Zero Weeks plus Ellen Bravo on the importance of paid family and medical leave
The Economic Policy Institute had the distinct pleasure this week of hosting a showing of Ky Dickens’ new film, Zero Weeks, with a special Q&A with renowned paid leave advocate, Ellen Bravo.
The film gives the audience a glimpse into the lives of several workers and their families as they struggle to balance their own health needs and that of their families without the ability to take time off from work. A lifelong activist and leading expert on work-family issues, Ellen offered up her wide breadth and depth of her experiences and expertise following the film, sharing the long fight across the country to improve workers ability to earn paid time off to care for themselves and their families in times of need.
In 1993, the United States passed the Family and Medical Leave Act (FMLA), which allows eligible employees to take up to 12 weeks of unpaid, job-protected leave within a calendar year for a serious health condition, the birth of a child or to care for a newly born, adopted, or foster child, or to care for an immediate family member with a serious health condition. While it’s important to celebrate that important milestone, federal action stopped 26 years ago.
Furthermore, because eligibility for FMLA is limited based on size of firm, work hours, and tenure at job, the FMLA only provides access to unpaid leave to an estimated 56 percent of the workforce. But the largest loophole in the FMLA is that it is unpaid, so many workers who would want to take advantage of it to care for themselves or a family member, simply cannot afford to.
Workers have to make difficult choices between their careers and their caregiving responsibilities precisely when they need their paychecks the most, such as following the birth of a child or when they or a loved one falls ill. This lack of choice can often lead workers to not take any leave or cut their leave short; about 45% of FMLA-eligible workers did not take leave because they could not afford unpaid leave and among workers who took time off for caregiving responsibilities, about one-third of leave-takers cut their time off short due to lost wages.
Fighting inequality is key to preparing for the next recession
The failure to make a serious dent in high levels of economic inequality in recent years will make responding effectively to the next inevitable recession more difficult, both economically and politically.
Rising income and wealth inequality, combined with financial deregulation and the expanding financialization of the U.S. economy, led to the credit boom and crash that substantially deepened the resulting economic crisis in 2008. Fiscal stimulus during the Great Recession prevented the economy from collapsing completely but was still insufficient and phased out too soon. What’s more, instead of taking lessons from our experiences a decade ago and strengthening our recession-fighting tools, recent policies passed by Congress have focused on cutting taxes, reduced the perceived space we have to increase spending in a downturn and exacerbated income and wealth disparities in the United States.
First, let’s zoom out. Recessions aren’t just one-offs. They are part of the economic cycle. Aggregate demand in the economy expands and contracts over time and recessions occur during prolonged contractions, which are more likely when economic inequality distorts consumption and savings. Inequality also affects the time it takes to recover from recessions because it subverts our institutions and makes our political system ineffective. Lifting the economy out of a downturn requires decisive government action to boost spending and aggregate demand, which often runs counter to the primary interests of those with economic and political power. As entrenched interests continually hamstring the government’s capacity to respond to a recession, policymakers should act now to prepare for the next one by addressing inequality in the United States.
The Great Recession, education, race, and homeownership
The Great Recession was associated with a dramatic reduction in the wealth of millions of Americans, particularly wealth in the form of home equity. The net worth of the typical household plunged by 40 percent, or about $50,000, as a result of the worst economic downturn since the Great Depression.1 Of course, these detrimental effects were not felt equally by all groups. Relative to white wealth, black wealth was hit especially hard by the Great Recession. Blacks saw their median net worth fall precipitously compared with whites (that is, in percentage terms, not in absolute terms).2 Between 2005 and 2009, the median net worth of black households dropped by 53 percent, while white household net worth dropped by 17 percent.3
Yet whether we look at the racial wealth gap before or after the Great Recession, the disparity between blacks and whites is persistent. According to the U.S. Census Bureau’s Survey of Income and Program Participation, in 2005 blacks had relative holdings of nine cents on the dollar compared with whites—this fell to just five cents in 2009 and inched up to six cents in 2011. In this sense, the Great Recession did not wipe out black wealth but decimated the very modest bit of wealth accumulated by blacks. While the economy continues to recover, and while some point to recent increases in the homeownership rate, we are alarmed by evidence that black college graduates may be falling even further behind in this new paradigm.4
First, we find that long-standing racial disparities in homeownership have worsened in the post-recession recovery. Second, we find that the Great Recession left black college graduates facing enhanced barriers in the housing market. While a bachelor’s degree is often framed as a reliable stepping stone on the path to economic security, our findings add to a growing literature that challenges that accepted wisdom. Research by Hamilton et al. finds that black households headed by a college graduate have less wealth than white households headed by someone who dropped out of high school.5
In particular, we use the Blinder-Oaxaca decomposition technique to demonstrate that the demographic and socioeconomic characteristics of college-educated blacks are explaining less and less of the racial difference in homeownership rates, in turn suggesting that structural barriers (including the criteria by which homes are financed), discrimination in lending and housing markets, and initial wealth itself are playing an increased and racially uneven role in the manner in which college-educated Americans are acquiring new homes.6
Disparities in homeownership rates, 2004 to 2017
Trump’s China tariff confusion: It won’t solve chronic trade deficits
The wizard of the White House roared last week, and markets quaked from Shanghai to London. In the face of Beijing’s refusal to meet U.S. demands on intellectual property theft and forced technology transfer, President Donald Trump is ramping up tariffs on Chinese imports.
This may prove to be another ploy to coerce a trade deal from China’s negotiating team. But while president can indeed impose draconian tariffs on imports from China, it still won’t solve the most fundamental trade problem for America: chronic trade deficits.
To be sure, China is a growing problem for the U.S. economy. Last year, the United States racked up a $419 billion goods trade deficit with China—almost half of the nation’s entire international goods deficit.
And the U.S. has lost at least 3.4 million good-paying jobs, including 136,100 jobs in Pennsylvania, mostly in manufacturing, due to growing trade deficits with China since it entered the WTO in 2001.
For a long time, the fundamental cause of this growing trade chasm with China was Beijing’s deliberate currency undervaluation. Between 2000 and 2013, China invested more than $4 trillion—nearly 40 percent of its current GDP—in foreign currency assets, primarily U.S. Treasury securities.
And it paid off, since it drove down the value of the Chinese yuan relative to the U.S. dollar. This served as a massive subsidy for Chinese exports and a tax on U.S. products shipped to China.
How to think about the job-creation potential of green investments: A boost to labor demand that will create some jobs, shift some others—and increase job-quality overall
A key dividing line between competing proposals to address climate change is the role of publicly financed and directed investments.
A recent open letter about policies that should be enacted to slow climate change from a group of prominent economists mentioned only carbon pricing, and, at least implicitly argued against publicly financed and directed investments by asserting that a carbon tax “should …be revenue neutral to avoid debates over the size of government.”
Alternatively, the central organizing principle around the “Green New Deal”—both the congressional resolution as well as the looser collection of ideas associated with the phrase–is that pricing carbon alone is not enough, and that a substantial degree of public planning and investment will be necessary to stop catastrophic climate change.
Here at EPI, we are firmly of the view that a robust package of publicly financed and directed investments should be part of a large portfolio of policies (which includes carbon pricing) for stopping climate change. Not every impediment to undertaking green investments is rooted simply in the too-low price of carbon. Public investments offer a way to cut through the Gordian knot of incentives and inertia that would slow green investments even in the presence of carbon pricing.Read more
Why is teaching becoming a less appealing occupation? One answer is right in front of us
Proof that teaching is increasingly becoming a profession under siege is mounting.
Many of us have relatives or friends who were dismissed from their schools during the recession or kept their jobs but faced cuts in school funding and other challenges affecting their work lives. News reports are replete with stories of teachers who quit or who are thinking about quitting. And the most recent PDK poll of American’s views of public education found that more than half of the parents surveyed said they do not want their children to become public school teachers—the largest share since the question was introduced in 1969 and the first time a majority of parents answered this way.
The U.S Department of Education closes the school year with the publication of the Teacher Shortage Areas. Researchers point to a lack of available individuals to fill teaching positions as a factor in the teacher shortage, which we explore in a series of reports being released this spring and summer. The shortage is estimated to exceed 110,000 teachers missing in the current school year, according to our colleagues at the Learning Policy Institute.
Why is the role of educating our children becoming so unpopular?
The explanations people would provide for the declining popularity of teaching are many and may vary depending on the respondent and her or his connection to the profession. Still, it is pretty likely that low teacher pay would be a common response, either as a single cause or as an important feature in a constellation of causes that includes disrespect from policymakers, underfunding (which leaves teachers without the supports to handle their day-to-day needs), and disinvestment in the professional supports that help teachers adapt to changing conditions, continue their professional education, and collaborate with one another—key elements of any professional occupation. It’s likely that explanations from teachers themselves would emphasize both the lack of professional supports that reflect a lack of appreciation for teaching as a professional like any other profession and the pay penalty they live with.
Don’t be fooled by calls for a ‘regional’ minimum wage
Federal law is supposed to be the backstop that protects the vulnerable when lower levels of government fail to act. But a recent proposal to establish a regionally-adjusted federal minimum wage would undermine this principle, codifying disparities into federal law that in many cases are not the result of benign economic forces.
For one thing, it is impossible to separate the prevalence of low wages in the South from the persistent racial hierarchies there. Fortunately, the historical record shows that federal lawmakers do not need to accept this legacy. Establishing a federal $15 minimum wage in 2024, as over 200 Congressional Democrats have proposed, is economically achievable nationwide.
For decades, lawmakers—particularly in southern states—have refused to raise minimum wages and have prohibited cities and counties from doing so. The proposed regionally-adjusted federal minimum would simply accept this outcome, locking in these areas’ low-wage status, and leaving behind millions of workers—particularly workers of color—in the process. The Economic Policy Institute estimates 15.6 million fewer workers would get a raise under the regional proposal compared with a universal $15 minimum wage, and over 40 percent of these excluded workers are people of color.
It is true that states and sub-state areas have varying wage and price levels and there are times when policies should take those differences into account. The good news is regional wage differences are far smaller today than in past decades. This means implementing a more livable national minimum wage is easier now than for previous generations.
Doing so will generate a universal federal minimum wage that states and cities can exceed if needed, so that no worker fails to receive a livable wage and policy gradually shifts upward those at the bottom of the wage scale. A uniform federal minimum wage would help combat inequality across both racial and gender lines.Read more
The PRO Act: Giving workers more bargaining power on the job
Our economy is out of balance. Corporations and CEOs hold too much power and wealth, and working people know it. Workers are mobilizing, organizing, protesting, and striking at a level not seen in decades, and they are winning pay raises and other real change by using their collective voices.
But, the fact is, it is still too difficult for working people to form a union at their workplace when they want to. The law gives employers too much power and puts too many roadblocks in the way of workers trying to organize with their co-workers. That’s why the Protecting the Right to Organize (PRO) Act—introduced today by Senator Murray and Representative Scott—is such an important piece of legislation.
The PRO Act addresses several major problems with the current law and tries to give working people a fair shot when they try to join together with their coworkers to form a union and bargain for better wages, benefits, and conditions at their workplaces. Here’s how:Read more
What to Watch on Jobs Day: An expected and continued return of workers into the labor force
Over the last several years, the economy has continued on a slow-but-steady march to full employment. Along with improvements in nominal wage growth, we’ve seen evidence that more and more sidelined workers continue to pour into the labor market, seeking work and getting jobs. This growing labor force participation rate (LFPR), which has beaten many experts’ more pessimistic projections, is the subject of this jobs day preview post.
Projections of labor force participation changed dramatically once the Great Recession hit and many experts quickly decided that cyclical drop-offs in participation were actually structural trends. Think of cyclical changes as being short term, driven by the aggregate demand shortfall that caused the Great Recession and its aftermath. Structural changes are due to long-run trends, such as the aging of the workforce or the retirement of baby boomers. In and immediately following the Great Recession, there was a steady and deep decline in labor force participation. Even after the unemployment rate began to recover after a sharp spike, the participation rate continued to decline. That relationship is clearest when you look at the prime-age population, as I’ve pointed out before, but is true when you look at overall labor force participation and unemployment as well.
The figure below shows the relationship between the unemployment rate and the labor force participation rate between 1989 and 2019. It’s clear that the labor force participation rate continued to decline even as the unemployment rate started to recover in the aftermath of the Great Recession. Remember that to be counted as unemployed, you must be actively looking for work in the four weeks prior. With so many would-be workers falling off the official count of the unemployed, because the weak economy meant they did not believe there were job opportunities for them, many analysts began to question whether they would ever return.
The labor force participation rate continued to decline long after the unemployment rate began recovering in the aftermath of the Great Recession: Labor force participation and unemployment rates, ages 16 and older, 1989–2019
| Labor Force Participation Rate | Unemployment Rate | |
|---|---|---|
| Jan-1989 | 66.5% | 5.4% |
| Feb-1989 | 66.3% | 5.2% |
| Mar-1989 | 66.3% | 5.0% |
| Apr-1989 | 66.4% | 5.2% |
| May-1989 | 66.3% | 5.2% |
| Jun-1989 | 66.5% | 5.3% |
| Jul-1989 | 66.5% | 5.2% |
| Aug-1989 | 66.5% | 5.2% |
| Sep-1989 | 66.4% | 5.3% |
| Oct-1989 | 66.5% | 5.3% |
| Nov-1989 | 66.6% | 5.4% |
| Dec-1989 | 66.5% | 5.4% |
| Jan-1990 | 66.8% | 5.4% |
| Feb-1990 | 66.7% | 5.3% |
| Mar-1990 | 66.7% | 5.2% |
| Apr-1990 | 66.6% | 5.4% |
| May-1990 | 66.6% | 5.4% |
| Jun-1990 | 66.4% | 5.2% |
| Jul-1990 | 66.5% | 5.5% |
| Aug-1990 | 66.5% | 5.7% |
| Sep-1990 | 66.4% | 5.9% |
| Oct-1990 | 66.4% | 5.9% |
| Nov-1990 | 66.4% | 6.2% |
| Dec-1990 | 66.4% | 6.3% |
| Jan-1991 | 66.2% | 6.4% |
| Feb-1991 | 66.2% | 6.6% |
| Mar-1991 | 66.3% | 6.8% |
| Apr-1991 | 66.4% | 6.7% |
| May-1991 | 66.2% | 6.9% |
| Jun-1991 | 66.2% | 6.9% |
| Jul-1991 | 66.1% | 6.8% |
| Aug-1991 | 66.0% | 6.9% |
| Sep-1991 | 66.2% | 6.9% |
| Oct-1991 | 66.1% | 7.0% |
| Nov-1991 | 66.1% | 7.0% |
| Dec-1991 | 66.0% | 7.3% |
| Jan-1992 | 66.3% | 7.3% |
| Feb-1992 | 66.2% | 7.4% |
| Mar-1992 | 66.4% | 7.4% |
| Apr-1992 | 66.5% | 7.4% |
| May-1992 | 66.6% | 7.6% |
| Jun-1992 | 66.7% | 7.8% |
| Jul-1992 | 66.7% | 7.7% |
| Aug-1992 | 66.6% | 7.6% |
| Sep-1992 | 66.5% | 7.6% |
| Oct-1992 | 66.2% | 7.3% |
| Nov-1992 | 66.3% | 7.4% |
| Dec-1992 | 66.3% | 7.4% |
| Jan-1993 | 66.2% | 7.3% |
| Feb-1993 | 66.2% | 7.1% |
| Mar-1993 | 66.2% | 7.0% |
| Apr-1993 | 66.1% | 7.1% |
| May-1993 | 66.4% | 7.1% |
| Jun-1993 | 66.5% | 7.0% |
| Jul-1993 | 66.4% | 6.9% |
| Aug-1993 | 66.4% | 6.8% |
| Sep-1993 | 66.2% | 6.7% |
| Oct-1993 | 66.3% | 6.8% |
| Nov-1993 | 66.3% | 6.6% |
| Dec-1993 | 66.4% | 6.5% |
| Jan-1994 | 66.6% | 6.6% |
| Feb-1994 | 66.6% | 6.6% |
| Mar-1994 | 66.5% | 6.5% |
| Apr-1994 | 66.5% | 6.4% |
| May-1994 | 66.6% | 6.1% |
| Jun-1994 | 66.4% | 6.1% |
| Jul-1994 | 66.4% | 6.1% |
| Aug-1994 | 66.6% | 6.0% |
| Sep-1994 | 66.6% | 5.9% |
| Oct-1994 | 66.7% | 5.8% |
| Nov-1994 | 66.7% | 5.6% |
| Dec-1994 | 66.7% | 5.5% |
| Jan-1995 | 66.8% | 5.6% |
| Feb-1995 | 66.8% | 5.4% |
| Mar-1995 | 66.7% | 5.4% |
| Apr-1995 | 66.9% | 5.8% |
| May-1995 | 66.5% | 5.6% |
| Jun-1995 | 66.5% | 5.6% |
| Jul-1995 | 66.6% | 5.7% |
| Aug-1995 | 66.6% | 5.7% |
| Sep-1995 | 66.6% | 5.6% |
| Oct-1995 | 66.6% | 5.5% |
| Nov-1995 | 66.5% | 5.6% |
| Dec-1995 | 66.4% | 5.6% |
| Jan-1996 | 66.4% | 5.6% |
| Feb-1996 | 66.6% | 5.5% |
| Mar-1996 | 66.6% | 5.5% |
| Apr-1996 | 66.7% | 5.6% |
| May-1996 | 66.7% | 5.6% |
| Jun-1996 | 66.7% | 5.3% |
| Jul-1996 | 66.9% | 5.5% |
| Aug-1996 | 66.7% | 5.1% |
| Sep-1996 | 66.9% | 5.2% |
| Oct-1996 | 67.0% | 5.2% |
| Nov-1996 | 67.0% | 5.4% |
| Dec-1996 | 67.0% | 5.4% |
| Jan-1997 | 67.0% | 5.3% |
| Feb-1997 | 66.9% | 5.2% |
| Mar-1997 | 67.1% | 5.2% |
| Apr-1997 | 67.1% | 5.1% |
| May-1997 | 67.1% | 4.9% |
| Jun-1997 | 67.1% | 5.0% |
| Jul-1997 | 67.2% | 4.9% |
| Aug-1997 | 67.2% | 4.8% |
| Sep-1997 | 67.1% | 4.9% |
| Oct-1997 | 67.1% | 4.7% |
| Nov-1997 | 67.2% | 4.6% |
| Dec-1997 | 67.2% | 4.7% |
| Jan-1998 | 67.1% | 4.6% |
| Feb-1998 | 67.1% | 4.6% |
| Mar-1998 | 67.1% | 4.7% |
| Apr-1998 | 67.0% | 4.3% |
| May-1998 | 67.0% | 4.4% |
| Jun-1998 | 67.0% | 4.5% |
| Jul-1998 | 67.0% | 4.5% |
| Aug-1998 | 67.0% | 4.5% |
| Sep-1998 | 67.2% | 4.6% |
| Oct-1998 | 67.2% | 4.5% |
| Nov-1998 | 67.1% | 4.4% |
| Dec-1998 | 67.2% | 4.4% |
| Jan-1999 | 67.2% | 4.3% |
| Feb-1999 | 67.2% | 4.4% |
| Mar-1999 | 67.0% | 4.2% |
| Apr-1999 | 67.1% | 4.3% |
| May-1999 | 67.1% | 4.2% |
| Jun-1999 | 67.1% | 4.3% |
| Jul-1999 | 67.1% | 4.3% |
| Aug-1999 | 67.0% | 4.2% |
| Sep-1999 | 67.0% | 4.2% |
| Oct-1999 | 67.0% | 4.1% |
| Nov-1999 | 67.1% | 4.1% |
| Dec-1999 | 67.1% | 4.0% |
| Jan-2000 | 67.3% | 4.0% |
| Feb-2000 | 67.3% | 4.1% |
| Mar-2000 | 67.3% | 4.0% |
| Apr-2000 | 67.3% | 3.8% |
| May-2000 | 67.1% | 4.0% |
| Jun-2000 | 67.1% | 4.0% |
| Jul-2000 | 66.9% | 4.0% |
| Aug-2000 | 66.9% | 4.1% |
| Sep-2000 | 66.9% | 3.9% |
| Oct-2000 | 66.8% | 3.9% |
| Nov-2000 | 66.9% | 3.9% |
| Dec-2000 | 67.0% | 3.9% |
| Jan-2001 | 67.2% | 4.2% |
| Feb-2001 | 67.1% | 4.2% |
| Mar-2001 | 67.2% | 4.3% |
| Apr-2001 | 66.9% | 4.4% |
| May-2001 | 66.7% | 4.3% |
| Jun-2001 | 66.7% | 4.5% |
| Jul-2001 | 66.8% | 4.6% |
| Aug-2001 | 66.5% | 4.9% |
| Sep-2001 | 66.8% | 5.0% |
| Oct-2001 | 66.7% | 5.3% |
| Nov-2001 | 66.7% | 5.5% |
| Dec-2001 | 66.7% | 5.7% |
| Jan-2002 | 66.5% | 5.7% |
| Feb-2002 | 66.8% | 5.7% |
| Mar-2002 | 66.6% | 5.7% |
| Apr-2002 | 66.7% | 5.9% |
| May-2002 | 66.7% | 5.8% |
| Jun-2002 | 66.6% | 5.8% |
| Jul-2002 | 66.5% | 5.8% |
| Aug-2002 | 66.6% | 5.7% |
| Sep-2002 | 66.7% | 5.7% |
| Oct-2002 | 66.6% | 5.7% |
| Nov-2002 | 66.4% | 5.9% |
| Dec-2002 | 66.3% | 6.0% |
| Jan-2003 | 66.4% | 5.8% |
| Feb-2003 | 66.4% | 5.9% |
| Mar-2003 | 66.3% | 5.9% |
| Apr-2003 | 66.4% | 6.0% |
| May-2003 | 66.4% | 6.1% |
| Jun-2003 | 66.5% | 6.3% |
| Jul-2003 | 66.2% | 6.2% |
| Aug-2003 | 66.1% | 6.1% |
| Sep-2003 | 66.1% | 6.1% |
| Oct-2003 | 66.1% | 6.0% |
| Nov-2003 | 66.1% | 5.8% |
| Dec-2003 | 65.9% | 5.7% |
| Jan-2004 | 66.1% | 5.7% |
| Feb-2004 | 66.0% | 5.6% |
| Mar-2004 | 66.0% | 5.8% |
| Apr-2004 | 65.9% | 5.6% |
| May-2004 | 66.0% | 5.6% |
| Jun-2004 | 66.1% | 5.6% |
| Jul-2004 | 66.1% | 5.5% |
| Aug-2004 | 66.0% | 5.4% |
| Sep-2004 | 65.8% | 5.4% |
| Oct-2004 | 65.9% | 5.5% |
| Nov-2004 | 66.0% | 5.4% |
| Dec-2004 | 65.9% | 5.4% |
| Jan-2005 | 65.8% | 5.3% |
| Feb-2005 | 65.9% | 5.4% |
| Mar-2005 | 65.9% | 5.2% |
| Apr-2005 | 66.1% | 5.2% |
| May-2005 | 66.1% | 5.1% |
| Jun-2005 | 66.1% | 5.0% |
| Jul-2005 | 66.1% | 5.0% |
| Aug-2005 | 66.2% | 4.9% |
| Sep-2005 | 66.1% | 5.0% |
| Oct-2005 | 66.1% | 5.0% |
| Nov-2005 | 66.0% | 5.0% |
| Dec-2005 | 66.0% | 4.9% |
| Jan-2006 | 66.0% | 4.7% |
| Feb-2006 | 66.1% | 4.8% |
| Mar-2006 | 66.2% | 4.7% |
| Apr-2006 | 66.1% | 4.7% |
| May-2006 | 66.1% | 4.6% |
| Jun-2006 | 66.2% | 4.6% |
| Jul-2006 | 66.1% | 4.7% |
| Aug-2006 | 66.2% | 4.7% |
| Sep-2006 | 66.1% | 4.5% |
| Oct-2006 | 66.2% | 4.4% |
| Nov-2006 | 66.3% | 4.5% |
| Dec-2006 | 66.4% | 4.4% |
| Jan-2007 | 66.4% | 4.6% |
| Feb-2007 | 66.3% | 4.5% |
| Mar-2007 | 66.2% | 4.4% |
| Apr-2007 | 65.9% | 4.5% |
| May-2007 | 66.0% | 4.4% |
| Jun-2007 | 66.0% | 4.6% |
| Jul-2007 | 66.0% | 4.7% |
| Aug-2007 | 65.8% | 4.6% |
| Sep-2007 | 66.0% | 4.7% |
| Oct-2007 | 65.8% | 4.7% |
| Nov-2007 | 66.0% | 4.7% |
| Dec-2007 | 66.0% | 5.0% |
| Jan-2008 | 66.2% | 5.0% |
| Feb-2008 | 66.0% | 4.9% |
| Mar-2008 | 66.1% | 5.1% |
| Apr-2008 | 65.9% | 5.0% |
| May-2008 | 66.1% | 5.4% |
| Jun-2008 | 66.1% | 5.6% |
| Jul-2008 | 66.1% | 5.8% |
| Aug-2008 | 66.1% | 6.1% |
| Sep-2008 | 66.0% | 6.1% |
| Oct-2008 | 66.0% | 6.5% |
| Nov-2008 | 65.9% | 6.8% |
| Dec-2008 | 65.8% | 7.3% |
| Jan-2009 | 65.7% | 7.8% |
| Feb-2009 | 65.8% | 8.3% |
| Mar-2009 | 65.6% | 8.7% |
| Apr-2009 | 65.7% | 9.0% |
| May-2009 | 65.7% | 9.4% |
| Jun-2009 | 65.7% | 9.5% |
| Jul-2009 | 65.5% | 9.5% |
| Aug-2009 | 65.4% | 9.6% |
| Sep-2009 | 65.1% | 9.8% |
| Oct-2009 | 65.0% | 10.0% |
| Nov-2009 | 65.0% | 9.9% |
| Dec-2009 | 64.6% | 9.9% |
| Jan-2010 | 64.8% | 9.8% |
| Feb-2010 | 64.9% | 9.8% |
| Mar-2010 | 64.9% | 9.9% |
| Apr-2010 | 65.2% | 9.9% |
| May-2010 | 64.9% | 9.6% |
| Jun-2010 | 64.6% | 9.4% |
| Jul-2010 | 64.6% | 9.4% |
| Aug-2010 | 64.7% | 9.5% |
| Sep-2010 | 64.6% | 9.5% |
| Oct-2010 | 64.4% | 9.4% |
| Nov-2010 | 64.6% | 9.8% |
| Dec-2010 | 64.3% | 9.3% |
| Jan-2011 | 64.2% | 9.1% |
| Feb-2011 | 64.1% | 9.0% |
| Mar-2011 | 64.2% | 9.0% |
| Apr-2011 | 64.2% | 9.1% |
| May-2011 | 64.1% | 9.0% |
| Jun-2011 | 64.0% | 9.1% |
| Jul-2011 | 64.0% | 9.0% |
| Aug-2011 | 64.1% | 9.0% |
| Sep-2011 | 64.2% | 9.0% |
| Oct-2011 | 64.1% | 8.8% |
| Nov-2011 | 64.1% | 8.6% |
| Dec-2011 | 64.0% | 8.5% |
| Jan-2012 | 63.7% | 8.3% |
| Feb-2012 | 63.8% | 8.3% |
| Mar-2012 | 63.8% | 8.2% |
| Apr-2012 | 63.7% | 8.2% |
| May-2012 | 63.7% | 8.2% |
| Jun-2012 | 63.8% | 8.2% |
| Jul-2012 | 63.7% | 8.2% |
| Aug-2012 | 63.5% | 8.1% |
| Sep-2012 | 63.6% | 7.8% |
| Oct-2012 | 63.8% | 7.8% |
| Nov-2012 | 63.6% | 7.7% |
| Dec-2012 | 63.7% | 7.9% |
| Jan-2013 | 63.7% | 8.0% |
| Feb-2013 | 63.4% | 7.7% |
| Mar-2013 | 63.3% | 7.5% |
| Apr-2013 | 63.4% | 7.6% |
| May-2013 | 63.4% | 7.5% |
| Jun-2013 | 63.4% | 7.5% |
| Jul-2013 | 63.3% | 7.3% |
| Aug-2013 | 63.3% | 7.2% |
| Sep-2013 | 63.2% | 7.2% |
| Oct-2013 | 62.8% | 7.2% |
| Nov-2013 | 63.0% | 6.9% |
| Dec-2013 | 62.9% | 6.7% |
| Jan-2014 | 62.9% | 6.6% |
| Feb-2014 | 62.9% | 6.7% |
| Mar-2014 | 63.1% | 6.7% |
| Apr-2014 | 62.8% | 6.2% |
| May-2014 | 62.9% | 6.3% |
| Jun-2014 | 62.8% | 6.1% |
| Jul-2014 | 62.9% | 6.2% |
| Aug-2014 | 62.9% | 6.1% |
| Sep-2014 | 62.8% | 5.9% |
| Oct-2014 | 62.9% | 5.7% |
| Nov-2014 | 62.9% | 5.8% |
| Dec-2014 | 62.8% | 5.6% |
| Jan-2015 | 62.9% | 5.7% |
| Feb-2015 | 62.7% | 5.5% |
| Mar-2015 | 62.6% | 5.4% |
| Apr-2015 | 62.7% | 5.4% |
| May-2015 | 62.9% | 5.6% |
| Jun-2015 | 62.6% | 5.3% |
| Jul-2015 | 62.6% | 5.2% |
| Aug-2015 | 62.6% | 5.1% |
| Sep-2015 | 62.4% | 5.0% |
| Oct-2015 | 62.5% | 5.0% |
| Nov-2015 | 62.6% | 5.1% |
| Dec-2015 | 62.7% | 5.0% |
| Jan-2016 | 62.7% | 4.9% |
| Feb-2016 | 62.8% | 4.9% |
| Mar-2016 | 62.9% | 5.0% |
| Apr-2016 | 62.8% | 5.0% |
| May-2016 | 62.7% | 4.8% |
| Jun-2016 | 62.7% | 4.9% |
| Jul-2016 | 62.8% | 4.8% |
| Aug-2016 | 62.9% | 4.9% |
| Sep-2016 | 62.9% | 5.0% |
| Oct-2016 | 62.8% | 4.9% |
| Nov-2016 | 62.7% | 4.7% |
| Dec-2016 | 62.7% | 4.7% |
| Jan-2017 | 62.9% | 4.7% |
| Feb-2017 | 62.9% | 4.7% |
| Mar-2017 | 62.9% | 4.4% |
| Apr-2017 | 62.9% | 4.4% |
| May-2017 | 62.8% | 4.4% |
| Jun-2017 | 62.8% | 4.3% |
| Jul-2017 | 62.9% | 4.3% |
| Aug-2017 | 62.9% | 4.4% |
| Sep-2017 | 63.1% | 4.2% |
| Oct-2017 | 62.7% | 4.1% |
| Nov-2017 | 62.8% | 4.2% |
| Dec-2017 | 62.7% | 4.1% |
| Jan-2018 | 62.7% | 4.1% |
| Feb-2018 | 63.0% | 4.1% |
| Mar-2018 | 62.9% | 4.0% |
| Apr-2018 | 62.8% | 3.9% |
| May-2018 | 62.8% | 3.8% |
| Jun-2018 | 62.9% | 4.0% |
| Jul-2018 | 62.9% | 3.9% |
| Aug-2018 | 62.7% | 3.8% |
| Sep-2018 | 62.7% | 3.7% |
| Oct-2018 | 62.9% | 3.8% |
| Nov-2018 | 62.9% | 3.7% |
| Dec-2018 | 63.1% | 3.9% |
| Jan-2019 | 63.2% | 4.0% |
| Feb-2019 | 63.2% | 3.8% |
| Mar-2019 | 63.0% | 3.8% |
Source: EPI analysis of Current Population Survey public data series
Now you see them, now you don’t: Vanishing benefits for U.S. workers in NAFTA-2 (USMCA) deal
The purported benefits of the U.S.-Mexico Canada Agreement (USMCA, or NAFTA-2) for American workers are so tiny, one can hardly see them.
The U.S. International Trade Commission’s recent study of the economic impacts of the USMCA finds that it will have small, but positive, effects on U.S. output (GDP up 0.35 percent over six years), employment (176,000 jobs or 0.12 percent) and wages (up 0.27 percent). However, these projections are based on a number of questionable assumptions about the impacts of the trade deal, “assuming” for example that Mexico will adopt new labor legislation that will improve labor rights in that country, and “that these provisions are enforced” and Mexican union wages increase by 17.2 percent as a result. Furthermore, the ITC claims that U.S. wages will rise as a direct result of improved labor rights enforcement in Mexico, although that conclusion is not supported by the results of their own model.
These findings illustrate a much larger problem with the outdated modeling approach used by the ITC, which assumes that the purpose of trade and investment deals, such as the USMCA, is to reduce tariffs. However, the most important provisions of modern international economic agreements, such as the USMCA and the World Trade Organization, lay down rules governing matters such as foreign investment, services trade, government procurement, data transmission and storage, food and product safety standards, as well as labor rights and environmental standards. These rules govern how countries trade and businesses invest and how our economies are governed and regulated. At the end of the day, they determine who wins and loses, how income is distributed, the tradeoffs between corporate power and control, and whether the rights of workers, the public and the environment will be protected from transnational abuses from big business and big government.
Chapter 8 of the ITC report on the USMCA (p. 215) makes the following erroneous claim: The Commission estimates that the collective bargaining legislation will likely increase unionization rates and wages in Mexico and also increase Mexican output. This, in turn, would be expected to increase U.S. output and employment also, resulting in a small (0.27 percent) increase in U.S. real wages to attract the new workers.
This claim is not supported by the model results. Appendix F of the ITC report (Modeling the Labor Provisions, Table F.5 (p 327)) reports the results of a sensitivity analysis showing the impacts of various assumptions about the size of the Mexican union wage premium (17.5 percent, 32.7 percent, and 37.5 percent) on US macroeconomic variables, including GDP, total employment and wages. The first of these is the base case for the ITC’s overall estimates. These simulations resulted in no significant changes between the base case and alternatives (despite much higher assumed union wage premiums in Mexico) in the estimated impact of the USMCA on GDP (0.35 percent), wages (0.27 percent), or employment (176,000 jobs) in the United States, despite roughly doubling the assumed impact of collective bargaining on wages in Mexico (GDP and total U.S. employment increased very slightly in these simulations, by between 1/10 to 3/10 of 1 percent, as the Mexican wage premium was doubled).