Salaried workers not eligible for overtime often do not receive “current wages” for hours worked in excess of 40. Instead they often earn nothing. That is, a worker was paid a salary based on a 40-hour work week, but was then forced by employers to put in 45 or 50 or 55 hours of actual work with no additional compensation. If such a worker has the hours they’re forced to work cut from 45 to 40 but keeps the same weekly pay, then it is really silly to label this an increase in “underemployment,” and no economist worth their salt would do this.
Federal budget season came and went this year without any budget proposal hitting the floor of the U.S. House of Representatives.
Weak data had convinced many that the Federal Reserve was unlikely to raise interest rates in June, but in recent days multiple Fed policymakers have suggested that an increase should be on the table in the near future. What’s unclear is why.
Mother Jones’ Kevin Drum seems to dislike a New York Times article calling job prospects for young high school graduates “grim.” Along the way, he directs an odd bit of unprovoked snark at us:
I don’t know how EPI measures unemployment, but the federal government measures it in a consistent way every single month.
Raising interest rates is a poor strategy for managing asset bubbles. Low interest rates did not cause the housing bubble of the early 2000s and higher interest rates would have been ineffective at preventing it. To deflate an asset bubble interest rates would have to be raised to levels that would cause enormous damage to the labor market. Fortunately, the Federal Reserve has numerous tools besides rate increases that would be more effective and inflict less collateral damage on the nonfinancial side of the economy.
Neil Irwin wrote a piece on productivity growth in the New York Times that’s making the rounds. It’s a good piece, definitely worth reading.
The Bureau of Economic Analysis reported this morning that gross domestic product (GDP), the broadest measure of economic activity, grew at just a 0.5 percent annualized rate in the first quarter of 2016.
It's been pointed out to me that yesterday’s blog post about a story by NPR’s Chris Arnold targeted too much ire at Arnold himself rather than the phenomenon he was reporting about. I think that’s probably right, and so I apologize to him for that. I was using Arnold’s story as a jumping off point for a discussion of a larger issue, and should have made that more clear. I do think my larger points about the substance of the topic under debate hold.
Trade agreements in recent decades have not been simple good-faith exercises in trade liberalization. Instead, they have exposed some American workers to fierce international competition while locking in rules that expanded protections for others.
The House GOP budget resolution that passed out of committee would double down
on such severe cuts, and yet it couldn’t even get a majority in a Republican-controlled House because it doesn’t call for large enough cuts. Or, to put it just as accurately, it failed because too many in the Republican caucus decided that it wouldn’t do quite
enough damage to the economy. That’s the real story here.
Robert Waterman, Compliance Specialist
Wage and Hour Division, U.S. Department of Labor
Room S–3510, 200 Constitution Avenue NW.
Washington, DC 20210
Re: Proposed Department of Labor (Wage and Hour Division) Rule on Establishing Paid Sick Leave for Federal Contractors (RIN 1235–AA13)
While it has received plenty of deserved scorn, we shouldn’t lose sight of the fact that about half of the ridiculousness of Trump’s overall debt plan actually just mimics pretty conventional DC budget wisdom. The other half brings a new kind of ridiculousness to the table, but these new proposals come with a grain of useful insight embedded in them.
Only an expansive reading of some of Sanders' rhetorical excesses would lead one to think he would pursue policies that radically restricted the access to U.S. markets currently enjoyed by our poorer trading partners’ exports. It is not an uncommon reaction to criticisms of today’s global trade regime to assume that this market access would clearly be significantly reduced if this status quo
were overturned, but that’s far from obvious.
An ambitious national investment in early childhood care and education would provide high societal returns. American productivity would improve with a better-educated and healthier future workforce, inequality would be immediately reduced as resources to provide quality child care are progressively made available to families with children, and the next generation would benefit from a more level playing field that allows for real equality of opportunity.
EPI’s Josh Bivens spoke with “Marketplace” about the need for the Federal Reserve to hold off on raising interest rates amid sluggish wage growth.
Since 2011, the Economic Policy Institute Policy Center (EPIPC) has provided advice and technical analysis of the annual budget proposal of the Congressional Progressive Caucus (CPC).
All eyes will be on the Federal Open Market Committee (FOMC) today as they decide whether or not to follow up December’s interest rate hike (the first since 2006) with another.
The Labor Department reported this morning that 242,000 jobs were added to the U.S. economy in February, up from 172,000 in January.
Data on employment and unemployment in February will be released this coming Friday by the Bureau of Labor Statistics. Notably, this is the last jobs official jobs data we’ll get before the Federal Reserve meets in two weeks to decide whether or not to follow up December’s quarter point interest rate increase with another rate hike.
Testimony of EPI Research and Policy Director Josh Bivens before the U.S. House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law hearing on the impact of Federal rules on the economy.
EPI’s Josh Bivens spoke with public radio’s “Marketplace” about how hourly wages have remained stagnant despite a gradually improving economy.
http://www.epi.org/files/2016/radio-2016-01-29-josh-bivens.mp3From time-to-time, EPI contributes segments for broadcast on Workers Independent News. In February 2016, EPI Communications Director Liz Rose interviewed Research and Policy Director Josh Bivens.
In an interview with public radio’s “Marketplace,” EPI’s Josh Bivens spoke about consumer spending and GDP.
The stakes in how we interpret recent signs on weak productivity growth are huge. If productivity growth is simply a given, and cannot be boosted by further efforts to close the aggregate demand shortfall, this means we’re actually much closer to full employment than otherwise, and, it means that the level of wage growth consistent with a fully healthy economy is closer to 3 percent than 4 percent. And since wage growth is now running around 2.5 percent, we’re getting close to this long-run wage target and hence close to hitting the inflation barrier—that is, crossing the line into economic overheating that will cause prices to rise faster than the Fed’s 2 percent target.
for American workers rose by 2.6 percent in the 12 months ending in December 2015. Over the same time, prices have risen just under 0.7 percent
(held down mostly by falling oil prices). This mean that real
(that is, inflation-adjusted) wages have grown 1.9 percent in that year. Since it is this real, not nominal, wage-growth that influences living standards, shouldn’t we be perfectly happy with this constellation of wage and price inflation? Not really, for a number a reasons.
The economic impact of so-called “right-to-work” (RTW) laws has become a hotly contested issue in recent years. These laws restrict the ability of unions to collect dues from workers whose interests they represent.
Some will argue that last week's hike does not
presage a relatively rapid series of rate increases to follow. We certainly hope not. But because the hike happened despite the lack of any discernible inflationary pressure, we worry that decisions are being driven less by data and more by who has the best access to Fed decision makers.
The Federal Reserve’s decision to begin nudging up interest rates—in the clear absence of any inflationary pressures—is disappointing. Since 2008 the Fed has been the policymaking institution that has most consistently worked to restore the economy to health, even as it had to fight through headwinds imposed by fiscal austerity.
On Wednesday, December 16, the Federal Reserve is expected to announce that it is raising interest rates above zero for the first time in seven years.
A common theme uniting many conservative economic plans is that policymakers in recent years have somehow hamstrung the ability of American business to make profits.