Media clips
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In one paper, economist Josh Bivens of the Economic Policy Institute, a left-leaning research and advocacy group, made three points in defense of the Fed. First, the bond-buying strengthened the economic recovery by lowering interest rates and creating jobs in interest-sensitive sectors such as housing and manufacturing. “Stimulus that reduces unemployment disproportionately benefits low- and moderate-wage workers,” Bivens wrote. Overall, Fed policies cut the unemployment rate by 1 percentage point, he estimated. That’s about 1.5 million jobs today.
Second, back-of-the-envelope estimates exaggerate the Fed’s effects on stock prices. Bivens reviewed studies and found estimates ranging from 3 percent to 8.5 percent — far smaller than Wien’s recent estimate. Bivens settled on 5 percent as a plausible gain. Third, lower interest rates also boosted the wealth of the middle class, with the largest effects on home prices. Bivens estimated that interest rates on mortgage bonds fell 1.5 percentage points, raising average home prices about 7 percent. That’s significant, because for middle-income Americans, housing represents nearly two-thirds of their wealth.
The Washington Post June 4, 2015 -
With all of that, today’s teachers — prospective, new and veteran — also face growing ethical challenges, which was the subject of a recent commencement speech given to graduates of Bank Street Graduate School of Education in New York by scholar Richard Rothstein, who received an honor doctorate for his contribution to the field of education. Rothstein is a research associate at the Economic Policy Institute, a non-profit created in 1986 to broaden the discussion about economic policy to include the interests of low- and middle-income workers. His recent work has documented the history of state-sponsored residential segregation, as in his report, “The Making of Ferguson.”
The Washington Post June 4, 2015 -
O’Malley’s staff pointed to June 2014 research from the left-leaning Economic Policy Institute and 1947-2013 historical Census data as sources of his figures. The Economic Policy Institute (EPI) found slow and unequal wage growth in recent decades, and a “near stagnation” of hourly wage growth over the past generation for the majority of American workers. Hourly wage data compiled by the group, from the Census Bureau’s Current Population Survey, show a breakdown by percentile from 1973 to 2013, adjusted to 2013 dollars. Hourly wages for the 10th through 60th percentiles in 2013 were lower, or relatively flat compared to their hourly wages in 2001.
The Washington Post June 4, 2015 -
Wages for university grads are 2.5 percent lower than what they were 15 years ago, according to the latest edition of the Economic Policy Institute’s annual report on the labor market prospects of new workers. The research found that young college grads’ hourly wages currently sit at an average of $17.94, or just over $37,000 annually. In 2000, the average hourly rate was $18.41.
Huffington Post June 3, 2015 -
Josh Bivens, director of research and policy at the left-leaning Economic Policy Institute, delivered that defense at Brookings. Mr. Bivens has sounded the alarms about inequality in recent years, but he said the Fed’s stimulus campaign was not to blame. Compared with an alternate reality in which the Fed would have done nothing, he said it was clear that the stimulus campaign reduced inequality by increasing employment. “Successful macroeconomic stabilization is strongly progressive,” Mr. Bivens said.
Even the Fed’s impact on asset prices was arguably progressive, he said. While the Fed drove up stock prices, most of which are owned by the wealthy, it also increased the value of housing, which is mostly owned by the middle class. Indeed, Mr. Bivens said he had compared the impact of the Fed’s campaign with the Obama administration’s 2010 fiscal stimulus and found no evidence of a larger impact on inequality. The means were different, but the impact was more or less the same.
The New York Times June 2, 2015 -
Critics including Daniel Costa, an immigration expert at the Economic Policy Institute, say that of particular concern are Indian outsourcing companies that provide workers for entry-level positions in the U.S., such as tech support at retailers and banks. Such companies are among the top procurers of H-1B visas, according to U.S. government data.
Wall Street Journal June 2, 2015 -
The Economic Policy Institute estimates that since 2007, there are 1.8 million missing jobs in the public sector. Moreover, across the country, conservative Republican governors have assaulted unions and sought to curb collective bargaining, erase teacher tenure, and dramatically cut pensions and other benefits.
Chicago Sun Times June 2, 2015 -
Yet despite recent high-profile racial discrimination settlements with major retailers like Walgreen, Walmart and Wet Seal, economic results for people of color remain weak. Median black family income is actually less than it was relative to white families 50 years ago, according to the Economic Policy Institute.
Salon June 2, 2015 -
There has been a lot of justifiable high-fiving about the steady fall in the unemployment rate, to 5.4 percent recently. But joblessness is still higher than it was before the last recession began at the end of 2007. Unemployment is still above the pre-recession levels in Washington, D.C. and 36 states, including California, Illinois, Indiana, Maryland, Massachusetts, New Jersey and New York. Despite steady if lackluster economic growth, job prospects are still rocky even for recent college graduates. The average unemployment rate in the past year for college grads ages 21 to 24 was 7.2 percent, compared to 5.5 percent in the pre-recession year of 2007. Their underemployment rate, which includes those who do not have full-time hours, is 14.9 percent, compared to 9.6 percent in 2007.
The New York Times June 1, 2015 -
In fact, the central bank has purchased $1.7 trillion worth of mortgage-backed securities in the aftermath of the Great Recession with the express purpose of propping up the real estate market. Josh Bivens, research and policy director at the left-leaning Economic Policy Institute, found that program helped push up housing prices by 7 percent, while raising stock prices 5 percent — essentially cancelling each other out. More important, Bivens proposes, the Fed has sought to lower unemployment through its stimulus efforts. By pumping money into the economy, Bivens estimates, the central bank lowered unemployment by a percentage point, making it more powerful than the fiscal stimulus enacted in 2010. Stabilizing the economy and ensuring people have jobs help reduce inequality by ensuring the bottom doesn’t fall out, Bivens says. “Recent concerns that the Fed’s expansionary stance since the onset of the Great Recession may have exacerbated long-running trends towards greater income inequality seem quite misplaced,” he wrote.
The Washington Post June 1, 2015