Everybody knows the most pressing economic problem facing the United States today is joblessness. And many also know that this problem is economically solvable, yet not being solved largely because of political gridlock.

But, some might still find it hard to believe that policymakers could really be so indifferent to the economic struggles of most American families. This is where The State of Working America—released yesterday—comes in handy. Think of it as the Rosetta Stone of American economic policymaking over the past generation. Or just a book and accompanying website with lots and lots of charts and tables. Either way.

The two important points that come through loud and clear from its tracking of trends in income, wages, jobs, wealth and poverty are:

• The primary barrier to low– and middle-income families seeing decent rates of economic growth over most of the last generation was the simple fact that a very narrow slice at the very top claimed a vastly disproportionate share of the fruits of economic growth Read more

In his Democratic National Convention speech last week, former President Bill Clinton joked about conservatives’ struggle between professed concern about public debt, proposed tax cuts, and arithmetic:

“Somebody says, ‘Oh, we’ve got a big debt problem. We’ve got to reduce the debt.’ So what’s the first thing [Republican presidential nominee Mitt Romney] says we’re going to do? ‘Well, to reduce the debt, we’re going to have another $5 trillion in tax cuts, heavily weighted to upper-income people. So we’ll make the debt hole bigger before we start to get out of it.’”

There are plenty of holes in Romney’s plan, which would translate to somewhere between $2.7 trillion and $6.1 trillion in deficit-financed tax cuts over the next decade, relative to current tax policies.1 Within this range, their impact is difficult to quantify because the Romney plan suffers from serious sins of omission.

Romney initially proposed repealing the estate tax; eliminating capital gains, dividends, and interest taxation for households with adjusted gross income under $100,000 ($200,000 for married taxpayers filing jointly); cutting the corporate income tax rate from 35 percent to 25 percent; eliminating the corporate alternative minimum tax (AMT); and repealing new taxes from the Affordable Care Act (ACA). This $2.7 trillion package of tax cuts would be entirely deficit-financed. Read more

By Scott Nova and Isaac Shapiro

Information from Apple’s own factory auditor, the Fair Labor Association, and new reports in Chinese media show that the iPhone 5 is being produced by employees:

• Who work far more hours than allowed by Chinese law;
• Who are not paid for all the hours they work;
• Who lack any true voice in the workplace to advocate for necessary reforms
• Who partly consist of thousands of students who are being coerced to work, in a practice that Chinese media outlets characterize as “forced labor”

In short, any excitement over any new capabilities of the iPhone 5 demands to be tempered by a realistic appraisal of the unacceptable working conditions for the Chinese workers producing it. These conditions are explained in some detail below; a fuller analysis by our organizations of what changes in labor practices have and have not been made at Foxconn (Apple’s lead supplier in China) over the past year is forthcoming. Read more

If you believed the Wall Street Journal Washington Wire headline or the rhetoric of Arizona’s attorney general, you’d think the right to use card check to select a union as a bargaining representative had been struck down by a U.S. district court. But it always helps a little to read the court’s decision. And having done so, I’m happy to report that the obituary for card check as a way to select a union was premature, at best.

Arizona, goaded by the Koch brothers and anti-union businesses, passed a constitutional amendment declaring that secret ballot elections are the only permissible way to select an employee representative in Arizona. In other words, card check elections are illegal. (“The right to vote by secret ballot for employee representation is fundamental and shall be guaranteed where local, state or federal law permits or requires elections, designations or authorizations for employee representation.”) Federal law protects card check elections, so the National Labor Relations Board sued Arizona in federal court, and the court issued a decision on Wednesday. Read more

In his convention speech last night, former President Bill Clinton claimed that, “We could have done better, but last year the Republicans blocked the President’s job plan, costing the economy more than a million new jobs.” According to Glenn Kessler of the Washington Post’s Fact Checker, this claim was “merely a fuzzy and optimistic projection.” This is flat-wrong, and the evidence cited by Kessler to support his claim is far “fuzzier” than the counterfactual impact of the American Jobs Act (AJA).

The problem revolves around the baseline against which policy changes are scored. With the benefit of hindsight, we know pretty well how many jobs would have been created relative to what actually happened in terms of 2012 policy changes. The article linked to by Kessler, and on which he hangs his criticism, is full of quotes from forecasters saying that the AJA wouldn’t add to jobs because, “Some of this is just extending support that was already in place,” and implicitly would happen anyway. We now know that this is wrong—much of what was called for in the AJA turns out not to have supported the economy in 2012 (because it was never passed). And if it had been, the effects would have been … to add over a million jobs to the economy. Wonky details follow. Read more

People are buzzing about former President Clinton’s speech to the Democratic convention last night. And the man clearly knows how to communicate ideas about economic policy. But for my money, it was Elizabeth Warren who got it spot-on:

“I’m here tonight to talk about hard-working people: people who get up early, stay up late, cook dinner and help out with homework; people who can be counted on to help their kids, their parents, their neighbors, and the lady down the street whose car broke down; people who work their hearts out but are up against a hard truth—the game is rigged against them… It wasn’t always this way.”

 This isn’t just a good translation of policy analysis into English—it could also pretty much serve as the press release for a book EPI is officially releasing next week: The State of Working America, 12th edition.

The State of Working America (SWA, around here) is the comprehensive reference tracking trends in wages, incomes, and wealth of American families, and it focuses particular attention on low- and middle-income workers and their families—the same group Warren was talking about last night. We’ve never intended SWA to be a policy manifesto—it has always instead been a “just the facts” kind of project. But this year, we decided to connect some awfully obvious dotsRead more

Almost all seniors are covered by Medicare and most also have supplemental coverage. Nevertheless, out-of-pocket (OOP) health expenditures are higher for seniors than younger households because seniors tend to be in worse health. Though the weak economy and the 2006 Medicare prescription drug benefit have moderated growth in OOP spending, per capita costs are nearly three times higher for seniors than for younger households ($2,849 versus $997).

OOP costs have grown significantly faster than inflation over the past 25 years—at an average annual rate of 4.4 percent across all age groups (4.7 percent for seniors), compared to 2.7 percent annually for overall consumer price index (CPI-U) inflation. These figures are based on the U.S. Bureau of Labor Statistics’ Consumer Expenditure Survey (CEX) and reflect faster growth in the price of medical goods and services as well as greater consumption and cost sharing.

Average per capita spending for seniors now consumes 20 percent of the average Social Security retiree benefit, up from 16 percent in 1985. These figures understate the financial burden posed by OOP health spending because CEX does not survey people in nursing homes. A Kaiser Family Foundation analysis of Centers for Medicare & Medicaid Services (CMS) data found that long-term care constituted 19 percent of OOP health care spending for Medicare beneficiaries in 2006.

The supposedly kinder and gentler Medicare voucher proposed this year by House Budget Committee Chairman and Republican vice presidential nominee Paul Ryan (R-Wis.) is less draconian than last year’s version, but still packs a wallop. The voucher shifts costs to seniors because the value of the voucher can’t grow faster than half a percentage point above per capita GDP, and health care costs are projected to grow faster than that. (You can ignore the part about tying the voucher to the second-lowest-cost private plan or, if it’s cheaper, fee-for-service Medicare cost growth—this is just window dressing because overall costs will exceed the “fallback” spending limits.)

The voucher will initially shift around 11 percent of costs ($700) to seniors in 2023, an amount that will grow to 45 percent ($15,700) by 2087 (all figures are in 2012 dollars and rounded to the nearest $100). You can see how this adds up by summing the annual amounts in the table below over life expectancy in retirement. Thus, for example, a 40-year-old female who expects to retire at 65 in 2037 will live to about 2058, during which she will pay roughly $82,800 more for health care.Read more

The emergency unemployment compensation (EUC) benefits that millions of Americans are receiving to help them survive a period of long-term joblessness will terminate on Dec. 31 under current law. If the modest but steady income EUC provides—averaging about $300 per week—is cut off, then families, communities, and businesses across the country will suffer. Jobless workers will struggle to pay their rent and utilities and will reduce spending on discretionary purchases of food, clothing, recreation, and entertainment. Businesses, in response, will hire fewer employees. If EUC is not extended through the end of 2013, the effects on the economy will be serious: Economic activity will be about $56 billion lower than it otherwise would have been1and about 430,000 jobs will be lost—at a time when every job is precious.

So far, I have  heard nothing to indicate that policymakers in Washington are addressing this matter, even though Democratic and Republican leaders are about to close a deal on keeping the government running for the next six months. It would be disastrous for Congress and the president to let EUC expire. Continuing EUC has to be part of the continuing appropriations legislation that congressional leaders are negotiating right now, which will fund existing programs all across the government through March 2013 at current levels. Read more