Media clips
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Despite what the Wall Street Journal says, the tide stopped rising for the average worker in 1970. (Economic Policy Institute, updated by WCEG)
Moore and Vedder also assume, for some reason, that blue states invariably have liberal economic policies. One wonders where they get that idea. For example, California may be blue, but until very recently economic policymaking in Sacramento was hamstrung by the strong veto held by conservative Republicans in the Legislature.Finally, Price contradicts their assertion that “John F. Kennedy had it right that a rising tide lifts all boats.” This may have been correct when Kennedy said it, but it changed shortly after his presidency. As is shown by the chart above, first compiled by the Economic Policy Institute and updated and reproduced by Price, average wages started diverging from productivity gains in 1970. The gap has grown inexorably in the four decades since.
Los Angeles Times June 11, 2014 -
One newly trained butler was hired last year in the United Arab Emirates for $158,000, the BBC reports. That alone would place the butler in the top 8 percent of earners in the U.S., although of course that’s a mere pittance to the top .01 percent, who have a net worth of $100 million.
And the top 1 percent — as well as the top .1 percent and top .01 percent — have seen their wealth grow by staggering leaps. From 1979 to 2007, the top 1 percent took in over half of the total increase in U.S. income, according to the Economic Policy Institute. Worldwide, the number of millionaires rose to a record 12 million people in 2012, a jump of more than 9 percent, according to the World Wealth Report.
CBS Moneywatch June 11, 2014 -
The soft economy has forced many economists to reduce their yield forecasts.
Paul Dales, senior U.S. economist at Capital Economics, a research firm, says wage gains will pick up this year and bond yields will move higher.
But even he has cut his forecast for the 10-year yield to 3 percent at year end, from the 3.25 percent he forecast earlier. If he is right, that would leave the yield unchanged for the full year. Next year, he thinks the 10-year yield will edge up to just 3.5 percent, and he considers himself above the consensus.
Economists were pleased that the economy created 217,000 jobs in May. That sent U.S. payrolls to a record high. It was the first time since the late-1990s boom that the economy created more than 200,000 jobs a month for four consecutive months.
Nice as that was, job gains didn’t keep up with population growth. The economy would need to create 7 million more jobs to account for the increase in working-age people since 2008, according to the Economic Policy Institute, a Washington think tank supported by labor unions.
MSN Money June 11, 2014 -
Economists are somewhat divided over the broader impact of raising the overtime floor, a proposal that the Labor Department is still hammering out. Once they come up with their recommendations on how to make overtime pay available to more workers, the business community will have an opportunity to weigh in during a 90-day public-comment period.
Ross Eisenbrey, vice president of the Economic Policy Institute, a nonpartisan think tank in Washington, D.C., recommended in November that the floor be raised to $984 a week, or nearly $25 an hour—a change that he says could help as many as five million salaried employees.
Yet Dean Baker, an economist with the Center for Economic and Policy Research in Washington says that even if the threshold were raised as high as $20 per hour, just a few hundred thousand workers would be newly eligible for overtime. “This has been hugely overblown, the impact is likely to be relatively limited,” Mr. Baker adds.
Wall Street Journal June 11, 2014 -
Back in 1979, notes a new Economic Policy Institute report released last week, households in America’s statistical middle — the 20 percent of households making more than the nation’s poorest 40 percent and less than the nation’s most affluent 40 percent — averaged $16.72, after inflation, per hour worked. In 2012, households in this same statistical middle averaged $16.26 per hour.
Over roughly that same period, EPI analysts add, America’s top one percent of income-earners doubled their share of the nation’s income from paychecks, dividends, rent and business earnings, from 7.2 to 14.2 percent.
Moyers & Company June 11, 2014 -
To Dave in his piece, and also used some of Larry’s data:
Note: Most of the statistics come from David Cooper of the Economic Policy Institute. His calculations include so-called spillover effects: Minimum wage researchers have found that employers often increase the pay of those earning slightly above the new minimum to roughly maintain their relative wage structure. A Congressional Budget Office report gets similar results to Mr. Cooper’s. For example, the budget office finds that 53 percent of affected workers work at least 35 hours per week, compared with 54 percent in the Cooper study.
…
As with the population as a whole, low-wage workers are more educated than in the past. In the late 1960s, less than half had finished high school and only 17 percent had attended any college at all.
The New York Times June 11, 2014 -
First, the new data: Americans with four-year college degrees made 98% more an hour, on average, in 2013 than people without a degree. That’s up from 89% five years earlier, 85% a decade earlier and 64% in the early 1980s. These figures are based on an analysis of Labor Department statistics by the Economic Policy Institute and first reported in The New York Times.
Researchers conclude that over the long run not going to college will cost you about $500,000. That’s double the penalty for not getting a degree three decades ago. “The decision not to attend college for fear that it’s a bad deal is among the most economically irrational decisions anybody could make in 2014,” says The Times.
Time June 11, 2014 -
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 -
From the 1950s until some time in the 1970s or 1980s, the U.S. economy was the proverbial rising tide lifting all boats. Living standards were rising for the broad middle class. Economic growth was driving down the poverty rate. Then something shifted.
The left-leaning Economic Policy Institute is launching a new initiative to study what drove that shift – and what can be done to reverse it – that places a large part of the blame on U.S. labor market policies. The initiative is already drawing attention from the administration of President Barack Obama, whose labor secretary, Tom Perez, will give a keynote speech at the launch event for the effort Wednesday morning.
The lengthy EPI analysis seeks to lay out the case for what went wrong and then to chart a policy path forward. But it also takes a few detours into a more utopian past, examining what the world would have looked like if these inequality trends had not arisen.
Wall Street Journal June 5, 2014 -
By law, schools aren’t segregated. In reality, many are. “Education policy is a housing policy,” says Economic Policy Institute Research Associate Richard Rothstein in a new paper published to commemorate the 60thanniversary of the Supreme Court’s landmark desegregation ruling Brown v. Board of Education.
“Brown was unsuccessful in its purported mission,” Rothstein writes. Today, black students generally attend schools where only 29 percent of their fellow students are white, down from 36 percent in 1980. (He also notes that in 1954, the percentage was zero in Southern states. So something has changed.)
Rothstein goes on to say that without desegregating neighborhoods, we can’t desegregate schools. As a liberal thinker, one of Rothstein’s preferred solutions is to aggressively enforce a new rule from the Department of Housing and Urban Development to require municipalities, white suburbs included, to integrate. Conservatives and libertarians blanch at such an idea, but there may be other ways to address a problem that neither Republicans nor Democrats can deny. The libertarian Cato Institute’s Neal McCluskey suggests greatly expanding school choice, an idea supported by the vast majority of African Americans.
National Journal May 23, 2014 -
In 2010, the Republicans won control of the executive and legislative branches in 11 states (there are now more than 20 such states). Inspired by business groups like the American Legislative Exchange Council (ALEC), the U.S. Chamber of Commerce and the National Association of Manufacturers, they proceeded to rewrite the rules of work, passing legislation designed to enhance the position of employers at the expense of employees.
The University of Oregon political scientist Gordon Lafer, who wrote an eye-opening report on this topic last October for the Economic Policy Institute, a liberal think tank in Washington, looked at dozens of bills affecting workers. The legislation involved unemployment insurance, the minimum wage, child labor, collective bargaining, sick days, even meal breaks. Despite frequent Republican claims to be defending local customs and individual liberty, Mr. Lafer found a “cookie-cutter” pattern to their legislation. Not only did it consistently favor employers over workers, it also tilted toward big government over local government. And it often abridged the economic rights of individuals.
The New York Times May 23, 2014 -
Some are actually hurting kids. In a new report out last week, Gordon Lafer, a political economist at the University of Oregon, reviewed the growing low-budget-charter sector in Milwaukee, which has the oldest charter system in the country, and found startling results with national implications. Cost-cutting charters such as the Rocketship chain offer a narrow curriculum focused on little more than reading and math test prep, inexperienced teachers with high turnover, and “blended learning” products designed to enrich charter school board members’ investment portfolios. Lafer “questions why an educational model deemed substandard for more privileged suburban children is being so vigorously promoted—perhaps even forced—on poor children…” [Economic Policy Institute, 4-24-14] Others have pointed out significant problems with zero-tolerance, strict discipline charters made famous by the “no excuses” KIPP chain of schools. [EdWeek, 2-20-13]
The Washington Post May 23, 2014 -
A report last year by the Economic Policy Institute found that the retirement system largely benefits higher income workers the most because they can actually contribute enough to make 401(k) plans work for retirement.
“Retirement-income inequality has grown in part because most 401(k) participants are required to contribute to these plans in order to participate, whereas workers are automatically enrolled in defined-benefit pensions and, in the private sector, are not required to contribute to these plans,” the liberal-leaning think-tank found. “Thus, higher-income workers are much more likely to participate in defined-contribution plans. In addition, higher-income workers have more disposable income and a higher investment-risk tolerance, receive larger tax breaks, and are more likely to work for employers that provide generous matches.”
CBS Moneywatch May 23, 2014 -
Talk of progress on inequality “sounds a bit hollow” right now, said Heidi Shierholz, an economist at the Washington-based Economic Policy Institute, which conducts research on the economic condition of low- and middle-income families. She said she’d like to wait for further evidence confirming gains for lower-income workers.
Bloomberg May 23, 2014 -
The legislation, SB 1372, has passed one Senate committee by a 5-2 vote and will come before the Appropriations Committee this week. To the best of my knowledge, it is the first bill in the nation that seeks to diminish economic inequality through corporate tax reform. Odds are it won’t be the last.
The gap between the compensation packages of CEOs and their employees’ pay is a relatively new phenomenon. In 1965, according to a study from the Economic Policy Institute, CEOs made 20 times what their median employee made. By 2012, the ratio had risen to 273 to 1.
That could mean that today’s CEOs are 14 times better than their mid-20th century predecessors, or that today’s workers are 14 times worse.
Los Angeles Times May 23, 2014 -
They are your neighbors, your fellow congregants, some of the men and women crammed beside you on the subway or bus. Day in and day out, they are coping with upended lives, struggling to squeeze back into a work force that has squeezed them out.
Nationally, more than three million unemployed people have been searching for work for longer than six months, nearly three times more than there were in 2007, before the Great Recession began, according to the Economic Policy Institute, a left-leaning research group based in Washington.
The numbers tell part of the story. The rest often remains unspoken: the emotional and financial burdens of joblessness; the mounting sense of self-doubt, the awkward silences among friends who grasp for words of comfort and the job offers that vaporize after seeming so tantalizingly within reach.
The New York Times May 23, 2014 -
(Also in Port Clinton News Heralds, htrnews, The Des Moines Register, Courier-Post, Cincinnati.com
The latest jobs report for April gave grads a puzzling picture. Employers added the most jobs in more than two years, 288,000. Unemployment dropped from 6.7% to 6.3%, the first time it was that low since September 2008. Young adults still face higher unemployment, but the rate for 25-29 year-olds fell from 7.5% in March to 6.9%. The unemployment rate for those 20-24 dropped from 12.2% to 10.6%.Still, the portion of Americans 25-34 who were working in April fell to a five-month low of 75.5%, down from 75.9% in March.
“The entire drop (in unemployment) was due to people dropping out of the labor force, in particular young people,” says Heidi Shierholz, a labor market economist who writes an annual report on the state of employment for young adults for Economic Policy Institute.
And despite the number of jobs added last month, Shierholz calls the gradual improvement “agonizingly slow.”
USA Today May 23, 2014 -
(Also in Star Tribune, NBC News, News Times, Reading Eagle)
Labor leaders and many economists worry. Contract workers have less job security and don’t contribute to the economy through spending as much as permanent, full-time workers. Nor do they have the same job protections. Few are union members.“It is not hugely clear that we’re coming into a temp-worker, contract-worker, contingent-worker nation. But it’s something to keep an eye on,” said Heidi Shierholz, an economist with the labor-oriented Economic Policy Institute. “There’s definitely been an increase in the share of those working part time.”
Associated Press May 23, 2014 -
“After all these years, it’s no wonder people are still feeling the weight of the Great Recession,” said Heidi Shierholz, an economist at the liberal Economic Policy Institute, which tracks the well-being of the poor and the working class, “because the weight is still there.”
The New York Times May 23, 2014 -
Retirement saving aside, many young potential first-time homebuyers largely just can’t afford to purchase a home. They point to insufficient credit history or score and a lack of funds to cover a down payment and closing costs as the biggest obstacles to purchasing a home, according to a May report from Fannie Mae.
Further compromising their financial stability, the unemployment of Americans under 25 is likely higher given the scarcity of job opportunities, a recent report from the Economic Policy Institute showed. There are about 1 million “missing” young workers, which means they’re not employed, in school or actively seeking work. They’re not counted in the jobless rate, which was 10.6 percent in April for Americans 20-24. Almost five years after the recession ended, there should be 7.1 million more jobs to match the growth of the labor force.
US News and World Report May 23, 2014 -
“Whenever it comes to the issue of the day, whether it’s labor or energy, you can’t ignore what they are doing because they have a measurable effect on the economy,” said Josh Bivens, research and policy director at the liberal Economic Policy Institute.
Wall Street Journal May 16, 2014