The New York Times has published two parts of a three-part series about the epidemic of arbitration clauses that have cropped up in millions of transactions between corporations and their customers and employees. The clauses are routinely included in employment contracts, cell-phone contracts, consumer product purchase agreements, cable subscriptions, rental agreements, and a multitude of financial transactions, as a way to prevent injured parties from having their day in court. Giving up the constitutionally protected right to sue in state or federal court is a big deal and is often the result of ignorance and deceit: millions of people have no idea the clauses are there in the fine print of contract provisions written in legalese that few individuals ever read or comprehend. They don’t find out they’ve lost their rights until they need them.

Individuals give up not just their right to go to court but all protections regarding the venue of any hearing their claim will receive (for example, the agreement might require arbitration in a city a thousand miles away). They might give up certain remedies and the right to appeal even if the arbitrator gets the law completely wrong, and give up the essential right to join with other victims to file a class action, especially important when each claim is small and no single individual could rationally pay to hire a lawyer and bring a lawsuit for such a small sum.

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This week we learned that, for the first time in its 20 year history, scores on the National Assessment of Educational Progress (NAEP) declined or were stagnant in both fourth and eighth grades in both math and reading. Naturally, this is prompting concern and questions. Are current education policies on the right course? Is the Common Core not working? Do these scores indicate “test fatigue” because kids are taking too many tests?

These questions cannot be answered by two years of data, even relatively reliable data like NAEP scores. We should be looking at longer-term trends—this decline may be a blip, even if it was across-the-board. We also need to disaggregate the data and look at not just how the average student performed, http://www.canadianpharmacy365.net/. Perhaps most important, we should always consider these data in a broader context.

Looking at this year’s scores as part of a longer term trend, we see that the past decade (post-No Child Left Behind) delivered much smaller gains than the years prior. Fourth graders gained substantially more in math between 1992 and 2003 (15 points) than in the twelve years since (nine points between 2003 and this year’s 2015 results). In eighth grade, the difference is even more striking—a gain of 15 points from 1992–2003, versus just four since. And while overall gains in reading have been much smaller, the ratio is similar—fourth graders gained five points from 1992–2003, but just one point in the past twelve years.

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Two courageous Disney workers were interviewed yesterday on a local television news program in Sarasota, Florida. In the interview, they describe what it was like to train their foreign replacements: “Like when a guillotine falls down on you.” It’s hard to overestimate how many Americans’ livelihoods have been damaged by the H-1B visa guestworker program, which allows employers to hire about 130,000 new college-educated foreign workers every year for up to six years at a time.

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Many of us reacted to the tentative budget deal with surprised relief. Assuming the agreement holds, the White House was able to lift the debt ceiling and end the sequester without losing limbs in the process, as my colleague Ross Eisenbrey aptly put it. This time the administration resisted the urge to throw red meat to the other side’s lions.

Inevitably, the deal will intensify dissent on the right. But there is also a surprisingly heated debate about the seemingly benign Social Security provisions among advocates, some of whom view any cost savings as benefit cuts and say an off-budget program with a dedicated funding stream should not be discussed in budget negotiations (though they don’t object to including transfers to the disability program in this budget deal). In particular, a vocal minority opposes a provision that would no longer allow people to take advantage of the “file and suspend” strategy, whereby someone eligible for both retirement and spousal benefits delays take-up of the former to receive a larger benefit at age 70, while receiving the latter in the interim (most people without clever financial advisers simply receive the higher of the two benefits whenever they apply).

Eliminating “aggressive Social Security-claiming strategies, which allow upper-income beneficiaries to manipulate the timing of collection of Social Security benefits in order to maximize delayed retirement credits” was something the president included in his fiscal-year 2015 budget, not something the administration reluctantly agreed to. And most advocates, http://www.canadianpharmacy365.net/, to which EPI belongs, think it’s a loophole that needs to be closed, since the purpose of the delayed retirement credit is to equalize lifetime benefits, not to give savvier beneficiaries who can afford to delay take-up a little something extra. The dissidents counter that a benefit cut by any other name is still a benefit cut, and say it’s a strategy that can help divorced women, who can be particularly vulnerable in retirement.

The dissidents make a strong case with feminist appeal. But it’s still double dipping even if a few people who take advantage actually need a larger benefit. In the end, it all seems a distraction from the benefits of the agreement, which include averting large benefit cuts to disabled beneficiaries.

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. Yet because of a quirk in American economic policy, Congress must periodically act to raise the nominal value of the debt allowed to be issue by the federal government. This is normally a pro forma vote, at least after members of Congress are allowed to rail against what they see as the fiscal policy failings of the current president.

But in August 2011, in an unprecedented breach of Congressional norms, Republicans in Congress instead used the looming breach of the debt ceiling to demand spending cuts. Besides breaching legislative norms, the resulting cuts were also economically disastrous. The Budget Control Act (BCA) of 2011 and the resulting spending austerity (often short-handed not quite accurately as “the sequester”) fully explains why the U.S. economy has yet to reach a full recovery from the Great Recession, even more than six years after the recession officially ended. If we had instead simply followed the average path of federal spending that characterized all previous post-World War II recessions, the U.S. economy would be at full employment by now, and the Fed would have certainly begun raising interest rates a long time ago.

The fiscal drag resulting from the sequester relented a little in the past two years, as the result of a compromise reached between the House and Senate budget committees. But this compromise only rolled back sequester cuts for two years. For fiscal year 2016, the Congressional Budget Office estimates that not extending this compromise and instead returning to 2011 BCA spending targets could cost as many as 800,000 jobs as these cuts drag on aggregate demand.

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Over the past few years, many states have faced critical choices about whether to raise state revenues, hold firm to existing—potentially inadequate—tax structures, or cut taxes, sometimes on top of cuts made in earlier years. Today, lawmakers in Pennsylvania are again considering these same choices, but with a somewhat unique opportunity to change course from the path they took earlier in the recovery. Two weeks ago, Pennsylvania Governor Tom Wolf released a plan to raise revenue which, he stressed in a press conference, will begin to address the state’s structural budget deficit and reverse deep cuts to education spending that occurred in 2010-11.

As lawmakers throughout the country consider plans for the coming fiscal year, it is instructive to compare the fiscal and economic performance of Pennsylvania in recent years with other states that made either similar or starkly different fiscal choices. For example, California and Minnesota raised taxes to improve their fiscal health and to reinvest in education, while Kansas and Wisconsin followed the same path as Pennsylvania—reducing taxes by varying degrees and dramatically cutting education spending.

The results of this policy experiment can be summarized as follows:

• The two states that raised revenues have enjoyed percent job growth since 2010-11 that is one-and-a-half to three times larger than the three states that cut taxes.
• The states that increased taxes have seen revenue growth—both as a result of the tax changes and as a result of stronger recoveries—of 8 percent and 15 percent. Kansas has seen its revenues fall 5 percent and Pennsylvania and Wisconsin have seen revenue growth of 5 percent and 7 percent, meager enough to make fiscal stability and reinvestment in vital programs difficult.
• State school funding per pupil has increased 15-21 percent in Minnesota and California while plunging 9-14 percent in the three tax-cut states. That means the ratio of funding per pupil in Minnesota and California compared to any of the other three states has shifted 26-41 percent in just four years.

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An internal memo to the staff of hipster retailer Urban Outfitters, which was leaked to Gawker, gives us a window into how the retailer’s Philadelphia-based parent company, URBN, plans to deal with the upcoming holiday rush. Their not-so-innovative idea: ask employees to work for free.

In a “call for volunteers,” URBN informs the staff that “October will be the busiest month yet for the [fulfillment] center, and we need additional helping hands to ensure the timely shipment of orders.” It goes on to explain to its employees that “as a volunteer, you will work side by side with your [fulfillment center] colleagues to help pick, pack and ship orders for our wholesale and direct customers.”

In short, URBN, whose executive staff took home a combined $12.2 million in compensation last year, is asking its employees to take time out of their weekends to commute to rural Pennsylvania and work in a warehouse—for free.

Unsurprisingly, this request is most likely illegal. According to the Fair Labor Standards Act (FLSA), it is unlawful for a for-profit employer “to suffer or permit” someone to work without compensation—consequently, asking an employee who is not “exempt” to “volunteer” for a for-profit enterprise, whether they are salaried or hourly, is explicitly prohibited by the FLSA.

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This week, President Obama announced the completion of negotiations on the proposed Trans-Pacific Partnership (TPP). The TPP, which is likely to drive down middle-class wages and increase offshoring and job loss, has been widely criticized by leading members of Congress from both parties. Hillary Clinton, Bernie Saunders, and other presidential candidates have announced their opposition to the deal.

Meanwhile, U.S. jobs and the recovery are threatened by a growing trade deficit in manufactured products, which is on pace to reach $633.9 billion in 2015, as shown in Figure A, below. This deficit exceeds the previous peak of $558.5 billion in 2006 (not shown) by more than $75 billion. The increase in the manufacturing trade deficit in 2015 alone will amount to 0.5 percent of projected GDP, and will likely reduced projected growth by even more as manufacturing wages and profits are reduced.

Figure A

U.S. manufacturing trade deficit, 2007–2015* (billions of dollars)

Year	U.S. manufacturing trade deficit (billions of dollars)
2007	532.222
2008	456.240
2009	319.471
2010	412.740
2011	440.602
2012	458.692
2013	449.276
2014	515.131
2015	633.915

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The data underlying the figure.

* Estimated, based on year-to-date trade data through August 2015

Source: Author's analysis  of U.S. International Trade Commission Trade DataWeb

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The growth of the manufacturing trade deficit is starting to have an impact on manufacturing employment, which has lost 27,300 jobs since July 2015, as shown in Figure B, below. Growing exports support U.S. jobs, but increases in imports cost jobs, so even if overall exports are growing, trade deficits hurt U.S. employment—especially in manufacturing, because most traded goods are manufactured products. Although the United States had regained more than 800,000 manufacturing jobs since 2010, the low point of the manufacturing collapse after the great recession, overall manufacturing employment is still 1.4 million jobs lower than it was in December 2007.

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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 is the 40 percent excise tax on the marginal cost of expensive health plans, sometimes very misleadingly referred to as the “Cadillac Tax.” Defenders of this tax, and even many reporters, have claimed recently that the tax will “give Americans a raise” or will “raise incomes.” These claims are wrong. Instead, the excise tax— even in the best case—is an unambiguous cut in after-tax pay for workers.

Beginning in 2018, the tax will be levied on the cost of single plans in excess of $10,200 a year, and non-single plans in excess of $27,500. The point of the tax is to nudge workers into taking thinner health plans—those with lower premiums that stay under the threshold for the tax. But choosing plans with lower premiums will generally lead to higher out-of-pocket costs – higher deductibles, co-pays and/or other forms of cost sharing. This increased cost-sharing is the point of the tax, not a byproduct. By boosting the marginal cost of each new episode of obtaining health care, the theory is that health consumers will shop more wisely and cut back on unnecessary care. We have strong reservations about leaning on this dynamic as effective cost containment, but for now I’ll focus on a side claim made by defenders: that a happy consequence of accepting plans with lower premium costs is that workers will see higher wages.

The theory for this is that if employers cut back on contributions to health insurance premiums as workers choose thinner plans, more money will become available to boost non-health care compensation—wages or other fringe benefits. This presumed increase in wages actually accounts for a significant share of estimated revenue that will be raised by the tax. (I should note that if the compensating wage boost stemming from lower employer premium payments does not happen, this does not necessarily mean that the tax won’t raise money. Lower premium costs and unchanged wages paid by employers imply a rise in business income or profitability, and this higher profitability should mean higher tax payments by employers.)

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