Media clips
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It pays to go to college. Literally. A new analysis by the Economic Policy Institute in Washington found that the wage difference between college graduates and non-degree holders is at a record. People with college degrees make 98 percent more an hour than people without, up from 89 percent just five years ago. In fact, MIT economist David Autor found that not getting a college degree costs someone about half a million dollars. College debt may still be a real fear and hardship, but it’s a relatively small cost in the long term. The average $25,000 in student debt doesn’t hold a candle to the $500,000 to be made over a lifetime.
The Daily Beast June 11, 2014 -
College-educated workers still earn much more than less-educated ones, but landing a good job at rising pay is made even more difficult as each new group of graduates joins a backlog of unemployed and underemployed college and high school graduates, dating back to the class of 2008.
Over the last six years, one of the economy’s biggest problems has been faulty fiscal policy, with the federal government underestimating the need for economic aid or withholding and reducing help prematurely. Another drag has been lack of business investment, even as financial markets have prospered with the help of loose monetary policy.
The New York Times June 11, 2014 -
There’s little debate that wages for the average American household have stalled and wealth is flowing to the top of the income ladder.
There’s less consensus about why—and what should be done about it.
A new study analyzing more than three decades of wage data argues that government polices (such as the failure to have the minimum wage track inflation) go further toward explaining the expanding wealth gap in America than globalization, new technologies or gaps in education or training.
“There’s a lot of uncertainty about the rise in inequality, but we’ve changed a lot of government policies over the last generation that have pretty predictable effects on wages,” said co-author Josh Bivens, policy director at the Economic Policy Institute, a Washington think tank devoted to helping low and middle income households.
NBC News June 5, 2014 -
The Economic Policy Institute’s Family Budget Calculator shows that even in low-cost cities like St. Louis, a single full-time worker supporting a child needs to earn more than $24 an hour to cover basic living costs. The wages needed are as much as 40 percent higher in more expensive regions. And while many low-wage workers do not have children, the lion’s share are in working-class households and providing a major share – on average half – of their family’s incomes.
So a $15 minimum wage would be a very significant step towards reducing hardship and meeting family needs. It would also bring the minimum wage more in line with productivity gains over past decades, since the minimum wage would be over $16 per hour if it had kept up with even conservative measures of productivity growth since 1979.
U.S. News & World Report June 5, 2014 -
The vote underscores efforts nationwide by cities and states to increase pay on the local level as the federal minimum wage debate in the nation’s capital divides policymakers. And the effort could gain momentum as the national conversation on income inequality and its economic consequences intensifies.
“It sends a big signal that people are fed up with the stagnant wages that we’ve seen,” says Heidi Shierholz, an economist at the Washington, District of Columbia-based Economic Policy Institute. “In this country, we used to see overall economic growth at the high end, at the middle and at the bottom. Since the 70’s, it’s really changed. We’ve continued to have overall economic growth, but it’s been captured by this thin slice at the top and you’ve seen real stagnation for the vast majority.”
U.S. News & World Report June 5, 2014 -
What can be done to reverse rising economic inequality in America—not just for future generations, but right now?
Raise wages. That’s the conclusion of a new policy report from the Economic Policy Institute and the starting point for a multi-year research and education initiative that was launched on Wednesday with a keynote address by Secretary of Labor Thomas Perez. The paper’s central argument is that the root of America’s most pressing economic challenges lies in the disconnect between wages and productivity—and that government policy and business practices are in large part to blame.
“The clear connections between wages, income and living standards mean that progress in reversing inequality, boosting living standards and alleviating poverty will be extraordinarily difficult without addressing wage growth,” reads the introduction to the report, which was written by EPI President Lawrence Mishel and economists Josh Bivens, Elise Gould and Heidi Shierholz. “Indeed, converting the slow and unequal wage growth of the last three-and-a-half decades into broad-based wage growth is the core economic challenge of our time.”
The Nation June 5, 2014 -
While the last recession officially ended in June 2009, that may come as a surprise to many Americans, who increasingly feel that the American Dream is out of reach.
Almost 6 out of 10 respondents in a CNNMoney Poll said they believe the American dream — however they wish to define it — is no longer achievable.
While the American dream may mean different things to different people — higher wages than their parents, or homeownership, or a healthy bank balance — the survey is reflecting the lingering impact of the recession: Lagging wages, a tough job market, and greater income inequality. From 2000 to 2013, hourly wages for most Americans either fell or flatlined, according to a new study published today from the liberal-leaning Economic Policy Institute.
CBS Moneywatch June 5, 2014 -
How do we get rid of income inequality and poverty?
One rather obvious way, according to the Economic Policy Institute, is to pay people more.
“Raising wages is the central economic challenge of our time—essential to addressing income inequality, boosting living standards for the broad middle-class, reducing poverty, and sustaining economic growth,” according to the briefing paper announcing the “Raising America’s Pay” initiative that the EPI is launching Wednesday. Secretary of Labor Thomas Perez is scheduled to deliver the keynote address at EPI’s Washington offices.
The Washington Post June 5, 2014 -
“The classes were smaller and more personal, and I’ll be able to pursue all three of my interests,” Favia says. “For me, it’s a better place.”
However, Favia says she does think the new rating system would be helpful for other students in regards to expected loan debt and future employment prospects.
With college graduates facing an unemployment rate of 8.5%, according to the Economic Policy Institute, some entering college students welcome the White House’s pragmatic approach to providing information about colleges.
USA Today June 5, 2014 -
The disconnect between growth and poverty reduction is a key finding of a sweeping new study of wages from the Economic Policy Institute. The liberal-leaning group’s policy prescriptions are open to debate, but this piece of data the researchers find is hard to dispute: From 1959 to 1973, a more robust United States economy and fewer people living below the poverty line went hand-in-hand. That relationship broke apart in the mid-1970s. If the old relationship between growth and poverty had held up, the E.P.I. researchers find, the poverty rate in the United States would have fallen to zero by 1986 and stayed there ever since.
New York Times June 5, 2014