Speaker McCarthy’s debt limit proposal = enormous human toll: Proposal would impose burdensome work reporting requirements to restrict access to Medicaid and food stamps
This week, Speaker of the House Kevin McCarthy plans to hold a vote on a bill that would raise the nation’s debt limit, but only in conjunction with extraordinarily steep spending cuts and new barriers to accessing income support programs. This is the next milestone in House Republicans’ attempt to play a game of dangerous political brinkmanship with the U.S. economy, trying to force through harmful and deeply unpopular federal spending cuts in exchange for increasing the debt limit. This approach recklessly flirts with bringing on the economic catastrophe of a government default in the short term.
Speaker McCarthy’s proposal would slash spending across federal programs for the next decade, cutting federal resources for everything from child care programs to environmental protection safeguards. If these deeply unrealistic spending cuts actually came to pass, the human toll would be enormous, and economic growth would be deeply damaged.
The McCarthy proposal also resurfaces a completely inaccurate but alarmingly persistent conservative claim: the idea that government anti-poverty programs are unnecessarily generous, bloated, and are keeping people out of the workforce who should otherwise be supporting themselves entirely through income earned in the labor market. The proposal seeks to severely restrict access to Medicaid health coverage and food stamps by imposing onerous requirements to prove that recipients are working or looking for work. Past evidence about these types of burdensome reporting requirements shows clearly that they will not actually lead to increased employment but will deprive vulnerable families of vital support.
State and local experience proves school vouchers are a failed policy that must be opposed: As voucher expansion bills gain momentum, look to public school advocates for guidance
Recently passed school voucher bills in four states are part of an extreme and unpopular campaign to defund and privatize public schools. As momentum builds around efforts to divert public funds to private schools, lawmakers and advocates should recommit to opposing harmful voucher bills and supporting greater investment in public education. Research and advocacy by educators and champions of public education in the states can serve as a guide.
On Tuesday, the House Committee on Education and the Workforce held a congressional hearing on voucher expansion featuring three voucher advocates and one opponent. The hearing comes amid an intense, coordinated push this year by anti-public school advocates who have long sought to privatize public education, in part through state-level efforts to enact private school voucher programs in state legislatures across the country.
School vouchers—which include traditional private school subsidies, Education Savings Accounts, and private school tuition tax credits—are diversions of public funds to private and religious schools. Efforts to implement and expand voucher programs in states across the country are key to the relentless and enduring campaign to defund and then privatize public education, a movement that also includes manufacturing mistrust in public schools and targeting educators and their unions.
Tech and outsourcing companies continue to exploit the H-1B visa program at a time of mass layoffs: The top 30 H-1B employers hired 34,000 new H-1B workers in 2022 and laid off at least 85,000 workers in 2022 and early 2023
Key takeaways:
- The H-1B visa program was created to fill labor shortages in professional fields and could be a valuable temporary work visa program, but new data show it is being subverted by employers that are not facing labor shortages and by outsourcing firms.
- H-1B use is overly concentrated among a small number of employers. In 2022, the top 30 H-1B employers hired more than 34,000 new H-1B workers, accounting for 40% of the total annual cap of 85,000.
- The top 30 companies also laid off, or will imminently lay off, at least 85,000 workers in 2022 and the first quarter of 2023.
- Thirteen of the top 30 H-1B employers were outsourcing firms that underpay migrant workers and offshore U.S. jobs to countries where labor costs are much lower.
- Laid-off H-1B workers, who likely number in the thousands, must find a new employer to sponsor their visa within 60 days after their layoff or they may be forced to leave the United States.
- President Biden should use executive authority to fix the H-1B program and implement new rules that raise wages for migrant workers and prevent outsourcing companies from exploiting the H-1B program.
The H-1B program is the largest U.S. temporary work visa program, with a total of approximately 600,000 workers employed by 50,000 employers. The program’s intent is to allow employers to fill labor shortages for jobs that require a college degree, by providing work authorization for migrant workers in fields like accounting, journalism, health and medical, and teaching. Most H-1B workers, however, are employed in occupations like computer systems analysis and software development.
Visas for new workers are capped at 85,000 per year, but many employers are exempt from that annual cap, including universities and their affiliated nonprofit entities, nonprofit research organizations, and government research organizations. Approximately 130,000 temporary migrant workers will receive new H-1B visas each fiscal year to begin new employment for capped and cap-exempt employers, with another 300,000 receiving renewals (which are not subject to the cap). Every April 1, the government decides, via lottery, which employers will receive the 85,000 new visas subject to the cap.
The end of the pandemic public health emergency largely doesn’t change how state and local governments can use ARPA fiscal relief funds
Last week, Congress passed H.J.Res.7, a resolution that formally ends the public health emergency declared at the beginning of the COVID-19 pandemic. This termination is effective as of today—April 10, 2023—and signals the end of certain programs put in place in the past three years, including important measures related to Medicaid and health insurance.
However, the resolution will largely not affect the ability of state, local, territorial, and tribal governments to spend the close to $200 billion in unspent State and Local Fiscal Recovery Funds (SLFRF) allocated by the American Rescue Plan Act (ARPA). State and local governments will still be able to use remaining SLFRF dollars to make transformative investments to enhance equity and support working families and communities.
Jobs report shows 236,000 jobs added in March and wage growth slowing to disinflationary rates
Below, EPI president Heidi Shierholz shares her insights on the jobs report released this morning, which showed 236,000 jobs added in March. Read the full Twitter thread here.
The unemployment rate ticked down to 3.5% in March—near a 50-year low—and all for good reasons. The labor force participation rate and the employment-to-population ratio both rose. 2/
— Heidi Shierholz (@hshierholz) April 7, 2023
THIS IS IMPORTANT: The labor market is strong, but it’s not “too hot.” We know this because wage growth is slowing. We can absolutely sustain the kind of labor market tightness we are seeing today, if the Fed doesn’t stand in the way (or hasn’t already). 4/
— Heidi Shierholz (@hshierholz) April 7, 2023
Even with today’s slowdown, profit growth remains a big driver of inflation in recent years: Corporate profits have contributed to more than a third of price growth
As strange as this might sound, the actual economic cost of inflation is often hard to identify. One might think that it’s obvious that if inflation rises from 0% to 5% then the purchasing power of “real” incomes (nominal incomes adjusted for inflation) throughout the economy has fallen by 5%.
But that’s not right—or at least it’s not right without some further specification about just whose income has fallen. The “circular flow” diagram that is in chapter one of most macroeconomic textbooks highlights something profound: one person’s cost is another person’s income. So, when the price of eggs rises by 30%, that extra money out of shoppers’ pockets doesn’t disappear into thin air, instead it lands someplace. In the case of eggs, that someplace could be in chicken farmers’ incomes, or the profits of middle-men brokers, or the profits of grocery stores.
There are times when inflation really can be driven by most incomes in society rising at mostly the same pace. In this case, inflation is distributionally neutral, but there’s also no “real” cost. For example, if inflation accelerates from 0% to 4%, but nominal wage growth accelerates from 2% to 6%, real wages haven’t been harmed. The inflation we’ve seen since 2021 has had profound distributional consequences. Prices and incomes for low-wage workers, middle-wage workers, high-wage workers, and profits have not moved in lockstep but have seen very different rates of growth.
Most striking is the role of profits in starting and sustaining inflation since 2021. Figure A below shows one measure of profit “mark-ups” in the non-financial corporate (NFC) sector of the U.S. economy. We look at this sector because it has rich and timely data coverage. Mark-ups are essentially profits earned per unit of output divided by labor and non-labor costs.
An average of 27 workers a day suffer amputation or hospitalization, according to new OSHA data from 29 states: Meat and poultry companies remain among the most dangerous
This is a guest post from Debbie Berkowitz and Patrick Dixon at the Kalmanovitz Initiative for Labor and the Working Poor, Georgetown University.
In January 2015, the Occupational Safety and Health Administration (OSHA) began requiring all covered employers to self-report all worker injuries severe enough to cause an amputation, the loss of an eye, or an overnight stay in the hospital. This requirement covers employers in 29 states under federal OSHA jurisdiction. (Employers in the other 21 states and Puerto Rico with State OSHA Plan agencies must report severe injuries to their state agency.)1
Updated data released by federal OSHA reveal that employers from the covered 29 states reported 74,025 severe injuries to the federal agency between January 1, 2015, and May 31, 2022. That amounts to a stunning 27 workers a day, on average, suffering among the most severe work injuries in just over half the states.
Gender wage gap widens even as low-wage workers see strong gains: Women are paid roughly 22% less than men on average
Last week, we released the latest State of Working America Wages Report, which highlighted historically fast real wage growth for low-wage workers between 2019 and 2022. Even after taking into account higher inflation, the 10th percentile hourly wage grew 9.0% over that three-year period, significantly faster than at an equivalent point from any other business cycle peak in recent history.
This tremendous wage growth occurred because policymakers took a different path in the pandemic recession and passed vital relief and recovery measures at the scale of the problem, which created a strong labor market. Unfortunately, despite this recent period of growth, wage levels for U.S. workers at the bottom of the earnings distribution remain low, making it difficult to make ends meet in any county or metro area.
While low-wage workers experienced welcome gains, we were surprised to find that the gender pay gap widened, even though women are disproportionately more likely to be lower-wage workers. We found that the gender wage gap grew across three measures: the median, the average, and a regression-adjusted average (i.e., controlling for age, race/ethnicity, education, and geographic division). Here, we delve deeper into the question of what happened to women’s wages vis-a-vis men’s over the last three years as well as the large wage gaps that remain across educational attainment and are worse for Black and Hispanic women.
The gender wage gap
Between 2019 and 2022, the gender wage gap remained stubbornly large even as lower-wage workers experienced gains. Women, on average, were paid 20.3% less than men in 2019. By 2022, that gap widened to 22.2%. Similarly, the regression-adjusted wage gap, which has been stagnant for most of the last 20+ years, widened slightly from 22.6% to 22.9%. Much of the growing wage gap at the average (unconditional and regression-adjusted) is driven by men’s higher wages and faster wage growth at the top of the wage distribution. When we look instead at wage growth at the middle of the wage distribution—the 40th to 60th percentiles—a different story emerges. In 2019, these middle-wage women were paid on average 16.2% less than middle-wage men. In 2022, that wage gap narrowed to 15.4%, a small but promising move in the right direction.
Employers regularly engage in tactics to suppress unions: Examples at Starbucks, Amazon, and Google illustrate employers’ anti-union playbook
The U.S. labor movement has seen a resurgence in union activity in recent years. In 2022, more than 16 million workers were represented by a union—an increase of 200,000 from 2021. Union election petitions with the National Labor Relations Board (NLRB) increased by 53% during fiscal year 2022, the highest single-year increase since fiscal year 2016. Further, unions saw their highest approval rating in more than 50 years.
Despite this resurgence, the current unionization rate (11.3%) is well under half what it was roughly 40 years ago. This is because of decades of attacks on the right to organize and, increasingly, employers’ use of “union avoidance” consultants, including in response to recent union organizing campaigns at Starbucks, Amazon, and Google. These campaigns—illustrated below—are representative of employer response and hostility toward workers attempting to organize.
State and local governments have spent less than half of their American Rescue Plan fiscal recovery funds: Recovery funds should be used to rebuild the public sector
On March 13, the U.S. Treasury Department released data and an interactive dashboard showing how state and local governments have been using the $350 billion in State and Local Fiscal Recovery Funds (SLFRF) appropriated by the American Rescue Plan Act (ARPA). These funds have fueled transformative investments and contributed to a strong recovery from the pandemic recession, and state and local governments should use their remaining SLFRF allocations to rebuild the public sector and support working families.
SLFRF spending by state and larger local governments (cities and counties with a population over 250,000) totaled just over $114 billion by December 31, 2022, an increase of $13 billion in the final quarter of the year. Six states—South Carolina, Oklahoma, Missouri, Tennessee, South Dakota, and Mississippi—have spent less than 10% of their funding. All six have Republican governors and Republican majorities in their legislatures.
One of SLFRF’s main purposes was to allow states to restore their public-sector capacities quickly. There were 376,000 fewer public-sector workers in February 2023 than three years earlier. States should be using their SLFRF dollars to fill open positions and retain experienced employees by increasing the compensation of public-sector workers, one-third of whom are paid less than $20 an hour.
Evidence suggests states that have chosen to invest larger shares of their SLFRF dollars are having greater success in recruiting and retaining state employees in a highly competitive job market. As seen below, states that have spent less than 30% of their SLFRF allocation have seen their state government workforces recover more slowly compared with those that have spent over 30%. States, therefore, have an excellent opportunity to spend their recovery funds in rebuilding the public sector and restoring public services.
