stagnated since the year 2000. Inflation-adjusted wages for workers holding a bachelor’s degree but no advanced degree were $1,030 per week in 2000 and declined slightly to $1,025 per week in 2009.

Mishel notes that this wage stagnation cannot be blamed simply on the current recession since the country was in a period of economic expansion between 2002 and 2007. Now, with unemployment expected to remain above 8% into 2012, it will likely be many years before college graduates – or any workers – see substantial wage growth, Mishel noted.

EPI in the news
EPI Vice President Ross Eisenbrey and former U.S. Secretary of Labor Ray Marshall co-authored an op-ed in The Hill that outlined the need for a new commission to oversee employment-based immigration. The authors note that by regularly evaluating the flow of immigrant workers, the United States would be better able to adjust immigration policies to current labor market conditions. EPI co-founder and board member Robert Kuttner published an op-ed in The Huffington Post, explaining why the United States has “more urgent business than cutting the deficit” and why the most effective way to reduce the deficit would be to create more jobs.

“Yes, it is too big,” Kuttner said of the deficit. “But the best and least painful way to get it under control is to put America back to work, so that more workers and businesses are paying taxes again.” The Minneapolis Star Tribune and Minnesota Daily both cited Algernon Austin’s recent paper on Unemployment by Metropolitan Area and Race, which showed that Minneapolis has the largest racial unemployment gap of any metropolitan area in the United States.

From the EPI Blog
Lawrence Mishel and Will Kimball
The Top 1 Percent of Wage Earners Falters in 2013—Was it a Temporary Event?
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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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