Media clips
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Since the California law began taking effect, work hours for farm workers have held consistent, Daniel Costa, the director of immigration law and policy research at the left-leaning think-tank Economic Policy Institute, testified in January to the wage board, citing National Agricultural Statistics Service data.
USA Today October 21, 2022 -
The groups at the highest risk of workplace surveillance are prevalent in meatpacking. Animal slaughtering and processing workers are more than twice as likely to be immigrants compared to the entire U.S. workforce. Of the foreign-born workers, 70% are noncitizens, according to the Economic Policy Institute.
Nebraska Examiner October 21, 2022 -
The same UTLA report offers a reason for that: Los Angeles teachers are paid 22% less than other Los Angeles workers with the same level of education. That’s in line with the 23.5% teacher pay penalty the Economic Policy Institute finds nationally. Pay for first-year Los Angeles teachers is $51,440, an amount that does not allow them to afford average rent in any neighborhood of the expensive city they teach in without being rent-burdened—and that’s according to the school district.
Daily Kos October 21, 2022 -
This phenomenon is explored in a new report by the Economic Policy Institute (EPI), whose findings are staggering. From 1978 to 2021, CEOs at the top 350 firms in the U.S. saw their compensation packages grow by 1,460%. For purposes of comparison, the stock market grew by 1,063% during that time, and the top 1% of earners saw their compensation rise 385% between 1978 and 2020 (the latest data available).
Even under the most generous assessment of the value a CEO brings to a company (or to its stock price), the gulf between top executives and the rank and file is extreme. More to the point, CEO pay isn’t really controlled or regulated by anything other than board votes. For an employee who is constantly being ground down to the lowest wage that can possibly be paid, that has to rankle.
“The reason for this mostly lies in the totally dysfunctional wage market in which CEOs reside,” says Josh Bivens, director of research at the EPI and a co-author of the study. “We’re talking about a big enough chunk of money that it actually matters, too.”
The average compensation package for a CEO at one of the U.S.’s top 350 companies last year was nearly $28 million, per EPI’s research. Significantly, very little of that total, only about 10%, was taken in salary, Bivens says, while roughly 80% came in the form of stock awards. (The next time you read about a CEO forgoing his salary amid a corporate crisis, it’s something to keep in mind.)
Partly because of that heavy stock mix, the institute looks at CEO compensation in two ways: the “granted” measure, which is the value of the stock rewards and options at the time they’re given, and the “realized” measure, which is what they’re worth when the stock awards are vested and the options cashed in.
By both methods of computation, top CEOs are killing it. Using the realized measure, they actually averaged an 11.1% increase in pay from 2020 to 2021, when the pandemic brought entire industries to a near halt and millions of Americans were thrown out of work. Reason? The stock market went up, and along with it the value of vested stock awards.
At most public companies, CEO pay is theoretically set by the shareholders themselves. “But the shareholders are usually represented by boards of directors, and in many, many cases, the members of those boards are hand-picked by the CEO,” Bivens says.
As a result, only about 3% of CEO compensation packages ever get turned down, Bivens says. Tim Cook’s deal was recommended against by the Maryland-based Institutional Shareholder Services, which noted that half of it wasn’t tied to a performance-based metric such as Apple’s stock price, and that the stock awards would continue to vest even if the 61-year-old Cook were to retire. It went forward anyway.
“If you get paid $85,000 for a job you’d take at $65,000, you have $20,000 in rents,” Bivens says. “The average top CEO pay is $28 million. We’re asking what would happen if, say, that compensation was cut in half. Would these executives really not show up at work or not work as hard for $14 million?”
It isn’t an idle thought. The notion of top CEO pay is tied to the idea that corporations have to offer such bloated deals because of competition with other companies for those executive minds. But as EPI’s report notes, “They are not getting higher pay because they are becoming more productive or more skilled than other workers, or because of a shortage of excellent CEO candidates.” They’re getting paid more simply because they are.
What might turn that tide? Bivens says that, historically, companies whose workers are unionized tend to rein in the compensation of their executives, in part because those top pay figures often become publicly debated and criticized during labor negotiations. It’s also possible to tweak corporate governance in a way that encourages more direct voting by shareholders on things like CEO packages, diluting the sway of executive-friendly boards.
More broadly, the EPI recommends imposing higher marginal tax rates on the top earners, to “limit rent-seeking behavior and reduce the incentive for executives to push for such high pay.” Another option, the institute’s authors write, is to set corporate tax rates higher for firms that have higher ratios of CEO-to-worker compensation.
“It’s one thing to have an incentive to attract great CEO candidates,” Bivens says. What we’re seeing now is runaway compensation of another order entirely — the kind that ought to make shareholders wonder about the value they’re really receiving.
Capital and Main October 21, 2022 -
In a video that went viral this week, Rep. Katie Porter (D-Calif.) cited an Economic Policy Institute analysis showing how larger corporate profits are behind 53% of the higher prices Americans are facing at gas pumps as well as when buying groceries and paying for other essentials.
Common Dreams October 21, 2022 -
An analysis released in August by the Economic Policy Institute shows teachers’ weekly pay and total compensation have worsened over time compared to other college-educated professionals. The EPI report acknowledged this situation discourages college students from entering teaching careers and makes it more difficult for districts to retain teachers.
K-12 Dive October 21, 2022 -
The big picture: Over 61% of people who work cleaning houses in the U.S. are Hispanic, according to an analysis of census data from the Economic Policy Institute think tank.
Axios October 21, 2022 -
Latinos also are less likely to have access to investing. Latino household wealth lags that of white counterparts, and only 26% of Hispanic households have access to an employer-sponsored 401(k) plan, compared to 37% of Black households and half of white ones, the Economic Policy Institute found.
CNBC October 21, 2022 -
Modern interpretations of the “brand called you” present a trade-off of sorts. Workers are no longer reliant on the fecklessness of an employer that could at any moment pivot, downsize or cut wages. There are heaps of corporate data pointing to those possibilities: Over roughly the last four decades, typical hourly worker pay rose 17.5 percent while productivity rose by nearly 62 percent and C.E.O. compensation by 1,460 percent, according to the Economic Policy Institute.
New York Times October 21, 2022 -
The Washington, D.C.-based think tank Economic Policy Institute estimates that day care in Michigan costs $905 a month for an infant, and $741 for a 4-year-old child. Housing in Michigan on average costs $844 a month, according to the Economic Policy Institute.
MiBiz: West Michigan Business News October 21, 2022 -
Like many observers, Reeves paints a picture of an economy that has failed men. Their labor force participation has fallen sharply, for instance. However, Reeves’s contention that the drop is due to “a one-two punch, of automation and free trade” is undermined by his subsequent concession that no academic consensus exists on these points. Reeves also writes that the “median real hourly wage for men peaked sometime in the 1970s and has been falling since.” But analysts ranging from the liberal Economic Policy Institute to, well, me, have found that, after a lengthy period of decline, men’s pay has rebounded back to historic highs over the past 30 years.
Education Next October 21, 2022 -
The Economic Policy Institute reported that economic consequences of being denied an abortion included a higher chance of living in poverty, a lower likelihood of full time employment and an increase in unpaid debt and financial distress.
The Hill October 21, 2022 -
The CTC originated from the Taxpayer Relief Act of 1997. It started at $400 per qualifying child and was a nonrefundable tax credit. Nonrefundable tax credits reduce the taxpayer(s)’ tax liability and aren’t issued as a tax refund. The Economic Policy Institute stated that the purpose of Congress creating the CTC was to minimize the tax burden of families having more children. It gained momentum and was widely supported by both Democrats and Republicans, which led to an increase of $1,000 per qualifying child of age 16 and under in 2001 initiated by the Bush administration’s tax policy.
Bloomberg Tax October 21, 2022 -
According to the Economic Policy Institute, the average child care worker in the U.S. makes about $13.51 an hour. That’s roughly $30,000 a year, which is less than half of what the average U.S. worker makes at almost $28 an hour.
The Economic Policy Institute says that raising the minimum wage to at least $21 per hour would help retain the workforce and give workers the financial security they need.
News Nation Now October 21, 2022 -
The Virginia Mercury previously cited a 2019 analysis by the Economic Policy Institute that ranked Virginia last in the country in terms of the “teacher wage penalty,” referring to the gap in weekly salaries between teachers and other college-educated professionals. Business.org this year ranked Virginia 49th (behind Arizona and Washington, D.C.) when comparing the average salary of teachers to the average salary for all jobs in the state.
Virginia Mercury October 21, 2022 -
“We have the lowest unemployment rate in the country for African Americans,” said Kemp, which is true based on what has been reported by the Economic Policy Institute, but its map also shows many states that did not report Black unemployment figures. “We’re also in the top ten of the states for Black entrepreneurship in the state of Georgia…we will continue to work with all of those entrepreneurs in the days ahead and working class Georgians.”
BET October 21, 2022 -
If they pull a similar move in 2023, it could be similar to 2011, when the GOP manufactured a debt ceiling crisis that ultimately “led directly to the worst recovery following a recession since World War II,” according to the Economic Policy Institute.
Truthout October 21, 2022 -
“Over the past two decades, there has not been a single minimum wage ballot initiative that has failed, when eventually put to a vote,” Ben Zipperer, Economic Policy Institute economist, said in an email.
Bloomberg October 21, 2022 -
“In terms of things that would lower prices on store shelves, it’s pretty tough to act that quickly,” said Josh Bivens, director of research at the liberal Economic Policy Institute.
Philadelphia Inquirer October 21, 2022 -
A third element was a long-overdue ideological shift in the Democratic Party, especially its presidential wing. Before Biden, economic advisers to Democratic presidents were free-traders, counseling that the nature and location of production was the proper business of the market, not the state. With Biden, voices long in the wilderness on industrial targeting, such as the labor movement, the Roosevelt Institute, and the Economic Policy Institute, have had the heady experience of actually influencing and making policy.
American Prospect October 21, 2022 -
Bottom line: Employers Could Be Quitting On Workers
There is a truth behind the idea of “quiet quitting,” but the truth is that employers are quitting on workers. The evidence points in the direction of workers feeling increased pressure and working too much instead of too little. The Economic Policy Institute has argued that “quiet fleecing” would be a better term.
Forbes October 21, 2022 -
According to a study from the Economic Policy Institute, Colorado teachers earn almost 36% less than other workers with college degrees, the widest such gap in the nation and a full 3 percentage points worse than the next closest state, Virgina. How would you help the state change this and boost salaries for Colorado educators?: Not all teachers work the same hours. According to the World Economic Forum, U.S. teachers spend 998 hours in the classroom per year. Teachers’ prep time and homework from students vary but add more hours. Teachers who work longer hours and produce better results should be rewarded. But the educational system is a monopoly and does not allow this flexibility. More solutions than this one-size-fits-all for rewarding teachers are needed. There is also disparity among teachers and other professions. Degrees in the (science, technology, engineering and math) area considered more rigorous than education degrees. Many times, teachers are teaching subjects they are not even trained to teach. Teachers are also told what to teach and how to teach it; this is vocational at best — becoming technicians rather than professionals. Our teachers should be given the autonomy to use their ingenuity to challenge all students to think, create, innovate. Change is needed in the Colorado public school system.
Daily Camera October 21, 2022 -
As the country deals with inflation and a looming recession, the economy is top of mind for Americans in the 2022 midterm elections. However, when researching candidates, it’s important to remember that policy makers did not cause inflation. Inflation was caused by global and public health issues, like supply chain disruptions due to COVID-19, port shutdowns, a shift of spending from services to goods, and the war in Ukraine. Knowing this, Economic Policy Institute(opens in new tab) President Heidi Shierholz advises voters to elect candidates based on their willingness to boost living standards and eliminate inequalities, which directly impacts the economy.
“[Elected] policy makers don’t have the ability to really affect inflation. They do have the ability to pass policies that ameliorate the harms of high inflation for the people who are hardest hit,” she says. “So things like raising the minimum wage, the expansions of the child tax credit which were in the relief and recovery packages(opens in new tab). Those are the kinds of things that policy makers can do for the people who are getting hit hardest by inflation until inflation comes down. And it is.”
Additionally, union organizing is at its highest point of approval since 1965(opens in new tab). State and local governments, not just the federal government, have the ability to build worker power(opens in new tab) (the Economic Policy Institute has outlined some of the ways(opens in new tab) they can do so). That starts with electing leaders in the midterms who can enact these policies.
Marie Claire October 21, 2022 -
In July 2021 President Joe Biden issued an executive order promoting competition in the economy that encouraged the Federal Trade Commission to impose a national ban or limit on noncompete agreements. The FTC held a workshop on noncompetes the following year. It isn’t clear how any FTC-imposed ban would be enforced. California has a law barring enforcement of noncompete agreements, but a 2019 study by the Economic Policy Institute found that 45 percent of the state’s businesses maintained them anyway. Lower-wage workers are easy to intimidate even when the law isn’t on management’s side. Another problem is that an FTC ban would face a likely legal challenge from the U.S. Chamber of Commerce, which maintains the agency lacks jurisdiction over the matter. “Non-competes have a legitimate place in contract law,” the Chamber’s Sean Heather, senior vice president of anti-trust policy, told The Wall Street Journal in June. Republican FTC commissioner Noah Phillips agrees. But as FTC chair Lina Khan pointed out to the Journal, the rationale for noncompetes “really falls apart” when they’re imposed on low-wage workers.
New Republic October 21, 2022 -
Older households are more likely to be indebted than they were three decades ago and a typical older household held roughly three times as much debt in 2016 as it did in 1989, adjusted for inflation. The increase in financial fragility is highlighted in the forthcoming Older Workers and Retirement Security Chartbook, a research collaboration between The New School’s Schwartz Center for Economic Policy Analysis and the Economic Policy Institute funded by the RRF Foundation for Aging.
Forbes October 21, 2022 -
In capitalist societies, it’s a given that corporations are run for elite owners and investors, not the workers who actually create the value and profits. It’s also a given that corporations will try to pay their employees as little as they possibly can. In 2021, CEO compensation packages at the top 350 U.S. corporations averaged $27.8 million annually, according to a report from the Economic Policy Institute. Overall, CEOs earned 399 times as much as the average worker. In 1965, CEOs by contrast earned only 20 times the average worker compensation. But it’s actually worse for many. According to the Institute for Policy Studies, the 300 largest corporations paying the lowest median wages in 2020 had a CEO to worker pay gap of 670 to 1!
CityWatch LA October 21, 2022 -
But Josh Bivens, the director of research at the left-leaning Economic Policy Institute, said that inflation has been ubiquitous “across every advanced economy” since the pandemic began and he didn’t believe the American Rescue Plan was a major contributor to inflation. An analysis published in August by Bivens, Asha Banerjee, and Mariia Dzholos examined the United States’ core inflation from December 2020 to May 2022 and compared it to core inflation in other Organization for Economic Cooperation and Development (OECD) countries. To calculate the rate of acceleration in each country, the researchers took the difference between the “post-pandemic” core inflation and the “pre-pandemic” core inflation using data from 2018 and 2019.
Bivens also pointed to the Federal Reserve Bank of San Francisco’s research on housing inflation and said that price gains in the United States were mostly driven by pandemic-related events that would have occurred without the stimulus — like supply chain disruptions and increased demand for housing. And although he said he believed the American Rescue Plan had inflationary impacts, the trade-off was necessary to stave off higher unemployment numbers.
“We could have kept inflation much lower in the US if we had raised interest rates through the roof beginning in early 2021 and hadn’t done the stimulus package,” Bivens said. “But there would be a huge cost to that. We’d be looking at a very different labor market with much higher unemployment.”
VOX October 21, 2022 -
A recent special issue of The Journal of Law and Political Economy casts a jaundiced eye on the convenient fiction that employment contracts reflect the free choices of employees. The issue was conceived and edited by Lawrence Mishel, the former president of the Economic Policy Institute.
“This is Econ 101 silliness, that any transaction between consenting adults is optimal,” Mishel said. “The basis of at-will employment is that if a worker can quit then an employer has to be able to quit a worker. That’s the logic. If you articulate it like that, people would be something between horrified and laughing.”
The main power workers do have is the threat to quit. But, Mishel wrote in his introduction to the special issue, “The death on the job of eight workers at a Kentucky candle factory and six in an Amazon warehouse when tornadoes struck the Midwest in December 2021 vividly illustrates the ineffectiveness of quitting, either as a constraint on employer exploitation or as a protection of basic worker freedoms.” (The final death toll in the Kentucky factory was nine.)
New York Times October 21, 2022 -
According to the Economic Policy Institute, in 2019 teachers made about 20% less than other college-educated workers with similar experiences.
WVUA 23 October 21, 2022 -
An April analysis by the Economic Policy Institute, a progressive economic think tank, put numbers behind the theory that corporate pricing is an inflationary driver.
Prices have risen at an annualized rate of over 6% since 2020’s second quarter compared with 1.8% during the pre-pandemic business cycle of 2007-2019. EPI broke prices in the non-financial corporate sector into three main components: labor costs, non-labor inputs and profit margins.
Over half of the Covid recovery era increase “can be attributed to fatter profit margins” while labor costs represented less than 8%, the report’s author, Josh Bivens, wrote.
That’s nearly an exact flip of what was seen in the decades leading up to Covid, the report found.
“Companies are taking higher inputs, putting a bigger markup on them than they were previously, then passing that on to customers,” Bivens said.
Skyrocketing demand for durable goods coupled with supply chain problems has created “enormous pricing power” for companies that had stock on hand, Bivens said. Typically corporations attempt to widen margins by suppressing wages, but that changed during the Covid recovery, he added.
The situation is ever-evolving. Wages are falling, which should mean people are buying less and eroding corporations’ pricing power, Bivens said, and some supply chain issues are resolving themselves – the cost of some shipping containers is down by 64% from the same week last year.
Guardian October 21, 2022