Wage and price growth ain’t what they used to be, even at low unemployment. Here’s what that implies for policy.
The Washington Post/Jared Bernstein
I asked a bunch of my colleagues how they’d answer this question. Economists Dean Baker and Elise Gould point to a few labor market indicators — quit rates and employment rates for working-age people — that are still somewhat depressed. Jason Furman notes that noninflationary wage gains are being paid for by shrinking profit margins, something I’d chalk up as another benefit of tight labor markets. Marshall Steinbaum and Heather Boushey argue that at least so far, even with tight labor markets, workers’ bargaining power remains too weak to create much wage pressure. Carola Binder suggested that inflation expectations are “well-anchored,” meaning that because people expect the Federal Reserve to enforce its 2 percent inflation target, the rate of price growth is locked in around that target (as Binder points out, this explains both why inflation didn’t fall earlier and why it’s not rising that much now). Ben Spielberg wonders whether the increase in Internet shopping is enforcing more price competition that dampens producers’ pricing power. … Second, if, in the spirit of Steinbaum and Boushey’s view, many workers will find it tough to claim their fair share of growth even at very low unemployment, we’re going to need offsetting policies, such as higher minimum wages, a much expanded earned-income tax credit, and direct job creation in places where labor demand is still weak (as per Baker and Gould’s analysis).
The Washington Post
May 9, 2017
Last year, Washington ranked as having the highest rate of homelessness among U.S. cities, according to a survey by the U.S. Conference of Mayors, and, in 2015, as being the most expensive city in the United States to raise a family, according to the Economic Policy Institute.
The Washington Post
May 9, 2017
The American Prospect
May 9, 2017
NEIL BUCHANAN: YOU THINK TRUMP’S NOT SO BAD? WRONG!
Newsweek/Neil Buchanan
The Economic Policy Institute (EPI), a labor-supported think tank that provides some of the best policy research available, provided a nice summary of Trump’s first 100 days, detailing the ways in which Trump has made workplaces more deadly as well as the many ways in which employers will now find it easier to violate labor laws (such as wage-theft prohibitions). These moves by the Trump Administration have already affected plenty of Trump’s voters, especially the now-mythologized working class white people who flocked to Trump’s rallies. But even non-unionized people should be worried, including people who prefer not to think of themselves as “labor” at all. Most prominently, Trump has ordered a “review” of the Fiduciary Duty Rule, which was promulgated by the Obama Administration. Sound boring? As EPI explains, that rule “simply requires financial advisers to provide what most clients likely believe they are already receiving—advice about their retirement plans free from conflicts of interest.”
Newsweek
May 6, 2017
Elise Gould, an economist at the Economic Policy Institute, also cautioned policymakers to remember groups that have been left behind. In April, the unemployment rate sat at 3.8 percent among whites and 3.2 percent among Asians, but 7.9 percent among African Americans and 5.2 percent among Hispanics. None of those rates changed from the month before. Younger people also continue to graduate into a weaker economy than generations before them, Gould said. “Yes, it’s a rosier picture for today’s graduates, but we know that when people graduate into a weaker economy, that can have effects many years down the road,” she said. “It’s still not like the economy we saw in 2000.”
The Washington Post
May 5, 2017
5/5 Here’s how much the average young graduate earns
CNBC/Kathleen Elkins
In general, wages have stagnated, or declined, for young graduates since 2000. As the Economic Policy Institute (EPI) reports in a new study, “wages have grown in recent years, but not fast enough to make up for all the losses experienced since the Great Recession.” Scroll over the chart to see how the average hourly wages for high school and college grads have changed over the past three decades. (whole story)
CNBC
May 5, 2017
The whole notion of robots is a distraction, said economist Larry Mishel, president of the progressive Economic Policy Institute in Washington. More significant, he said, are the declining wages and power of workers and the corresponding increase in power among the nation’s wealthiest. “Do not fear the robots,” he said. “The challenge is good jobs at good wages.” Yes, he said, capital invested in machinery is replacing human labor; that’s not new. People ride elevators but no longer encounter the operators who used to operate doors. If automation were as big a threat as pundits say, Mishel said, “you would expect unemployment to go up every year, but it hasn’t.”
Philadelphia Inquirer
May 5, 2017
The left-leaning Economic Policy Institute in Washington issued a report this week that had a complementary message. While the demand for high school graduates has improved since the recession, they are still paid less on average than they were 10 years ago, according to the analysis. (The figures are adjusted for inflation.) “We need an economy that works for everyone, not just for those with the highest credentials,” said Teresa Kroeger, an author of the report.
The New York Times
May 5, 2017
Things are looking up for the college class of 2017, but not their high school peers
MarketWatch/Jill Berman
It took 10 years, but the college class of 2017 is finally doing as well as its peers who graduated just before the recession. Those graduating in 2017 with just a high-school diploma? Not so much. The unemployment rate for young college graduates is 5.6% compared with 5.5% in 2007, according to a report released Thursday by the Economic Policy Institute, a think tank focused on economic justice. The jobless rate for young high school graduates is 16.9% compared with 15.9% in 2007. What’s more, they’re paid 4.3% less today in inflation-adjusted wages than they were paid in 2007. (whole story)
MarketWatch
May 5, 2017
Graduating college students all over the country are preparing to claim their diplomas, but equal salaries will not await the class of 2017 when they join the work force. The gender wage gap for recent college graduates has expanded, according to a new study, with women making a mere 86 percent of what their male peers will earn. As reported by the Huffington Post, the nonprofit, nonpartisan think tank the Economic Policy Institute released their findings on Thursday — and what they revealed was a distressing dose of reality for bright-eyed and bushy-tailed young grads. (whole story)
Bustle
May 5, 2017