Soon, the Labor Department under the Trump administration will release its final rule on worker overtime. The rumor is that the administration may showcase the rule around Labor Day and claim they are taking steps to help workers. That means an important public service announcement is in order: do not be fooled! Workers would lose billions under this rule.

It is likely that the final rule will not depart radically from the proposal the administration laid out earlier this year, which was to raise the overtime salary threshold (the threshold under which salaried workers are automatically entitled to overtime pay) to $35,308 a year. This is a dramatic weakening of a rule published just three years ago. In 2016, following an exhaustive rule-making process, the Labor Department finalized an overtime rule that would have increased the salary threshold to $47,476, (which was the 40th percentile of the earnings of full-time salaried workers in the lowest wage census region). However, a single district court judge in Texas enjoined the Department from enforcing the rule, and the court later erroneously held the rule to be invalid. Instead of defending the threshold from the egregiously flawed logic of the judge, the Department abandoned the rule and proposed their much weaker threshold, which is roughly the 20th percentile of the earnings of full-time salaried workers in the lowest-wage census region.

It’s useful to note that if the rule had simply been adjusted for inflation since 1975, today it would be roughly $56,500. This is more than $20,000 higher than the Trump administration’s level! The Trump administration’s weaker rule will leave behind an estimated 8.2 million workers who would have gotten new or strengthened overtime protections under the 2016 rule. This includes 4.2 million women, 3.0 million people of color, 4.7 million workers without a college degree, and 2.7 million parents of children under the age of 18. Further, the annual wage gains are $1.2 billion dollars less under the presumed Trump rule than under the 2016 rule—and these annual earnings losses will grow from $1.2 billion to $1.6 billion over the first 10 years of implementation because, unlike the 2016 rule, the Trump administration rule almost surely will not include automatic indexing.

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It’s the beginning of the school year, a time of eager anticipation and hopeful expectations. Amid the excitement, parents are engaged in practical tasks, including opening their wallets to stock their children’s backpacks with school supplies. Teachers, too, are gearing up to go back to their classrooms by opening their wallets to buy classroom supplies. An overwhelming majority of them—more than nine out of 10—will not be reimbursed for what they spend on supplies over the school year, according to survey data from the National Center for Education Statistics (NCES).

The nation’s K–12 public school teachers shell out, on average, $459 on school supplies for which they are not reimbursed (adjusted for inflation to 2018 dollars), according to the NCES 2011–2012 Schools and Staffing Survey (SASS). This figure does not include the dollars teachers spend but are reimbursed for by their school districts. The $459-per-teacher average is for all teachers, including the small (4.9%) share who do not spend any of their own money on school supplies.

Unlike the data from the more recent 2015–2016 survey (now called National Teacher and Principal Survey or NTPS), the 2011–2012 SASS microdata provide state-by-state information, allowing us to see how much teachers spend on supplies by state. The map below shows the inflation-adjusted state-by-state spending. We know that the figures in the map are not an atypical high driven by the Great Recession because the 2011–2012 spending levels are lower than spending levels in the 2015–2016 NTPS data. The figure after the map shows that teachers’ unreimbursed school supply spending has actually increased overall since the recovery.

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Last year, on the 50^th anniversary of the “Kerner Commission” report, the Economic Policy Institute, collaborating with the Haas Institute for a Fair and Inclusive Society at the University of California, Berkeley, and Johns Hopkins University’s 21^st Century Cities Initiative, hosted a conference on “Race & Inequality In America,” not only to commemorate the report but to re-assess its findings and conclusions. The conference assembled prominent national experts in the fields of housing, employment and labor markets, criminal justice, health, and education to consider where the black-white divide has narrowed, where it has stayed the same, and where it has widened.

In The Road Not Taken we have now summarized the conclusions of these experts, adding some additional perspectives with the benefit of another year of hindsight. We focus particularly on how far we have come, or not come, in housing segregation and criminal justice disparities over the last 50 years. In particular, we examine the recommendations of the 1968 commission and note how few have ever been implemented.

The Road Not Taken notes that in some ways the last half century has seen progress—the desegregation of workplaces is perhaps the most conspicuous example, although here too, much remains to be done. In some areas, we’re about where we were—residential segregation has not diminished much, if at all. And in some areas, things have gotten much worse—the disparate incarceration of young black men, in particular.

We review the most important policies now needed to break us out of stagnation in the two most critical areas of criminal justice and housing. Reforms in both areas have been largely inadequate, partial or superficial. Unfortunately, many of the policies needed today are no different from those recommended by the Kerner Commission. Some are new. Our chief policy recommendations are these:Read more

Working women and men need and deserve a Secretary of Labor—somebody who will look out for their interests, protect them from unscrupulous employers, set strong health and safety standards, and safeguard their retirement security.

Unfortunately, corporate lawyer Eugene Scalia, the man named by President Trump to be the next Secretary of Labor, is not that person.

Scalia, a graduate of the University of Chicago Law School, is a partner at the Washington, D.C.-based law firm Gibson, Dunn & Crutcher, where he specializes in labor and employment law and administrative law. He is an active participant in the activities of the Federalist Society—a right-wing legal group. Scalia was nominated in 2001 by President George W. Bush to be Solicitor of Labor, but his nomination was blocked because of opposition over his extreme views against worker health and safety protections. Bush circumvented the Senate and installed Scalia as Solicitor through a recess appointment. Scalia returned to his law firm at the beginning of 2003.

Scalia has built his career representing corporations, financial institutions, and other business organizations—and fighting worker protections like health and safety regulations, retirement security, and collective bargaining rights. Scalia’s reputation as the go-to lawyer for corporations wanting to avoid worker and consumer protections is so notorious that a headline in a Bloomberg Businessweek profile on Scalia read, “Suing the Government? Call Scalia.”1 Here are just a few examples of cases where Scalia, on behalf of corporations and trade associations, has attacked worker and consumer protections:Read more

Remember that ad from the 1980s where that woman keeps asking “Where’s the beef?” I’m feeling a little like her these days, asking “Where’s the wage growth?” It’s true that the labor market continues to chug along. The unemployment rate has been at or below 4.0 percent for the last 16 months, yet, I still find myself looking for the beef—in this case, stronger wage growth.

Earlier this week in EPI’s Macroeconomic Newsletter, Josh Bivens posited two different ways to measure wage growth using the establishment survey (CES) data that’s released every jobs day. The first measure, as EPI typically uses in our nominal wage tracker, tracks growth each month relative to the same month the prior year. For the second, he looks at quarter to quarter changes (at an annualized rate for comparison). While year over year, it’s pretty clear that wage growth has flat-lined in recent months and has yet to reach the Federal Reserve’s target zone (given inflation targets and productivity potential), the second measure shows clearly that there’s actually been a deceleration in wage growth this year. The Employment Cost Index, released yesterday, also shows a marked deceleration in private sector wage growth.

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Josh Bivens, director of research at EPI

Federal Reserve Chair Jerome Powell’s July 10 testimony before the House Financial Services Committee was unlike any hearing featuring his predecessors.

Despite the vital importance of Fed decisions for the day-to-day lives of working families, congressional hearings featuring the Fed chair speaking about the state of the economy historically have disappointed. Disinterested and poorly informed questions posed by members of Congress have elicited opaque answers from Fed chairs.

This hearing was different. The questions were probing and informed, and Powell answered them with clarity.

Perhaps the most illuminating exchange occurred when Representative Steve Stivers (R-Ohio) asked Powell if the Fed was worried that low interest rates would cause the job market to run “hot.”

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The strongest economically-respectable argument from proponents of the Trump administration’s Tax Cuts and Jobs Act (TCJA) was that corporate tax cuts would eventually trickle down to workers’ wages. The theory goes that higher after-tax corporate profits are passed down to shareholders in the form of higher dividends. Higher dividends incentivize households to save more, or attract more savings from abroad. The increased savings push down interest rates, so that it’s easier for corporations to borrow money to invest in new plants and equipment. And this new capital stock gives workers more and better tools to work with, boosting their productivity, and eventually that increased productivity should boost wages.

We’ve explained plenty of times why, in practice, this theory was unlikely to hold (and that even this theory depends on the tax cut not being debt-financed to work—but the TCJA was indeed financed solely with debt). But the bottom-line linchpin for assessing if the TCJA is working as promised is the performance of investment. We now have 18 months of data on investment since the passage of the TCJA, plenty of time for its increased incentives for private investment to have taken hold. But the data doesn’t come close to supporting the story told by TCJA proponents.

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On June 11, 2019, EPI participated in the Peter G. Peterson Foundation’s (PGPF) “Solutions Initiative.” This project entailed submitting our own model federal tax and budget plan. In a previous post, we described the big picture behind our proposals. And in a recent report, we described the size of the spending and revenue increases in our budget, while paying particular attention to the details of our proposals for raising revenues and the reasoning behind them.

But we also wanted to provide more specific scores for each proposal in the “Budget for Shared Prosperity.” Estimates for spending proposals were put together by EPI and reviewed by independent scorekeepers contracted by PGPF. Estimates for the tax policies in our budget were put together by the Tax Policy Center (TPC). More information on score-keeping can be found in the report for the “Solution’s Initiative.”

Table 1 provides 30-year scores for each of the proposals in the “Budget for Shared Prosperity” in billions of dollars, as well as the effect on debt and deficits. Table 2 provides the net effects of these proposals relative to CBO baseline as a percentage of GDP. And Table 3 provides the net effects of these proposals relative to CBO baseline in billions of dollars.

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Today, Congress ended its legislative work for the summer. Members return to their districts after a busy week dominated by discussion of the Mueller report. While much of the focus of the 116^th Congress has been on investigations of the Trump administration, the House of Representatives has passed several bills that would benefit working people. Just last week, the House passed the Raise the Wage Act which would raise the minimum wage to $15 an hour in 2025. This critical legislation would increase wages for over 33 million U.S. workers and lift 1.3 million people out of poverty–nearly half of them children. Workers in every congressional district in the country would benefit from this critical legislation. EPI recently released a map that shows the benefits of raising the minimum wage to $15 by 2025 by congressional district.

In March, the House passed the Paycheck Fairness Act, which would strengthen the Equal Pay Act of 1963 and guarantee that women can challenge pay discrimination and hold their employers accountable. Since the passage of the Equal Pay Act of 1963, millions of women have joined the workforce. However, more than five decades later, women are still earning less than their male counterparts. On average in 2018, women were paid 22.6 percent less than men, after controlling for race and ethnicity, education, age, and location. This gap is even larger for women of color, with black and Hispanic women being paid 34.9 and 34.3 percent less per hour than white men, respectively—even after controlling for education, age, and location. The Paycheck Fairness Act is crucial legislation in reducing these gender pay gaps and guaranteeing women receive equal pay for equal work.

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Last month, Senator Warren (D-Mass.) and Representative Haaland (D-N.M.) introduced the Universal Child Care and Early Learning Act. The legislation sets out to tackle the two-pronged problem with the current early care and education (ECE) system in the Unites States today: affordability and quality. Current funding for the ECE system is insufficient because what parents can afford to pay is simply not enough to provide early educators with a fair wage and ensure high-quality care and education for young children.

The lack of affordability for families has been well-documented. EPI has consolidated information from a variety of sources and crunched the numbers on affordability for each state into handy child care fact sheets. There, you can see just how hard it is for families to pay for ECE for one, let alone two children. And, the problem of affordability isn’t limited to low-income families. In Arizona, the state with the median (middle) value of infant care costs across the nation, a typical family with children would have to pay 20 percent of their income for infant care. The cost is more than one year of in-state tuition for a four-year public college and greatly exceeds the recommended affordability standard of 7 percent.

The proposed legislation tackles affordability by setting limits on how much parents need to pay out of pocket for care. Those with incomes under 200 percent of the federal poverty line (about $40,000 for a two-parent one child family) are fully subsidized, while expenses are capped on a graduated basis up to 7 percent of income for the highest earners. This payment structure recognizes that affordability issues persist in not just the poorest of families but many middle-income families as well.

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