Media clips
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It’s an ambitious target, $10.10: Correctly adjusting for inflation using the Bureau of Labor Statistics’ best historical data series, it would be the highest minimum wage ever—more potent in buying power than the $1.60 mandated wage in 1968, when middle-class jobs were plentiful, factories hummed, and labor unions ruled. It’s just more than half of the $19.55 median wage for full-time workers, which would put the U.S. minimum-to-median ratio back in sync with that of other rich, industrialized countries.
Bumping up the base over two years, as suggested by the Obama-endorsed bill by Representative George Miller (D-Calif.) and Senator Tom Harkin (D-Iowa), would directly affect 17 million workers and indirectly benefit an additional 11 million near-minimum workers who’d probably be given raises to preserve pay ladders, estimates the Economic Policy Institute, which favors the increase. Those 28 million workers make up a fifth of the labor force, and an almost 40 percent raise would meaningfully relieve their economic anxiety. (On Feb. 12, Obama signed an executive order raising the floor for federal contractor workers to $10.10 starting next year.)
Bloomberg BusinessWeek February 18, 2014 -
A study released Monday that was commissioned by the pro-business group the Maryland Foundation for Research and Economic Education, predicted that raising the minimum wage to $10 an hour would result in the loss of 11,502 jobs, increase the price of consumer goods and weaken the state’s competitive position.
But Douglas Hall, an economist with the liberal Economic Policy Institute, who testified alongside O’Malley on Tuesday, questioned the methodology of the study. He argued that a minimum-wage increase would strengthen Maryland’s economy because low-wage workers would have more money to spend on goods and services.
About 67,000 workers in Maryland earned the minimum wage or less in 2012, according to the U.S. Bureau of Labor Statistics.
The bill would affect a far greater number of workers, however, since many more earn less than $10.10 an hour. An analysis by the Economic Policy Institute that was cited by Maryland legislative analysts put that figure at 304,000.
The Washington Post February 12, 2014 -
According to data from the Bureau of Labor Statistics the unemployment rate for 20 to 24-year-olds was 11.9% in January, up from 11.1% the month prior(compared to 6.6% for population at large,which was down slightly from December). And that’s just unemployment, not underemployment. An April 2013 survey by consulting firm Accenture found that 41% of 2011 and 2012 college graduates have a job that does not require their degree. In 2011, the Economic Policy Institute found that entry-level wages for males with college degrees were only 5% higher adjusted for inflation than in 1979. Female wages were 15% higher, but still 9% below what a man earned in 1979. Meanwhile, the Consumer Financial Protection Bureau estimates that outstanding student loan debt is near $1.2 trillion and growing at an astounding rate.
Forbes February 12, 2014 -
The good (and maybe bad) of the declining U.S. trade deficit. “Much of the improvement in U.S. trade accounts came from the displacement of imported oil with domestically produced energy. The folks at the Economic Policy Institute and the Alliance for American Manufacturing were quick to note that, once oil is factored out, the deficit in manufactured goods grew wider over the year, while the gap with China stood at over $318 billion. That makes a single country responsible for two-thirds of the total U.S. goods and services trade deficit of $471 billion. Are we swapping our role as an industrial giant to become a resource economy? Not quite – the trade accounts were also supported by the country’s large surplus in services.” Howard Schneider in The Washington Post.
The Washington Post February 11, 2014 -
The unemployment rate doesn’t reflect “discouraged workers” — people who want a job and are available to work and have actually looked for work in the past year, but who have given up looking in the past month because they don’t think any jobs are available or they don’t qualify for the ones that are. Because they’re no longer “actively seeking work,” they’re no longer considered out of work even though they aren’t working. And they’re no longer in the labor force because they’re no longer considered unemployed.
Taking into account all of the people who aren’t working changes the picture. Economist Heidi Shierholz at the Economic Policy Institute estimates that the unemployment rate would be 9.9 percent instead of 6.6 percent if what she calls “missing workers” were included in the official unemployment rate.
The Washington Post February 11, 2014 -
What all of this suggests is that the long-term unemployed are mainly victims of circumstances — ordinary American workers who had the bad luck to lose their jobs (which can happen to anyone) at a time of extraordinary labor market weakness, with three times as many people seeking jobs as there are job openings. Once that happened, the very fact of their unemployment made it very hard to find a new job.
So how can politicians justify cutting off modest financial aid to their unlucky fellow citizens?
New York Times February 11, 2014 -
Finally, much of the debate relies on elusive accounting. Ultimately, the argument turns on things that are difficult to value, especially retirement benefits. Most public employees are guaranteed a pension and have access to retirement health insurance – benefits that are disappearing from the private sector. What is this worth?
A lot more than federal surveys show, said Andrew G. Biggs of the American Enterprise Institute, because state and local governments are putting away far lessthan they should to finance their obligations, especially in some heavily unionized states. But Jeffrey H. Keefe, a Rutgers professor who studies the issue for the liberal Economic Policy Institute, disputes this and argues that the cost of defined benefit pensions is overestimated in federal surveys.
The Washington Post February 11, 2014 -
DOES IT KILL JOBS? The minimum wage is one of the most thoroughly researched issues in economics. Studies in the last 20 years have been especially informative, as economists have been able to compare states that raised the wage above the federal level with those that did not.
The weight of the evidence shows that increases in the minimum wage have lifted pay without hurting employment, a point that was driven home in arecent letter to Mr. Obama and congressional leaders, signed by more than 600 economists, among them Nobel laureates and past presidents of the American Economic Association.
That economic conclusion dovetails with a recent comprehensive study, which found that minimum wage increases resulted in “strong earnings effects” — that is, higher pay — “and no employment effects” — that is, zero job loss.
New York Times February 11, 2014 -
On an economy-wide basis, the fact that the trade deficit narrowed was a prop to growth. As a share of overall economic output, the gap between imports and exports fell from 3.3 percent of gross domestic product in 2012 to 2.8 percent last year, meaning the deficit was less of a drag on the economy as a whole.
“In terms of the macro impact and the impact on growth, what matters is the narrowing of the deficit. That is helping growth in the U.S., and it is what would help job growth,” said Nariman Behravesh, chief economist with the IHS Global Insight consulting firm.
But from there, the debate gets messier. Much of the improvement in U.S. trade accounts came from the displacement of imported oil with domestically produced energy. The folks at the Economic Policy Institute and the Alliance for American Manufacturing were quick to note that, once oil is factored out, the deficit in manufactured goods grew wider over the year, while the gap with China stood at over $318 billion. That makes a single country responsible for two-thirds of the total U.S. goods and services trade deficit of $471 billion.
The Washington Post February 7, 2014 -
The money would be invested in a government-backed bond with a yield pegged to the Government Securities Investment Fund offered to federal employees through the government’s Thrift Savings Plan, a retirement program. That low-risk, low-return fund yielded 1.47% over the last year and an average 2.24% over the last three years. Like Series EE savings bonds, the myRA bonds wouldn’t lose face value, which means the investments would be protected from market losses. But with such low yields they might barely keep up with inflation.
Once the accounts reach $15,000 in value, they would have to be rolled over into a conventional Individual Investment Account. That’s a sop to the financial services industry, which makes billions from managing IRAS. And that’s bad news, says economist Monique Morrissey of the Economic Policy Institute. “The president’s plan may serve to channel more savings into a high-risk, high-fee system without first addressing its failings,” she wrote on EPI’s blog.
Los Angeles Times February 6, 2014