One of the most urgent questions in economics is why pay for middle-income workers has increased only slightly since the 1970s, even as pay for those near the top has escalated.
For years, the rough consensus among economists was that inexorable forces like technology and globalization explained much of the trend. But in a new paper, Lawrence Mishel and Josh Bivens, economists at the liberal Economic Policy Institute, conclude that government is to blame. “Intentional policy decisions (either of commission or omission) have generated wage suppression,” they write.
Included among these decisions are policymakers’ willingness to tolerate high unemployment and to let employers fight unions aggressively; trade deals that force workers to compete with low-paid labor abroad; and the tacit or explicit blessing of new legal arrangements, like employment contracts that make it harder for workers to seek new jobs.
Together, Dr. Mishel and Dr. Bivens argue, these developments deprived workers of bargaining power, which kept their wages low.
New York Times
May 14, 2021
Research by the left-leaning Economic Policy Institute and Howard University professor Ron Hira found the visa program was exploited by outsourcing companies and that “most H-1B employers … are taking advantage of a flawed H-1B prevailing wage rule to underpay their workers … resulting in major savings in labor costs for companies that use the H-1B.”
The institute’s Daniel Costa and Hira found that in 2019, IT staffing and outsourcing companies had applied for large numbers of H-1B workers at the second-lowest wage levels, while Google, Apple, Cisco and Oracle had a mix of higher and lower levels.
The Mercury News
May 14, 2021
Because of the decline in union membership, “American workers are losing $200 billion a year,” she said, citing unspecified research. “So, this impacts not only the quality of life of the American worker, this impacts the quality of life of all Americans because it impacts our economy.”
“And to the extent that we are interconnected — when our economy does well, when the middle class does well — we all do well, which means unions must do well.”
The task force is aimed at bolstering union membership and worker power, specifically in organizing and bargaining. Harris seemed to be citing research from the left-leaning Economic Policy Institute (EPI), which studied the impact of “deunionizing” over the past few decades.
Business Insider
May 14, 2021
“Customers are coming back faster than restaurants can staff up,” said Josh Bivens, research director at the left-leaning Economic Policy Institute. “By raising pay, they are able to get more workers in the door.”
Associated Press
May 14, 2021
CEOs of 350 large publicly traded companies in 2019 earned an average 320 times more than the typical worker in the same company, according to the Economic Policy Institute. In 1989, the average ratio was 61-to-1.
Huffpost
May 14, 2021
A recent analysis by the Economic Policy Institute noted through March there were an average of 9.8 million unemployed workers compared to 8.1m job openings. Several industries, including the accommodation and food service industries, had more than 1.5 unemployed workers per job opening.
In regards to labor shortage claims, the Economic Policy Institute noted such claims would be short-lived as the accommodation and food service industry added 241,400 jobs in April last year. The leisure and hospitality sectors have experienced the most rapid employment growth over the past month, and economists with the Economic Policy Institute warned of the negative economic consequences of cutting pandemic unemployment insurance benefits.
The Guardian
May 14, 2021
Alexia Fernandez Campbell, Senior Reporter at the Center for Public Integrity, and Terri Gerstein, Senior Fellow at the Economic Policy Institute and Director of the State and Local Enforcement Project at the Harvard Law School Labor and Worklife Program, talk with reporter Chris Bangert-Drowns about wage theft during the pandemic, potential enforcement failures by the Department of Labor, and how to best end the practice.
WPFW
May 13, 2021
David Cooper, senior economic analyst at the Economic Policy Institute, told The American Independent Foundation that with the economy still 8.2 million jobs behind pre-pandemic levels, it was not the time to be cutting back unemployment benefits.
“There are far more people looking for work and unable to find it than there are employers unable to fill vacancies, and pulling back on [unemployment insurance] will only slow down the recovery,” he said. “To the extent that employers in some industries — like restaurants and leisure and hospitality — are having trouble finding staff, they need to take a hard look at the wages and quality of those jobs. Those industries are notoriously some of the lowest paying industries in the economy.”
He added, “I don’t think anyone should be surprised that some people might not be eager to take difficult jobs that are even harder now — and that might put their health at risk — if employers aren’t offering better pay and benefits than they were offering prior to the pandemic.”
The American Independent
May 13, 2021
American-made steel has been essential to our national security and our economy for decades. Now, with our economy beginning to recover from the COVID-19 crisis, it’s essential that the Biden administration continue supporting the U.S. steel industry by keeping Section 232 steel measures in place.
Morning Consult
May 13, 2021
Other economists, including Heidi Shierholz, senior economist at the Economic Policy Institute, a left-leaning think tank, say unemployment benefits’ disincentive effect is overstated. She said if there was a significant shortage of labor, employers wouldn’t be able to hire more than 900,000 workers in a month, as they did in March, and wages would be escalating at a much more rapid rate.
Dr. Shierholz, who worked in the Obama administration, said the pandemic caused a huge disruption in the labor market and it will take time for the dust to settle.
“And if the extended benefits mean some workers can take the time to find a job that’s a better match for their skills, and pays them a better wage, that’s a good thing, not a bad thing,” she said.
The Wall Street Journal
May 10, 2021
Currently, in 33 states and Washington, D.C., infant care is more expensive than college, according to the Economic Policy Institute.
CNBC
May 10, 2021
Vermont has plenty of company in facing calls for unemployment insurance reform. Nationally, experts say the crisis has exposed deep problems in states’ unemployment systems.
The problem was especially pronounced last spring. For every 10 people across the country who succeeded in lining up unemployment benefits in the first month of the pandemic, five to six more either tried and were unable to file a claim, or did not try to apply because it seemed too difficult, according to a study by the Washington, D.C-based Economic Policy Institute, a progressive think tank.
…
“This is another part of the infrastructure in our country that needs to be updated, and we need to put resources into our systems so this doesn’t happen again,” said Elise Gould, an expert on wages and poverty at the Economic Policy Institute. “This is the kind of trouble that many people were facing in the past. But it happened so quickly when millions were claiming that it became clear to more people how broken the system was.”
VT Digger
May 10, 2021
“Employers simply don’t want to raise wages high enough to attract workers,” observes Heidi Shierholz, a former chief economist for the Department of Labor who is now policy director at the labor-affiliated Economic Policy Institute. “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.’”
LA Times
May 10, 2021
While there is no single measure for workforce shortage, increased work hours and wages are considered some of the signs that indicate employers are struggling to fill jobs and the labor market is tightening, according to Heidi Shierholz, senior economist and director of policy at the Economic Policy Institute. Both occurred in April.
Average weekly hours for workers in leisure in hospitality significantly increased in April, reaching 26.7 hours, up from its pre-pandemic levels of 25.8 hours in February 2020, according to data from the Labor Department.
“If employers really can’t find the workers that they need, they’ll respond by ramping up the hours of the workers,” Shierholz told Yahoo Money.
Yahoo Finance
May 10, 2021
Even so, college seniors will be competing against a larger-than-usual universe of job seekers when you include last year’s crop of graduates.
“Because there is a large pool of unemployed workers, companies can pick exactly who they want and skip over people with less experience,” said Elise Gould, a senior economist at the Economic Policy Institute.
Graduating into a recession has historically led to poor outcomes for many young people, with research showing that they sometimes bear long-running scars. Starting a career in a recession can lead to lower incomes for as long as a decade afterward for those graduates, compared with their peers who completed college just before or after a recession.
Associated Press
May 10, 2021
Perhaps it would be OK if the average American worker shared in the largesse, but they have been left behind. An analysis done by the Economic Policy Institute found the ratio of compensation between CEOs and their workers was 21-to-1 in 1965; by 2019, the ratio was 320 to 1.
Boston Globe
May 10, 2021
“Hard to single out unemployment benefits as ‘dampening’ job growth in the lowest-wage industries when those same industries are the ones with the fastest job growth,” Ben Zipperer, economist at the left-leaning Economic Policy Institute, tweeted on Friday.
CNN
May 10, 2021
South Carolina and Montana residents will be cut off from federal pandemic unemployment benefits next month, with Republican governors in each state claiming the payments have led to a workforce shortage. Economists say that’s not the case.
“Employers are just angry that they are unable to find workers at relatively low wages,” Heidi Shierholz, a senior economist and director of policy at the Economic Policy Institute, said in an interview. “The jobs being posted are more stressful, more risky, harder jobs than they were pre-COVID. … When the job is more stressful, then it should command a higher wage.”
…
Shierholz told ABC News that after the $600 bonus on unemployment expired at the end of July, “You should have seen a bump up in employment, and you can’t see that in the data so it just points to that it wasn’t really causing the labor supply effect. It’s just difficult to imagine that something half that big is having any effect now.”
But a report from the Economic Policy Institute shows that a more likely reason some employers aren’t attracting workers is that many of these businesses are offering too-low wages. In a true labor shortage, the report states, wages will rise as does competition among employers. But wages aren’t growing — at least not quickly enough.
ABC News
May 10, 2021
Friday’s jobs report from the Labor Department showed the U.S. added 266,000 jobs in April, far short of the 1 million gain economists had forecast. Elise Gould, senior economist at the Economic Policy Institute, talks with Bloomberg’s Caroline Hyde, Romaine Bostick and Joe Weisenthal on “What’d You Miss?” about the growing pains as the economy rapidly reopens.
Bloomberg TV
May 10, 2021
Valerie Wilson: Child care responsibilities disproportionately fall on women. And so at a time when everyone was home, children and parents, women clearly took on more of those responsibilities, but they took on those responsibilities at the same time that they would usually be working. So there was some difficult tradeoffs.
PBS Newshour
May 10, 2021
The Biden administration plans to name Thea Lee, a former AFL-CIO trade official, to head the Labor Department’s international affairs division, according to people familiar with the appointment.
Ms. Lee, who most recently served as president of the Economic Policy Institute, a liberal think tank that often critiques free trade policies, is slated to become the deputy undersecretary for international labor affairs. In that job, she will oversee the bureau that investigates labor rights, forced labor and child trafficking around the globe.
Wall Street Journal
May 10, 2021
Even so, college seniors will be competing against a larger-than-usual universe of job seekers when you include last year’s crop of graduates.
“Because there is a large pool of unemployed workers, companies can pick exactly who they want and skip over people with less experience,” said Elise Gould, a senior economist at the Economic Policy Institute.
Graduating into a recession has historically led to poor outcomes for many young people, with research showing that they sometimes bear long-running scars. Starting a career in a recession can lead to lower incomes for as long as a decade afterward for those graduates, compared with their peers who completed college just before or after a recession.
Associated Press
May 10, 2021
Perhaps it would be OK if the average American worker shared in the largesse, but they have been left behind. An analysis done by the Economic Policy Institute found the ratio of compensation between CEOs and their workers was 21-to-1 in 1965; by 2019, the ratio was 320 to 1.
Boston Globe
May 10, 2021
“Hard to single out unemployment benefits as ‘dampening’ job growth in the lowest-wage industries when those same industries are the ones with the fastest job growth,” Ben Zipperer, economist at the left-leaning Economic Policy Institute, tweeted on Friday.
CNN
May 10, 2021
South Carolina and Montana residents will be cut off from federal pandemic unemployment benefits next month, with Republican governors in each state claiming the payments have led to a workforce shortage. Economists say that’s not the case.
“Employers are just angry that they are unable to find workers at relatively low wages,” Heidi Shierholz, a senior economist and director of policy at the Economic Policy Institute, said in an interview. “The jobs being posted are more stressful, more risky, harder jobs than they were pre-COVID. … When the job is more stressful, then it should command a higher wage.”
…
Shierholz told ABC News that after the $600 bonus on unemployment expired at the end of July, “You should have seen a bump up in employment, and you can’t see that in the data so it just points to that it wasn’t really causing the labor supply effect. It’s just difficult to imagine that something half that big is having any effect now.”
But a report from the Economic Policy Institute shows that a more likely reason some employers aren’t attracting workers is that many of these businesses are offering too-low wages. In a true labor shortage, the report states, wages will rise as does competition among employers. But wages aren’t growing — at least not quickly enough.
ABC News
May 10, 2021
Friday’s jobs report from the Labor Department showed the U.S. added 266,000 jobs in April, far short of the 1 million gain economists had forecast. Elise Gould, senior economist at the Economic Policy Institute, talks with Bloomberg’s Caroline Hyde, Romaine Bostick and Joe Weisenthal on “What’d You Miss?” about the growing pains as the economy rapidly reopens.
Bloomberg TV
May 10, 2021
Valerie Wilson: Child care responsibilities disproportionately fall on women. And so at a time when everyone was home, children and parents, women clearly took on more of those responsibilities, but they took on those responsibilities at the same time that they would usually be working. So there was some difficult tradeoffs.
PBS Newshour
May 10, 2021
The Biden administration plans to name Thea Lee, a former AFL-CIO trade official, to head the Labor Department’s international affairs division, according to people familiar with the appointment.
Ms. Lee, who most recently served as president of the Economic Policy Institute, a liberal think tank that often critiques free trade policies, is slated to become the deputy undersecretary for international labor affairs. In that job, she will oversee the bureau that investigates labor rights, forced labor and child trafficking around the globe.
Wall Street Journal
May 10, 2021
Kyle Moore, an economist at the Economic Policy Institute, said he’s encouraged by the Fed’s increased focus on unemployment and higher tolerance for inflation. “In the past there have been Fed chairs who have been overly wary of inflation and they’ve often tried to fight it at the expense of employment,” he says. “That has disproportionately fallen on Black workers.”
Quartz
May 7, 2021
“Employers have the ability to set the terms of the contract,” said Elise Gould, senior economist for the Economic Policy Institute in Washington, D.C.
“They’re really holding all the cards. They have all the leverage,” Gould said.
Gould noted that the country was still down 8.4 million jobs in March from its pre-pandemic level in February 2020. The economy had been steadily adding jobs before the virus left millions out of work, she said, so theoretically the jobs shortfall is even higher, perhaps as high as 11 million.
Detroit Free Press
May 7, 2021