Summer is typically the time of year when we see the highest rates of employment for teens — young people between the ages of 16 and 19.  This group includes new high school graduates along with others in search of an opportunity to earn a few extra dollars while out of school for the summer.  Based on this month’s jobs report, the 2015 summer job market for teens is off to a better start than last year.  According to seasonally unadjusted teen employment-to-population (EPOP) ratios, 32.1 percent of all teens found employment in June 2015, compared to 30.9 percent in June 2014 (Figure A).  However, this may actually be an understatement of the June 2015 increase.  The White House suggests that an earlier-than-normal reference week for this year’s survey is capturing a smaller share of the usual June gains.  June teen employment rates were essentially flat between June 2012 and June 2014.

Racial differences in teen employment rates mirror those of adults – 35.5 percent of white teens were employed in June, compared to 26.7 percent of Hispanic teens and 20.8 percent of black teens.

The relatively improved June 2015 numbers reflect the fact that this summer teens are entering a stronger job market than the last several years.  The average rate of job growth during the 12 months preceding June 2015 (July 2014-June 2015) was 245,000 jobs/month compared to 221,000 jobs/month during the 12 months preceding June 2014 and 175,000 jobs/month during the 12 months leading up to June 2012 (Table 1).  Also, the adult unemployment rate (age 20 and older) is lower heading into the summer of 2015 than in previous years – 5.0 percent in May.

Despite the uptick in teen employment this June, employment rates for teens and prime age adults (age 25 to 54) remain well below pre-Great Recession levels.  The longer-term pattern in June teen employment rates is consistent with the sharp decline in average annual teen employment rates since 2000.  This partly reflects an ongoing increase in college enrollment (except for a post-2012 decline), but is also the result of relatively weaker labor markets that have persisted since 2000.  Based on a recent EPI report, the share of young high school graduates, age 17 to 20, who are not working and not enrolled in school is also well above the 2000 rate.

(This is the second of six blog posts on disability.)

In my previous blog post, I questioned Stanford economist Mark Duggan’s Senate testimony that workers’ financial incentives are driving a growth in Social Security Disability Insurance (SSDI) rolls. I showed that there had been no upward trend in age-adjusted disability incidence over the past 20 years, though there had been a modest increase for women offset by a modest decline for men.

Though age-adjusted incidence isn’t rising, it’s possible that financial incentives have prevented it from falling. This blog post will focus on Duggan and Massachusetts Institute of Technology economist David Autor’s claim that disability benefits are replacing a rising share of low-wage workers’ earnings. Though this is a plausible and widely accepted hypothesis, there is surprisingly little evidence to back it up. In any case, this assumes workers are weighing the costs and benefits of working versus applying for disability benefits–a lengthy and difficult process that results in nearly two out of three applicants being denied–even though it’s doubtful that many applicants could instead choose to work.

Are disability benefits becoming more generous? The average benefit awarded is roughly a third of the average wage, a ratio that has remained essentially unchanged since 1985. And as Harvard economist Jeffrey Liebman points out, rising inequality and other factors have reduced the value of disability benefits relative to productivity per worker. As a result, program costs increased only modestly over the three decades preceding the Great Recession as a share of GDP (from 0.55 to 0.68 percent) despite a much faster growth in enrollment.

Though benefits have just kept pace with wage growth and lagged productivity growth, Duggan and Autor (2006) hypothesize that benefits have risen relative to lower-wage workers’ earnings due to rising inequality and a progressive benefit formula. Lower-wage workers are more likely to apply for disability benefits because they tend to be in worse health, are more likely to be in physically demanding or dangerous occupations, and qualify for fewer jobs that accommodate disabilities.

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A lot has changed since 1975. The Soviet Union collapsed, we fought (and are fighting still) several wars in the Middle East, same-sex marriage is now legal across the United States, we have our first African-American President, we have the internet. But what has changed only minimally is the salary level for determining which “salaried’ workers are entitled to overtime. Seriously. While the Bush Administration made a minuscule adjustment in 2004, essentially a political smokescreen to avoid a real increase, that number is finally going to increase in a meaningful way – the Economic Policy Institute deserves a lot of credit for pushing for this long-overdue update. The Department of Labor is announcing a significant increase in the threshold – from $23,660 to approximately double that amount. What that means is that workers earning up to the new level, even if they are not called “hourly,” will get overtime pay for their hours worked over 40 in a work week. In 1975, the salary basis test captured 60 percent of salaried workers; in 2015, only 8 percent of salaried workers fall below this level and earn overtime. While writing my book, Under The Bus: How Working Women Are Being Run Over, I discovered (with help from EPI’s economists) just how much this change will help workers, particularly women of color.

The Fair Labor Standards Act (FLSA) established the requirement of minimum wage and overtime, but in a provision known as the “salary test,” the law provides that employers need not pay either the minimum wage or overtime to workers they designate as “bona fide executive, administrative, professional and outside sales employees,” so long as their daily tasks meet the DOL definition and they make more than $455 per week – which is how $23,660 breaks down as a weekly wage. Clearly, outdated level has given unscrupulous employers a way to avoid paying low-paid staff overtime by calling them “salaried.” Workers have had to challenge their denial of overtime when their employers tried to get out of the requirement by adding “manager” or “leader” to their title when their actual work consisted of serving fast food, shelving merchandise, or ringing up customers’ purchases.

Contrary to the statute’s original purpose, many workers put in the “salaried” category do little if any supervisory work. While in theory, “their duties must include managing a part of the enterprise and supervising other employees or exercising independent judgment on significant matters or require advanced knowledge,” the reality is quite different. This loophole has allowed employers to tell women that as a receptionist or typist they are administrative or professional, while in fact they have little or no supervisory responsibilities. But what they do get, in addition to a nicer title, is the right to work overtime without overtime pay. The Bush administration used regulatory black magic to push more workers into this category in 2004. That DOL rule cost an additional 8 million employees their overtime pay. Even without chicanery, the rules have become so lax that many employees are called “salaried” who should be earning overtime under the FLSA’s original purpose. According to EPI’s Ross Eisenbrey, “under current rules, it literally means that you can spend 95 percent of the time sweeping floors and stocking shelves, and if you’re responsible for supervising people 5 percent of the time, you can then be considered executive and be exempt.”

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In 2014, President Obama directed the Department of Labor to update the threshold under which all workers are eligible for overtime pay. Today, the Department of Labor announced that it will raise the overtime salary threshold from $23,660 to $50,440 by 2016. The threshold will also be indexed, guaranteeing that the law’s important protections will not be diminished by inflation.

We applaud President Obama and Secretary Perez for this bold action. The new threshold will protect more workers from being taken advantage of by their employers, giving some higher pay for working overtime and others reduced hours without any reduction in pay. This is a significant victory for American workers and will ensure that they get paid for the work they do.

This higher threshold will guarantee 15 million more workers overtime pay on the basis of their salary alone, in addition to the 3.4 million workers who are already guaranteed overtime pay. It will boost wages, which have been largely stagnant for the past 35 years, create hundreds of thousands of jobs, and give more family time to millions of working parents. Overall, 3.1 million mothers and 3.2 million fathers will be guaranteed overtime pay under the new threshold, and 12.1 million children will benefit from their parents’ overtime coverage.

In 1975, the overtime salary threshold covered about 62 percent of all salaried workers–today, it only protects 8 percent. Had overtime kept pace with the 1975 level, it would be about $52,000 today adjusted for inflation, about equal to the U.S. median household income. The new salary threshold puts us back on track to reconnect workers’ wages with gains in productivity.

With today’s announcement, the DOL is opening a comment period that will give workers an opportunity to express their support of the proposed rule change. FixOvertime.org allows workers to use their voice and submit their comment for consideration as the Department of Labor decides whether or not to actually boost overtime in accordance with the proposed rule changes. It also lets workers calculate how much extra they can earn per week under the new overtime rules.

(This is the first of six blog posts on disability insurance.)

The Social Security Disability Insurance (SSDI) program is set to be the next big battle in Republicans’ long campaign to dismantle Social Security. Congressional Republicans are trying to block a routine reallocation of funds to the SSDI Trust Fund, insisting that they will only allow reallocation if “reforms” to SSDI are implemented. The intellectual underpinning for their demands is that there is an unfolding fiscal crisis caused by workers who are able to earn a living but are instead choosing to claim disability benefits. A chief proponent of this view, Stanford economist Mark Duggan, testified before the Senate Budget Committee earlier this year, claiming that disability benefits are increasingly attractive to lower-wage workers, who respond by leaving the labor force. According to Duggan, a key piece of evidence supporting this claim is an increase in the share of beneficiaries suffering from musculoskeletal disorders and other “subjective” health conditions who have a “substantial” employment potential.

Claims like these have become a mainstay of attacks on the disability program. However, a closer look at the evidence shows that SSDI benefits have become, if anything, less generous. Moreover, even research cited by critics shows SSDI receipt has a negligible impact on work effort because few applicants, including marginal applicants who were denied benefits, are able to earn a living afterward. Meanwhile, there are good explanations for the increase in the share of beneficiaries suffering from musculoskeletal disorders, including an aging population, rising obesity rates, and fewer workers able to retire early when their health deteriorates.

These topics will be discussed in later blog posts. This post will focus on whether disability incidence has increased in the first place. The evidence shows that while “raw” or unadjusted incidence–the number of new awards per thousand insured persons–increased as the large baby boomer cohort aged into the peak disability years before retirement, age-adjusted incidence hasn’t trended upward over the past 20 years, though it increased during periods of high unemployment. However, incidence has fallen in the wake of the Great Recession and as older baby boomers become eligible for Social Security retirement benefits, including disabled boomers who automatically transition to retirement benefits as they reach the normal retirement age.

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If salaried employees are paid less than the overtime salary threshold  (currently $23,660 in annual salary), they are entitled to overtime pay when they work more than 40 hours in a week. If however, they make more than the salary threshold, they are entitled to overtime pay only if their primary duty is not executive, administrative, or professional.

In a 2014 analysis, former EPI economist Heidi Shierholz estimated the share of salaried workers who were covered by the overtime salary threshold in 1975 and in 2013. She found that, despite an increase in the threshold in 2004, the share of the workforce covered by the threshold declined from 65 percent in 1975 to just 11 percent in 2013. This is because most of the value of the threshold was eliminated between 1975 and today due to inflation. As a result of Shierholz’s findings, EPI recommended that the overtime salary threshold be increased to the 1975 threshold in today’s dollars (in 2013, this was $51,168), which would have covered 47 percent of the workforce.

Because the analysis focused solely on the salary threshold test–i.e., because the analysis focused on just the salary of workers without regard for the duties of their occupation[1]–increasing the threshold to reflect an amount into today’s dollars wouldn’t mean that all of the workers who fell in between $23,660 and $51,168 would gain overtime protections. Many of these workers would already have been entitled to this protection because their primary job duty was not executive, administrative, or professional.

Now, in updating this analysis, we want to be as precise as possible in identifying the workers who will be affected by the updated salary threshold rule. To do this, we narrowed the sample to those workers who are full-time workers (usually work 35 hours or more at their primary job), expanded the age of the population to all workers 18 years or older (previously limited to those 18-64), and removed certain occupations that are automatically exempt from overtime protections (e.g., medical professionals, lawyers, judges, teachers of all levels, and religious workers).

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On World Refugee Day, The Hill published a Contributors piece by the libertarian Cato Institute’s immigration policy analyst, Alex Nowrasteh, headlined, “The US should be a home for refugees.” In it, he offers a brief history of refugee policy and flows into the United States over the past century and suggests that the United States “should … allow more to settle here.” That’s a noble sentiment, but the headline is misleading because it leaves out the substance of what Nowrasteh proposes in order to help make this happen. In short, Nowrasteh wants to welcome more refugees to the United States but proposes abandoning them and letting them fend for themselves once they get here…

Continue reading the rest of this op-ed at the Hill.

A new EPI study of the academic preparation of kindergartners by social class and race ended up being less about absolute preparation of children at the beginning of school and more about how prepared they are relative to one another. In short, children do not start school as equals. According to Inequalities at the Starting Gate: Cognitive and Noncognitive Skills Gaps between 2010–2011 Kindergarten Classmates, children’s school preparation is highly unequal, and what determines being better or worse off is a student’s social class.

While inequalities in the cognitive abilities of our young people have been documented by previous research (see EPI’s Inequality at the Starting Gate study from 2002 and Robert Putnam’s new book, Our Kids: The American Dream in Crisis), our study uses a dataset that allowed for examining how prepared children are in both cognitive (reading and math) and noncognitive domains (social skills, persistence, and creativity, among others). The data set (the National Center for Education’s Early Childhood Longitudinal Study of the Kindergarten Class of 2010-2011) also offers information on individual and family demographic characteristics and various enrichment activities that parents undertake with their children, enabling assessment of the importance of these variables for children’s preparation. All in all, the data allowed us to understand the broad school readiness of a recent generation of students. These students were born after—and thus presumably benefited from—the spread of prekindergarten education and other advances in school preparedness research and policymaking. But these children were also raised in a context of economic stagnation.

Consistently, results showed that having less money puts children at a relative disadvantage, in terms of the cognitive and noncognitive skills developed by the age of 5, while having more money benefits them, as skill levels increase along with social class. Most gaps are striking in size and appear for all the examined cognitive, noncognitive, and executive function skills. For example, children in the highest socioeconomic group have reading and math scores that are a full standard deviation larger than the scores of their peers in the lowest socioeconomic group. To give a sense of how large this gap is, it would take up to four independent, “substantively important,” education interventions to close the gap, according to a “classification of effects” from the U.S. Department of Education’s What Works Clearinghouse. The social-class-based gaps in other skills such as working memory, persistence in completing tasks, and self-control are 0.7, 0.4, and 0.5 standard deviations, respectively.

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Fast-track trade legislation is the first step in the process of greasing the skids for the proposed Trans-Pacific Partnership (TPP), and any other trade deal proposed by this president or any other for the next six years. Last month, the 13 democrats listed in the table below voted to end debate on fast track (Trade Promotion Authority, or TPA), allowing a final vote to take place. There are strong arguments against the TPP, which will increase inequality and hurt the middle class.

These 13 democrats come from 10 states that lost 996,200 jobs due to growing trade deficits with China between 2001 and 2013, nearly one-third of the 3.2 million jobs eliminated by China trade in the United States in that period. States like Oregon, California, and Colorado were among the hardest hit states in the country. But they are also home or host to Nike (Oregon), Lockheed-Martin (Colorado), and Apple, Google, Intel and other Goliaths of Silicon Valley (California). New Hampshire serve as a bedroom community for many electronics industry workers in nearby Massachusetts, and has lost hundreds of thousands of jobs in recent decades in textiles, shoemaking and small machine making.Read more

Our new study shows the average compensation of CEOs in the largest firms was $16.3 million in 2014, up 3.9 percent since 2013 and 54.3 percent since the recovery began in 2009. More impressively, from 1978 to 2014, inflation-adjusted CEO compensation increased 997 percent, a rise almost double stock market growth and substantially greater than the painfully slow 10.9 percent growth in a typical worker’s annual compensation over the same period. Consequently, the CEO-to-worker compensation ratio was 303-to-1 in 2014, lower than the 376-to-1 ratio in 2000 but far higher than the 20-to-1 in 1965 and any time in the 1960s, 1970s, 1980s, or 1990s, as the Figure shows.

Our measure of CEO pay covers chief executives of the top 350 U.S. firms and includes the value of stock options exercised in a given year plus salary, bonuses, restricted stock grants, and long-term incentive payouts. (Full methodological details here)

Our analysis, which shows that CEO pay grew far faster than pay of the top 0.1 percent of wage earners (those earning more than 99.9 percent of wage earners), indicates that CEO compensation growth does not simply reflect the increased value of highly paid professionals in a competitive race for skills (the so-called “market for talent”). CEO compensation in 2013 (the latest year for data on top wage earners) was 5.84 times greater than wages of the top 0.1 percent of wage earners, a ratio 2.66 points higher than the 3.18 ratio that prevailed over the 1947–1979 period. The compensation gains of top CEOs were therefore equivalent to the wages of 2.66 very-high-wage earners.

Don’t worry about all this, says American Enterprise Institute scholar Mark Perry, because our sample, and those used by the Associated Press and the Wall Street Journal, is misleading. Looking at the compensation of CEOs in the largest firms, according to Perry, is not “very representative of the average U.S. company or the average U.S. CEO,” because “the samples of 300–350 firms for CEO pay represent only one of about every 21,500 private firms in the U.S., or about 1/200 of 1 percent of the total number of U.S. firms.” Perry notes, “According to both the BLS and the Census Bureau, there are more than 7 million private firms in the U.S.”

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In a jointly authored statement, former EPI board members and U.S. Labor Secretaries F. Ray Marshall and Robert Reich called on Congress to reject Trade Promotion Authority and the Trans-Pacific Partnership because that deal will “harm America’s working people.”  Despite this statement, the House today approved a truncated version of Fast Track (TPA) that excludes funding for Trade Adjustment Assistance for displaced workers.  But passing TPA without TAA is a risky gamble because many Democrats have demanded that the two move simultaneously.

In their letter to Congress, Marshall and Reich conclude that “Trade can work for working Americans, but only when Americans can effectively know about what is in a trade deal, and only when a trade deal is effectively designed to create more good jobs in America. This Fast Track mechanism toward the Trans Pacific Partnership is a bad deal for America.”

We learned of some welcome news when Computerworld and the New York Times reported that Disney had reversed a decision to replace 35 American information technology (IT) workers with cheaper H-1B guestworkers at its ABC broadcasting offices in New York City and Burbank, CA. The news comes after a significant spotlight was shined on Disney’s recent replacement of 250 technology workers with H-1B guestworkers at Disney’s Theme Parks division. This is good news for the 35 workers who will keep their jobs for now, and at least in the short term, will not have to train their foreign guestworker replacements. However, this decision by Disney executives does nothing for the 250 workers who have already lost their jobs to workers they were forced to train and who will earn roughly $40,000 less for doing the same job. Nor does it help the approximately 225 Northeast Utilities workers, or the 400 at Southern California Edison (SCE), or the 600 at Xerox, or 900 at Cargill, or 100 at Fossil Group, or tens of thousands of workers who likely suffered a similar fate at hundreds of other places that have never been reported.

It appears that the media attention has shamed Disney into reversing its decision to force more of its American workers out in favor of cheaper guestworkers. Clearly, Disney’s own sense of social responsibility wasn’t enough to convince its executives to do the right thing in the first place. While the reversal of Disney’s layoffs is good news, it hardly makes us sanguine about the future of the H-1B visa program. The payoff for replacing American workers with indentured and underpaid H-1B guestworkers is simply too high: as much as a 49 percent wage savings in some cases. Relying solely on the media to shame firms is insufficient. Simply put, the government must immediately make changes to the program.

We would also like to emphasize two important points about the H-1B that have not been highlighted enough in the recent media coverage. First, the temporary foreign workers employed by the firms hired to replace American workers are blameless in all of these situations, as one American IT worker who was recently replaced by an H-1B at SCE attested to in a recent interview. The blame should be placed squarely on the corporate profiteering that leaves Americans out of a job and foreign workers vastly underpaid for the work they are hired to do. The H-1B workers are simply seeking to advance their careers and to make better lives for themselves in the United States, and are often placed in working situations where they are vulnerable and can be easily exploited.

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This piece was originally published in the New York Times “Room for Debate” section on May 12, 2015.

The true costs of goods and services is a secondary issue to stagnant and exploitative wages: The cost of certain goods might go up, but more people would be able to afford them with better compensation. The current price of low-cost goods and services in the United States is low-income, exploited workers living in poverty. But the country as a whole isn’t broke, only its workers are — while corporations and C.E.O.s are richer than ever.

The value of the federal minimum wage has declined 24 percent since 1968. If we re-established the relationship between the minimum wage and the overall median wage to its 1968 level, we would raise wages for 35 million people, a full quarter of the workforce.

The situation is even worse for those earning tips, such as nail salon workers. Their pay is set at $2.13 an hour by the federal government. If tips don’t supplement these workers’ paycheck to the regular minimum, they have to ask their employers for the difference. (And good luck with that.)

But low and stagnant wages are not the result of benign, abstract economic forces. They reflect conscious policy choices by lawmakers influenced by powerful corporate lobby groups like the Chamber of Commerce and the National Restaurant Association.

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Corporate lobbyists have convinced legislators of both parties that America needs more guest workers in high-tech jobs. Leading the charge in Congress to do their bidding is Utah Sen. Orrin Hatch, who has introduced legislation to double or triple the number of non-immigrant tech workers who can be hired annually on H-1B visas. But his proposal won’t fix the H-1B program’s flaws, which allow American and foreign workers alike to be exploited and underpaid.

Continue reading the rest of this op-ed at the Salt Lake Tribune.

The National Retail Federation (NRF), a lobbying organization for department store corporations, sporting goods and  grocery chains,  and other large retailers, is opposed to the Department of Labor’s update of the rules governing the right of salaried workers to overtime pay. The reasons the NRF gives are somewhat contradictory and are sometimes surprising. But they boil down to this: the retail lobby doesn’t think businesses should have to pay for the overtime hours most of their employees work.

In March 2014, President Obama directed the Secretary of Labor to update the rules intended to exclude high-level employees like executives and professionals from overtime protections. The rules are currently so out of date that they define even workers earning below-poverty salaries as exempt, even though the pay of true executives and professionals like lawyers and CPAs has been soaring for decades. To fix this problem, the Labor Department is reportedly considering raising the threshold for exemption from $23,660 a year to $42,000 or more. Some advocates are calling for a threshold as high as $70,000 a year, which would protect the same share of the salaried workforce as was covered in 1975.

If the threshold is raised to $42,000, the NRF predicts significant changes in retail employment: while some employers will raise salaries for employees near the threshold to guarantee that they continue to be excluded from overtime protection, many salaried employees (some of whom work 60-70 hours a week for no extra pay) will have their hours reduced and as a result, 76,000 new jobs will be created averaging 30 hours per week. Altogether, half of the retail workforce that is currently excluded from coverage will be guaranteed coverage by the law’s overtime protections. That all sounds pretty good to me.

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Stung by the sudden derailment in the House of Representatives of their rush to pass the Trans-Pacific Partnership (TPP), the Washington establishment has wasted no time in warning us of the terrifying menace of a rising China, should the trade deal not be put back on track next week.

Echoing previous remarks by the president, House Speaker John Boehner warned “we’re allowing and inviting China to go right on setting the rules of the world economy.” Pro-TPP Democratic Congressman Jim Hines (D-Conn.) said that Friday’s vote, “told the world that we prefer that China set the rules and values that govern trade in the Pacific.”

These remarks are both fatuous and revealing of how weak the case for the TPP is, even among its own promoters.

As a matter of obvious fact, the rules of the world economy within which the Chinese have been taking the United States to the economic cleaners were not set in China. They were set in Washington, DC by our own American policymakers and fixers who in one way or another were, and still are, are in the pay of multinational corporate investors.

Under Ronald Reagan, the two Bushes, Bill Clinton and now Barack Obama the United States government designed and imposed the global model of  “free trade” which promoted the shift of investment from the United States to parts of the world where labor is cheap, the environment is unprotected, and the public interest is even more up for sale than it is here.

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Proponents of Trade Promotion Authority (aka fast-track trade negotiating authority), which the House of Representatives will likely vote on soon, have made an unequivocal promise that future trade agreements like the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) will explicitly exclude any provisions that would require a change to U.S. immigration law, regulations, policy, or practices. Many members of Congress in both parties have expressed concern that trade agreements might limit America’s ability to set immigration policy. Republican congressmen Paul Ryan and Robert Goodlatte have responded by explicitly assuring members of their party that there will be no immigration provisions in any trade bill.

U.S. Trade Representative Michael Froman has stated in an interrogatory with Sen. Chuck Grassley (R-Iowa) and via letter that nothing is being negotiated in the TPP that “would require any modification to U.S. immigration law or policy or any changes to the U.S. visa system.”

Furthermore, just a few weeks ago, the Senate Finance Committee released a statement titled “TPA Drives High-Quality Trade Agreements, Not Immigration Law: The Administration Has No Authority Under TPA or Any Pending Trade Agreement to Unilaterally Change U.S. Immigration Laws,” and the committee’s May 12 report on the Fast Track bill that was eventually passed by the full Senate contained this relevant language:

For many years, Congress has made it abundantly clear that international trade agreements should not change, nor require any change, to U.S. immigration law and practice…

The Committee continues to believe that it is not appropriate to negotiate in a trade agreement any provision that would (1) require changes to U.S. immigration law, regulations, policy, or practice; (2) accord immigration-related benefits to parties to trade agreements; (3) commit the United States to keep unchanged, with respect to nationals of parties to trade agreements, one or more existing provisions of U.S. immigration law, policy, or practice; or (4) expand to additional countries immigration-related commitments already made by the United States in earlier trade agreements.

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The House is expected to vote this week on fast track authority to negotiate two massive trade deals, including the proposed Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (T-TIP). The Wall Street Journal noted on Sunday that “the decade’s old argument that major trade agreements boost both exports and jobs at home is losing its political punch, even in some of the country’s most export-heavy Congressional Districts.” One reason is that counting exports is less than half the story. While it’s true that exports support domestic jobs, imports reduce demand for domestic output and cost jobs.

As I’ve written before, trade is a two-way street, and talking about exports without considering imports is like keeping score in a baseball game by counting only the runs scored by the home team. It might make you feel good, but it won’t tell you who’s winning the game. The Journal story included a table showing the ten congressional districts with the biggest gains in exports since 2006. The authors expressed surprise that only three of the ten members representing these districts have announced support for fast track (trade promotion authority, or TPA).

Looking at jobs supported and displaced by trade in these districts provides a very different picture, which helps explain why supporters of fast track are having trouble rounding up votes in the House. In a recent study, I estimated the number of jobs supported and displaced by China trade between 2001 and 2013. We used the results of this study to examine the impacts of China trade on jobs by congressional district between 2006 and 2013—the period covered in the Wall Street Journal story. The results for the top ten districts identified by the Journal are shown in the following table.

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I testified last week in Harrisburg on a 410-page public pension “reform” bill (SB1) that neither I nor my fellow witnesses had read. Normally, we would have been able to rely on actuarial reports, but the actuaries weren’t given enough time to read the bill either. This didn’t stop 28 state senators from passing the bill on a party-line vote without even bothering to hold a hearing (the two I attended—one as a witness—were held by House committees after the Senate vote).

At the first hearing, supporters claimed the bill would help repair Pennsylvania’s credit rating and ensure intergenerational equity. You would never know that the bill actually delays paying down legacy costs. As a result, even the Manhattan Institute’s Richard Dreyfuss (the public pension scourge, not Jaws hero), couldn’t bring himself to support it.

Supporters also claim the bill “preserves current employee retirement benefits,” despite the fact that $13 billion of the projected $16 billion in cost savings comes from changes affecting current employees. At least one of these changes—removing a subsidy for lump sum distributions—might be a good idea in the abstract. But all cuts affecting mid-career workers will inevitably (and probably successfully) be challenged in court, as Dreyfuss pointed out.

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Last week, I wrote about how high school graduates will face significant economic challenges when they graduate this spring. High school graduates almost always experience higher levels of unemployment and lower wages than their counterparts with a college degree, and their labor market difficulties were particularly exacerbated by the Great Recession. Despite officially ending in June 2009, the recession left millions unemployed for prolonged spells, with recent workforce entrants such as young high school grads being particularly vulnerable.

Underemployment is one of the major problems that young workers currently face. Approximately 19.5 percent of young high school graduates (those ages 17–20) are unemployed and about 37.0 percent are underemployed. For young college graduates (those ages 21–24) the unemployment rate is 7.2 percent and the underemployment rate is 14.9 percent. Our measure of underemployment is the U-6 measure from the BLS, which includes not only unemployed workers but also those who are part-time for economic reasons and those who are marginally attached to the labor force.

When we look at the underemployment data by race, we often see an even worse situation. As shown in the charts below, 23.0 percent of young black college graduates are currently underemployed, compared with 22.4 percent of young Hispanic college grads and 12.9 percent of white college grads. And as elevated as these rates are, the picture is bleakest for young high school graduates, who are majority of young workers.

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Three separate sources have recently “fact-checked” claims that Martin O’Malley made about American wages in his recent speech announcing his candidacy for the Democratic nomination. The precise O’Malley quote was:

Today in America, 70 percent of us are earning the same or less than we were 12 years ago, and this is the first time that that has happened this side of World War II.

O’Malley has said that our research on wages provided a basis for his claim (examples can be found here and here).

First, let’s be clear on what our claim is and then I’ll talk about the fact checkers’ assessments of O’Malley’s use of the data.

We have data on hourly wages by decile since 1973. Between 2002 and 2014, inflation-adjusted hourly wages for the bottom 7 deciles (i.e., 70 percent of the American workforce) fell. This is a remarkable economic fact and one that O’Malley is clearly right to highlight.

Further, between 1947 and 1973 there is almost certainly no 12-year period when the bottom 70 percent of wage earners saw hourly wage declines. Precise wage data by decile is sketchy over this period, but the circumstantial evidence on this is overwhelming. Just look at this graph, which shows hourly pay for a grouping reflecting the bottom 80 percent of the workforce rising sharply until the early 1970s.

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When Canada joined the Trans-Pacific Partnership talks in 2012 it did so somewhat reluctantly and, like Mexico, with strings attached. One of them was that Canadian negotiators could not reopen any closed text. So, in this sense, it’s been a bit of a raw deal for the Obama administration’s NAFTA partners from the beginning. Canada’s bigger business lobbies called it a defensive move, to “secure” NAFTA supply chains rather than offering any meaningful market access elsewhere. The Canadian public have almost no idea what’s going on. But as TPP countries appear to be close to the end game, people here are starting to ask the obvious questions: what’s in it for us, and what will we have to give up to get it. The answers are equally obvious if you look past the hype: not much, and quite a lot.

To begin with, Canada already has free trade deals in place with four of the larger TPP countries (Peru, Chile, the United States, and Mexico), and tariffs on trade with the others—representing 3 percent of imports and 5 percent of exports—are very low. Canada has a trade deficit with these non-FTA countries of $5 to $8 billion annually, and 80 percent of Canada’s top exports to these countries are raw or semi-processed goods (e.g., beef, coal, lumber), while 85 percent of imports are of higher value-added goods (e.g., autos, machinery, computer and electrical components). This Canadian trade deficit will likely widen if the TPP is ratified, as the United States found two years into its FTA with South Korea.

Tariff removal through the TPP is therefore likely to worsen the erosion of the Canadian manufacturing sector and jobs that has been taking place since NAFTA—a result, in part, of the limits free trade deals place on performance requirements and production-sharing arrangements. NAFTA-driven restructuring did not even have the promised effect of raising Canadian productivity levels, which languish at 70 percent of U.S. levels twenty years into the agreement. Instead, Canada has experienced greater corporate concentration, a significant decline in investment in new production, and rising inequality.

In short, there is little trade expansion up­side for Canada in this negotiation. And yet the Canadian public will eventually be asked to make considerable public policy concessions to see the TPP through. As many U.S. commentators have argued, the trade impacts of TPP are far less important than the serious concerns it raises about excessive intellectual property rights, regulatory harmonization, and the perpetuation of a controversial investor-state dispute settlement (ISDS) regime that has been extremely damaging to democratic governance globally, not to mention quite humiliating for Canada.

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There was a lot to celebrate in the Magic Kingdom this year. The Disney Corporation had its most profitable year ever, with profits of $7.5 billion—up 22 percent from the previous year. Disney’s stock price is up approximately 150 percent over the past three years. These kinds of results have paid off handsomely for its CEO Bob Iger, who took home $46 million in compensation last year.

Disney prides itself on its recipe for “delighting customers,” a recipe it says includes putting employees first. They tout this as a key to their success in creating “a culture where going the extra mile for customers comes naturally” for employees. One method of creating this culture is referring to its employees as “cast members.” In fact, Disney is so proud of its organizational culture that it’s even created an institute to share its magic with other businesses (for a consulting fee, of course).

So, you would expect a firm that puts its employees first to share the vast prosperity that’s been created with the very employees who went above and beyond to help generate those record profits.

Well, how did Mr. Iger repay his workers—sorry, I mean cast members—for creating all this profit? Not with bonuses and a big raises. Instead, as the New York Times just detailed in a major report, he forced hundreds of them to train their own replacements—temporary foreign workers here on H-1B guestworker visas—before he laid them off.

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