Speaker of the House John Boehner has just released the Republican Party’s anxiously awaited and very brief “Standards for Immigration Reform.” President Obama and the Democrats, and the Senate generally, have needed a dancing partner to get immigration reform passed, move the country forward, and give it an economic boost by granting legal status and citizenship to the nearly 12 million unauthorized immigrants who are living in the shadows. Although it’s far from a concrete legislative proposal, the Standards released today at least give us a hint of what the Republican caucus might eventually be willing to vote on.

My initial reaction to the Standards can be summed up as, “You’ve come a long way, baby.”

Boehner laid out six specific Standards. Much of it is unobjectionable and looks very similar to what passed in the Senate’s comprehensive immigration bill (S. 744) in the summer. The section titled “Border Security and Interior Enforcement Must Come First” is vague and takes a jab at administrations from both parties for not adequately enforcing immigration laws, and takes a thinly veiled swipe at President Obama by noting that presidents should not be able to “unilaterally stop immigration enforcement.” This of course, ignores the nearly two million deportations the president’s Department of Homeland Security (DHS) has carried out, much to the chagrin of his progressive supporters and immigration advocates. The “Employment Verification and Workplace Enforcement” and “Implement Entry-Exit Visa Tracking System” sections are also vague, but broadly call for E-Verify and entry-exit visa system reforms like those in S. 744. One notable exception is the Republicans’ insistence that the entry-exit system be biometric. (Whether such a system should be biometric was a main topic of contention during the Senate’s debate on S. 744.)Read more

Yesterday morning, I had the honor of participating in a Democratic Steering and Policy Committee hearing, hosted by Leader Nancy Pelosi, in the Cannon House Office Building. Appearing with Lilly Ledbetter—whose story of pay discrimination went all the way to the Supreme Court and ultimately resulted in new legislation in 2009 named after her—and Laura Miu, a psychological counselor, who recently experienced pay discrimination, I was able to share recent research by the Institute for Women’s Policy Research (IWPR), which I lead, and by the Economic Policy Institute (EPI), the think tank that provides the last word on virtually all topics related to American workers. The briefing attracted 20 members of Congress, including Representatives Rosa DeLauro and Robert Andrews, who co-chair the Steering and Policy Committee, and Representatives Donna Edwards and Doris Matsui, who chair and vice-chair, respectively, the Democratic Women’s Working Group. IWPR’s research was originally released in January when it appeared in the latest Shriver Report, A Woman’s Nation Pushes Back from the Brink, produced in partnership with the Center for American Progress. EPI’s research was published as an update in December 2013 of an earlier paper last spring that details the impact of an increase in the minimum wage to $10.10 per hour.

The economic progress women have made in the past five decades is enormous. Women have entered many occupations that had been virtually closed to them, now earn more over their lifetimes, and contribute more to family income and to the economy as a whole than ever before.

But there is still a long way to go. Despite the passage of the Lilly Ledbetter Fair Pay Act of 2009, which makes it easier for women to sue for equal pay—avoiding a similar plight as the bill’s namesake, when she learned she was earning vastly unequal pay near the end of her career—progress toward closing the pay gap has stagnated. Since 2000, the wage ratio has remained around 76.5 percent. If trends of the past five decades are projected forward, it will take almost another five decades—until 2058—for women to reach pay equity.

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The last six months of 2013 saw the headline GDP growth rate reach 3.7 percent. That’s a healthy number. Not gangbusters (we really have seen growth rates over 5 percent for a year or more in previous recoveries where there was slack in the economy comparable to what persists today), but undeniably healthy.

So what’s to be glum about?

Strip out the contribution of inventory investments and exports, and add in (rather than subtract) the value of imports. This is a measure of real “final sales to domestic purchasers,” or, what is sometimes called domestic demand. It’s a measure of how much demand from households, businesses, and governments is growing—and since the economy’s problem remains a huge shortfall of this demand relative to productive potential, it’s a key barometer of health.

Domestic demand growth for the last six months of 2013 was only half as fast as headline GDP growth (1.8 percent).

Key evidence that this slow rate of domestic demand growth is keeping us from making good progress in closing the gap between aggregate demand and potential supply (and closing this gap really should be the operative definition of “full recovery”) is the stubbornness of core price growth—the year over year change in the “market-based” deflator for core (i.e., excluding food and energy) price deflator for personal consumption expenditures was 1.1 percent for the last three quarters of 2013. This is well below the too-conservative target of 2 percent inflation often assumed to be guiding monetary policymakers. In short, this is a clear sign of an economy not climbing rapidly back to full employment.

Are there any reasons to be less glum about 2014? For sure.

The big one is that federal fiscal policy will no longer be actively throttling growth. It knocked nearly a full percentage point off the fourth quarter growth rate. To be clear, fiscal policy won’t aid growth in 2014, instead it will provide a very slight drag rather than an anvil-heavy drag. This is what counts as progress in today’s fiscal policymaking. But, we’ll take what we can, I guess.

Details of the president’s new retirement plan emerged today, and it’s nothing to get excited about. On the bright side, it’s refreshing to see a focus on investment risk, since many 401(k) participants invest too aggressively based on the mistaken belief that cumulative returns average out over time, while risk-averse people may be put off from saving altogether.

However, cautious savers already have convenient access to low- or no-risk investment options, either through existing retirement accounts or by purchasing Treasuries through automatic payroll deduction. What the myRA plan does is offer a modest tax break for investing in a Treasury bond fund similar to one available to federal workers. The tax benefit is modest because it is based on taxes that would otherwise be paid on investment earnings, which would likely be low.

MyRA accounts would be structured like Roth IRAs, with taxes paid up front. Another selling point of the president’s plan is that participants would be able to change their minds and withdraw their money without paying a penalty, encouraging participation by risk-averse low-income workers. However, this would also likely lead to significant pre-retirement leakage. Finally, participants would earn slightly higher investment returns than they would by investing in short-term Treasury bills without being locked in to a longer-term investment.

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Rick Snyder, the Republican Governor of Michigan recently introduced a new plan to “jump-start” the economically suffering city of Detroit. He proposes that over the next five years, the government authorize the granting of 50,000 EB-2 green cards—i.e., immigrant visas granting legal permanent resident (LPR) status in the employment-based, second preference category—to foreign workers who hold advanced degrees or have “exceptional ability” and are willing to live and work in Detroit. This could either be done by creating additional new immigrant visas, or by reallocating existing ones. There’s no question that Detroit needs many more people to move into its empty spaces and increase its tax base dramatically. But is this the way to do it? It’s an interesting idea worth exploring, but the mechanics of it would be complicated, the numbers are probably unrealistic, and the politics will undoubtedly be messy. It also takes the focus off the 18 percent of workers in Detroit who are unemployed, and those who are seeing their pensions plundered. With that being said, here are some of the main issues at play.

Allocating new or existing immigrant visas to an individual city or state has never been done in the United States. However, it is not unprecedented. Many Canadian provinces are able to sponsor permanent residence visas for immigrants who agree to live and work in the sponsoring province (what’s known as the Provincial Nominee Program). If enacted in the United States, an important question to consider would be the visa’s terms and conditions: Immigrants granted an EB-2 can live and work anywhere they wish, so to restrict them to Detroit, the government would have to make the visa provisional; that is, make it revocable if the holder doesn’t live and work in Detroit.

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In his State of the Union address last night, President Obama articulated some core truths that ought to guide economic policy, with lines like “the best measure of opportunity is access to a good job,” and “Say yes.  Give America a raise.”

We need policies to create more jobs, but we must insure that they’re good jobs, with benefits and decent pay that can support a family and fuel economic growth based on what people earn on the job, as opposed to what households borrow or “gain” in asset bubbles.

The president highlighted the problem of stagnant wages, noting that “women hold a majority of lower-wage jobs—but they’re not the only ones stifled by stagnant wages.” This is absolutely true. I illustrated this point recently by pointing out that the share of young (ages 25-34) men earning poverty-level wages ($11.29 in 2012) had doubled from 1979 to 2012, jumping from 10.8 to 25.5 percent. Young women were even more likely to earn poverty-level wages, with 31.1 percent doing so in 2012. There’s been some, but not much, progress for women on this front, since a third earned poverty-level wages in 1979.

This is not news to us at EPI—we’ve focused on job quality and wage stagnation since our founding in 1986, and pounded on these themes in the twelve editions of the State of Working America and numerous other works. Generating better jobs and better pay is the key to addressing inequality and strengthening and expanding the middle class. Unfortunately, we have only seen broad-based wage growth for a few years (the late 1990s) over the last four decades. Over the last ten years there has been no wage growth for the vast majority of workers, white collar or blue collar, among college and high school graduates. We cannot get where we want to go unless different wage dynamics are generated and that has to be a central focus of economic policy. The president’s call for Congress to pass the Harkin-Miller minimum wage bill was absolutely right, as is his executive order requiring federal contractors to pay $10.10. Providing income to working families through a robust social insurance system, and work supports such as an improved EITC, are also pillars of economic growth and living standards.

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Today marks the fifth anniversary of the Lilly Ledbetter Fair Pay Act.  Named after Lilly Ledbetter, who worked for a production plant for years without knowing she was getting paid less than her male counterparts, the bill protects workers against pay discrimination. The Supreme Court had previously ruled that Ms. Ledbetter had filed her case too late, as the company’s decision on her case had been made years earlier. The law now says that pay discrimination on the basis of sex, race, origin, age, religion and disability occurs whenever an employee receives a discriminatory paycheck, when a discriminatory pay decision is adopted, or when a person is affected by a pay decision or practice. It is a great first step in giving women the tools to be economically secure in today’s workplace. But it’s not enough.

At a time when both women and men face the lingering effects of the Great Recession and stagnating wages at all education levels, a crucial step to improve women’s labor market success is to ensure a full recovery from the Great Recession. While it is true that women have regained pre-recession employment levels—contrasted with men, who are still 1.5 million short—women’s comparable return to 2007 employment is largely because the industries that have taken the biggest employment hits since 2007 also have a disproportionately larger share of male workers. However, within the majority of industries, women’s job growth has trailed men’s. Additionally, these numbers fail to address the fact that the working-age population (and with it the potential labor force) is growing all the time. Accounting for the growth in the potential female labor force, women are still 3.5 million jobs in the hole.

In this economy, it is clear that women need more jobs (as do men), but they also need pay equality. Women who work full time, year round still only earn 77 percent of what men earn, a pay gap that accumulates over time. For a 40-year working career, the average woman loses $431,000—no small amount. And, women with a college degree are no exception. Over their lifetime, women with at least a bachelor’s degree earn approximately $713,000 less than similarly educated men over their lifetime. Additionally, over half of women workers make poverty-level wages over half of the poverty-level wage workers are women (poverty-level wage workers are defined as workers who earn wage below what a full-time, full-year worker needs to give a family of four enough income to reach the poverty threshold). Fully, 32.0 percent of workers in 2011 earn poverty-level wages.

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Things are good for Google Executive Chairman Eric Schmidt. With $8.3 billion in his bank account, he’s the 49th wealthiest person in America. And he spent the week at the Davos World Economic Forum to celebrate.

During Schmidt’s Davos fireside chat, which was reported on by Henry Blodget at Business Insider, Schmidt had this to say, in the context of a discussion of income inequality:

“The stagnation in middle-class wages is not just a middle-class problem. It’s an economic problem. And it’s one of the main reasons that global economic growth is so lousy.

Why do stagnant middle-class wages hurt the economy?

Because the middle-class folks whose wages are stagnant are the global economy’s biggest spenders.”

He hit the nail right on the head. Wages for the vast majority of Americans have been basically flat for the last 40 years. To be specific, wages for the median worker have increased by just 5.0 percent between 1979 and 2012. During that time, workers gained a lot of education, and the economy as a whole became 75.4 percent more productive—we now produce more per hour worked than we ever have. Yet the typical American worker is being paid almost no more than his or her counterpart a half century ago.

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A higher minimum wage is an important way to address wage inequality, as the erosion of the minimum wage is the main reason for the increase in inequality between low-and middle-wage workers (in particular the 50/10 wage gap, that between the median and the 10^th percentile earner). This is particularly true among women, the group for whom the wage gap in the bottom half grew the most. As the figure below shows, two-thirds of the increase in the 50-10 wage gap can be attributed to the erosion of the real value of the minimum wage. [The 50/10 wage gap grew 25.2 (log) percentage points between 1979 and 2009 and that two-thirds of this increase (16.5 percentage points, or 65 percent of the total) can be attributed to the erosion of the minimum wage.] The paper this figure draws on usefully and appropriately captures the spillover impact of the minimum wage—the impact on those earning above the legislated rate. This finding makes sense, since it was in the 1980s that the minimum wage eroded the most, and that was the same time period when the 50/10 wage gap among women expanded greatly. The erosion of the minimum wage explains over a tenth (11.3 percent) of the smaller 5.3 (log) percentage point expansion of the 50/10 wage gap among men. For workers overall more than half (57 percent) of the increase in the 50/10 wage gap was accounted for by the erosion of the minimum wage.

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University of Oregon labor scholar and EPI research associate Gordon Lafer often points out how relatively poor the quality of life is in right-to-work states, on average, compared to states that don’t restrict union contract rights.

Politico just came out with a new ranking of the 50 states, on a combination of 14 different measures of quality of life, including “high school graduation rates, per capita income, life expectancy and crime rate.” Then they average those 14 to create one overall ranking of the states.

The outcome suggests the opposite of corporate assertions that “right-to-work” states are doing better than others. According to Politico, 4 of the 5 best states to live in are non-right-to-work. In order, they are New Hampshire, Minnesota, Vermont, Utah, and Massachusetts.

Right-to-work states account for 8 of the 10 worst states, and all 5 of the 5 worst states (in order, from 46th-50th: Alabama, Tennessee, Arkansas, Louisiana, Mississsippi). The majority of RTW states are not only in the bottom half of the country, but in the bottom 20 of the 50 states.

Lafer’s home state, Oregon, where corporate backers are trying to pass a public sector right-to-work law, is ranked 23rd, outperforming nearly 2/3 of the states that currently have RTW laws.