The unemployment rate held steady in March, but in a departure from the usual story in this recovery, that masked some good news. The share of the working-age population with a job ticked up by one-tenth of a percent—and the share of the prime-age population with a job, which is my favorite measure of labor market trends in recent years—ticked up by two-tenths of a percent. If more people were finding work, why didn’t the unemployment rate go down?  Because more people came into the labor force. The labor force participation rate rose by two-tenths of a percent. The number of “missing workers”—workers who have left, or never entered, the labor force due to weak job opportunities—dropped from 5.7 million to 5.3 million. That is still a lot of missing workers (the unemployment rate would be 9.8% if they were counted as unemployed), and there is a great deal of month-to-month variability in the number of missing workers (meaning we can’t make too much of one’s month’s drop), but this is a step in the right direction.

Interestingly, most of the decline in missing workers in March was due to the increase in labor force participation of men under age 25. Men under age 25 had seen a steep decline in labor force participation over the prior five months, and March’s increase almost entirely reverses that decline. There are still 580,000 missing men under age 25, but again, March’s drop was a step in the right direction.

Earlier this week, Senate Finance Committee Chair Ron Wyden (D-Ore.) unveiled his proposal to retroactively renew the “tax extenders”—a group of just more than fifty “temporary,” unrelated tax incentives, breaks, loopholes, and outright giveaways that Congress routinely extends as they lapse.

My earlier analysis of this abdication of responsible policymaking concluded that instead of renewing the entire slate of tax extenders, lawmakers should conduct a thorough review of each individual provision to see if it efficiently targets useful policy goals. They should then improve and make permanent the provisions that pass muster, and shelve those that don’t.

Taking a close look at each tax incentive on a case-by-case basis is absolutely necessary. Some of the policies, like the “active financing exception”—a loophole by which financial services firms and manufacturers can defer U.S. taxes on overseas income from specific types of financial transactions—are simply giveaways to some of America’s largest corporations. (There’s a reason why keeping this provision around is a “top lobbying priority for companies such as GE and JP Morgan.”) Meanwhile, other tax extenders seem to benefit society—such as the provision that lets teachers deduct $250 worth of school supplies they buy for their classrooms with their own money—but these are regressive, and could better accomplish their goals (in this case, decreasing the cost of school supplies as borne by teachers) outside of the tax code (say, by giving more money directly to schools). For still other provisions, like the ones that benefit thoroughbred racehorse owners or Puerto Rican rum distillers, the punchlines just about write themselves. And because the extenders would go into effect retroactively, it’s hard to claim they’re helping incentivize any particular desired behavior.

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As we enter graduation season, the media will get flooded with stories of labor market prospects of young people, college graduates, and of course, student debt. EPI will do its fair share of flooding (with a 2014 update to our Class of 2013 paper), but one aspect that often gets overlooked are those who have started college but will never graduate. Young adults with some college but no degree are stuck in a catch-22, without the better employment opportunities and wage increases that comes with a college degree, but with a similar mountain of student debt. The number of people that fail to complete college—and the burdens this places on them—is one of the most corrosive aspects of the higher education system.

The Bureau of Labor Statistics recently released new data from their National Longitudinal Survey of Youth, a survey that follows women and men born between 1980 and 1984 in an effort to provide long-term information on the employment experiences and educational attainment of young people. The educational makeup of young adults by the time they are 27 is such: 28.1 percent have a college degree, 25.5 percent have a high school degree or equivalent with no further education, and 8.7 percent have not finished high school. That leaves nearly 40 percent of young adults who have some college education by age 27 (this includes individuals with an associate’s degree or any enrollment in college after high school). Put another way, of the 66 percent of young adults who began college, 37.5 haven’t completed their degree by age 27.

While it’s encouraging to see that more young adults are getting their foot in the door at colleges, you need to graduate to reap the higher wages of a college degree. This is seen most obviously in the entry-level wages young adults. Currently, entry-level college graduates (age 23-29) make $20 an hour, while young adults with some college (ages 21-27) make $12 an hour. An hourly wage of $12 is much closer to high school graduates’ wages of $10 an hour than to the wages of their college graduated peers.

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Total employment in the U.S. labor market is currently more than 600,000 jobs below where it was when the Great Recession officially started in December 2007, and it likely won’t surpass its December 2007 level for several months.

But private sector employment is another story. The private sector is currently “only” 126,000 jobs below where it was when the Great Recession started, which means it is poised to surpass its pre-recession peak when the March jobs numbers are released on Friday.

That makes this a good time to note that re-attaining pre-recession employment levels is a pretty meaningless benchmark economically. Because the working-age population (and with it, the potential labor force) is growing all the time, the private sector should have added millions of jobs over the last six-plus years just to hold steady. That means that even when the pre-recession employment level is re-attained, there will still be a huge jobs gap. Every month when the employment numbers are released, we update the total gap in the labor market (which includes both the public and private sector). The figure below shows that gap just for the private sector, with a current shortfall of 5.9 million jobs. When the March numbers are released on Friday, that gap may drop to 5.8 or even 5.7 million, but we are still far, far from healthy labor market conditions.

Conventional wisdom holds that the American workforce lacks the specialized skills that employers are looking for, and that this “skills gap” is the main, if not the only, explanation for our persistently high unemployment rate—especially our long-term unemployment rate. Paul Krugman helpfully exploded this idea in his New York Times column on Monday, making these key points:

• The ratio of unfilled jobs to unemployed workers today is quite low by historical standards. There are always unfilled jobs, because workers leave and employers have not yet had time or opportunity to hire replacements. This is a frictional, not structural, phenomenon. There are very few, if any, jobs today that remain unfilled because employers cannot find workers with the needed skills.
• Today’s long term unemployed have skills comparable to those of recently laid-off workers “who quickly find new jobs.” The long-term unemployed face a shortage of demand for their labor, not skill requirements beyond their education and training.
• If there really were a skills shortage, we would expect to see wages increasing in job categories where skills are allegedly in short supply. But such wages are not increasing.

Nor have wages increased for quite a while. It is especially telling that wages of college graduates, not just those of non-college educated workers, have been flat for a decade, and that young college graduates have been faring poorly, even prior to the 2008 recession. According to a recent report of the New York Federal Reserve Board, the percentage of recent college graduates “who are unemployed or ‘underemployed’—working in a job that typically does not require a bachelor’s degree—has risen, particularly since the 2001 recession. Moreover, the quality of the jobs held by the underemployed has declined, with today’s recent graduates increasingly accepting low-wage jobs or working part-time.” In other words, “skills gaps” are responsible for neither our unemployment problems nor our wage problems.

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In a post last month I compared nondefense discretionary spending (NDD) in three budget proposals: the Murray/Ryan budget deal, the administration’s budget, and the Congressional Progressive Caucus’s (CPC) budget. Nondefense discretionary spending is the part of the budget containing much of our spending on infrastructure, education, and public research and development—the part concerned with investments in the future.

House Budget Committee chair Paul Ryan released the House GOP fiscal year 2015 budget proposal today. The chart below shows nondefense discretionary spending as a percent of GDP in FY2007 (the year before the onset of the Great Recession) as a historical comparison to the various budget proposals.

For FY2015, the House GOP budget would adhere to the Murray/Ryan budget deal with NDD equivalent to 2.7 percent of GDP; the president’s NDD proposal is slightly higher at 2.8 percent of GDP and the CPC’s would be 3.8 percent of GDP. However, beginning in FY2016, the House GOP proposes to start slashing NDD spending. By FY2024 they propose that NDD spending shrink to 1.7 percent of GDP—almost half of what it was in 2007, and half of what it was during the Reagan Administration.

Earlier today, House Budget Committee Chair Paul Ryan (R-Wis.) unveiled the House Republicans’ fiscal year 2015 budget resolution. Like Chairman Ryan’s FY14 budget, this year’s model (again called “The Path to Prosperity”) aims to balance the budget within a decade—an economically nonsensical goal during a slow recovery, and one that requires damaging austerity to achieve.

In many respects, the austerity Chairman Ryan calls for this year is even more painful than in previous years. This is because Ryan is stubbornly hanging on to his goal of balancing the budget amid changing economic and political conditions, including a downward revision of $1 trillion in projected revenues over ten years and a deal he made with Senate Budget Committee Chair Patty Murray (D-Wash.) to not change discretionary spending levels in FY15 (creating the need for more draconian cuts throughout the ten-year “budget window”), as well as an unbending refusal to increase revenues.

Five years after the end of the Great Recession, our economic recovery is plodding, not because of massive deficits (which are not currently massive—they have fallen faster than at any point in the last 60 years), but due to a lack of aggregate demand. In a demand-starved economy like ours, public spending has a high multiplier effect, meaning that for each dollar the government spends, more than a dollar is added to the economy. This is especially true when that public spending is allocated in such a way that it can circulate quickly throughout the economy—for example, through low-income support programs (which are automatic stabilizers) or infrastructure investments that would create jobs rapidly.

For that reason, pulling back spending in today’s economic environment, as Chairman Ryan proposes, would have a deleterious effect on the economy and jobs. On net, I estimate that the House budget resolution would decrease GDP by 0.9 percent and decrease nonfarm payrolls by 1.1 million jobs in fiscal year 2015, relative to CBO’s current-law baseline. The following fiscal year, when Ryan’s cuts to discretionary spending kick in, “The Path to Prosperity” would decrease GDP by 2.5 percent and cost 3.0 million jobs. And if the recovery remains sluggish, large job losses could continue under the Ryan budget in 2017 and beyond.

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Andy Puzder is the CEO of CKE Restaurants (Hardee’s and Carl’s Jr.). Bloomberg reported his 2012 salary and other compensation as $4.485 million, so he is doing well in what he likes to deride as the Obama economy.  His restaurant chain is doing well, too, apparently, since its profits reportedly rose more than 30 percent last year. (So much for overregulation!)

But Puzder is opposed to President Obama’s proposal to update the Department of Labor’s overtime rules, an update Puzder claims would turn CKE’s poorly paid assistant managers into “glorified crew members.”  Those rules have been updated only once in the last 39 years and are so obsolete that workers earning less than the poverty level can be considered “executives” and denied overtime pay even if they work so many extra hours that their pay falls below the minimum wage. But that helps Puzder make a bigger profit, so he says leave the rules alone.

One thing is certain: Puzder won’t let any rule change reduce the millions he takes home from CKE. He wants us to know he will take it out of his employees, one way or another. As Puzder says, “overtime pay has to come from somewhere, most likely reduced hours, reduced salaries or reduced bonuses.”

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On Wednesday, the National Labor Relations Board (NLRB) region 13 director, Peter Sung Ohr, granted the Northwestern University football players the right to join the College Athletes Players Association (CAPA) union. The petition by the Northwestern football players was filed by their quarterback, Kain Colter, and had the support of the United Steelworkers. Ohr’s decision establishes a precedent for athletes at private colleges and universities to form or join unions. At the very least, it will allow players to join together to voice their concerns with issues that affect their well-being such as injury risk and time commitment. As of January, CAPA’s stated goals for the petition were limited to seeking more medical protections for players and guaranteeing scholarships in the event of injury. This decision, however, could also fuel growing criticism of the thriving business of college athletics and encourage the idea that the players should be paid on top of their scholarships.

Northwestern University and the NCAA have criticized the decision, arguing that college athletes are amateur athletes and students, not employees. Yet, the facts of the current system indicate that by any definition, these athletes are woefully underpaid employees. Broadly speaking, an employee is one who is compensated for one’s work and is under the control of an employer. The players at the Northwestern football team were compensated in the form of grant-in-aid of about $61,000 each academic year to cover the costs of tuition, fees, room, board, and books required for their education. As for control, Ohr touched on several aspects of the Northwestern football program’s system that are typical of many college athletic programs, in which players are under the supervision of their coaches and must follow a special set of rules. Northwestern sets strict limits on players’ ability to pursue outside employment, post on social media, or profit from their “athletic ability or reputation.” Additionally, players are required to commit 40 to 60 hours of time for conditioning, meetings, and practice for the team. “Not only is this more hours than many undisputed full-time employees work at their jobs,” Ohr noted, “it is also many more hours than the players spend on their studies.”

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The Supreme Court is deliberating in a case that will decide whether in-home personal care and home health aides are allowed to unionize and bargain agreements with government agencies. The case will also decide whether their contracts can require every aide who benefits from the collective bargaining agreement to pay her fair share in agency fees (or dues, if she is a union member).  These collective bargaining agreements have made a huge difference in the lives of the overwhelmingly female and disproportionately minority workforce that cares for the sick and disabled, the frail elderly and small children in their homes or in the homes of the customers.

Until the 1990’s, when states and counties across the nation began creating public entities to act as employers and bargain collectively with the workers’ unions, the in-home care workers rarely were paid more than the minimum wage, they had no coverage for health or dental insurance and no pension or retirement plan. Even today, after almost two decades of progress, half of these workers have incomes less than twice the poverty level and they earn far less than workers in other occupations – even after taking into account gender, age, race, education, and geography.

But where in-home aides have been permitted to unionize and bargain collectively they have improved pay and benefits, training, retention, and the safety of clients and workers alike. In Illinois, where the Supreme Court case challenging unionization arose, the latest contract includes $13.00 an hour pay, health and dental insurance, a grievance procedure, and paid training hours – a huge improvement over what was formerly minimum wage work with no benefits and no respect.

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