Media clips
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Economist Bill Rodgers has a name for the recovery — and it’s not a very nice one.
Rodgers, a professor at Rutgers University, calls it “bifurcated” because people who have college degrees are getting hired, but those who didn’t finish school are sitting on the sidelines. Many have given up on their search for work.
“This horrible recession, combined with this weak recovery, has lead to this bifurcated set of outcomes,” he says.
The nation’s unemployment rate fell slightly in March to 8.8 percent; more than 200,000 jobs were added to the payroll. But the unemployment rate leaves out many people — including those who have stopped looking for jobs and have dropped out of the labor force.
“One of the things that I think is sort of an intuitive idea is that if the unemployment rate is improving, that’s really only good news if we see a bigger share of the labor force that’s working,” says Heidi Shierholz, an economist with the Economic Policy Institute.
Shierholz says she thinks the employment-to-population ratio, which measures the share of the U.S. population that has a job, is a more accurate reflection of the unemployment picture. The ratio has hardly budged over the past year. That means the percentage of people working in this country hasn’t changed though the unemployment rate has ticked down.
NPR April 8, 2014 -
The good news in the report, by Daniel Aaronson and Scott Brave — sort of — is that fewer jobs will be required in the future because fewer people are participating in the labor force (either working or actively looking for work). They said that the economy would need only 80,000 jobs a month — far less than the 150,000 to 200,000 needed in the 1980s and 1990s, when millions of women were entering the labor force. In a couple of years, the number of jobs needed to stay on trend would fall to 35,000. That augurs a future of low growth. Another estimate, based on Congressional Budget Office projections, says 90,000 jobs a month are needed.
But, they acknowledge, that is based on a number of assumptions about which there is high uncertainty, such as the extent to which the decline in participation is driven by demographic changes like aging Baby Boomers, as opposed to discouraged people who would like to have jobs dropping out. Right now, there are 6.1 million people who are not in the labor force but “want a job now,” lower than last year’s average of 6.4 million. As the job market improves, those people tend to re-enter the labor force.
The Economic Policy Institute has a chart showing where the economy would be if job growth had continued on trend (that is, if the recession had never happened). The gap stands at 7.3 million jobs.
The New York Times April 8, 2014 -
REPORT: TO FIX THE TAX CODE, DON’T DEFER. Economic Policy Institute’s Thomas Hungerford will release a paper this morning focusing on how Congress can reform corporate taxes — and he’s offering a simple fix.
It wouldn’t take wholesale tax reform to solve the problem of corporate income taxation, he argues. All it would take is ending deferral, which allows multinational corporations to delay paying U.S. taxes on income held abroad as long as the companies keep those profits offshore. Economic Policy Institute is a left-of-center think tank. It’s an idea likely to make many friends among Democrats as the White House and some Democrats on the Hill support limiting corporate tax deferral. Republicans, for their part, promote moving to a territorial system, which would only tax the U.S. income of a corporation, largely exempting foreign income from domestic taxation.
The Hill April 3, 2014 -
The Obama administration’s decision to restrict tire imports from China, they contend, “saved a maximum of 1,200 jobs” at “the total cost to American consumers from higher prices” of $1.1 billion in 2011. “The cost per job saved was at least $900,000 in that year. Only a very small fraction of this bloated figure reached the pockets of tire workers. Instead, most of the money landed in the coffers of tire companies, mainly abroad but also at home.”
Back on the other side of the trade issue, the pro-labor Economic Policy Institute has a comprehensive set of proposals, “New Trade Policies for a New Era,” that would radically alter United States trade policy. The proposed policies include the abandonment of congressional “fast-track” approval of trade agreements, the initiation of sanctions against China for currency manipulation, the renegotiation of free trade agreements, and the replacement of the Office of the U.S. Trade Representative and the Commerce Department with a new department of industry and trade with a mandate to support job creation in the United States.
The New York Times April 3, 2014 -
“People often think that severe weather will hurt employment, but it rarely has a measurable impact,” says Diana Furchtgott-Roth, a former chief economist at the Labor Department. “Any person who is paid — even if just for one day — during the reference period, will be counted as on the payroll,” she added.
As Heidi Shierholz, an economist at the Economic Policy Institute, explained, “the seasonal adjustment factors already take bad weather into account, so the weather would have to be extremely bad across a wide swath of the country” for it to have a measurable impact on the employment data.
The Washington Post April 3, 2014 -
Maybe it has led employers to add tens of thousands of jobs. Or perhaps it has caused the loss of 700,000 jobs. Maybe it has been “a bonanza for U.S. farmers and ranchers,” as the United States Caanhamber of Commerce has said. But perhaps it has depressed wages for millions of working families. Then again, maybe all sides are wrong: “Nafta brought neither the huge gains its proponents promised nor the dramatic losses its adversaries warned of,” wrote Jorge G. Castañeda in an essay for Foreign Affairs this winter. “Everything else is debatable.”
The New York Times April 3, 2014 -
Upworthy April 3, 2014
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For years, I’ve been making the same embarrassing mistake about U.S. economic inequality. Sorry.
I’ve written, over and over, that the most important divide in our wealth disparity was between the 1 percent and the 99 percent. For example, when I compared the evolution in investment income since the late 1970s, I often imagined a graph like this from the Economic Policy Institute, showing the 1 percent flying away from the rest of the country.
The Atlantic April 3, 2014 -
Who earns the minimum wage?
About 67,000 workers in Maryland earned the minimum wage or less in 2012, according to the U.S. Bureau of Labor Statistics. The vast majority work in businesses that employ 50 people or more.
A hike in the minimum wage would be likely to affect about 445,000 workers, according to an analysis by the Economic Policy Institute. That number includes people who are currently paid between $7.25 and $10.10 an hour, and those who are paid slightly more than $10.10 but would likely get raises if the minimum wage approached their pay grade.
The Washington Post April 3, 2014 -
As an aside, I think the same kind of policy machismo was an important reason so many people who really, really should have known better supported the Iraq war.
The deficit obsession has faded a bit; but we still have others. And this new EPI report is a useful reminder of the extent to which another doctrine that sounds serious retains a grip on discourse — namely, the notion that we have big problems because our work force lacks essential skills.
This is very much a zombie doctrine — that is, a doctrine that should be dead by now, having been repeatedly refuted by evidence, but just keeps on shambling along. EPI presents some very interesting evidence from a survey of manufacturing, but they’re hardly the first to show that the data don’t at all support the skills-shortage hypothesis. And it’s not just labor-associated think tanks or progressives who have rejected the skill shortage story based on the evidence. The Boston Consulting Group did its own study,and the only hints of a skills shortage it found were in unglamorous skilled blue-collar work:
By BCG’s definition, only five of the nation’s 50 largest manufacturing centers (Baton Rouge, Charlotte, Miami, San Antonio, and Wichita) appear to have significant or severe skills gaps. Occupations in shortest supply are welders, machinists, and industrial-machinery mechanics.
The New York Times April 3, 2014