Media clips
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Hilary Wething and Daniel Costa are featured on the “Young and the Guest List” in Washington Life magazine.
See page 45.Washington Life Magazine February 6, 2014 -
For some time now, there has been a debate about why the labor-force participation rate has fallen so far. Some analysts point to demographics: the aging of baby boomers. Others blame low levels of demand and hiring, which have prompted some of the unemployed to give up on looking for work. The C.B.O. study splits things down the middle. Of the roughly three-percentage-point fall in the participation rate since 2007, the study attributes 1.5 percentage points to “long term trends (particularly the aging of the population)” and the other 1.5 percentage points to “weak employment prospects” and other “unusual aspects of the slow recovery.”
One can quibble with these figures. At least one other study, by the Economic Policy Institute, found that weak demand accounted for two-thirds of the fall in the participation rate. But, even if we accept the C.B.O.’s conclusions, they imply that about three million Americans who should be working have vanished from the labor force.
The New Yorker February 6, 2014 -
Elaine Weiss of the Economic Policy Institute in Washington speaks at a Tennesseans Reclaiming Educational Excellence event at the legislative office complex in Nashville, Tenn., on Monday, Jan. 27, 2014. The event was the first of a series scheduled from supporters and opponents of creating a school voucher program and expanding charter schools in the state.
AP January 30, 2014 -
Today, newly-formed education advocacy group TREE (Tennesseans Reclaiming Educational Excellence) hosted a presentation by Elaine Weiss of the Broader, Bolder Approach to Education.
Weiss discussed recent Tennessee education policy in the context of the drivers of educational inequality. She pointed to research suggesting that poverty is a significant contributor to student outcomes and noted other research that suggests as much as 2/3 of student outcomes are predicted by factors outside of school.
Later in the day, SCORE (Statewide Collaborative on Reforming Education) released its annual State of Education in Tennessee Report.
Tennessee Education Report January 30, 2014 -
With education the burning issue driving policy on the local, state and federal level, the presentation across the street inside Legislative Plaza was a horse of a different color.
Tennesseans Reclaiming Education Excellence, TREE, held its first-ever press conference in a packed small legislative committee room Monday, examining how the state’s approach to addressing achievement gaps drive policies that are hurting public schools.
“The state of education for Tennessee is it has a lot of potential to do the right things and is not doing them,” said Elaine Weiss, a TREE presenter and national coordinator for Washington, D.C.-based Broader, Bolder Approach to Education. Nearby, Democratic Rep. Mike Stewart bumped his fists together like a boxer, congratulating her for taking on the state.
Nashville Scene January 30, 2014 -
On Tuesday, we wrote about some good-sounding news: unemployment rates in 29 states are at post-recession lows. We alluded to some caveats, however, including the historically huge share of people out of work for prolonged periods —six months or more. On Wednesday, the Economic Policy Institute’s David Cooper provided the state-level data.
Before the Great Recession hit, the national share of the jobless who were long-term unemployed peaked at 26 percent, in June 1983, as you can see in the graph below:
Last year, long-term unemployment was above that level in 41 states and D.C., according to EPI, a think tank whose research focuses on low- and middle-income workers. Long-term unemployment is lowest in the Dakotas, where less than a fifth of the jobless have been out of work for long stretches. It’s highest in D.C., New Jersey and Florida, where more than 45 percent of the jobless are long-term unemployed.
Head on over to EPI’s site for an interactive version of the map above, or scroll down to view state-by-state data. Below that is a series of survey responses from people who are long-term unemployed.
The Washington Post January 30, 2014 -
This morning, President Obama visited a Costco in suburban Maryland to reemphasize the theme of income inequality he sounded in the State of the Union speech last night. Our calculator shows why Obama chose the home of the giant pickle jar and behemoth TP package: Even at the relatively low wages paid by big-box retailers, slightly better pay can mean the difference between inescapable poverty and a modest living.
Mother Jones January 30, 2014 -
Ariane Hegewisch, study director at the Institute for Women’s Policy Research. “If you look at who is poor and who is likely to remain poor, women are the majority.”
The Institute for Women’s Policy Research estimates that the poverty rate for working women would be cut in half if women earned as much as men.
The pay gap appears narrower in lower-wage jobs than in higher wage jobs, said Heidi Shierholz, an economist at the Economic Policy Institute. But she noted that the reason is not because women are doing better, but because men in lower wage jobs are doing worse.
“That’s not the kind of improvement women want,” Shierholz said. “If you could solve inequality overall, you’d have helped a lot of women.”
Reuters January 30, 2014 -
Obama says expanded trade will generate high-paying jobs for an economy that’s still more than 1 million paychecks short of its pre-recession peak. His critics in the labor movement and some economists say previous deals, such as the North American Free Trade Agreement, destroyed millions of factory jobs.
“It has absolutely been a contributor to the rise in inequality,” said economist Josh Bivens of the Economic Policy Institute, a Washington research group partially funded by labor groups. “We would have a different country, with less inequality, had we not seen the developments in the global economy that we’ve had over the last 15 to 20 years.”
The concern that Obama is fanning over the income gap could boomerang on his plans. Five fellow Democrats on the Senate Finance Committee this month said they won’t vote for giving the president “fast track” authority to speed trade deals through Congress, citing in part the risk to jobs.
Bloomberg Politics January 30, 2014 -
As Obama follows up on a State of the Union speech Tuesday that focused on increasing economic opportunity, census tracts at opposite ends of the spectrum help paint the picture. Data from 2010 showed a median family income of just $8,831 in the Napier-Sudekum area. In Belle Meade, the median family income was more than 20 times higher at $183,047.
The same stories can be found across the state. Incomes for the bottom 20 percent of Tennessee households fell by 12 percent over the course of nearly a decade, a 2012 report by the Center on Budget and Policy Priorities and the Economic Policy Institute found.
USA Today January 30, 2014 -
Account holders would be able to make hardship withdrawals without facing significant tax penalties. And while the plan is aimed at low-income people, anyone in a household earning up to $191,000 a year is eligible to invest.
“The plan has the advantage that it helps people who do not have the ability right now to save easily through payroll deduction,” said David C. John, a senior policy advisor at AARP who added that it steers people around financial institutions that discourage investors with small accounts. “It helps get people into the habit of saving.”
But others said Obama’s new initiative is so modest that it does nothing to address the larger problem of eroding retirement security for Americans.
“At best, it is a distraction from the bigger issue of what we need to do to shore up retirement,” said Monique Morrissey, an economist at the Economic Policy Institute. “It is a very, very modest tweak, and it is not likely to have much of a substantive impact.”
The Washington Post January 30, 2014 -
The plan, as the President outlined it in his address and the White House fleshed out a bit more Wednesday, aims to give lower-income workers a way to start building retirement nest eggs in tax-deferred accounts, through regular payroll deductions made by their employers. The employers would have to agree to offer the service to employees.
The accounts would be available to those earning less than $191,000, but the minimum initial contribution would be $25 and subsequent contributions could be as little as $5.
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 January 30, 2014 -
Lawrence Mishel, the president of the Economic Policy Institute, responded to my email asking for his take on Piketty:
“We’d take the perspective that this phenomenon is related to the suppression of wage growth so that policies which generate broad-based wage growth are an antidote. The political economy is such that the political power to enact those taxes also requires a mobilized citizenry and institutional power, such as a robust labor movement.”
The New York Times January 29, 2014 -
Many owners who supported a wage hike say they don’t believe their workers can live on minimum wage and already pay them more. About 95% of respondents agreed that $7.25 is not a living wage and only 7% said they pay any of their workers that hourly rate or the minimum set by their state, which can be higher.
But more than 20% said they pay some employees between $7.25 and $10.10 an hour. That means if a federal wage hike is passed, these small business owners would have to raise wages for employees in that range.
There are currently 1.6 million workers who earn the federal minimum wage, according to the Congressional Research Service. And the liberal-leaning Economic Policy Institute estimates that an additional 17 million make between $7.25 and $10.10 and would see wages increase as well.
CNNMoney January 29, 2014 -
It’s about time to raise the minimum wage, at least according to 600 economists.
The group, which includes seven Nobel laureates, attached their name to a letter released earlier this month by the Economic Policy Institute urging lawmakers to raise the minimum wage to $10.10 an hour. In the two weeks since the left-leaning think tank first published the letter, the list of signatories has grown from 75 to more than 600.
President Obama is expected to push for an increase in the minimum wage during his State of the Union address Tuesday. In his speech last year, Obama called on Congress to boost the federal minimum wage from $7.25 an hour to $9 an hour. Senate Democrats proposed increasing the minimum wage to $10.10 — a measure Obama later said he backed — but the bill is still stalled in Congress.
The Huffington Post January 29, 2014 -
The simple economic theory of wage formation would argue that workers must be getting increasingly unproductive. That is, if you’ve studied this corner of economics, you may recall the assertion that your hourly wage is equal to your “marginal product,” meaning the dollar value your work adds to the firm’s output. Now, this theory applies to the average worker, so it entertains differences in real wage trends across the wage scale, explaining them by referring to differences in the marginal product of the losers versus the winners.
But there are a lot of problems with the theory. First, even at the average, in recent years real compensation has grown more slowly than productivity. This dynamic, by the way, is behind the historically large decline in labor’s share of national income, a trend that is wholly inconsistent with conventional marginal product theory (which assumes constant income shares for labor and capital or profits).
Second, as the Economic Policy Institute recently pointed out — and it has carefully tracked the “real” wage story for decades — even in the lowest fifth of the wage scale, workers have become more highly educated. The institute’s analysis reveals that since the late 1960s, the share of low-wage workers with at least some college has increased from 17 percent to 46 percent.
The New York Times January 29, 2014 -
Labor advocates are agitating for a boost to that lower wage, but they’re facing off against a more influential restaurant lobby, which paints a pretty bleak picture of the impact a wage hike would have on its industry. According to the National Restaurant Association, an increase in the subminimum wage would raise menu prices and cause restaurants to cut service jobs. Plus, the group says a pay raise couldn’t come at a worse time as businesses struggle to recover from the recession.
But there is evidence—from states that don’t have a separate, lower wage for tip-earning workers—that the restaurant owners are wrong to make such a dire and definitive case.
Seven states—Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington—don’t have a tipped wage at all: The minimum wage is the minimum wage for everyone. (Nineteen states follow the federal subminimum wage, and the rest are somewhere in between).
“You can … look anecdotally to the experiences of California and Washington and Oregon, where the restaurant industry is doing very well, even though those states don’t even have a tipped minimum wage,” said David Cooper, an economic analyst at the left-leaning Economic Policy Institute.
National Journal January 29, 2014 -
The unemployment rate drastically understates the weakness of job opportunities, because it does not include “missing workers,” who are neither employed nor looking for work because of scarce job openings, according to the liberal-leaning Economic Policy Institute in Washington, D.C.
McClatchy January 29, 2014 -
“Using the deficit for something like unemployment insurance—that’s a multiplier—is a good thing,” says Josh Bivens, the director of research and policy at the Economic Policy Institute. “They’re shock absorbers, not bad things.” Unemployment benefits tend to get spent right away on needs like groceries, for example.
Mother Jones January 29, 2014 -
Ellison personally handed the president a letter on the matter last month. Just last week, at an event hosted by the left-leaning Economic Policy Institute, he publicly questioned Jason Furman, the chairman of Obama’s Council of Economic Advisers, on whether Obama planned to issue the order. Ellison later criticized Furman for what he felt was an evasive answer.
The Huffington Post January 29, 2014 -
During tonight’s State of the Union address, President Barack Obama will announce an executive order to raise the minimum wage to $10.10 an hour for federally contracted workers, according to a White House statement.
Economists at the leftist Economic Policy Institute estimate “1 in 5 employees working for private firms for the benefit of the federal government are likely working for poverty wages.” The move comes as the president has continued to push Congress to raise the minimum wage for all workers, which has met resistance from Republican leaders.
Guests:
Ross Eisenbrey, Vice President, Economic Policy Institute (a think tank focused on low- and middle-income workers);
NPR January 29, 2014 -
The increase directly and indirectly could raise pay for up to 28 million workers, according to estimates from the liberal Economic Policy Institute.
The legislation has received backing from 75 economists, but its passage remains a political long shot.
CNNMoney January 29, 2014 -
Obama renewed his call for lawmakers to pass a proposal to raise the minimum wage for all workers to $10.10 per hour by 2015. A legislative increase would affect 27 million workers, according to an analysis of census data by the nonpartisan Economic Policy Institute.
McClatchy January 29, 2014 -
This year the White House promises todeliver the most interactive State of the Union yet. In anticipation for tonight’s speech, we’ve offered 17 charts of our own to better explain a core message in this year’s State of the Union: economic inequality in America.
IT ISN’T JUST WAGES, DIFFERENCES IN CAPITAL INCOME HAVE SKYROCKETED OVER THE LAST DECADE
January 29, 2014 -
Per the Economic Policy Institute, working women would be more affected by a raise to $10.10 than men. See the wage increase impact by gender here.
National Journal January 29, 2014 -
Obama’s minimum wage order will cover people who perform services, such as janitors or construction workers, and make less than $10.10 per hour.
David Cooper, an economic analyst at the Economic Policy Institute (EPI) in Washington, said the announcement of the pay hike is “a good step going forward” but is limited in its reach.
“It’s not going to have the same impact that Congress increasing the federal minimum wage for all workers would have, and because it only applies to new contracts or contracts that are renegotiated, it may take a little while before current employees of federal contractors see the increase in their pay,” said Cooper, whose organization has advocated for a minimum wage increase.
In a call with officials at the Economic Policy Institute on Monday night before the announcement, Jason Furman, a top economic adviser to the president, told the group that the White House believes the executive action could impact roughly 250,000 people, according to Ross Eisenbrey, vice president at EPI.
USA Today January 29, 2014 -
But the minimum wage order will also illustrate the limits of that approach. If Congress increases the federal minimum wage to $10.10 from $7.25 as Mr. Obama has sought, 17 million employees would eventually get a raise unless their jobs were eliminated and another 11 million would benefit indirectly as wage ladders were adjusted, according to estimates by the Economic Policy Institute, a liberal research organization. Mr. Obama’s order, by contrast, will affect relatively few at first because it will apply only to new or renewed contracts, and even down the road at most it might affect several hundred thousand workers.
New York Times January 29, 2014 -
The rise in inequality has coincided with an enormous growth in the financial sector, which remunerates its employees extremely generously. Indeed, much of the shift in overall income to the top one per cent can be explained by the contribution of this one industry. “Executives, and workers in finance, accounted for 58 percent of the expansion of income for the top 1 percent and 67 percent of the increase in income for the top 0.1 percent from 1979 to 2005,” a 2012 paper from the liberal Economic Policy Institute pointed out.
The New Yorker January 29, 2014 -
But that’s by no means the norm. Tom Hungerford, an economist with the left-leaning Economic Policy Institute who used to analyze tax policy for the nonpartisan Congressional Research Service, says the vast majority of small business owners don’t make enough to clear the bar.
“So you’re just talking about the very top of the income distribution, probably owners of S-corps and some partnerships,” he says. “A lot of those are law firms, and I don’t think they have huge capital investments.” The rest in that bracket are mostly salaried executives, managers, financiers, lawyers and doctors — who tend to spend their personal income on themselves, not their business.
The Washington Post January 29, 2014 -
Rising inequality has obvious economic costs: stagnant wages despite rising productivity, rising debt that makes us more vulnerable to financial crisis. It also has big social and human costs. There is, for example, strong evidence that high inequality leads to worse health and higher mortality.
New York Times January 27, 2014