President Obama recently announced a major overhaul of the rules governing the payment of overtime to salaried employees. These changes are long overdue and will finally align the overtime exemption for salaried employees with common sense and the original intention of the law—to ensure that all workers receive overtime protection except those with such high salaries or such substantial responsibilities that they don’t need the protections.

Since the president’s announcement, opponents of the proposal have made a number of questionable claims. One claim in particular—that nonprofit organizations providing services to the poor and the disadvantaged will see a crippling increase in personnel costs—is demonstrably false.

The Fair Labor Standards Act (FLSA) is based on a few basic principles. First, most employees in the United States are entitled to the minimum wage, currently set at $7.25 per hour at the federal level, for all hours worked, and “time-and-a-half” for all hours worked over 40 in a workweek. These rules, first enacted in 1938, have proven to be a simple but important protection for workers and the labor market, guaranteeing workers at least a minimal level of wage protection.

The second principle, however, is that FLSA coverage does not extend to all employees or all employers. There are number of exemptions and exclusions from minimum wage and/or overtime embedded in the FLSA. Unless coverage is established for the employer or employees, the protections of the FLSA, including the proposed overtime rule changes, simply do not apply.

Coverage is determined in one of two ways. First, employers who are engaged in business that generates annual business or sales revenues of at least $500,000 per year are covered by the FLSA and must pay the minimum wage and overtime, unless another of the many exemptions in the law applies. Importantly, the key criterion for this provision is business or sales revenue. Most nonprofitsincluding the charitable organizations providing free meals to the hungry and nonprofits providing addiction or mental health services are not engaged in business, they are providing charitable services and therefore their employees are not typically covered by the FLSA.Read more

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. There’s some good stuff there—including the riff on how GOP politicians are looking to “disrupt” economic statistics largely by defunding those doing the valuable work of collecting them.

But “Step 1” in her list is a pet peeve of mine. The claim is that the growth of the mid/late-20^th century rested largely on the fact that the United States faced less foreign competition in those years, as trading partners’ economies in Europe and Asia were devastated by war. Let me quote a chunk of Rampell’s point here:

“If we (or others) can manage to destroy the capital stock of our economic rivals while sustaining no damage to our own—which is, you know, basically what happened in World War II—we’ll be perfectly positioned for another global-competition-free, postwar economic boom. This little artifact of the last postwar era, and how much it explains the robust mid-20th-century growth rates that my presidential rivals now pine for, has curiously eluded others’ policy plans.”

One hears variants of this argument a lot*, but it’s actually really hard to make an economic case that this dynamic—increased U.S. competitiveness stemming from war destruction in our trading partners—mattered at all for mid-century American growth.

Is the claim that exports surged and that’s why mid-century growth was good? They really did not—exports grew substantially faster post-1979 than before. And we were not shielded from import growth in the pre-1979 period, since imports grew faster than in the pre-1979 period than after.

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This post originally appeared in The Huffington Post.

After forty years of rising income and wealth inequality, some of America’s rich seem worried that maybe things have gone too far. In a recent New York Times op-ed, for example, Peter Georgescu, CEO emeritus of the multinational public relations firm, Young and Rubicon, wrote that he is “scared” of a backlash that might lead to social unrest or “oppressive taxes.”

The Times was so impressed with such enlightened views from this prominent capitalist that a few days later they devoted another long article with his answers to questions submitted by readers.

We should, I suppose, be grateful that Georgescu seems to understand that the gap between the rising value of what American workers produce and the stagnation of their wages has channeled the benefits of economic growth to shareholders (and, he might have added, but didn’t, corporate CEOs). But if you are waiting for him and other members of his class to get serious about the problem, don’t hold your breath.

Georgescu writes that he would like to see corporations pay their workers a fair wage. But with few exceptions, they don’t. He doesn’t tell us why, but the reason is obvious—paying workers less has made their owners and top executives rich.

So, what to do?

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China’s decision to devalue its currency last week means that it has chosen to export its unemployment problem, rather than take the hard steps needed to restructure its domestic economy. Over the past decade, trade deficits caused by currency manipulation by about 20 mostly Asian countries, predominantly China, has eliminated between 2.3 million and 5.8 million U.S. jobs. The yuan fell 4.4 percent in the first three days after China announced its devaluation, and a cumulative drop of 10 to 15 percent is possible over the next two weeks, according to the Economist Intelligence Unit. A devaluation of the yuan of between 4.4 to 15 percent, if it persists, would likely increase U.S. trade deficits sufficiently to eliminate between 190,000 and 640,000 U.S. jobs. There is growing, bipartisan support from both Republicans and Democrats for new policies to end currency manipulation and to reverse the damage it has done to the U.S. economy. Congress should take immediate steps to pass tough laws to end currency manipulation and to ensure that injured domestic workers and companies obtain timely relief from unfairly traded imports.

To evaluate the costs of China’s currency devaluation, I use the results of C. Fred Bergsten and Joseph E. Gagnon’s study for the Peterson Institute for International Economics, which used the Federal Reserve Board’s macroeconomic model to assess the effects of a 10 percent depreciation of the trade-weighted value of the U.S. dollar. China is America’s largest trading partner, responsible for 21.3 percent of total U.S. trade, based on the trade weights used in the Federal Reserve’s Broad Index of the U.S. dollar. Thus, a 4.4 percent devaluation of the yuan (or renminbi, as it is also known) translates into a 0.9 percent appreciation of the real U.S. dollar. Likewise, a 10 percent devaluation would increase the U.S. dollar by 2.1 percent, and a 15 percent devaluation would increase the value of the dollar by 3.2 percent.

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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. In the end, Kessler’s “fact check” is much more misleading than anything Sanders and his staff released.

The CBO provided a range of estimates of job losses that would occur in 2016 and 2017 if these spending caps are not lifted (alternatively, one could describe these as job gains that would be realized if the caps are lifted). The high end of these estimates was 800,000 jobs in 2016 and 600,000 in 2017. That’s how much higher total employment in the United States could be if the caps were lifted, relative to a counterfactual baseline where the caps stay in place.

So, what has Kessler so angry? First, that Sanders cited the high end of the CBO range—even though he and his staff are clearly identifying it as the high end. Kessler writes:

First of all, note that the Sanders’ statement says that “as many as” 1.4 million jobs would be lost. That’s a signal that a politician is using the high-end of a range.

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Eighty years ago today, President Franklin D. Roosevelt signed the Social Security Act into law. Four and a half years later—after the German invasion of Poland but still two years before Pearl Harbor propelled the United States into war—65-year-old Ida May Fuller received the first Social Security check for $22.54. She would live to be 100 years old.

Fuller might seem like a historical footnote, but history matters, and not just because the Social Security program was born in the midst of the Great Depression and the first benefit check was paid out even as the country was poised on the brink of war.

By any measure, Fuller got a bargain. She paid into the program for three years and collected benefits for 35 years. This was by design: Social Security’s pay-as-you-go structure allowed the first generation of seniors to collect benefits even if they hadn’t had a chance to contribute meaningfully into the program. Fuller herself was unsure if she was eligible for benefits, later saying she dropped by the Rutland, Vermont, Social Security office on a whim, remembering that contributions had been deducted from her paycheck. (Fuller, who never married, had had a long career as a teacher and legal secretary.)

Most of the benefits claimed by retirees are paid out of current workers’ contributions, not advanced savings in the Social Security trust fund (contrary to popular belief). This means that each generation earns a “return” on contributions that is linked to productivity and wage growth and not subject to the vagaries of financial markets. The trust fund is more like a checking or contingency savings account than a retirement savings account, expanding and contracting to accommodate demographic booms and busts. Thanks to advance planning, we accumulated enough in the trust fund to get us through the peak retirement years of the large baby boomer generation, another legacy of World War II.

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On Tuesday, China announced the largest one-day devaluation of its currency in more than two decades. Make no mistake—although authorities claimed this policy was a shift toward more market-driven movements, the value of the currency is tightly controlled by China’s central bank. By choosing to devalue its currency, Chinese officials are trying to solve their domestic economic problems—including a massive property bubble, a collapsing stock market, and a slowing domestic economy—by exporting unemployment to the rest of the world. The United States, which is the largest single market for China’s exports, will be hardest hit by the devaluation of the yuan. Manufacturing, which was already reeling from the 20 percent rise in the value of the dollar against major currencies in the last 19 months, can expect to see even faster growth in imports from China.

The devaluation of the yuan (also known as the renminbi) will subsidize Chinese exports, and act like a tax on U.S. exports to China, and to every country where we compete with China, which is already the largest exporter in the world. It will provide rocket fuel for their exports, transmitting unemployment from China directly to the United States and other major consumers of imports from China. Already in 2015, the U.S. manufacturing trade deficit has increased 22 percent, which will continue to hold back the recovery in U.S. manufacturing, which has experienced no real growth in output since 2007.

The Chinese devaluation highlights the importance of including restrictions on currency manipulation in trade and investment deals like the proposed Trans-Pacific Partnership (TPP), which includes a number of well-known currency manipulators. Millions of jobs are at stake if a clause to prohibit currency manipulation is not included in the core of this “twenty-first century trade agreement.” This devaluation by China, which is not a member of the TPP, will raise pressure on other known currency manipulators that are in the agreement—such as Japan, Malaysia, and Singapore—to devalue their currencies, which could more than offset any benefits obtained under the terms of the TPP.

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I was caught off guard by all of the recent attention and coverage given to Senator and presidential candidate Bernie Sanders’ positions on immigration. Not because his views were widely discussed (he is running for president, after all), but because the criticisms he was subjected to were often mistaken or even intentionally misleading.

So what did Senator Sanders actually say about immigration? In an interview with Sanders, Vox.com editor Ezra Klein brought up the concept of an “open borders” immigration policy. Sanders rejected the notion—open borders and unlimited immigration, of course, being a position that no elected official supports. Sanders went on to point out—a point which he later reiterated to journalist Jose Antonio Vargas and the Hispanic Chamber of Commerce—that in some cases the importation of new foreign workers can negatively impact the wages of workers in the United States. Note that Sanders didn’t say immigrants are taking jobs or lowering wages. He was specifically referring to non-immigrant, temporary foreign worker programs, also known as “guestworker” programs, which are full of flaws that employers take advantage of to exploit American and migrant workers alike, and to pit them against each other in the labor market.

The reality is that what Sanders supports on immigration is careful and nuanced, and it’s the correct path forward for American immigration policy. In a nutshell, Sanders is strongly in favor of legalization and citizenship for the current unauthorized immigrant population, which will raise wages and lift labor standards for all workers, and he’s against expanding U.S. temporary foreign worker programs, which allow employers to exploit and underpay so-called guestworkers. Limiting guestworker programs will reduce wage suppression and improve labor standards for U.S. and migrant workers alike.

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