White House framework calls for a vast increase in immigration enforcement on the backs of DREAMers, while only legalizing 16 percent of the undocumented population
Yesterday the White House one-page framework for a legislative deal to provide a permanent immigration status to DACA recipients was made public, which is in addition to the four-page memo released on January 9 that included the Department of Homeland Security’s priorities for an “immigration deal.” The new one-page memo includes a long list of far-reaching demands to “reform” the immigration system, in exchange for remedying the crisis that President Trump himself imposed on the nearly 700,000 immigrants who were brought to the United States as children by their parents, and who voluntarily availed themselves to the U.S. government after they were promised that they would be protected and not deported by the Obama administration.
President Trump’s latest demands for major changes to the U.S. immigration system include additional legal authority to deport unauthorized immigrants, $25 billion in new funding for more border security and immigration enforcement agents, an end to the diversity visa program, and cuts to permanent immigrant visas for family reunification, among other things. All of this would be in exchange for putting up to 1.8 million DACA recipients and DREAM Act-eligible immigrants on a path to citizenship.
It is notable that the Trump administration is willing to extend the possibility of legalization and citizenship beyond just the current 700,000 DACA recipients, but doing so would still only legalize 16 percent of the total unauthorized immigrant population (1.8 million out of 11.3 million). DACA recipients and potential DREAMers themselves have made it clear that they reject a path to citizenship if it means that their parents and the millions of unauthorized immigrants left behind will be terrorized through a vastly expanded national deportation apparatus and additional border militarization, plus sharp cuts to future immigration levels.
Lessons from today’s GDP report: Long-expected rebound in productivity finally seems to be happening, and no reason for Fed to raise rates in their next meeting
The Bureau of Economic Analysis (BEA) reported this morning that gross domestic product (GDP—the widest measure of economic activity) grew at a 2.6 percent annualized rate in the last quarter of 2017. This was down slightly from the 3.2 percent growth rate of the third quarter of 2017.
Today’s data also lets us examine how the economy grew over the year that ended in December 2017. Between the end of 2016 and the end of 2017, the economy grew by 2.5 percent. This is a faster rate of growth than what prevailed in either 2015 (2.0 percent) or 2016 (1.8 percent), but it is far from unprecedented. Growth was faster in both 2013 and 2014, for example (2.7 percent growth in both of those years).
Importantly, the recent pickup in GDP growth is largely the result of faster productivity growth. Employment growth actually slowed in 2017 while output growth rose, which implies a pickup in productivity (the amount of economic output generated in an average hour of work). As I wrote almost a year ago, this pickup in productivity growth should not come as a surprise—productivity growth has been extraordinarily slow in recent years but it generally reverts to long-run averages. Further, the source of recent productivity growth weakness was clear—it was a continuing casualty of the enormous shortfall of demand caused by the Great Recession and its subsequent slow recovery. As the economy worked off this demand shortfall, it was always quite likely that a rebound in productivity growth would follow.
Davos is Trump’s kind of town
The global punditry is all a twitter this week with the prospect of Donald Trump going to Davos—the chic winter gathering place of the world’s rich and powerful.
The media narrative is that this will be a titanic clash of opposites. Populist, “America First” Trump confronting the high-minded capitalist builders of the global economy.
“It’s going to be a hell of a show,” a Vox writer assures us. “Fox in the Globalist Henhouse?” headlines the New York Times. The internationalist intellectual Niall Ferguson explains that: “Trump is as loathed by the elites of Western Europe as he is by the elites of Manhattan.”
No doubt many of Manhattan’s rich and powerful would agree with Trump’s Secretary of State (the former CEO of Exxon) that the president is a moron. But so what? Rather than drain the Washington swamp he pumped it even more full of Wall Street financiers, international business interests and lobbyists from virtually every sleazebag business interest in the country.
The TCJA, combined with a cynical PR campaign from the GOP and the corporate world, could hit American families hard in the 2019 tax season
Republican congressional leaders and President Trump have made loud claims about how great the recently passed Tax Cuts and Jobs Act (TCJA) will be for typical American families. When will these families be able to conclusively judge the truth of these claims? Not for a long while. The changes from the new tax law took effect on January 1. Companies now have to figure out how much to change workers’ tax withholdings to comply with the new law. To do that, they need guidance from the Internal Revenue Service (IRS).
But this is the same IRS that has seen its budget cut by 18 percent and its workforce cut by 14 percent since 2010. And it’s the same IRS that would send home over half of its workforce if the government shuts down again. While a deal was reached to end the current shutdown, that deal only funds the government through February 8th. All as the 2018 tax filing system ramps up and 2017 tax returns flood into the agency.
Typically, this shouldn’t be much of an issue. A shutdown would usually only push back the timing of withholding changes. The IRS would understandably take more time to issue guidance, and companies would simply implement the new withholdings later in the year.
But the Trump administration has already been pressuring the IRS to aim for speed over accuracy in new withholdings. Further, they would love companies to err on the side of withholding too little and boosting workers’ take-home pay, even if this meant that these workers have to make large payments back to the government in 2019. After all, the salience of the TCJA is as high as it’s going to be, and this administration is not shy at all about putting political expedience over smart policy. And telling workers that the tax cut is already working for them is awfully expedient in a mid-term election year. If the administration continues to focus on speed, then what was already a risk of under-withholding would be augmented by a government shutdown.
Overall union membership rises in 2017, union density holds steady
Newly released Bureau of Labor Statistics data on union membership trends show that union membership as a share of overall employment held steady at 10.7 percent in 2017, with essentially stable membership rates in both the private (6.4 or 6.5 percent) and public (34.4 percent) sectors.
Union membership gains among men offset continued losses among women last year. But, it is important to view these different trends by gender within historical context: union membership in 2017 was roughly equivalent among men (11.4 percent) as women (10.0 percent), compared to 1979 when men were more than twice as likely as women to be union members and comprised 69 percent of union members.
It is difficult to use one year changes in union membership trends to assess underlying dynamics. For one, the small samples involved for particular subgroups produce year-to-year volatility that should not be mistaken for a trend. Second, any change in union density can result from many different factors including the pattern of overall employment growth (whether sectors or occupations that are more heavily union grow faster or slower than average), the success or failure of union organizing drives, the scale of union organizing, changes in workers’ desire for union membership (i.e., demand for collective bargaining), and other factors. An understanding of the dynamics of union membership and representation requires a long-term analysis of detailed trends.
Nevertheless, it is worth squeezing out what is plausibly interesting in the most recent data:
- Union membership (according to the BLS release) rose by 262,000 in 2017, more than the 173,000 additional workers covered by a collective bargaining agreement (hereafter referred to as “coverage”). See Table 1 (which relies on tabulations of the underlying survey data because BLS does not provide gender breakdowns within sectors). The greater growth in union membership than coverage was driven by developments in the private sector where membership growth was triple (164,000) that of the growth of coverage (53,000), centered in professional and service occupations.
Union membership and collective bargaining coverage: By sector, for men and women, annual 2016-17
| Employment | Rates | |||||
|---|---|---|---|---|---|---|
| Sector | All | Union membership | Collective bargaining coverage | Union membership | Collective bargaining coverage | |
| Change, 2016 to 2017 | ||||||
| All industries | 1,781,023 | 261,891 | 171,556 | 0.1% | 0.0% | |
| Men | 870,382 | 282,105 | 230,065 | 0.3% | 0.2% | |
| Women | 910,642 | (20,214) | (58,509) | -0.2% | -0.2% | |
| Private sector all | 1,499,242 | 164,069 | 52,852 | 0.1% | 0.0% | |
| Men | 670,042 | 214,632 | 120,916 | 0.3% | 0.1% | |
| Women | 829,199 | (50,563) | (68,063) | -0.2% | -0.2% | |
| Public sector zll | 281,782 | 97,822 | 118,704 | 0.0% | 0.1% | |
| Men | 200,339 | 67,473 | 109,150 | 0.0% | 0.4% | |
| Women | 81,443 | 30,349 | 9,554 | 0.0% | -0.2% | |
Note: Changes in rates are percentage point changes.
Source: Economic Policy Institute, Analysis of Current Population Survey data.
- Union membership became more common among men: some 32 percent of the net increase in male employment in 2017 went to men who were union members, leading union membership to rise from 11.2 to 11.4 percent of all male employment. Growth of union membership for men was strong in both the public and private sectors and for Hispanic and for non-Hispanic white men.
- Correspondingly, union membership dipped slightly among women because women’s union membership did not rise in the private sector although employment overall did rise—private sector employment growth for women was concentrated in nonunion sectors. Union membership growth, however, was strong among Hispanic women.
Change in union membership and union coverage rates by gender, 2014-2017
| Rates | ||||
|---|---|---|---|---|
| 2014 | 2015 | 2016 | 2017 | |
| All | ||||
| Union membership | 11.1 | 11.1 | 10.7 | 10.7 |
| Bargaining coverage | 12.3 | 12.3 | 12.0 | 11.9 |
| Men | ||||
| Union membership | 11.7 | 11.5 | 11.2 | 11.4 |
| Bargaining coverage | 12.8 | 12.6 | 12.3 | 12.5 |
| Women | ||||
| Union membership | 10.5 | 10.6 | 10.2 | 10.0 |
| Bargaining coverage | 11.7 | 11.9 | 11.6 | 11.3 |
Source: Economic Policy Institute analysis of Bureau of Labor Statistics
- Union membership grew in manufacturing despite an overall decline in manufacturing employment. Union membership was also strong in the wholesale and retail sectors, in the public sector and in information sector (where union membership density rose 1.9 percentage points).
- Union membership density was stable or grew in a number of Southern states: Arkansas, Florida, Georgia, Louisiana, and Virginia with especially strong growth in Texas.
Unrigging the economy to grow the middle class: Pennsylvania takes the lead on overtime
Yesterday, Pennsylvania Governor Tom Wolf became the first state executive to take action to provide workers overtime protections that help guarantee fair pay for hard work, since a 2016 federal rule to do this at the national level was blocked in the courts by corporate interests. As part of his “Jobs That Pay” initiative, Wolf proposed a state rule change that will modernize the state’s overtime policies, providing new or strengthened overtime protections to 460,000 more middle-income workers by 2023 and ultimately putting close to $53 million more each year into Pennsylvanians’ paychecks.
The Keystone Research Center (KRC), a member of the Economic Analysis and Research Network (EARN), advocated for the Wolf administration to take this action. Stephen Herzenberg, KRC economist and executive director, applauded Wolf’s leadership.
On overtime pay, the governor has authority to act without the state legislature. On another vital measure to improve the lives of working families, raising the minimum wage, legislative action is required—and Pennsylvania still lags its neighboring states. Unlike these six contiguous states, the Pennsylvania legislature has failed to increase the minimum wage above the federal level of $7.25.
State and local policymakers should beware preemption clauses
On January 12, 2018, the Maryland legislature successfully overrode Governor Hogan’s veto of a bill granting Maryland workers access to paid sick days across the state. This is great news—it means that nearly 700,000 workers who previously lacked access to paid sick days will no longer have to choose between their health and their paycheck, or even their job. The Maryland legislature’s victory comes after other states, such as Oregon and Rhode Island passed statewide paid sick days laws in in 2015 and 2017.
There is no federal law that provides workers with the right to earn paid leave for sick days or to take time off to care for an ill family member—the federal Family Medical Leave Act simply allows workers to take up to 12 weeks of unpaid leave. In the absence of federal action, with Maryland, nine states have passed paid sick days laws, and five states (and the District of Columbia) have passed paid family leave laws. Local governments, however, have taken up the cause of providing workers with this fundamental need: at least 30 cities and two counties have enacted their own paid leave ordinances in various forms.
But state governments have begun blocking local government efforts to give workers the opportunity to earn paid time off for paid sick days and/or paid family leave through the use of “preemption laws.” “Preemption” in this context refers to a situation in which a state law is enacted to block a local ordinance from taking effect—or dismantle an existing ordinance. The figure below shows that at least 20 states have passed paid leave preemption laws.
Paid leave preemption is on the rise: States passing laws preempting local paid leave laws, January 2004–July 2017
Note: In each column, blue boxes represent paid leave preemption laws passed in the given year. Gray boxes represent paid leave preemption laws in effect (passed in previous years).
Source: EPI analysis of preemption laws in all 50 states
Maryland grants access to paid sick days to 700,000 workers and their families
Today, the Maryland legislature successfully overrode Governor Hogan’s veto of a bill granting Maryland workers access to paid sick days at long last. Coalition group Working Matters estimates that nearly 700,000 workers who previously lacked access to paid sick days will no longer have to choose between their health and their job.
While inaction on paid sick days at the national level continues to erode families’ economic security, a group of cities and states are stepping up for working people and serving as models for jurisdictions throughout the country. Maryland is the latest example and the ninth state to guarantee a minimum amount of paid time for eligible workers to care for themselves or their family when they are sick or need medical care.
Roughly 32 percent of the private sector workforce in the United States has no ability to earn paid sick time. Furthermore, access to paid sick days has historically been far more common among high-wage workers, leaving low-wage workers and their families with little protection when they get sick or need to visit the doctor. This important legislation not only protects workers from lost pay or potential job loss when they or their family members get sick, it also protects the public by keeping sick workers, who feel economically compelled to work, from spreading illness to co-workers and customers.
In a paper released last year, we highlighted some of the costs to workers and their families when they are not given the opportunity to earn paid sick time. By examining estimated spending on essential items for families who lack paid sick days today, we quantified how this lack threatens the economic security of low- and moderate-income families.
Fighting for public sector union rights 50 years after MLK’s assassination
The night before his assassination in April 1968, Dr. Martin Luther King spoke before a group of striking sanitation workers in Memphis, Tennessee as they prepared for a march for civil rights, union recognition, and economic justice. The movement behind the strike started earlier that year, when two Memphis garbage collectors, Echol Cole and Robert Walker, were sucked in by a malfunctioning compactor mechanism on a garbage truck and crushed to death. On the same day, when a heavy rainstorm hit, the city sent 22 black sewer workers home without pay while their white supervisors were retained with a full-day’s pay. 12 days later, more than 1,100 black men from the Memphis Department of Public Works went on strike, demanding recognition of their union, better safety standards, and a decent wage. The sanitation workers were led by garbage-collector-turned-union-organizer, T. O. Jones, and supported by the American Federation of State, County, and Municipal Employees (AFSCME).
Memphis Mayor Henry Loeb fought to break the workers’ strike, and “refused to take dilapidated trucks out of service or pay overtime when men were forced to work late-night shifts. Sanitation workers earned wages so low that many were on welfare and hundreds relied on food stamps to feed their families.” As Michael K. Honey writes in Going Down Jericho Road: The Memphis Strike, Martin Luther King’s Last Campaign, one of the things Loeb was most fervent about opposing was the dues-checkoff provisions that the sanitation workers wanted in their union contract. The workers on strike in Memphis knew that a dues checkoff—whereby union members voluntarily authorize the employer to make regular deductions from an employee’s wages to pay their union dues—was crucial to the union’s survival, especially given that Tennessee had passed a so-called “right-to-work” law, which allowed nonunion members to refuse to pay their fair share of dues but still collect the same benefits as union members. Loeb surely knew that the powers conferred to workers in the union contract—including an increase in black sanitation workers’ wages, protections for black workers from race-based employment discrimination, and a procedure for the black sanitation workers to file grievances against their white supervisors—would become wholly ineffective if the union could not collect dues to support its basic operations. More than once, the city had offered to settle the strike on the condition that dues checkoff be prohibited from their contract—but workers persisted, knowing that the “dues checkoff remained crucial, for without it, the union would not survive.” One of the cofounders of the Community on the Move for Equality, Reverend Malcom Blackburn, even embodied dues checkoff in his call to action.
Our analysis of January 1 state minimum wage changes understated the total increase in wages for workers throughout the country
In December, we published a “snapshot” estimating that 4.5 million workers throughout the country were likely to receive a raise at the beginning of the year as a result of higher state minimum wages going into effect. We estimated that these increases would raise the annual income of affected workers by roughly $5 billion. Subsequently, Mark Perry at the American Enterprise Institute published a blog post critiquing those estimates. He claimed our research methods were flawed and opaque, and that the wage increases for workers impacted by state minimum wage increases in 2018 will be much smaller than our original $5 billion. All of these claims are wrong.
In regards to our research methods, we do make one modeling decision that may strike some as overly optimistic: we assume that new minimum wage levels will largely be enforced. But in regards to the size of minimum-wage-driven raises in 2018 our methods contain one hugely conservative choice. We didn’t fully account for minimum wage changes in New York, and subsequently left out significant wage increases going to workers in New York City and its surrounding counties. We’ll say some more on both of these issues below.
It’s worth noting first that while EPI does not typically publish methodological statements for snapshots—they’re short pieces with a single, informative graphic with minimal accompanying text—the methodology employed in our December snapshot is the same methodology we have used for years in modeling the impact of higher state and federal minimum wages. We’ve published this methodology multiple times, the most recent being this past April in appendix B of our analysis of the proposal to raise the federal minimum wage to $15 by 2024.