Media clips
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Brad DeLong and Josh Bivens send us to a House hearing on monetary policy, in which three conservatives explain why it was totally forgivable for everyone on their side to predict runaway inflation from the Fed’s expansion of the monetary base, and why the failure of that inflation to appear says nothing at all about possible flaws in their approach.
It’s actually kind of amazing. In the exchange Brad highlights, Marvin Goodfriend says, how could you expect anyone to predict that reserves would just pile up and not be lent out — nothing like that had happened since the 1930s. And Larry White then adds that it was all sterilized because the Fed paid a whopping 0.25 percent interest rate on reserves.
Gosh. We had just had the worst financial crisis since, um, the 1930s. Why would anyone possibly think that 30s experience was relevant? I’m thinking, I’m thinking.
The New York Times March 20, 2014 -
Before 2004, the main criteria used to determine a worker’s primary duty was the amount of time they spent on a duty.
The revisions said a primary duty would no longer be based solely on time spent, but also on other, subjective factors.
Ross Eisenbrey, vice president at the liberal-leaning Economic Policy Institute in Washington, called the current test an “abomination.”
“Being a lead dishwasher is enough to make that person an exempt executive even though they spend essentially all of their time washing dishes,” Eisenbrey said. “Under the law as it stands now, it’s pretty much left to the employer to say.”
With his colleague Jared Bernstein, a former economic adviser to Vice President Joe Biden, Eisenbrey last year urged the White House to consider raising the salary threshold that puts overtime pay beyond the reach of some so-called managers.
Some states have diverged from the department’s post-Bush administration method for determining a worker’s primary duty, at least in state-level worker misclassification lawsuits.
Reuters March 18, 2014 -
Michigan saw one of the largest month-over-month declines between December and January, with the unemployment rate dropping 0.6 percent to 7.8 percent. That means unemployment in January was the lowest its been since June 2008, a claim no other state can match. In Florida and South Carolina, the rate was down to 6.2 percent and 6.6 percent, respectively, the lowest those states have seen since that July. Unemployment in January was at its lowest since some point in 2008 in a total of 24 states.
But those headline rates don’t reflect key problems with state labor markets. In the vast majority of states, long-term unemployment—a particularly intractable problem—is at or near record highs. In many states, the income gap between the poorest and richest has widened. And, as the Economic Policy Institute recently reported, low-wage workers in nearly every state have seen their wages drop (see chart below).
The Washington Post March 18, 2014 -
President Obama wants to make millions of Americans eligible for overtime pay. Just how many millions will come down to the details of his proposal.
Companies have to pay most hourly workers time-and-a-half for any work over 40 hours a week. But many salaried employees don’t qualify for overtime if they earn at least $455 per week, or about $24,000 per year. (California and New York set the bar higher.)
Obama on Thursday ordered the Labor Department to change that threshold for the first time in a decade. It isn’t clear what the new threshold will be — Obama asked the labor secretary to come up with a plan — but the left-leaning Economic Policy Institute has proposed $970 per week, or about $50,000 per year.
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The Economic Policy Institute’s proposal would have the biggest impact on a smaller group of workers who routinely work unpaid overtime but earn less than $970 per week. That’s about 6.1 million people, according to the Current Population Survey.
FiveThirtyEight March 18, 2014 -
For reference: Here are changes in hourly real wages of men, 1973-2012, at different percentiles of the wage distribution, calculated from Census data by the Economic Policy Institute. As you can see, wages have fallen for 60 percent of men.
I was curious to see how the House Budget Committee report on poverty deals with this fact, which surely plays some role in the persistence of poverty despite government efforts. The answer is, it never so much as mentions falling real wages.
The New York Times March 18, 2014 -
The restaurant industry statement is a reply, of sorts, to a similar statement signed by more than 600 economists endorsing the increase of the minimum wage. That statement was distributed by the Economic Policy Institute, a Washington research organization that receives about 30 percent of its funding from labor unions.
But the institute was clear about its role in collecting signatures and promoting the statement once it was released in January. The statement became a target of lobbying against a wage increase; an advertisement in The New York Times by a nonprofit group run by a firm supported by the restaurant industry, Berman & Co., noted that some of the signers were, at least at some point, self-avowed Marxists.
The statements demonstrate the growing power of surrogate voices that interest groups pursue, in the hope that these endorsements will help them win votes in Congress.
The New York Times March 18, 2014 -
First, because the threshold under which salaried workers are automatically eligible for overtime pay is not indexed for inflation, its value has declined and it covers fewer workers each year. In a recent paper I wrote with Ross Eisenbrey of the Economic Policy Institute, we pointed out that were the 1975 weekly salary threshold updated for inflation since then, it would be around $980 today, or around $51,000 a year.
That’s more than double the current threshold of $455, but the chart below shows how out of step that threshold is with the history of this important metric. In fact, the current threshold is below the poverty line for a family of four. Each bar represents the real value, in today’s dollars, of the Fair Labor Standards Act salary threshold that was reset in that year. Were the current threshold update to reflect inflation since 2004, it would be $560. Before that clearly low-ball 2004 update, the average is around $950, about where we’d set it today. This change alone would entitle millions of workers to the protections they should be getting under the statute.
The New York Times March 18, 2014 -
Given these mixed signals, the experts at the National Women’s Law Center view the job market for women as decidedly in the hands of Congress. Renewing unemployment insurance will inject money into the economy and improve the job market, according to their analysis. Raising the minimum wage to $10.10 an hour would create more demand and provide a particular boost for women, who make up two-thirds of minimum wage workers, according to the NWLC.
Senate Democrats have tried to alleviate this situation. Majority Leader Harry Reid (D-Nev.) has tried several times to restore long-term unemployment insurance benefits, with the most recent attempt occurring on Tuesday, but each time has failed to secure enough votes.
Economist Heidi Shierholz of the Economic Policy Institute has a way to try and make sense of the mixed signals from the labor report. She has a data point that she refers to as her “desert island” data, meaning that if she could take only one labor market measure to gauge the strength of the labor market, she’d put the employment to population (EPOP) ratio into her spreadsheet.
The Washington Post March 14, 2014 -
Productivity growth and employment growth tracked each other closely for decades but began to split in 2000. Lawrence Mishel, head of the liberal Economic Policy Institute, argues that the widening gap we’ve seen in recent years—often blamed on technology—isn’t due to their spread at all, but rather to weak growth and demand. Robots could theoretically be behind the weak demand (if people are earning lower wages and being otherwise muscled out of the labor market, they’re less inclined to buy things), Bernstein says, but that’s not something economists can tease out of the data until the economy returns to full employment.
Another place you’d expect to see signs of the robot “job-apocalypse” is in businesses’ investment in equipment, says Paul Beaudry, an economist at the University of British Columbia’s Vancouver School of Economics. That pace has actually been declining over the past 14 years, he says.
National Journal March 14, 2014 -
In person, thanks to good genes, people often assume I’m younger than I am. On paper, however, I’m just another overeducated, middle-aged, middle-class refugee whose last retail experience dates to the Reagan administration.
Not to mention retail employers these days have their pick of applicants: the Great Recession added countless numbers of desperate workers like me to the annual labor-market influx of college students and high schoolers. According to an Economic Policy Institute report, “In 1968, 48 percent of low-wage workers had a high school degree, compared to 79 percent in 2012.” Likewise, the percentage of people in these jobs who have spent some time in college has skyrocketed, jumping from under 17 percent to more than 45 percent in the same time. All of us are in a race to the bottom of the wage pool.
Although older job candidates bring experience and skills to the table, their job applications typically blink like red warning lights to retail managers:overqualified, overpaid, and probably harder to manage than some high school or college kid. In a word: trouble.
“Think about it, Joey—that’s why there are online applications,” my sister, a veteran human-resources professional, told me. “If you apply online, and you never hear back, they don’t have to tell you why they rejected you and face a discrimination lawsuit.”
The Atlantic March 14, 2014