Beyond Pre-kindergarten: Evidence and State-Level Action
A new policy guide from the Broader, Bolder Approach to Education (BBA) and the Schott Foundation’s Opportunity to Learn Campaign shows how to build high-quality early support systems for children that strengthen communities and families, promote and sustain early education, and enable children to thrive. It also covers ways to resolve one of our nation’s most intractable problems: the academic achievement gap.
We know that children arrive at kindergarten with already large gaps that divide them along lines of race, ethnicity, and social class. We know, too, that these gaps prove stubbornly difficult to close, and that they are very often widened by disparities in access to appropriately credentialed teachers, small classes, school resources, health care, nutritious meals, and other related factors.
The Economic Policy Institute, where BBA is housed, has been a leader not only in documenting these gaps, but in producing research showing how to narrow them before they get so hard to tackle. For example, in 2007, EPI calculated the economic and social benefits of investing in a voluntary, high-quality publicly funded prekindergarten program that would narrow gaps by helping disadvantaged students achieve their full potential. Seven years later, this is a cornerstone of President Obama’s proposal for early childhood investments, and of the Strong Start for America’s Children Act bills proposed by leaders in both houses of Congress.
Harris v. Quinn Is About the Right of Home Care Workers to Improve Their Wages
The Supreme Court is expected to decide Harris v. Quinn, a case of major importance for American workers, in the next few days. Many observers predict a disastrous decision that will cripple union organizing and collective bargaining for home health aides, child care workers, and other direct care aides. But the Court could go much further and threaten the ability of all public employees to form unions and bargain collectively with any state or local government.
The case involves the ability of public employees to bargain for a provision in their contracts (known as an agency fee) requiring every covered worker to pay his or her fair share of the cost of maintaining the union, negotiating a contract, and enforcing its provisions. A majority of states allow such provisions, but so-called right-to-work states do not.
Why is this so important? Wages in most occupations have stagnated or fallen since 2000, even as profits have climbed to historic heights and inequality has worsened. The erosion of the minimum wage, rising CEO pay, and many other factors have played a role, but the decline of unions is near the top in importance. Business and conservative groups have lobbied around the nation to impose right-to-work as a way to weaken unions and keep wages low. It’s a successful strategy: research shows that workers in right-to-work states are paid $1,500 a year less, on average, than employees where unions are free to bargain for agency fees. Negotiating and administering union contracts, organizing employees, and winning elections is expensive, especially when outside groups and politicians mount well-funded opposition campaigns, as recently occurred at Volkswagen in Chattanooga, TN. Right-to-work laws allow employees to get the benefits of union contracts without paying their fair share, drying up a key source of the funds unions need to survive.
In Remembrance of Harry Clay Ballantyne
I was saddened to learn that Harry Clay Ballantyne, who led the Office of the Actuary at the Social Security Administration, recently passed away. Harry was an exemplary civil servant and private citizen. Long after his retirement, he co-authored an EPI report dispelling the myth that Social Security, which must operate in long-term balance, was driving our nation into debt. Although he was in weakening health, he was determined to defend the program he had devoted his career to. And though he was not the type to flaunt his achievements, an important part of the story was that Social Security’s actuaries, far from being taken by surprise by the Baby Boomer retirement, increases in life expectancy, and other supposedly calamitous demographic trends that critics liked to suggest had crashed the system, had accurately predicted them years ago and dealt with them. What no one inside or outside Social Security had predicted was that wage stagnation, rising inequality, and the Great Recession would erode the program’s funding—problems that suggest entirely different solutions.
More Than Half a Million Jobs Are at Risk Due to Unfair Trade in the U.S. Steel Industry
Earlier this week, I estimated that up to half million (583,600) U.S. jobs are at risk due to surging imports of unfairly traded steel. A recent post by blogger Tim Worstall suggests that the number can’t possibly be that large because the steel industry employs only 150,000 people. But this misses the point—the risk to the steel industry goes far beyond the steel companies themselves, and the workers they employ. It also includes workers in iron ore and coal mines, in other manufacturing industries that support steel production, as well as lawyers, accountants, managers and other workers who supply services to the steel industry. All these jobs, 583,600 in total, are threatened by the flood of steel imports.
Half of the 46 top steel companies in the world were government-owned, and they accounted for 38 percent of global production. Illegally dumped and subsidized steel products are stealing market share and jobs from domestic producers. Worstall claims that we should ignore unfair import competition because, “if we get cheaper steel then this makes us all richer.” He concludes that “the market price is the fair price” for imports.
Responding to a similar question from a reporter this week, Ohio Senator Sherrod Brown said that this is “like arguing it’s OK to buy stolen TVs because they are cheaper.” Even a market economy needs rules to prevent cheating and unfair trade.
Worstall claims that we performed “some very heroic calculations” in estimating the jobs at risk due to unfair imports. He goes on to claim that “what is being done here is to assume that… steel workers buy restaurant meals so waiters are employed…and so on.” But this is exactly what we did not do.
Our model used standard data from the Bureau of Labor Statistics to estimate the direct and indirect jobs supported by U.S. steel production. Indirect jobs include those in production of “input commodities such as minerals and ore, coke, and other fuels, as well as downstream services and other resources consumed in the production of and distribution of steel products.” Furthermore, we very clearly stated that our estimate did “not include respending jobs supported by the wages of workers in the steel industry.”
The Deep Roots of Skilled Labor Shortages: Anti-Union, Anti-Worker Corporations
A recent story from NPR’s Andrew Schneider, about a construction boom and skilled labor shortage in Texas, is missing some of the links needed to understand what is happening there and why. The elements are all there: the huge loss of construction jobs following the financial crisis in 2008, the energy boom creating jobs regionally even while construction employment nationally remains about a million and a half jobs lower than its peak, a decline in unauthorized immigration, and contractors grudgingly increasing pay to attract workers.
The two missing links are the role of the construction owner, like Chevron, in crushing the unions that provide skilled journeymen in the construction trades, and a clear discussion of the wage levels needed to attract skilled workers from parts of the country the recovery hasn’t reached. The story says wages are rising in Texas, but from what to what? Are wage levels high enough to persuade a journeyman electrician from Michigan or Los Angeles to relocate to Houston? Or are they unreasonably low, given the scarcity of skilled workers and the years of training required to produce a journeyman? How do union wages compare with non-union wages? The story never says.
Oil giants like Chevron can afford to have their construction contractors pay well for skilled work, but they resist. Organizations they fund, such as the Business Roundtable, have led a decades-long campaign to weaken or destroy the building trades unions that actually train the greatest number of skilled tradesmen. Chevron, Koch Industries, ExxonMobil and many other energy industry corporations fund the American Legislative Exchange Council and its legislative efforts to kill unions and eliminate labor standards. It’s hard to hear Chevron complain about a labor shortage when Chevron and other Fortune 500 companies themselves are a major cause. They don’t merely fight unionization, they also oppose the state and federal prevailing wage laws that protect construction wages from being driven lower and allow union apprenticeship programs to continue providing the best-trained workers.
Schneider is wrong to suggest that community college vocational training programs are the long-term solution to the shortage of skilled labor in Texas. The real solution is to restore the power and reach of the unions, raise wages to attract more workers, and grow the only proven way to develop the necessary skilled labor—apprenticeship programs funded by employers and jointly administered by unions and employers.
Wages of Young Female College Grads Are Lower Today Than They Were In 1989
One of the most shocking findings from Heidi Shierholz’s, Will Kimball’s, and my research on young graduates is that inflation-adjusted wages for young female college graduates are lower today than they were in 1989. Average real wages for young female college graduates are currently $15.29, whereas 25 years ago they were $16.12 (in 2013 dollars)—a decrease of 5.2%.
This is part of a wider trend of wage stagnation and decline since 1989 for both men and women. For all college graduates ages 21-24 (male and female combined), wages today are only 2.4% higher than they were in 1989. This growth was driven entirely by the prosperous economy of the late 1990s, when young grads of both genders saw wage increases of close to 20%. Outside of that time period, however, wages have stagnated or declined, with women seeing especially large declines in the 2000s.
The figure below illustrates how the weak economy since 2000 has disproportionately hurt young women college grads’ wages as compared to men’s. Although women saw wage gains in the 1995-2000 period of strong economic growth, women’s wages have declined by 14.2% since 2000, with most of that loss in the period since the start of the Great Recession in 2007. In fact, since 2007, young women college grads have seen their wages fall 10.1%, while men’s wages declined 4%.
Our research showed that young college graduates’ fates are closely tied to the fate of the overall economy. The current weak labor market not only makes it difficult to find a job, but it also means that there is no need for employers to increase wages, as it is easy to keep the workers they need at lower wages when workers have no other options. If we want to reverse the wage losses that occurred due the Great Recession, we need to invest in our economy in ways that will boost aggregate demand and spur job growth, which will in turn improve wage growth for workers with jobs.

California School Board Rejects Rocketship Charter School
Last Thursday, the Alum Rock school district, part of metropolitan San Jose, California, voted to reject a charter school application from the Rocketship chain of schools. As I detailed in a recent paper, Rocketship’s model, which relies on cheaper, inexperienced teachers and completely replacing teachers with computer applications for a significant part of the day, is being promoted for poor urban children, but is dismissed as inadequate by more privileged families.
Rocketship is based in the San Jose area, and thus the Alum Rock rejection represents a rebuff in the part of the country with the most first-hand experience of their methods.
The vote at Alum Rock followed a report by school district staff that identified many of the same problems described in our report. Specifically:
- While Rocketship proposed to serve students from schools that had failed to make Adequate Yearly Progress under the federal No Child Left Behind Law, its application failed to mention that nearly all of Rocketship’s San Jose schools have themselves failed to make Adequate Yearly Progress for at least two years in a row.
- Rocketship’s statement to investors proclaimed that “no assurance is given” that Rocketship schools will make Adequate Yearly Progress in future years.
- Because Rocketship students spend a large portion of their day in computer labs with no licensed teacher, 4th and 5th graders will not receive the minimum instructional hours required by law.
- Rocketship was “misleading” in not including Learning Lab students in its calculation of student-teacher ratio. When all students are counted, “the true student/teacher ratio is, in fact, 37 students to 1 teacher.”
In Memoriam: Lynn Williams
Lynn Williams—president of the United Steelworkers of America from 1983 to 1994—died on May 5 at the age of 89.
Lynn was an extraordinary union leader—smart, compassionate, and a visionary. His strength and creativity helped protect and expand his union through the crisis years of mass layoffs, bankruptcies, and industry consolidation. He was also an enthusiastic and loyal supporter of EPI from the very beginning.
I first met Lynn in the mid-1970s when he was USWA’s Secretary-Treasurer. I was involved in an effort to revive a shut down steel mill in Youngstown, Ohio under worker and community ownership. The Steelworkers in Youngstown were of course totally supportive, but there was skepticism and even some hostility from the international union in Pittsburgh. But Lynn saw something important in the effort, and he helped steer me through some political land mines.
The Youngstown project failed, but the idea did not. And when Lynn became union president he aggressively and successfully used worker ownership—including seats on company board of directors—to negotiate agreements that kept at least 25 steel companies from disappearing.
The President Has This One Exactly Right: Cutting Corporate Taxes Should Not Be a Priority, but Extending Unemployment Insurance Should Be
Today (or possibly tomorrow) the House of Representatives will vote on H.R. 4438, which would permanently extend and expand the research and development tax credit. But unlike every other piece of legislation sponsored by the House GOP, this bill does not offset the $156 billion 10-year price tag. Apparently, tax cuts for corporations are such a high priority that passing them does not require the sacrifice elsewhere in spending or taxes that the House GOP demands for every other fiscal change. This flies in the face of everything the House GOP has done in this Congress. Last month, for example, House Republicans themselves passed a budget resolution that required offsetting with other revenue measures any tax extenders that were made permanent.
H.R. 4438 will cost 15 times more than the proposed extension of emergency unemployment benefits, which House Republicans insist be offset. And it is more than double the discretionary funding increases in the Bipartisan Budget Act of 2013, all of which were offset. President Obama has rightfully issued a statement that he would veto this bill if it passes.
House Republicans are making their priorities clear by rushing to make business tax cuts permanent without offsets and calling for raising taxes on millions of working families and students by letting important improvements to the Earned Income Tax Credit, Child Tax Credit, and education tax credits expire. Not to mention failing to reverse the cut-off of extended unemployment benefits at a time when long-term unemployment remains higher than it has ever been in the past when extended benefits were ended. If the House GOP were truly concerned about long-term fiscal challenges, then they would offset tax breaks by permanently closing other tax loopholes.
No Sign of Labor Shortages in Construction: There are Seven Unemployed Construction Workers for Every Job Opening
The National Association of Home Builders wants you to believe their members face a serious shortage of construction workers, even though construction employment is more than 1.7 million jobs below its pre-recession peak, and unemployed construction workers outnumber job openings in construction by well over seven-to-one. More and more news stories, even in respected sources like NPR and the Wall Street Journal, repeat the builders’ talking points and toss around wage figures with very limited resemblance to reality. (A healthy dose of skepticism is in order when employers complain about high wages. How many tile setters make “$100,000 a year,” which the WSJ story suggests is now the pay for experienced workers in Denver? Not many. The median hourly wage for tile setters in Denver is less than $18 an hour, and nationally, even the 90th percentile wage for tile setters is only $73,510 a year.)
The best way to identify a tight labor market, let alone a market beset by actual labor shortages, is to examine wages. Basically, if wages aren’t rising, the labor market isn’t tightening; if they don’t rise strongly, there are no shortages. As Adam S. Posen and David Blanchflower argue in a recent paper, if wages aren’t rising, it’s a sign of labor slack, weak demand, and a weak economy.
So what’s happening in residential construction? The Wall Street Journal describes a frenzied search for skilled labor, causing pay to soar “to boom-time levels and beyond.” While it’s true that construction wages have risen over the past two years, they’ve risen from such a deep depression that they are still well below the levels of 2009. In fact, the real hourly wages of residential building workers are still 4.2% below 2009, a loss significantly deeper than that of the overall private sector workforce, whose wages are 0.9 percent below 2009.
