The House is expected to vote this week on fast track authority to negotiate two massive trade deals, including the proposed Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (T-TIP). The Wall Street Journal noted on Sunday that “the decade’s old argument that major trade agreements boost both exports and jobs at home is losing its political punch, even in some of the country’s most export-heavy Congressional Districts.” One reason is that counting exports is less than half the story. While it’s true that exports support domestic jobs, imports reduce demand for domestic output and cost jobs.

As I’ve written before, trade is a two-way street, and talking about exports without considering imports is like keeping score in a baseball game by counting only the runs scored by the home team. It might make you feel good, but it won’t tell you who’s winning the game. The Journal story included a table showing the ten congressional districts with the biggest gains in exports since 2006. The authors expressed surprise that only three of the ten members representing these districts have announced support for fast track (trade promotion authority, or TPA).

Looking at jobs supported and displaced by trade in these districts provides a very different picture, which helps explain why supporters of fast track are having trouble rounding up votes in the House. In a recent study, I estimated the number of jobs supported and displaced by China trade between 2001 and 2013. We used the results of this study to examine the impacts of China trade on jobs by congressional district between 2006 and 2013—the period covered in the Wall Street Journal story. The results for the top ten districts identified by the Journal are shown in the following table.

Read more

I testified last week in Harrisburg on a 410-page public pension “reform” bill (SB1) that neither I nor my fellow witnesses had read. Normally, we would have been able to rely on actuarial reports, but the actuaries weren’t given enough time to read the bill either. This didn’t stop 28 state senators from passing the bill on a party-line vote without even bothering to hold a hearing (the two I attended—one as a witness—were held by House committees after the Senate vote).

At the first hearing, supporters claimed the bill would help repair Pennsylvania’s credit rating and ensure intergenerational equity. You would never know that the bill actually delays paying down legacy costs. As a result, even the Manhattan Institute’s Richard Dreyfuss (the public pension scourge, not Jaws hero), couldn’t bring himself to support it.

Supporters also claim the bill “preserves current employee retirement benefits,” despite the fact that $13 billion of the projected $16 billion in cost savings comes from changes affecting current employees. At least one of these changes—removing a subsidy for lump sum distributions—might be a good idea in the abstract. But all cuts affecting mid-career workers will inevitably (and probably successfully) be challenged in court, as Dreyfuss pointed out.

Read more

Last week, I wrote about how high school graduates will face significant economic challenges when they graduate this spring. High school graduates almost always experience higher levels of unemployment and lower wages than their counterparts with a college degree, and their labor market difficulties were particularly exacerbated by the Great Recession. Despite officially ending in June 2009, the recession left millions unemployed for prolonged spells, with recent workforce entrants such as young high school grads being particularly vulnerable.

Underemployment is one of the major problems that young workers currently face. Approximately 19.5 percent of young high school graduates (those ages 17–20) are unemployed and about 37.0 percent are underemployed. For young college graduates (those ages 21–24) the unemployment rate is 7.2 percent and the underemployment rate is 14.9 percent. Our measure of underemployment is the U-6 measure from the BLS, which includes not only unemployed workers but also those who are part-time for economic reasons and those who are marginally attached to the labor force.

When we look at the underemployment data by race, we often see an even worse situation. As shown in the charts below, 23.0 percent of young black college graduates are currently underemployed, compared with 22.4 percent of young Hispanic college grads and 12.9 percent of white college grads. And as elevated as these rates are, the picture is bleakest for young high school graduates, who are majority of young workers.

Underemployment

Underemployment rate of young college graduates, by race and ethnicity, 2000–2015*

Date	White	Black
2000-01-01	7.6%	17.5%
2000-02-01	7.5%	17.8%
2000-03-01	7.8%	17.8%
2000-04-01	7.8%	17.0%
2000-05-01	7.9%	16.1%
2000-06-01	7.8%	16.6%
2000-07-01	7.7%	15.4%
2000-08-01	7.4%	14.6%
2000-09-01	7.3%	15.1%
2000-10-01	7.2%	15.3%
2000-11-01	7.0%	15.7%
2000-12-01	6.9%	15.4%
2001-01-01	6.8%	14.2%
2001-02-01	6.8%	12.2%
2001-03-01	6.9%	11.6%
2001-04-01	7.0%	11.6%
2001-05-01	6.9%	11.3%
2001-06-01	7.1%	12.0%
2001-07-01	7.1%	12.3%
2001-08-01	7.6%	13.3%
2001-09-01	8.1%	13.3%
2001-10-01	8.3%	14.0%
2001-11-01	8.5%	14.7%
2001-12-01	8.6%	15.9%
2002-01-01	8.8%	16.4%
2002-02-01	9.0%	17.6%
2002-03-01	8.9%	17.6%
2002-04-01	8.9%	18.3%
2002-05-01	9.0%	18.5%
2002-06-01	8.8%	18.2%
2002-07-01	8.9%	18.3%
2002-08-01	8.6%	17.5%
2002-09-01	8.6%	17.5%
2002-10-01	8.4%	17.3%
2002-11-01	8.4%	17.1%
2002-12-01	8.7%	15.7%
2003-01-01	9.0%	15.3%
2003-02-01	8.9%	14.9%
2003-03-01	9.2%	14.8%
2003-04-01	9.1%	14.3%
2003-05-01	9.3%	15.9%
2003-06-01	9.6%	15.2%
2003-07-01	10.0%	15.5%
2003-08-01	10.3%	15.5%
2003-09-01	10.2%	15.4%
2003-10-01	10.4%	15.1%
2003-11-01	10.5%	15.0%
2003-12-01	10.4%	15.1%
2004-01-01	10.3%	15.9%
2004-02-01	10.5%	16.9%
2004-03-01	10.5%	17.5%
2004-04-01	10.7%	17.4%
2004-05-01	10.5%	15.9%
2004-06-01	10.6%	15.4%
2004-07-01	10.3%	15.5%
2004-08-01	10.1%	14.6%
2004-09-01	10.0%	14.5%
2004-10-01	9.8%	15.9%
2004-11-01	9.8%	16.5%
2004-12-01	9.8%	16.7%
2005-01-01	9.8%	16.3%
2005-02-01	9.8%	15.5%
2005-03-01	9.7%	15.7%
2005-04-01	9.7%	15.8%
2005-05-01	9.9%	16.6%
2005-06-01	9.6%	16.5%
2005-07-01	9.5%	16.6%
2005-08-01	9.6%	17.5%
2005-09-01	9.7%	17.6%
2005-10-01	9.6%	16.5%
2005-11-01	9.6%	15.8%
2005-12-01	9.5%	15.5%
2006-01-01	9.4%	15.0%
2006-02-01	9.4%	15.2%
2006-03-01	9.3%	15.2%
2006-04-01	9.0%	14.5%
2006-05-01	8.8%	13.2%
2006-06-01	8.9%	13.8%
2006-07-01	8.9%	14.8%
2006-08-01	8.6%	14.6%
2006-09-01	8.5%	14.3%
2006-10-01	8.7%	13.7%
2006-11-01	8.5%	13.3%
2006-12-01	8.7%	13.2%
2007-01-01	8.7%	13.4%
2007-02-01	8.4%	13.2%
2007-03-01	8.2%	13.4%
2007-04-01	8.2%	14.6%
2007-05-01	8.3%	15.3%
2007-06-01	8.4%	15.2%
2007-07-01	8.5%	14.6%
2007-08-01	8.8%	13.6%
2007-09-01	9.1%	14.5%
2007-10-01	9.0%	15.1%
2007-11-01	9.2%	15.4%
2007-12-01	9.0%	16.2%
2008-01-01	8.9%	16.6%
2008-02-01	9.0%	17.0%
2008-03-01	9.1%	16.1%
2008-04-01	9.2%	15.5%
2008-05-01	9.4%	15.6%
2008-06-01	9.8%	15.6%
2008-07-01	9.9%	15.4%
2008-08-01	9.9%	16.5%
2008-09-01	10.0%	15.8%
2008-10-01	10.2%	14.9%
2008-11-01	10.3%	14.8%
2008-12-01	10.6%	14.7%
2009-01-01	11.1%	14.9%
2009-02-01	11.5%	16.0%
2009-03-01	12.2%	18.0%
2009-04-01	12.5%	19.5%
2009-05-01	12.8%	20.4%
2009-06-01	13.3%	20.7%
2009-07-01	13.6%	22.3%
2009-08-01	14.4%	24.1%
2009-09-01	14.8%	25.9%
2009-10-01	15.1%	26.1%
2009-11-01	15.5%	25.1%
2009-12-01	15.8%	25.9%
2010-01-01	16.0%	26.3%
2010-02-01	16.2%	25.8%
2010-03-01	16.1%	24.6%
2010-04-01	16.4%	25.3%
2010-05-01	16.6%	24.9%
2010-06-01	16.6%	26.6%
2010-07-01	16.7%	28.5%
2010-08-01	16.2%	28.9%
2010-09-01	16.5%	28.7%
2010-10-01	16.6%	29.2%
2010-11-01	16.7%	29.3%
2010-12-01	16.7%	30.0%
2011-01-01	17.0%	30.8%
2011-02-01	17.2%	30.7%
2011-03-01	17.5%	31.0%
2011-04-01	17.3%	28.8%
2011-05-01	17.1%	28.2%
2011-06-01	17.1%	28.4%
2011-07-01	17.6%	26.0%
2011-08-01	18.1%	24.6%
2011-09-01	18.0%	23.7%
2011-10-01	17.7%	23.5%
2011-11-01	17.6%	22.5%
2011-12-01	17.3%	21.3%
2012-01-01	17.2%	20.9%
2012-02-01	17.0%	21.1%
2012-03-01	16.7%	21.4%
2012-04-01	16.5%	22.4%
2012-05-01	16.5%	22.2%
2012-06-01	16.4%	20.3%
2012-07-01	16.3%	19.8%
2012-08-01	15.9%	20.6%
2012-09-01	15.8%	21.2%
2012-10-01	15.7%	20.6%
2012-11-01	15.3%	20.8%
2012-12-01	15.5%	20.8%
2013-01-01	15.6%	21.2%
2013-02-01	15.6%	22.9%
2013-03-01	15.6%	23.5%
2013-04-01	15.7%	23.0%
2013-05-01	15.8%	24.0%
2013-06-01	15.7%	25.2%
2013-07-01	15.5%	25.0%
2013-08-01	15.5%	26.4%
2013-09-01	15.7%	27.5%
2013-10-01	16.0%	28.2%
2013-11-01	16.2%	28.4%
2013-12-01	16.1%	29.0%
2014-01-01	16.1%	29.5%
2014-02-01	16.0%	28.2%
2014-03-01	15.8%	28.1%
2014-04-01	15.4%	27.8%
2014-05-01	15.0%	26.8%
2014-06-01	14.9%	26.2%
2014-07-01	14.6%	27.0%
2014-08-01	14.3%	25.3%
2014-09-01	13.9%	24.0%
2014-10-01	13.6%	23.4%
2014-11-01	13.4%	22.7%
2014-12-01	13.4%	22.2%
2015-01-01	13.1%	21.7%
2015-02-01	13.0%	23.7%
2015-03-01	12.9%	23.0%

 

ChartData Download data

The data below can be saved or copied directly into Excel.

The data underlying the figure.

* Data reflect 12-month moving averages; data for 2015 represent 12-month average from April 2014 to March 2015.

Note: Data are for college graduates age 21–24 who are not enrolled in further schooling. Shaded areas denote recessions. Race/ethnicity categories are mutually exclusive (i.e., white non-Hispanic and black non-Hispanic).  The Hispanic category is not included due to insufficient sample sizes over part of the series.

Source: EPI analysis of basic monthly Current Population Survey microdata

Share on Facebook Tweet this chart

Embed

Copy the code below to embed this chart on your website.

<iframe width="100%" height="460" src="https://www.epi.org?p=87819&view=embed&embed_template=charts_v2013_08_21&embed_date=20260212&onp=87823&utm_source=epi_press&utm_medium=chart_embed&utm_campaign=charts_v2" frameborder="0"></iframe>

Download image

Read more

Three separate sources have recently “fact-checked” claims that Martin O’Malley made about American wages in his recent speech announcing his candidacy for the Democratic nomination. The precise O’Malley quote was:

Today in America, 70 percent of us are earning the same or less than we were 12 years ago, and this is the first time that that has happened this side of World War II.

O’Malley has said that our research on wages provided a basis for his claim (examples can be found here and here).

First, let’s be clear on what our claim is and then I’ll talk about the fact checkers’ assessments of O’Malley’s use of the data.

We have data on hourly wages by decile since 1973. Between 2002 and 2014, inflation-adjusted hourly wages for the bottom 7 deciles (i.e., 70 percent of the American workforce) fell. This is a remarkable economic fact and one that O’Malley is clearly right to highlight.

Further, between 1947 and 1973 there is almost certainly no 12-year period when the bottom 70 percent of wage earners saw hourly wage declines. Precise wage data by decile is sketchy over this period, but the circumstantial evidence on this is overwhelming. Just look at this graph, which shows hourly pay for a grouping reflecting the bottom 80 percent of the workforce rising sharply until the early 1970s.

Read more

When Canada joined the Trans-Pacific Partnership talks in 2012 it did so somewhat reluctantly and, like Mexico, with strings attached. One of them was that Canadian negotiators could not reopen any closed text. So, in this sense, it’s been a bit of a raw deal for the Obama administration’s NAFTA partners from the beginning. Canada’s bigger business lobbies called it a defensive move, to “secure” NAFTA supply chains rather than offering any meaningful market access elsewhere. The Canadian public have almost no idea what’s going on. But as TPP countries appear to be close to the end game, people here are starting to ask the obvious questions: what’s in it for us, and what will we have to give up to get it. The answers are equally obvious if you look past the hype: not much, and quite a lot.

To begin with, Canada already has free trade deals in place with four of the larger TPP countries (Peru, Chile, the United States, and Mexico), and tariffs on trade with the others—representing 3 percent of imports and 5 percent of exports—are very low. Canada has a trade deficit with these non-FTA countries of $5 to $8 billion annually, and 80 percent of Canada’s top exports to these countries are raw or semi-processed goods (e.g., beef, coal, lumber), while 85 percent of imports are of higher value-added goods (e.g., autos, machinery, computer and electrical components). This Canadian trade deficit will likely widen if the TPP is ratified, as the United States found two years into its FTA with South Korea.

Tariff removal through the TPP is therefore likely to worsen the erosion of the Canadian manufacturing sector and jobs that has been taking place since NAFTA—a result, in part, of the limits free trade deals place on performance requirements and production-sharing arrangements. NAFTA-driven restructuring did not even have the promised effect of raising Canadian productivity levels, which languish at 70 percent of U.S. levels twenty years into the agreement. Instead, Canada has experienced greater corporate concentration, a significant decline in investment in new production, and rising inequality.

In short, there is little trade expansion up­side for Canada in this negotiation. And yet the Canadian public will eventually be asked to make considerable public policy concessions to see the TPP through. As many U.S. commentators have argued, the trade impacts of TPP are far less important than the serious concerns it raises about excessive intellectual property rights, regulatory harmonization, and the perpetuation of a controversial investor-state dispute settlement (ISDS) regime that has been extremely damaging to democratic governance globally, not to mention quite humiliating for Canada.

Read more

There was a lot to celebrate in the Magic Kingdom this year. The Disney Corporation had its most profitable year ever, with profits of $7.5 billion—up 22 percent from the previous year. Disney’s stock price is up approximately 150 percent over the past three years. These kinds of results have paid off handsomely for its CEO Bob Iger, who took home $46 million in compensation last year.

Disney prides itself on its recipe for “delighting customers,” a recipe it says includes putting employees first. They tout this as a key to their success in creating “a culture where going the extra mile for customers comes naturally” for employees. One method of creating this culture is referring to its employees as “cast members.” In fact, Disney is so proud of its organizational culture that it’s even created an institute to share its magic with other businesses (for a consulting fee, of course).

So, you would expect a firm that puts its employees first to share the vast prosperity that’s been created with the very employees who went above and beyond to help generate those record profits.

Well, how did Mr. Iger repay his workers—sorry, I mean cast members—for creating all this profit? Not with bonuses and a big raises. Instead, as the New York Times just detailed in a major report, he forced hundreds of them to train their own replacements—temporary foreign workers here on H-1B guestworker visas—before he laid them off.

Read more