The final rule implementing President Obama’s executive order on fair pay and safe workplaces has been issued, along with guidance from the Department of Labor. This is a big deal, affecting as many as 28 million employees in the workforce of hundreds of thousands of government contractors.

The executive order puts in place a commonsense principle: when choosing which companies to do business with, choose the ones that follow the rules rather than the law breakers. Tax dollars should go to contractors with a record of integrity and business ethics, and should not be spent on bad actors. The executive order makes it clear that violations of labor law are an indication of bad ethics and a lack of integrity that must be considered when contracts are awarded.

As part of the contract approval process, federal contractors will have to reveal to the contracting agency any labor law violations they have been found guilty of committing in the previous three years. An agency can refuse to grant a contract to a company that has not resolved its violations. Today, by contrast, it is perfectly normal that a company with several OSHA violations, a National Labor Relations Act violation, and a judgment for wage theft and overtime pay violations could win a $200 million contract from the Department of Transportation or the Defense Department. In fact, the GAO found that almost two-thirds of the 50 largest wage-and-hour violations and almost 40 percent of the 50 largest workplace health-and-safety penalties issued between FY 2005 and FY 2009 were made against companies that went on to receive new government contracts.

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The White House is making one last push for passage of the Trans-Pacific Partnership agreement, most likely during the lame duck session of Congress, after the elections but before the end of the year. This is despite the fact that Democratic presidential nominee Hillary Clinton opposes the TPP, as did Bernie Sanders, her rival in the primary, and as do the majority of Democratic members of Congress.

Let’s review the basic facts. Growing imports of goods from low-wage, less-developed countries, which nearly tripled from 2.9 percent of GDP in 1989 to 8.4 percent in 2011 (as shown in Figure A, below), reduced the wages of the typical non-college educated worker in 2011 by “5.5 percent, or by roughly $1,800—for a full-time, full year worker earning the average wage for workers without a four-year college degree,” as shown by my colleague Josh Bivens.

Overall, there are nearly 100 million American workers without a 4-year degree. The wage losses suffered by this group likely amount to a full percentage point of GDP—roughly $180 billion per year. Crucially, trade theory and evidence indicate strongly that growing trade redistributes far more income than it creates. The modesty of net benefits from trade is highlighted by the U.S International Trade Commission report that recently estimated that the TPP would generate cumulative net gains of $57.3 billion over the next 16 years, or less than $4 billion per year.

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The U.S. economy has staged an impressively steady (if too slow) recovery from the Great Recession.  But more than 7 years in, genuine full employment has not been reached—and until it is there is no reason for the Federal Reserve to begin the process of reining in economic growth. This is frustrating to many central bankers, who have traditionally seen their primary job as making sure that the economy does not grow too fast and generate wage and price inflation. But the economy has decisively changed, and it is sustaining growth, not restraining it, that has become the central problem to be solved. The old school of central banking that demanded comparatively hair-trigger responses to inflation is based on the experiences of the 1970s. Today’s central bankers should instead pay a lot more attention to the 1990s.

Today’s unemployment rate sits at 4.9 percent. This represents tremendous progress from the late-2009 unemployment peak of 10.0 percent. And many policymakers think that 4.9 percent unemployment clearly constitutes full employment—the lowest unemployment can fall without sparking an unsustainable spiral of wage and price inflation. But there is very little evidence that this is the case. For example, between 2005 and 2007, the unemployment rate averaged 4.8 percent, yet inflation-adjusted wages for the large majority of American workers fell in those years. And since the recovery from the Great Recession began, both wage and price growth have fallen well below targets the Fed sets for a healthy economy. So the key question is why is there pressure to raise rates ahead of data indicating any swell of wage and price growth pressure?

The answer is largely: the 1970s. The worry is that the rapid increase in inflation that occurred in that decade, with wages and prices chasing each other upwards for a long spell of time, tells us that inflation can seem quiescent but then leap forward quickly. This 1970s wage/price spiral is the primary episode that informs many central bankers’ thinking on why they must always keep a firm hand on the reins of inflation.

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The top 10 H-1B employers all use the program to send American jobs offshore. All of the firms are leaders in using the offshore outsourcing business model to sell information technology (IT) Services. Contrary to what some have claimed, not all of the top H-1B offshore outsourcing companies are Indian companies or headquartered in India: Five of the firms have their headquarters in India, four are headquartered in the United States, and one is headquartered in Ireland. But all of the top 10 have a common business model with large workforces in India and other low-cost countries.

In 2014, the U.S. government granted these ten firms 25,227 new H-1B workers, nearly 30 percent of the 85,000 annual quota.

And 2014 was not an unusual year. Over the ten-year span from 2005-14 those offshoring firms brought in a staggering 170,535 new H-1B guestworkers (see Table 1). Virtually all of these jobs can, and should, be done by American workers or lawful permanent residents (i.e., permanent immigrants already living in the United States). In fact, in many cases American workers were already doing the job, and they are being directly replaced, often being forced to train their foreign guestworker replacements as a condition of severance agreements. As Craig Diangelo, an American worker who was forced to train his H-1B replacement put it, “The sad part is that my job is still there… It didn’t go away. I went away.”

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The Department of Labor has issued an update to its overtime rules that will bring an additional 12.5 million salaried employees under the exemption threshold, the level below which they are guaranteed overtime pay if they work more than 40 hours in a week, regardless of their job title or duties. The Department of Labor estimates that about 4 million employees will gain the right to overtime pay for the first time, and 8 million more will have their right to overtime pay strengthened.

Business groups know that with wages stagnant and profits at all-time highs, they are unsympathetic opponents of the rule, so they have been focusing attention on non-profits. The Society of Human Resources Management, for example, has adopted Operation Smile, a non-profit that helps coordinate cleft palate surgeries in less-developed countries, as its poster child. An Operation Smile executive testified in the U.S. Senate against the new overtime rule, claiming that it would raise the organization’s costs dramatically and reduce its ability to deliver cleft palate surgeries:

“Yet still, this proposed update will increase our payroll cost by nearly $1 million annually affecting over 50 percent of our workforce. This is not a financial cost we can absorb. Considering that a cleft lip surgery costs an average of $240, this would mean nearly 4,200 fewer surgeries provided globally each year.”

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This post originally appeared in Democracy.

This election will be different, not only because of the stark departure of Donald Trump’s candidacy from any usual political convention, but also because the current economic debate is unlike any in recent memory. This was further elucidated by the plans each candidate laid out in Michigan this week. It is noteworthy, first of all, that both candidates have joined in calling for greater infrastructure spending, have abandoned the traditional approach toward trade and opposed the Trans-Pacific Partnership (TPP), have proposed subsidizing child care expenses, have highlighted wage stagnation, and have each claimed to be able to provide faster economic growth than the other.

It would be pointless, however, to delve into precise policy details without first commenting on the disturbing nature of the Trump candidacy. Among the least of his campaign’s problems is that it fails to elaborate on any of its positions or provide any kind of science or data, that would allow a proper assessment of its proposals. Trump has offered many broad ideas about taxes, but the details are strikingly few. Similarly, Trump’s budget plans just don’t add up: He wants more military spending, more infrastructure spending, and no cuts to Medicare or Social Security, along with huge tax cuts—all while claiming he would still move toward a balanced budget. Of course, most problematic is Trump’s bigotry and misogyny, and the egregious character flaws he displays almost daily: authoritarianism, dishonesty, volatility, and a lack of compassion.

But setting all that aside for the moment…

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A recent Bloomberg View op-ed and Politico report have raised questions into whether Melania Trump, a Slovenian immigrant, former supermodel, and wife of the current Republican presidential candidate Donald Trump, was employed legally in the United States in the mid-1990s while she was in a temporary visa status. (The Washington Post also has a good Q-and-A-style rundown of the issues involved.) The op-ed and reports analyzed Ms. Trump’s past statements about her immigration status and juxtaposed them with the fact that it appears she was employed as a model during that period. If Ms. Trump was in the United States with a lawful immigration status and that status authorized her to be employed (for example, if she held an H-1B visa), then there’s really no issue here to discuss. But Ms. Trump’s response on Twitter to the Politico report did not answer the main questions that were raised: what was her visa status and did it authorize employment?

Since the reports were published, Ms. Trump’s former modeling agent has told the Associated Press that he sponsored an H-1B visa—a temporary work visa that allows employment in the United States for up to six years—for her in 1996. But photos she modeled for which have recently surfaced appear to have been taken in the United States in 1995. Without knowing more or being able to look at her immigration records on file at the State Department and Department of Homeland Security (which Ms. Trump could ask for and release, if she wanted to), it is reasonable to conclude that if she was in fact employed in 1995 and 1996—before she was issued an H-1B—it’s entirely possible that she was unlawfully employed while in the United States on a B-1 business visitor visa, a B-2 tourist visa, or a combination B-1/B-2 visa. Those visa statuses don’t permit employment, although a B-1 status might permit certain business activities (including a single, unpaid photo shoot) as long there is no payment from a U.S. source. But even in the case of a B-1, working for an extended period in the United States as a model would raise serious questions under U.S. law.

We will probably never get a final answer on this, but the situation raises a more important issue: there is a severe and troubling lack of government regulation, oversight, and enforcement when it comes to U.S. temporary (also known as “nonimmigrant”) visa programs.

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Republican presidential nominee Donald Trump gave an economic policy speech yesterday. Besides peddling his standard trade scam, Trump doubled-down on one of his favorite tax scams, and unveiled an entirely new scam.

The speech itself was wrapped in the guise of global economic “competitiveness,” a mostly meaningless term which my colleague Josh Bivens and I will expand further on in an upcoming paper. Trump misleadingly claims that U.S. firms face the highest taxes in the world, and therefore his plan slashes the corporate income tax rate from 35 to 15 percent. Since capital income is heavily concentrated at the very top of the income distribution, and the corporate income tax largely falls on the owners of capital, this is a steeply regressive tax cut.

But Trump would go one step further, creating an enormous tax loophole for the rich by applying his 15 percent corporate rate to “pass-through” entities as well. Pass-through entities are businesses whose income are not taxed at the corporate level, but rather passed through entirely to the businesses’ owners and then taxed at the owners’ individual income-tax levels. High-income households can easily avoid paying their full income tax bill by reclassifying their income as pass-through income. This loophole allows Trump to claim that he is closing the carried interest loophole, while actually lowering the rate that hedge fund managers would pay from 23.8 percent to 15 percent. Incidentally, this loophole has already been tested, which proved disastrous for Kansas Governor Sam Brownback. So disastrous in fact, that Kansas primary voters have ousted more than a dozen Brownback-aligned incumbents in response.

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In a story in the Wall Street Journal last Friday, reporter Eric Morath notes that the recovery from the Great Recession has been historically slow. “In terms of average annual growth,” he writes, “the pace of this expansion has been by far the weakest of any since 1949.” Missing from this story is the fact that our historically weak recovery has been accompanied by historically deep cuts in government spending. The figure below compares the strength of expansion for each recovery since 1949 with changes in government spending (it includes data on the strength of each expansion, as reported by Morath). You can see that almost every other recovery was accompanied by an increase in federal, state, and local government spending.

During a recession, changes in government spending have a “multiplier effect” on output and income: each dollar of additional spending increases—and each dollar cut spending decreases—GDP by much more than one dollar. The Great Recession of 2008-2009 was the worst on record since the Great Depression of the 1930s, in terms of both total decline in real GDP, and total increase in the unemployment rate between the previous peak and the beginning of the subsequent recovery. The economy was in a very deep hole in 2009, and had we spent the way we did after previous recessions, we would have experienced substantial increase in GDP since then. Instead, cuts in government spending over the last eight years have had a pernicious, negative impact on output and income, as well as on jobs and wages, which depend on the level of spending in the economy. If it weren’t for these cuts, the economy would likely be fully recovered by now, and the expansion would have equaled or exceeded the Bush recovery.

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