I spoke to Josh Bivens, an economist with the Economic Policy Institute in Washington who co-wrote one of the first critiques of the Reinhart-Rogoff paper in 2010. He said he wasn’t surprised by the UMass result: “There’s never a sound theoretical reason why there should be a threshold” at which debt suddenly becomes a serious problem—90 percent in the Reinhart-Rogoff paper.
Bivens also said it’s quite possible that rather than debt causing slow growth, in many cases it’s the other way around: Countries that are growing slowly tend to rack up lots of government debt. He said Reinhart and Rogoff in some of their nonacademic writings have ignored that possibility and asserted—without justification—that high debt does indeed harm growth.
Bloomberg
April 17, 2013
A new report from the Economic Policy Institute outlines the discouraging news about 16.2 percent unemployment for Americans younger than 25, along with low wages and underemployment for both high school and college students in the class of 2013.
“Young workers always experience disproportionate increases in unemployment during downturns,” the report notes. “The Great Recession and its aftermath has been the longest, most severe period of economic weakness this country has experienced in more than seven decades.”
Education Week
April 17, 2013
Only 88,000 new jobs were produced last month, and the only reason the unemployment rate ticked down to a still-alarming 7.6 percent is because so many people left the work force altogether, which sent the labor force participation rate down to 63.3 percent, the lowest point since 1979. If we were to include in the calculations those who have given up looking for work, the unemployment rate would actually be 9.8 percent.
The Huffington Post
April 17, 2013
Before I am deluged with angry comments, let me recognize that in recent years the one-for-one relationship between productivity and wages, especially median wages, has broken down. But that’s a subject for another day. (For those interested, Lawrence Mishel, of the Economic Policy Institute, has an informative survey article about it.)
The New Yorker
April 17, 2013
Challenges to success stories: Chicago, New York, Washington – all three have been described as showing success under hard-charging leaders demanding better results. But leaders of an organization called a Broader, Bolder Approach to Education released test data and other information last week that challenged that story line, saying the rhetoric didn’t match the reality and that, in some ways, all three had accomplished little, or even done worse, than other cities. The group, associated with the union-leaning Economic Policy Institute, said places showing more success, including Cincinnati and Charlotte, N.C., emphasize “holistic” approaches to children and their needs, and not test-oriented approaches.
Milwaukee Journal Sentinel
April 15, 2013
“People have no idea how important federal spending is,” said Rebecca Thiess of the Economic Policy Institute, a left-of-center think tank. “Education, the elderly, service to the disabled, firefighters. … It’s vastly important.”
Kansas City Star
April 15, 2013
Andrew Fieldhouse at The Fiscal Times put the nation’s upper economic echelons on notice last week by letting them know they’re not paying anything close to what economists feel is their fair share.
Amid stifled economic output, stagnant job growth, sequestration cuts, the expired payroll tax cuts, the stonewalling of the American Jobs Act and the gradual replacement of stimulus with European-style austerity, Fieldhouse says a dollar of government spending cuts will do four to seven times as much economic damage than an additional dollar of revenue collected from upper-income taxpayers.
MSN Money
April 15, 2013
A separate analysis of government data, released by the Economic Policy Institute earlier this week, also found that unemployment rates for young college grads are much lower than for young high school graduates who are furthering their education. Still, both groups are facing higher rates of joblessness than before the economy soured in late 2007.
LifeInc/Today
April 15, 2013
For the fifth year in a row, high unemployment rates and depressed wages await college grads, who are leaving campus, on average, with $26,000 in student loan debt, according to a new analysis by the Economic Policy Institute.
Many students go to college with the idea that “they will be able to get a high quality job to pay off their student debt, but that idea is broken at a time like this,” EPI economist and co-author of the report, Heidi Shierholz said.
Currently, the unemployment rate among young college grads is 8.8 percent. That’s down from 10.4 percent in 2010, but still much higher than the pre-recession level of 5.7 percent in 2007. To make matters worse, many of the college grads that do score full-time jobs are earning less than they would in a healthy job market. According to the EPI, college grads are earning about $3,200 less a year than they were in 2000. Their pay fell by 7.6 percent in the last six years alone.
The Fiscal Times
April 15, 2013
Since 2007, there’s been a huge exodus of people from the labor force. In March, the number was 496,000. Perhaps two-thirds of the dropouts leave because they’re discouraged that they’ll ever find work, estimates Heidi Shierholz of the Economic Policy Institute, a liberal think tank. (The remaining third reflects lifestyle choices and aging, including the retirement of baby boomers.) Counting many discouraged workers as jobless would raise the unemployment rate close to 10 percent instead of the reported 7.6 percent, she says.
The Washington Post
April 15, 2013