Public school teachers have long made less money than other professionals, but last year the gap hit its widest level since 1960, according to a new analysis of federal data.
Why it matters: The report from the Economic Policy Institute helps explain why the nationwide teacher shortage has grown so acute.
Zoom in: The immediate culprit is inflation,which eroded teachers’ real pay considerably in 2022.
The earnings of other college grads managed to just about keep pace with price increases, writes the report’s author, economist Sylvia Allegretto.
Public schools are less nimble when it comes to raising pay than the private sector.
Of note: Teachers typically receive better benefits than other workers (pensions!). In her analysis, Allegretto calculated that even considering the value of those benefits, teachers still earn about 17% less.
It doesn’t consider offsets from battery manufacturing jobs. The left-leaning Economic Policy Institute has estimated a loss of 75,000 jobs with EVs making up half of U.S. vehicle sales by 2030 — without efforts to offset such losses. “These losses would stem from policy failures that stunted investment in domestic capacity of U.S. producers to build the batteries and drivetrains of BEVs [battery electric vehicles], and from a failure to regain market share in overall vehicle sales,” said EPI, which is partly funded by labor unions.
The gap between employees and chief executives can be exorbitant. In some of the country’s largest firms, CEOs made 399 times more than the typical worker, according to research from the Economic Policy Institute. Thus, founders should ensure they’re offering reasonable salaries that encourage the best results from their team–and don’t engender resentment.
These dramatic increases were “the direct result of the policy choice to allow pandemic-era relief programs like the Child Tax Credit to expire,” said Economic Policy Institute researchers Kyle K. Moore and Adewale A. Maye in a recent report.
According to the Economic Policy Institute, PLAs – otherwise known as Community Workforce Agreements – are effective mechanisms for controlling construction costs, ensuring efficient completion of projects, and establishing fair wages and benefits for all workers. PLAs also help ensure worker health and safety protections while providing a unique opportunity for workforce development.
In the same time period that donations of corporate pretax profits have shrunk, executive salaries have skyrocketed. The CEO-to-worker compensation ratio reached 399 to 1 in 2021, a new high, according to a report from the Economic Policy Institute. That’s up from 59 to 1 in 1989, the report found.
According to the Economic Policy Institute, Union membership was at its highest in 1945, just after World War II was ending, the percentage of national workers represented by Union today is down to about 10%. Yet public support for labor unions is at its highest since 1965 with over two thirds of Americans supporting them. Unions are proven to reduce income inequality and get workers better wages and benefits. Is it possible we’ll see a resurgence?
One of every four Dollar General employees makes less than $10 an hour, over half under $12, notes an Economic Policy Institute study of 2021 survey data. Even notoriously low-wage Walmart was paying workers, that same year, at least $12 an hour.
When hiring picked up later that year, low-wage workers — like those in restaurants and hotels — had more bargaining power at the individual level, said Elise Gould, a senior economist at the Economic Policy Institute. As a result, wages began to grow.
“Low-wage growth between 2019 and 2022 [was] much faster than any other business cycle that we’ve had in the U.S.,” Gould said.
But to assess the two visits to Michigan mainly in terms of their potential effect on the 2024 election is to think too small. The single most important trend in US economic life in recent decades has been the rise of income inequality, which was overwhelmingly driven by anaemic growth in wages for all but the very highest-paid workers.
Jared Bernstein, the chair of the US Council of Economic Advisers, says the disconnect between the data and Americans’ views of the economy probably has a lot to do with persistent sticker shock.
“I think it all comes down to inflation,” Bernstein said during a Wednesday policy briefing at the Economic Policy Institute in Washington. “I think it’s about prices. I think we’re trying to talk to people about disinflation, and what they really want is deflation. They want their old prices back, dammit.”
Lack of standards has real ramifications. According to the Economic Policy Institute, domestic workers are three times as likely to live in poverty than other workers–typical wages for a domestic worker were $12.02/hour; for a non-domestic worker, $19.97. And 39 percent of nannies live twice below the poverty level; for non-domestic workers, the twice-poverty rate is 17 percent.
The bill could worsen graduation rates and hurt lower-income families, experts said, and could also be a way to replace some immigrant labor as Florida and other GOP-led states continue to crack down on undocumented workers.
“Are we willing to return to a world where we accept that children of the poorest families are working more than full-time jobs under hazardous conditions?” said Jennifer Sherer, director of the Economic Analysis and Research Network at the nonprofit Economic Policy Institute.
Don’t worry — it’s still plenty to sustain a growing economy, said Elise Gould at the Economic Policy Institute.
“When we see job growth in excess of around 100,000, that means that not only are we keeping up with population growth, we’re pulling people in off the sidelines,” Gould said.
Gould sees a job market returning pretty close to pre-pandemic normal.
“The share of workers between 25 and 54 with a job is now at or higher than before, particularly for women. We have very low Black unemployment. So there are many metrics that look very much like 2019 — and even better.”
Despite the new momentum, unions have a steep climb to reverse the decades- long decline. Recent union drives, while gaining attention, haven’t produced a plethora of new labor contracts. Many existing union members also are working under expired agreements while negotiations drag on. Current laws and regulations do little to help, says Margaret Poydock, a senior policy analyst with the Economic Policy Institute, a nonprofit think tank.
Over the past year, my colleagues in the Biden administration have presented compelling explanations of our approach to international trade. It is an approach that is unsurprisingly rooted in Bidenomics, specifically by recognizing two simple realities that EPI saw decades before most others.
To add context to CEO salaries, the Economic Policy Institute found that in 2021, the top 350 US CEOs made 399 times more than the average American’s annual salary. This disparity marks the widest gap the institute has recorded from 1965 to 2021.
There are more than 2 million domestic workers in the United States, according to a study by the Economic Policy Institute, a liberal research group. Laws similar to Chicago’s are on the books in San Francisco and Philadelphia.
Crucially, participation could be poised to keep rising. Department of Labor data show that the share of people moving into employment after being disconnected from the labor force—meaning they found a job without spending time searching for work—is at elevated levels, notes Elise Gould, a senior economist with the Economic Policy Institute. That, she says, means “the reserve of workers is much larger than the unemployment level would suggest.”
“It means there is still room to grow,” Gould adds.
Even in times of expansion, there has been little change in the fundamentals of an enormous wealth gap, persistent wage gap, disproportionate levels of unemployment, low workforce participation, limited fields of occupation, and a half-century of stunted growth of the middle class, according to The Unfinished March, a 2013 symposium by the Economic Policy Institute.
Many of those jobs have returned with higher wages. Between 2019 and 2022, wages have increased at the fastest rate for workers in the bottom 10 percent of jobs in terms of pay — including many of those hospitality jobs like cooks, servers and housekeepers — according to a study by the Economic Policy Institute.
This astounding inequity has spread across the economy. The Economic Policy Institute reports that over the last 45 years, adjusting for inflation, CEO compensation in America’s 300 largest companies has risen 1,460% while a typical worker’s pay grew by just 18%.
The Economic Policy Institute recently reported that child labor violations have increased by nearly 300 percent since 2015, and the Labor Department found more than 800 violators during the past fiscal year.
The U.S. economy is facing headwinds from a possible government shutdown, student debt payments restarting, higher interest rates and an autoworkers’ strike, White House economic adviser Jared Bernstein said on Wednesday.
The economy will keep going in a “pretty good way” unless there is a policy mistake or exogenous shock, he added, speaking at an event at the Economic Policy Institute, a progressive think tank.
The movement to sign the CROWN Act into law at the state level has gained momentum. As of 2023, 24 states and the U.S. Virgin Islands have enacted a related law, according to the Economic Policy Institute, including Massachusetts, New York, New Jersey, and most recently Michigan and Texas. The latter was the 24th state to implement the law, which officially went into effect on Sept. 1.