The Biden administration has made large investments in care work—both child care and elder care—key planks in its American Jobs Plan (AJP) and American Families Plan (AFP). These investments would be transformative, and a greater public role in providing this care work can make the U.S. economy fairer and more efficient. The administration has also recognized the need to pay workers in these sectors higher wages—which are sorely needed—but setting a fair wage standard for care workers presents unique challenges.

For a variety of systemic reasons, including racism, misogyny, and xenophobia, there has never been a set of institutions that has managed to carve out decent wages and working conditions in care work. For example, the average hourly wages for home health care and child care workers are $13.81 and $13.51, respectively, which is roughly half the average hourly wage for the workforce as a whole. So, unlike in sectors like construction, a “prevailing wage” standard would just cement the industrywide insufficient wages currently experienced in care work.

But just because it’s challenging doesn’t mean it’s impossible to establish strong wage standards in this sector. All wages in the U.S. economy are politically and socially determined, but given that care work is heavily publicly financed, care wages are especially determined by political decisions (via commission or omission). As a result, there is a strong administrative responsibility and opportunity to set equitable wages in this sector. This research memo outlines a number of ways to improve the wage standard for care workers and is a preview to a forthcoming, more comprehensive research report.

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As Congress debates the appropriate amount of investments needed to boost the economic recovery from the COVID-19-induced recession, we can learn a lot by carefully looking at the decisions made in the aftermath of the Great Recession of 2007–2009. One of the clearest lessons of that period is that spending by the federal government largely dictated the amount of economic suffering for those hit the hardest. When that spending falls short of what is needed, some groups never fully recover.

School finance deserves a place in this discussion. Federal support to education plays a critical role in filling recession-induced fiscal gaps that open at the state and local levels, and maintaining education funding during economic downturns contributes to a faster and fuller economic recovery. As we discuss in this post, if federal investments in public education had been larger, sustained as needed, and allocated in a way that channeled further assistance to districts serving larger shares of low-income students, they would have better assisted our students, schools, and communities in the aftermath of the Great Recession.

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EPI economists offer their initial insights on the June jobs report below. They see strong growth in employment, especially in leisure and hospitality—the numbers do not signal a big labor shortage. The economy appears to be on its way to a full recovery by the end of 2022.

From economist and director of EPI’s Program on Race, Ethnicity, and the Economy (@ValerieRWilson)

Read the full Twitter thread here. 

The 850k jobs added in June reflects lifting of more COVID-19 restrictions in time for summer, no indication of labor shortage, and on pace to reach pre-COVID unemployment rate by end of 2022. 1/n

— Valerie R Wilson (@ValerieRWilson) July 2, 2021

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Today, the U.S. Supreme Court published its decision in Cedar Point Nursery v. Hassid, a case involving an employer challenge to a California regulation that allows union representatives to visit the property of agricultural employers—in narrowly tailored and time-limited circumstances—to carry out efforts to organize the hundreds of thousands of California farmworkers who work in hazardous and low-paying jobs and who suffer disproportionately high rates of wage and hour violations.

In a disappointing 6–3 decision, the Court’s conservative justices ruled that the California regulation constitutes a per se physical taking of the employer’s property, which in practical terms means union organizers will no longer have the right to access the farms where farmworkers are employed.

The vast majority of farmworkers across the country are not protected by the National Labor Relations Act—the federal law that enshrines the right of workers to join and form unions. In an attempt to fill that gap for farmworkers in California, over four decades ago the state’s legislature passed the Agricultural Labor Relations Act (ALRA), which established collective bargaining rights for farmworkers, and then-governor Jerry Brown signed it into law in 1975. The ALRA’s access regulation enables organizers to visit the properties where farmworkers are employed, allowing the law to be implemented and have real meaning for workers.

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Several very good primers were recently written on how to think about inflation in the coming months. But as the reaction to monthly price inflation numbers that ever tick above a 2% annualized rate continues to be disproportionately angst-ridden, another one may be useful.

Assessing this week’s data and the ongoing debate about inflation and economic “overheating” requires an understanding of at least four key points:

1. The source of inflationary pressure is crucial to assessing how policy should respond. Inflation coming from the labor market because workers are empowered enough to secure wage increases that run far ahead of the economy’s long-run capacity to deliver them (that is, productivity growth) is the only source of inflation that should ever spur a contractionary macroeconomic policy response (either smaller budget deficits or higher interest rates). This type of inflation is what worries about “overheating” center on.
2. Other sources of inflationary pressure are far more likely to be transitory and hence should not spur a contractionary policy response.
   • Inflation in the prices of commodities is often volatile and driven largely by global markets. Such price increases are likely to hinge on idiosyncratic drivers like weather changes, oil field discoveries, or rapid growth in large economies outside the United States. This kind of inflation should not spur a contractionary response. These price increases are not driven by economic “overheating”; engineering an economic “cooling” by reducing budget deficits or raising interest rates will not stop them—but it will cause a lot of collateral damage in slowing growth within the United States.
   • Inflation driven by very large relative price changes is also highly likely to be transitory and should not be met with a contractionary macroeconomic policy response.
3. Arguing that inflation stemming from many sources should not be met with a contractionary policy response does not mean that this type of inflation is good, or even just benign. Such inflation often does reduce typical workers’ living standards. But to be effective, anti-inflation policy must address such types of inflation with tailored measures, not across-the-board macroeconomic austerity.
4. Spillovers of inflation that begin outside the labor market but spark inflation driven by wage-price spirals are highly unlikely given the extremely weak bargaining position and leverage of typical U.S. workers in recent decades. This degraded bargaining position also suggests that unemployment rates might reach far lower levels than they did in past decades before spurring wage growth sufficient to drive excess price inflation.

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A number of high-profile Republicans in recent years have tried to claim that they have become the “party of the working class.” Nothing exposes this as false as clearly as the GOP’s unrelenting attacks on the Affordable Care Act (ACA)—legislation that was imperfect but still an enormously important advance in the U.S. welfare state.

The latest attack is another court case that made its way to the Supreme Court (California v. Texas)—which could have a ruling as soon as Thursday. Legal merits of the case aside (there were essentially none), the economic fallout of the case if it is decided in the plaintiffs’ favor would be profound, as the requested remedy is the abolition of the entire ACA.

The ACA was in some ways hugely complicated, but can be boiled down to five major undertakings:

• Strengthening employer-provided health insurance with mandates like no lifetime caps on benefits paid and an allowance for adults up to the age of 26 to be covered on parents’ plans;
• Providing needed regulation for the “nongroup” health insurance market (the market for people who can’t get insurance through their employer or through existing government programs);
• Providing subsidies to make purchasing nongroup plans more affordable for many;
• Paying for states to expand their Medicaid programs significantly; and
• Raising taxes on high incomes to pay for its spending provisions.

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