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.
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.
This piece originally appeared in the Wall Street Journal’s Think Tank blog.
Our friend and former colleague Jared Bernstein has mounted a small but strategic retreat in the campaign to have the Fed continue focusing on full employment.
1. Are poor retirees and savers harmed by low interest rates?
In general, no. Almost by definition, someone who is poor cannot be hurt much by low interest rates.
Policymakers and candidates for office have reacted to rising inequality and near-stagnant wages in recent decades by promising to either cut or hold the line on federal taxes for “middle-class” families (and they tend to define “middle-class” awfully liberally, often lumping in those with incomes higher than 98 percent of American households).
Last Thanksgiving I wrote a blog post in the “how to argue with your relatives at Thanksgiving” genre, providing some hard numbers for people who didn’t want to let their conservative relatives spout nonsense about economics with impunity at the holiday dinner table.
Friend and former colleague Jared Bernstein made a defense
of the ACA excise tax on expensive employer-provided health insurance plans a couple of days ago. It’s about as good a defense as there is of the excise tax, but at EPI we’re still largely unconvinced.
EPI’s Research and Policy Director Josh Bivens spoke with ABC 7 News (Washington, D.C.) about the implications of the upcoming 2015 debt ceiling debate.
A bit over four years ago, the U.S. economy threatened to breach the legislated (and totally arbitrary) national debt ceiling. There was no economic sign (high interest rates, for example) that argued that public debt was too high, and there were many economic signs that such debt was actually too low.
The Affordable Care Act is making the U.S. health system much more efficient and fair. One provision of it, however, remains controversial, even among those strongly supportive of the overall law.
This piece originally appeared in the Wall Street Journal’s Think Tank.
The Affordable Care Act took enormous strides toward providing access to health-care coverage to the tens of millions of uninsured Americans and reining in the skyrocketing costs of health care that heavily pressured households and public budgets, addressing what we consider the most glaring shortcomings of the U.S.
I’ve been arguing for the past year that until nominal wage growth picks up considerably, the Federal Reserve has little to fear about price inflation being pushed above its 2 percent target. The logic of focusing on wage growth is pretty easy to explain.
Today’s decision by the Federal Reserve to keep short-term rates unchanged is welcome. The data clearly indicate that much slack remains in the economy and inflation is not a danger the Fed needs to be worried about right now.
In the debate over the relationship between economy-wide productivity and typical workers’ pay the numbers are clear: typical workers’ pay hasn’t come close to keeping up with productivity, and a wide gap between the two has developed.
The case against the Federal Reserve raising short-term interest rates at the end of the Federal Open Market Committee meetings Thursday is so clearly strong that is should carry the day. The point of raising rates is to rein in an overheating economy that is threatening to push inflation outside the Fed’s comfort zone. But inflation has been running below the Fed’s target for years–and its recent moves have been down, not up.
September 10, 2015 | By Josh Bivens
| Economic Snapshot
Between 2000 and the second quarter of 2015, the share of income generated by corporations that went to workers’ wages (instead of going to capital incomes like profits) declined from 82.3 percent to 75.5 percent.
EPI Research and Policy Director Josh Bivens spoke with the Wall Street Journal about why the Federal Reserve shouldn’t raise interest rates.
The data series and methods we use to construct our graph of the growing gap between productivity and typical worker pay best capture how income generated in an average hour of work in the U.S. economy has not
trickled down to raise hourly pay for typical workers.
Recent volatility in stock markets in the U.S. and globally
has led many economic observers to conclude that the Federal Reserve is less likely to begin raising short-term interest rates at its September meetings. I’ve been on Team Don’t Raise for a while now, but I’m not excited about those joining the cause in light of recent stock market swings.
The stock market has taken a hit in the past few days, with concern over the Chinese economy driving a big selloff. How worried should we be? The short answer is: not very.
Catherine Rampell wrote a piece having some fun with the bidding war among GOP candidates about how much they can promise to raise economic growth rates.
In the Washington Post Fact Checker column today, Glenn Kessler got really exercised about Bernie Sanders’ totally accurate description of a Congressional Budget Office (CBO) report on job losses that will occur if spending caps in the Budget Control Act (BCA) are not loosened in coming years.
Today’s report that gross domestic product (GDP) rose at a 2.3 percent rate in the second quarter of 2015 is clearly an improvement over the 0.6 percent growth in the first quarter, but it indicates that growth for 2015 is likely to be disappointing.