Media clips
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The Economic Policy Institute says misclassification comes at a steep price for governments.
“The loss of billions of dollars in tax revenue creates a significant financial burden for local, state, and the federal governments, not only due to lost revenue but also because of the added cost of providing social services to uninsured workers,” the left-leaning think tank found in a 2015 analysis of the problem.
Huffpost May 7, 2021 -
But others are quick to push back on the notion that overly generous benefits are the problem. If people are doing better on unemployment, the argument goes, it only means they were underpaid to start with.
“I think we should take what [businesses] say with grain of salt,” says Daniel Costa, an immigration researcher at the Economic Policy Institute, a liberal-leaning think tank. “Every time you hear ‘I can’t find any workers,’ you should add to the end of that – ‘at the wage I want to pay,’ because you’re talking about very low-wage jobs.”
NPR All Things Considered May 7, 2021 -
Still, some see Biden’s executive order as a useful start. “It’s not going to be as impactful as a minimum wage standard that applies to the labor market,” says Ben Zipperer, an economist at EPI. “But in the absence of that happening, I think it makes a lot of sense to push as many levers as possible to raise wages for those at the bottom of the wage distribution.”
Quartz May 7, 2021 -
But fiscal stimulus isn’t the only problem. Many of the unfilled jobs in the restaurant and retail industry underscore the fact that employers aren’t paying adequately or giving workers enough hours, according to Economic Policy Institute’s Heidi Shierholz.
“Employers are like: ‘Why the hell, if there are so many people who need jobs, can’t I find somebody really awesome, really cheap?’” said Shierholz, who worked as chief economist at the Labor Department under President Barack Obama.
Bloomberg May 7, 2021 -
“When you don’t see wages growing … you can be fairly certain that labor shortages, though possibly happening in some places, are not a driving feature of the labor market. And right now, wages are not growing at a rapid pace,” said Heidi Shierholz, senior economist and director of policy at the Economic Policy Institute, a left-leaning think tank. Shierholz said on Twitter that there are 80 percent more unemployed workers than job openings in the leisure and hospitality sector.
Washington Post May 7, 2021 -
Heidi Shierholz, senior economist and director of policy at the Economic Policy Institute, doesn’t believe there is a widespread labor shortage. For one, wages aren’t rising rapidly, which indicates a tight labor market and job growth is booming, she said in a recent op-ed in the Initiative for Policy Dialogue.
As for the $300 unemployment benefits keeping low-wage workers away from jobs, she points to research papers that found an extremely limited effect the weekly $600 benefit had last year in discouraging workers.
Instead, the lack of workers may have to do with the fact that employers aren’t raising wages, she argued.
“Employers post their too-low wages, can’t find workers to fill jobs at that pay level, and claim they’re facing a labor shortage,” she wrote.” Given the ubiquity of this dynamic, I often suggest that whenever anyone says, ‘I can’t find the workers I need,’ she should really add, ‘at the wages I want to pay.’”
CNBC May 7, 2021 -
For years, the Economic Policy Institute, a think tank close to organized labor (and where Bernstein, Boushey, and Jones each worked for a time) functioned as the locus of Democratic opposition to Clinton’s and Obama’s approach. The skills explanation offered both administrations “an excuse for what was a systematic deploying of policy to disempower workers,” argues Larry Mishel, a senior fellow at EPI who previously served as its president.
To Mishel and like-minded critics, the skills-gap theory couldn’t account for two key trends: the rising share of income and wealth concentrating in the top 1 percent, and the slowdown in wage growth even among college graduates, who were supposed to benefit from the digital revolution. And for many progressive skeptics, the skills gap also carried an unpleasant whiff of blaming workers for their stagnating wages, with the implication that they could solve their problems if they just devoted themselves to obtaining more education. “The center-left has totally abandoned, and appropriately so, that framework for understanding wage suppression and inequality,” Mishel told me. “What’s replaced it is a greater attention to the increases in employer power.”
The Atlantic May 7, 2021 -
Many labor and retirement analysts say that raising the minimum wage would be a vital step for advancing the economic security of lower-wage workers in the second half of life.
It would allow some to retire later, which could then boost their Social Security benefits when they finally claim them, said Ben Zipperer, economist at the progressive nonpartisan Economic Policy Institute.
Next Avenue May 7, 2021 -
It’s difficult to square the notion of a shortage of food service workers with the strong job growth in that industry, said Heidi Shierholz, former chief economist at the Labor Department now with the Economic Policy Institute. Dining and drinking establishments added 176,000 jobs in March, the biggest gain in any sector.
“I’m sure that labor supply is lower than it would be if we didn’t have COVID, but that doesn’t mean there’s a labor shortage,” Shierholz said.
Huffpost May 7, 2021 -
Despite anecdotal evidence from businesses, liberal economists said it’s unlikely the United States is facing a labor shortage. Heidi Shierholz, director of policy at the Economic Policy Institute in Washington, noted that there are still far more unemployed workers than job openings, according to federal government surveys. She said there haven’t been meaningful wage increases, either, which are a hallmark of labor shortages.
“It’s certainly happening in places,” Shierholz said of businesses having a hard time finding workers. “The real question is not whether it’s happening here or there, but is it a driving force in the labor market? And when you look at the data, it just doesn’t come up.”
The Philadelphia Inquirer May 7, 2021