Media clips
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5. If you’re not officially poor, you’re doing okay. The federal poverty line for a family of two parents and two children in 2012 was $23,283. Basic needs cost at least twice that in 615 of America’s cities and regions.
Mother Jones March 27, 2014 -
The graduation rate among U.S. high schools is now at 80 percent, the highest rate on record, the report said, adding that about 40,000 schools have used the grants.
But the initiative has been criticized by some organizations, such as the Economic Policy Institute, a Washington, D.C.-based think tank, that said that some of the gains cited by the administration may be due to other factors.
“The policy agenda put forth by Race to the Top is a severe mismatch for the opportunity gap that drives the achievement gap that Race to the Top wants to close,” said Elaine Weiss, national coordinator, of the Broader Bolder Approach to Education Campaign, a program of the institute.
She said the grants may benefit schools that are already performing at high levels, while not doing enough to help some troubled schools.
Reuters March 27, 2014 -
Job searching “was like playing the lottery”, says Sharone, an assistant professor at the Massachusetts Institute of Technology.
Israelis believed that if they kept up the hunt, eventually their number would come up.
But not Americans. They experienced a “more insidious and deep kind of discouragement” in which lost job opportunities were personal failures, he says.
And because they thought it was their fault, they were more likely to stop trying.
Heidi Shierholz, an economist at the Economic Policy Institute, argues there’s nothing wrong with current US job seekers as a group other than their “misfortune of being jobseekers during the worst labour market downturn this country has seen in 70 years”.
But that misfortune shows no signs of ebbing as labour markets continue to shift.
BBC News March 27, 2014 -
And more people are finding themselves in that situation more often these days. Here are three things that have happened in conjunction in America over the past decade: Debt loads have increased. Real earnings have stagnated. And payday lending has exploded. Debt loads have come down, but are still elevated. (Federal Reserve Bank of New York)
The Washington Post March 27, 2014 -
It’s not hard to see why. The primary goal of the Better Off Budget is to close the “output gap” that opened after the financial crisis—that is, to tap the economic resources that have been idling for the last few years, leading to higher unemployment and lower wages. Obama’s budget seeks to do the same thing, but wouldn’t close the gap by nearly as much. Ryan’s budget would more or less ignore the gap altogether. In 2013, the gap—measured as potential gross domestic product versus actual gross domestic product—stood at $790 billion. The CPC budget closes it in three years by investing in infrastructure, state aid and a government jobs program. By 2017, the Economic Policy Institute estimates, it will create 8.8 million new jobs.
New Republic March 27, 2014 -
In a hearing this week, Labor Secretary Thomas E. Perez said the Department of Labor would study both raising the wage threshold and overturning the 2004 rule that made certain salaried employees exempt from overtime because they perform some managerial duties.
“There are two issues we are working on in the regulation,” Perez said. “Number one, what should the threshold be, and secondly, how does the test work.”
Perez also said the current structure of the managerial exemption keeps deserving workers frozen out of overtime. “You can work 1 percent of your time in a management function and 99 percent of your time stocking shelves and you will be an exempt employee under the current regulation,” he said.
Workers who now make more than $455 a week, which adds up to less than $24,000 a year, cannot receive overtime pay. That level was set in 2004, when President George W. Bush raised it from $155 a week. That increase gave overtime pay to roughly 400,000 workers, according to an analysis by the Economic Policy Institute.
Roll Call March 27, 2014 -
Unemployment at a post-recession low in 30 states, but the news isn’t all good. “Unemployment rates in 30 states are the lowest they’ve been since the recession ended, according to the Labor Department. But beneath that headline statistic, the state of the state labor markets is far from recovered….In the vast majority of states, long-term unemployment — a particularly intractable problem — is at or near record highs. In many states, the income gap between the poorest and richest has widened. And, as the Economic Policy Institute recently reported, low-wage workers in nearly every state have seen their wages drop (see chart below).” Niraj Chokshi in The Washington Post.
The Washington Post March 20, 2014 -
After the tea party “wave” election of 2010, corporations used their army of lobbyists to push legislation in states aimed to lower living standards and undermine workers’ rights. Here are some of their most outrageous attacks on working people.
Buzzfeed March 20, 2014 -
The simplest way to think of the current account deficit is as a gap. It’s the value of all the stuff and money the U.S. sends overseas, minus what it imports. Right now the U.S. is importing $81.1 billion more in goods and services than it is exporting. But this is $215 billion less than the peak in 1999.
The main reason, says economist Robert Scott at the Economic Policy Institute, is that the economy is weak and therefore interest rates are low. That means the U.S. is paying less to foreign countries that hold U.S. Treasuries. That means less cash leaving the country, headed overseas.
A weak economy also means a weak dollar, which makes U.S. products more attractive to foreign countries, so they are buying more American goods. Another big reason for the deficit drop is the U.S. energy balance. “In recent years the U.S. has had a boom in unconventional energy production domestically, gas but also oil,” says Gian Maria Milesi-Feretti , deputy director of research at the International Monetary Fund.
Marketplace March 20, 2014 -
Advocates for continuing the extended benefits argue that while the economy has improved, there’s still a widespread long-term unemployment problem. Before the Great Recession, long-term unemployment peaked at 26 percent in June 1983. But during the Great Recession, that record was obliterated. It rose to about 45 percent nationally during the recession and has fallen, but remained above 26 percent in 41 states last year, as the map below shows.
The Washington Post March 20, 2014 -
Brad DeLong and Josh Bivens send us to a House hearing on monetary policy, in which three conservatives explain why it was totally forgivable for everyone on their side to predict runaway inflation from the Fed’s expansion of the monetary base, and why the failure of that inflation to appear says nothing at all about possible flaws in their approach.
It’s actually kind of amazing. In the exchange Brad highlights, Marvin Goodfriend says, how could you expect anyone to predict that reserves would just pile up and not be lent out — nothing like that had happened since the 1930s. And Larry White then adds that it was all sterilized because the Fed paid a whopping 0.25 percent interest rate on reserves.
Gosh. We had just had the worst financial crisis since, um, the 1930s. Why would anyone possibly think that 30s experience was relevant? I’m thinking, I’m thinking.
The New York Times March 20, 2014 -
Before 2004, the main criteria used to determine a worker’s primary duty was the amount of time they spent on a duty.
The revisions said a primary duty would no longer be based solely on time spent, but also on other, subjective factors.
Ross Eisenbrey, vice president at the liberal-leaning Economic Policy Institute in Washington, called the current test an “abomination.”
“Being a lead dishwasher is enough to make that person an exempt executive even though they spend essentially all of their time washing dishes,” Eisenbrey said. “Under the law as it stands now, it’s pretty much left to the employer to say.”
With his colleague Jared Bernstein, a former economic adviser to Vice President Joe Biden, Eisenbrey last year urged the White House to consider raising the salary threshold that puts overtime pay beyond the reach of some so-called managers.
Some states have diverged from the department’s post-Bush administration method for determining a worker’s primary duty, at least in state-level worker misclassification lawsuits.
Reuters March 18, 2014 -
Michigan saw one of the largest month-over-month declines between December and January, with the unemployment rate dropping 0.6 percent to 7.8 percent. That means unemployment in January was the lowest its been since June 2008, a claim no other state can match. In Florida and South Carolina, the rate was down to 6.2 percent and 6.6 percent, respectively, the lowest those states have seen since that July. Unemployment in January was at its lowest since some point in 2008 in a total of 24 states.
But those headline rates don’t reflect key problems with state labor markets. In the vast majority of states, long-term unemployment—a particularly intractable problem—is at or near record highs. In many states, the income gap between the poorest and richest has widened. And, as the Economic Policy Institute recently reported, low-wage workers in nearly every state have seen their wages drop (see chart below).
The Washington Post March 18, 2014 -
President Obama wants to make millions of Americans eligible for overtime pay. Just how many millions will come down to the details of his proposal.
Companies have to pay most hourly workers time-and-a-half for any work over 40 hours a week. But many salaried employees don’t qualify for overtime if they earn at least $455 per week, or about $24,000 per year. (California and New York set the bar higher.)
Obama on Thursday ordered the Labor Department to change that threshold for the first time in a decade. It isn’t clear what the new threshold will be — Obama asked the labor secretary to come up with a plan — but the left-leaning Economic Policy Institute has proposed $970 per week, or about $50,000 per year.
…
The Economic Policy Institute’s proposal would have the biggest impact on a smaller group of workers who routinely work unpaid overtime but earn less than $970 per week. That’s about 6.1 million people, according to the Current Population Survey.
FiveThirtyEight March 18, 2014 -
For reference: Here are changes in hourly real wages of men, 1973-2012, at different percentiles of the wage distribution, calculated from Census data by the Economic Policy Institute. As you can see, wages have fallen for 60 percent of men.
I was curious to see how the House Budget Committee report on poverty deals with this fact, which surely plays some role in the persistence of poverty despite government efforts. The answer is, it never so much as mentions falling real wages.
The New York Times March 18, 2014 -
The restaurant industry statement is a reply, of sorts, to a similar statement signed by more than 600 economists endorsing the increase of the minimum wage. That statement was distributed by the Economic Policy Institute, a Washington research organization that receives about 30 percent of its funding from labor unions.
But the institute was clear about its role in collecting signatures and promoting the statement once it was released in January. The statement became a target of lobbying against a wage increase; an advertisement in The New York Times by a nonprofit group run by a firm supported by the restaurant industry, Berman & Co., noted that some of the signers were, at least at some point, self-avowed Marxists.
The statements demonstrate the growing power of surrogate voices that interest groups pursue, in the hope that these endorsements will help them win votes in Congress.
The New York Times March 18, 2014 -
First, because the threshold under which salaried workers are automatically eligible for overtime pay is not indexed for inflation, its value has declined and it covers fewer workers each year. In a recent paper I wrote with Ross Eisenbrey of the Economic Policy Institute, we pointed out that were the 1975 weekly salary threshold updated for inflation since then, it would be around $980 today, or around $51,000 a year.
That’s more than double the current threshold of $455, but the chart below shows how out of step that threshold is with the history of this important metric. In fact, the current threshold is below the poverty line for a family of four. Each bar represents the real value, in today’s dollars, of the Fair Labor Standards Act salary threshold that was reset in that year. Were the current threshold update to reflect inflation since 2004, it would be $560. Before that clearly low-ball 2004 update, the average is around $950, about where we’d set it today. This change alone would entitle millions of workers to the protections they should be getting under the statute.
The New York Times March 18, 2014 -
Given these mixed signals, the experts at the National Women’s Law Center view the job market for women as decidedly in the hands of Congress. Renewing unemployment insurance will inject money into the economy and improve the job market, according to their analysis. Raising the minimum wage to $10.10 an hour would create more demand and provide a particular boost for women, who make up two-thirds of minimum wage workers, according to the NWLC.
Senate Democrats have tried to alleviate this situation. Majority Leader Harry Reid (D-Nev.) has tried several times to restore long-term unemployment insurance benefits, with the most recent attempt occurring on Tuesday, but each time has failed to secure enough votes.
Economist Heidi Shierholz of the Economic Policy Institute has a way to try and make sense of the mixed signals from the labor report. She has a data point that she refers to as her “desert island” data, meaning that if she could take only one labor market measure to gauge the strength of the labor market, she’d put the employment to population (EPOP) ratio into her spreadsheet.
The Washington Post March 14, 2014 -
Productivity growth and employment growth tracked each other closely for decades but began to split in 2000. Lawrence Mishel, head of the liberal Economic Policy Institute, argues that the widening gap we’ve seen in recent years—often blamed on technology—isn’t due to their spread at all, but rather to weak growth and demand. Robots could theoretically be behind the weak demand (if people are earning lower wages and being otherwise muscled out of the labor market, they’re less inclined to buy things), Bernstein says, but that’s not something economists can tease out of the data until the economy returns to full employment.
Another place you’d expect to see signs of the robot “job-apocalypse” is in businesses’ investment in equipment, says Paul Beaudry, an economist at the University of British Columbia’s Vancouver School of Economics. That pace has actually been declining over the past 14 years, he says.
National Journal March 14, 2014 -
In person, thanks to good genes, people often assume I’m younger than I am. On paper, however, I’m just another overeducated, middle-aged, middle-class refugee whose last retail experience dates to the Reagan administration.
Not to mention retail employers these days have their pick of applicants: the Great Recession added countless numbers of desperate workers like me to the annual labor-market influx of college students and high schoolers. According to an Economic Policy Institute report, “In 1968, 48 percent of low-wage workers had a high school degree, compared to 79 percent in 2012.” Likewise, the percentage of people in these jobs who have spent some time in college has skyrocketed, jumping from under 17 percent to more than 45 percent in the same time. All of us are in a race to the bottom of the wage pool.
Although older job candidates bring experience and skills to the table, their job applications typically blink like red warning lights to retail managers:overqualified, overpaid, and probably harder to manage than some high school or college kid. In a word: trouble.
“Think about it, Joey—that’s why there are online applications,” my sister, a veteran human-resources professional, told me. “If you apply online, and you never hear back, they don’t have to tell you why they rejected you and face a discrimination lawsuit.”
The Atlantic March 14, 2014 -
Ross Eisenbrey, the vice president of the liberal Economic Policy Institute, said there are about 10 million more workers who would qualify for overtime under that higher threshold. But he said not all work overtime and he estimated that such an increase would more than likely actually affect about 5 million salaried workers.
The current salary limit —equal to $23,660 a year —is below the poverty level for a family of four. “It’s so far from being an executive salary as to be a joke,” Eisenbrey said.
Associated Press March 14, 2014 -
Ross Eisenbrey, vice president of the liberal Economic Policy Institute, and Jared Bernstein, a former White House economist, recently proposed the limit be increased to $984 a week, or roughly $50,000 a year.
“That would mean between five- and 10-million people could be affected, but they might choose a lower number,” Mr. Eisenbrey said about the White House plans.
Economists like Mr. Eisenbrey point to stagnant wages as one cause behind the U.S.’s sluggish growth. Average hourly earnings, adjusted for inflation, rose 0.4% from January 2013 to January 2014. A bump in the threshold would “move more money from employers into employee pockets. That will be good for the economy,” Mr. Eisenbrey said.
Wall Street Journal March 14, 2014 -
EPI’s Richard Rothstein presented research at the Atlantic’s Reinventing the War on Poverty conference on March 6th. Watch the video.
The Atlantic March 7, 2014 -
A rising minimum wage is a tide that lifts all ships. This is common sense: If a shift worker gets a raise and is now making what the line manager has earned, the line manager is also going to get a bump in pay. Raise the minimum wage, and the bottom 20 percent of wage earners soon enjoy larger paychecks, says Dube of UMass.
A $10.10 minimum wage would boost the incomes of 27.8 million workers, according to an analysis by the Economic Policy Institute. Far from the image of a teen flipping burgers at Jack in the Box, the median worker who would benefit is a full-time working woman in her thirties, responsible for half of her family’s income.
Because these workers spend all the money they make, the $35 billion in extra wages they would earn as $10.10 is phased in would get pumped right back into the U.S. economy – doing far more to stimulate growth than if the same dollars were bloating some billionaire’s bank account.
Rolling Stone March 7, 2014 -
Recent college graduates are ending up in more low-wage and part-time positions as it’s become harder to find education-level appropriate jobs, according to a January study by the Federal Reserve Bank of New York.
The share of Americans ages 22 to 27 with at least a bachelor’s degree in jobs that don’t require that level of education was 44 percent in 2012, up from 34 percent in 2001, the study found.
Competition can leave less-educated — yet still qualified — individuals with few employment options, said Heidi Shierholz, economist at the Economic Policy Institute in Washington.
“College graduates might not be in a job that requires a college degree, but they’re more likely to have a job,” she said.
Less-educated young adults are then more likely to drop out of the labor market, said Paul Beaudry, an economics professor at the University of British Columbia in Vancouver who studies U.S. employment trends.
Bloomberg March 7, 2014 -
As part of an effort to revamp America’s complex tax code, U.S. Congressman Dave Camp last week proposed to curb CEO pay by tightening a tax giveaway created in the 1990s. Perhaps unexpected for a Republican, Camp’s plan would raise $12.1 billion in taxes over 10 years by prohibiting U.S. companies from taking income-tax deductions for their top executives’ pay exceeding $1 million, even if it’s based on performance.
Currently, laws exempt performance-based pay from the $1 million limit. The problem with that is it has encouraged companies to raise base salaries to that level and reward executives with options.
Camp’s proposal is a welcome move to help tame the ballooning CEO pay we’ve seen over the years. CEO pay began to escalate in the early 1980s, but salaries took off in big ways after the passage of the Omnibus Budget Reconciliation Act (OBRA) in 1993, which allowed unlimited deducibility of executive pay based on performance; at the time, President Bill Clinton signed it into law and it has been one of his greatest follies. In 2000, CEO pay was 383 times that of the average worker, compared with 123 times in 1995, according to a June 2012 study by the Economic Policy Institute.
CNNMoney March 7, 2014 -
The U.S. is among only three nations in the world that does not guarantee paid maternal leave (the other two are Papua New Guinea and Swaziland). This means many poor American mothers must choose between raising their children and keeping their jobs. The U.S. education system is plagued with structural racial biases, like the fact that schools are funded at the local, rather than national level. That means that schools attended by poor black people get far less funding than the schools attended by wealthier students. The Department of Education has confirmed that schools with high concentrations of poor students have lower levels of funding. It’s no wonder America has one of the highest achievement gaps between high income and low income students, as measured by the OECD. Schools today are actually more racially segregated than they were in the 1970s. Our higher education system is unique among developed nations in that is funded almost entirely privately, by debt. Students in the average OECD country can expect about 70 percent of their college tuition to be publicly funded; in the United States, only about 40 percent of the cost of education is publicly-funded. That’s one reason the U.S. has the highest tuition costs of any OECD country.
Rolling Stone March 7, 2014 -
New York Times March 5, 2014 -
Expanding the EITC would help reduce poverty in two ways, according to Thomas Hungerford, a senior economist at the Economic Policy Institute, another left-leaning think tank. First, it would give childless low-income Americans who are already working an income boost. And expanding the credit would encourage more people to work.
“It was designed to get people into the workforce because you can only get it if you have earned income,” Hungerford said.
Many argue that this is one of the most direct ways to help low-income workers. In 2011, the credit lifted 6.6 million people above the poverty line, according to an IRS estimate cited by the Associated Press. An EITC expansion only benefits the poor, unlike a minimum-wage hike, which could help some people who are not poor, like those working minimum-wage jobs for extra cash.
Expanding the EITC is also more politically palatable than a minimum-wage hike, which many conservatives oppose, arguing it will discourage businesses from hiring minimum-wage workers.
The Huffington Post March 5, 2014 -
March 3 (BNA) — Following Connecticut’s lead, Vermont and Massachusetts could be the next states to enact employer-paid sick leave laws, which tend to help workers with low wages who disproportionately lack access to this benefit, proponents of such policies told Bloomberg BNA.
The Economic Policy Institute said in a report released last October that almost 40 million U.S. employees, or about 40 percent of the nation’s private-sector workforce, currently have no right to any paid sick leave. As a result, EPI said, these employees commonly go to work sick or leave their ill children home alone because they fear they will be fired for missing work.
“Even if they are not terminated, the loss of pay they suffer takes a dramatic toll—particularly since jobs without sick pay are concentrated among low-wage workers,” EPI said in “The Legislative Attack on American Wages and Labor Standards, 2011-2012.”
Bloomberg BNA March 5, 2014