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Seven recipients of the Nobel Prize in Economic Sciences were among 75 economists endorsing an increase in the minimum wage for U.S. workers.
In a letter released today, the group called for the hourly minimum wage to reach $10.10 by 2016 from its current $7.25, and then be indexed for inflation thereafter. They said “the weight” of economic research shows higher pay doesn’t lead to fewer jobs.
Bloomberg January 15, 2014 -
Not only are we now faced with slower growth, but that lesser growth rate is much more narrowly distributed (for broader historical reference: the real annualized G.D.P. growth rate over the full 1960s cycle was 4.5 percent versus 2.6 percent over the 2000s cycle). We’re baking a smaller economic pie and cutting less equal slices. As underscored by the simple Danziger exercise, at any level of G.D.P. growth there would be less poverty reduction because of the inequality wedge. But we’ve also got less growth to boot.
One last chart. In my War on Poverty post, I referred to the chart below by the Economic Policy Institute, which quantifies the contributions of many of the factors driving poverty trends. Actually, it’s the institute’s adaptation of an earlier methodology introduced by Professor Danziger and the economist Peter Gottschalk. Of the factors they look at, they find that rising inequality is quantitatively the largest, including overall growth, family structure, education and race.
New York Times January 15, 2014 -
Here’s the good news: The demographic explanation might not have as big of a hole as some may think. When analyzing the data, most people stick to the 25 to 54 age group because that’s the one that the Bureau of Labor Statistics makes readily available. But that’s a big and diverse cohort of the working population.
Break down the data a little further, and you get a different picture. Of the 6 million dropouts since the beginning of the Great Recession, just over 500,000, or 8%, are 35 t0 44 years old, according to Heidi Shierholz at the Economic Policy Institute. And this age bracket represents a very large segment of the overall workforce. So the number of prime-aged workers giving up is not that large, especially as a percentage of the entire group of labor force dropouts.
And since baby boomers are now, on average, in their late 50s, a large portion of the dropouts in the 45 to 54 category are probably on the upper end of that scale, which is around the normal time people start thinking about retirement.
CNNMoney January 14, 2014 -
True, in some fields like petroleum engineering or cyber security there are many jobs that pay well, but a recent report from the Economic Policy Institute in DC concludes the US has more than enough people to fill most STEM positions.
Lindsay Lowell, a scholar at Georgetown, co-authored the study. “About half of STEM graduates coming out today don’t land a STEM job. You can expand that to look at people who end up in healthcare, which is not STEM, or end up in STEM management, or just simply say the job is closely related, and you still only come up with two-thirds of people with a STEM degree finding work in a STEM job.”
And in some fields there’s a real glut. McNamee concedes, for example, that it’s hard for people with PhD’s in the life sciences to find work in academia. “The competition for regular faculty positions can be pretty stiff. If people are flexible, they seem to find a good place. If they have their heart set on a regular faculty position at a certain type of institution, then in fact it can always be challenging. It’s a very competitive area.”
NPR January 14, 2014 -
Only about 1.6 million hourly workers currently earn the minimum wage, according the Congressional Research Service.
But the Economic Policy Institute, a liberal think tank that organized release of the letter, estimates that another 17 million hourly workers who now earn between $7.25 and $10.10 an hour would see higher wages over the three years of a phased-in increase.
And millions more who make above $10.10 would indirectly benefit if employers adjust pay scales commensurate with a minimum wage increase, EPI estimates.
The Miller-Harkin proposal would also raise the hourly base for workers paid in tips, initially to $3 from $2.13. After that, the proposal calls for their base to be adjusted annually so that it matches 70% of the federal minimum wage.
CNN Money January 14, 2014 -
Miller’s announcement isn’t entirely a shock, and many thought his decision to step down from the Steering and Policy Committee after the 2012 elections was an early indication he was eying the door even then. But several leadership aides pushed back against that notion Monday, arguing Miller’s close relationship with Pelosi meant he simply didn’t need the chairmanship of that panel to exert his influence.
“He’s always involved in what he wants to be involved in anyways — he always has her ear — so I just think he felt like he didn’t need it,” the current leadership aide said.
Few on Capitol Hill have fought harder than Miller for liberal priorities like workers rights, the environment and universal healthcare.
As then-chairman of the House Education and the Workforce Committee, Miller was instrumental in passing much of the Democrats’ 2010 healthcare reform law, the Lilly Ledbetter Fair Pay Act, the 2009 federal stimulus bill and a number of pieces of labor and environmental protection legislation. When a garment factory collapsed in Bangladesh last year, killing more than 1,100 workers who produced clothing for popular western labels, Miller was on the front lines of the push to install better worker safeguards, an effort that included an extended visit to the site of the accident.
He’s also been among the loudest proponents of increasing the minimum wage, a fight he’ll continue Tuesday with economists of the Economic Policy Institute.
The Hill January 14, 2014 -
“Raising the minimum wage may poll well, but having a job that pays $10 an hour is not the American dream,” Rubio said in his recent speech marking the 50th anniversary of Lyndon Johnson‘s anti-poverty program. “Our current government programs offer at best only a partial solution. They help people deal with poverty, but they do not help them escape it.”
Those are strong words as the movement to raise the federal minimum from the current $7.25 an hour is launched by Sen. Tom Harkin (D-Iowa), Rep. George Miller (D-Martinez) and the White House. (The lawmakers will be joined by chief White House economist Jason Furman at a forum on the topic on Tuesday in Washington.)
Los Angeles Times January 14, 2014 -
Seven recipients of the Nobel Prize in Economic Sciences were among 75 economists endorsing an increase in the minimum wage for U.S. workers.
In a letter released today, the group called for the hourly minimum wage to reach $10.10 by 2016 from its current $7.25, and then be indexed for inflation thereafter. They said “the weight” of economic research shows higher pay doesn’t lead to fewer jobs.
Bloomberg Personal Finance January 14, 2014 -
In a sense, he’s right: if the American dream means getting rich, then $10 an hour isn’t living that dream. But most people aren’t and won’t get rich. Raising the minimum wage would mean higher incomes for around 27 million people; in many cases the gains would amount to thousands of dollars a year, which is really a lot in low-income families. So what are all these people, chopped liver? Well, yes, at least in the eyes of the GOP — or maybe make that chopped losers.
The New York Times January 14, 2014 -
Never in any recession since at least 1957 has Congress let such emergency benefits expire when long-term unemployment was so high, the Economic Policy Institute pointed out on Wednesday. (Story continues below chart showing Congress’s historic callousness.)
The Huffington Post January 10, 2014 -
Even though the portion of Americans in poverty has dropped, that doesn’t mean that those above the poverty line – $23,550 for a family of four – have enough money to live on. A recent study by the Economic Policy Institute (EPI) of 615 communities in the US found that in all of those localities it was impossible for two parents who earn the federal minimum wage — $30,000 a year total — to support a family of four. For instance, the EPI analysis found that the monthly costs associated with “an adequate standard of living” in St. Louis include $830 for housing, $754 for food, $959 for child care, $607 for transportation, $1,457 for healthcare, $405 for other necessities and $377 in taxes, for a grand total of $5,389 a month. That’s far above the federal poverty line for a family of four, which is $1,962 a month. Here are the costs of living for a family of four in 13 cities across the United States, according to EPI:
Mother Jones January 10, 2014 -
According to an analysis of Census data by the nonpartisan Economic Policy Institute, these pay increases in 13 states will generate more than $619 million in new economic growth in 2014, helping support the creation of 4,600 new full-time jobs as businesses expand to meet increased consumer demand. A report last year profiling a Washington state McDonald’s franchise owner shows how this works on the ground: The franchisee chose to rebuild and expand his restaurant in Newport, Wash., instead of moving just across the street to Idaho, where the minimum wage is roughly $2 lower. The strong consumer demand his business was enjoying enabled him to continue to expand and employ more workers, even at higher wages.
Roll Call January 10, 2014 -
Four states have rolled back child labor restrictions over the past two years, political economist and University of Oregon Professor Gordon Lafer wrote in an expansive fall paper looking at state wage and labor laws and released by the Economic Policy Institute, a think tank focused on research related to low- and middle-income workers. (Disclaimer: The author moderated a panel at which the paper was unveiled.)
The Washington Post January 10, 2014 -
An evaluation last year by the economist Henry M. Levin, a co-director of Teachers College, Columbia University’s Center for Benefit-Cost Studies in Education, and Emma García, an economist at the Economic Policy Institute in Washington, D.C., concludes that although ASAP isn’t cheap — the program costs, on average, $3,900 per student each year — it’s a solid investment for New York City’s taxpayers. Dr. Levin and Dr. García calculate that the total lifetime benefits — from increased tax revenues as well as savings in crime, welfare and health costs — are a whopping $205,514 per associate degree graduate.
The New York Times January 10, 2014 -
If you’re CEO of one of America’s top-selling 350 firms, pay is higher still. Compensation in 2012 averaged $14 million for that group, including the value of exercised stock options, according to research by the Economic Policy Institute, a labor-leaning research group. That’s 273 times the pay of a typical worker, up from CEO pay that averaged 29 times worker wages in 1978.
Christian Science Monitor January 10, 2014 -
The Economic Policy Institute’s Josh Bivens says extending unemployment benefits since mid-2008 has kicked in $60B/yr to the U.S. economy and would add 310,000 jobs in 2014.
Reuters January 10, 2014 -
“Making them jump through more hoops will definitely increase administrative costs, but it’s not going to generate more jobs,” Economic Policy Institute economist Heidi Shierholz countered in a Tuesday interview with Salon. “Unless he’s looking at it as a jobs program to hire more public sector workers.”
Shierholz, a former University of Toronto professor now at the progressive Economic Policy Institute, panned several of the right’s other diagnoses and prognoses for the unemployed. A condensed and edited version of our conversation follows.
Some of the same Republican senators whose votes were necessary for unemployment extension to move forward Tuesday are implying they could still vote against final cloture if it isn’t offset with cuts. Is insisting on budget cuts to “offset” the cost of unemployment extension good policy?
It isn’t in this context. And I say that sort of carefully. Because if we were at full employment, and the economy was humming along, and fully utilizing all its potential, then if you’re going to spend a big chunk of money, you might want to think about offsetting it, because the economy doesn’t need any more demand.
We are so far away from that situation that this is exactly the kind of time where you do not have to worry about trying to do offsets like that.
Salon January 10, 2014 -
Ross Eisenbrey, vice president of the Economic Policy Institute, a nonpartisan, nonprofit policy research group, said the humanitarian argument was key. Those who receive the benefits did nothing wrong, he said, adding that federal labor statistics show that for every job opening, there are three people looking for a job.
But Eisenbrey said the decline in North Carolina’s unemployment rate was mostly because people gave up on their job searches. Looking for work is a condition for receiving the benefits.
He also said that the extra spending from the benefits creates demand for goods and services.
“Economically, there is zero benefit from cutting unemployment insurance, and I see a lot of harm,” he said.
McClatchy January 10, 2014 -
When Massachusetts became the first state to implement universal health coverage in 2006, many residents faced long waits for doctors’ appointments and crowded emergency rooms. Those waits have lessened, but not disappeared. Nonetheless, polls show most residents in Massachusetts approve of the law.
Likewise, the national law will be judged on whether people can find regular doctors and get in to see them when they need them. If enrollees face a protracted period of appointment waits, difficulties finding specialists because of narrow insurance networks, or glitches in insurers getting their information, the law could be seen as failing.
“The goal of health reform is not insurance, but for people to get health care when they need it,” says Elise Gould, director of health policy research at the Economic Policy Institute. “It’s about moving the dial on consumers getting preventive care and getting more compliance with taking prescription drugs and people getting more effective health care.”
The Washington Post January 6, 2014 -
Some non-investors may indirectly benefit from an up market. For example, a pension recipient may be less likely to face benefit cuts thanks to strong returns by a pension fund. And proponents of the so-called “wealth effect” say that a soaring stock market encourages wealthy consumers to spend more, which stimulates the economy.
But overall, the effects of the bull market have likely been minimal for non-investors.
“It just doesn’t have an impact for the vast majority of people,” said Heidi Shierholz, an economist at the Economic Policy Institute.
CNNMoney January 6, 2014 -
Earlier this year, New Jersey residents voted to raise the state’s minimum wage by $1 to $8.25 per hour. And lawmakers voted to hike the wage by between 25 cents and 75 cents per hour, to $8.70 in Connecticut and $8 in Rhode Island and New York.
Residents in Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont and Washington will see a higher wage floor due to annual cost of living adjustments.
The Economic Policy Institute, a left-leaning think tank, used Census data to estimate that the increases will boost the incomes of 2.5 million low-wage American workers next year.
CNNMoney January 6, 2014 -
It’s smart politics. More than three-quarters of Americans support a wage higher than the current $7.25 an hour, and Republicans will be hard-pressed to explain why they oppose it. The issue might bring people to the polls who would otherwise be indifferent to midterm Congressional elections.
But more important, it’s good economics, and it would benefit tens of millions of people. Raising the minimum wage to $10.10 an hour by 2016, as the current Democratic bill would do, would directly or indirectly increase the take-home pay of 27.8 million workers, according to the Economic Policy Institute, adding $35 billion in greater wages through 2016. The resulting increase in gross domestic product would create 85,000 new jobs.
The New York Times January 6, 2014 -
Economic Policy Institute Vice President Ross Eisenbrey discusses the U.S. minimum wage on Bloomberg Television’s “In The Loop”
Bloomberg January 6, 2014 -
“Job opportunities are, by most measure, really no better than they were a year ago,” said Heidi Shierholz, labor market economist at the Economic Policy Institute. The improving unemployment rate is largely due to people dropping out of the labor force, and hiring hasn’t budged from a year ago, she said. “The reason they extended it last year, that reason is still almost exactly the same right now.”
Despite more than 25 years in the retail industry, Shields said the fact that she doesn’t have a college degree makes landing a management level job challenging. “It’s such an employers’ market at this point. They seem to be more interested now in your education, if you’ve got a bachelor’s degree, than they used to be,” she said.
MSN January 6, 2014 -
In a guest op-ed for CNN, EPI Vice President Ross Eisenbrey explained that Detroit’s path to insolvency had little or nothing to do with pensions—and can be traced to Wall Street and big corporations not paying their fair share.
CNN December 20, 2013 -
— The Economic Policy Institute’s Thomas Hungerford outlines six tax changes Congress can utilize to fund an extension of unemployment insurance without stepping on tax reform’s toes.http://bit.ly/1gtc6Me
Politico December 17, 2013 -
Many more states are expected to take up similar fights next year, and advocates expect it to be a significant issue in the midterm elections next November.
“It’s easy, sometimes, for us to get discouraged when you see one or two states nudging the minimum wage up by a little bit here and a little bit there, but it does add up to something,” said Doug Hall, director of the Economic Analysis and Research Network for the liberal-leaning Economic Policy Institute. “There’s a sense of momentum.”
NBC News December 17, 2013 -
Another shibboleth of the naysayers of a minimum wage increase is that most minimum wage workers are teenagers. They are not. According to recent research by the Economic Policy Institute, about 30 million workers would benefit from the proposed increase in the minimum wage to $10.10 an hour. Of these workers, 88 percent would be at least 20 years old with an average age of 35; 55 percent would be working full time; 56 percent of them would be female, and more than 28 percent of them would be parents.…
Putting more income into the hands of minimum-wage workers would not only reduce poverty; it would also stimulate consumer spending at a time when inadequate demand continues to impede a robust recovery and job creation. Using very different methodologies, two recent studies confirm thatan increase in the minimum wage to the $10 range would lift spending, gross domestic product and job creation.
The New York Times December 17, 2013 -
A study published this year by Carnoy and Richard Rothstein, a researcher at the Economic Policy Institute, found that much of the difference between U.S. scores and those of high-ranking nations is because the United States has a higher proportion of disadvantaged students. But the researchers found that the scores of the most disadvantaged U.S. students have been improving markedly over the years, while scores for their counterparts in many top-ranked nations have fallen precipitously.
In contrast, the highest-scoring U.S. math students are nowhere near their peers in top-ranking countries, Carnoy said.
Los Angeles Times December 17, 2013 -
The Economic Policy Institute estimates that if Washington increased the minimum to $10.10 as Obama would like, some 21.3 million employees would be guaranteed a raise, assuming they kept their jobs. (Another 9 million might theoretically benefit if companies adjusted their whole wage scales upwards, which is what the light blue section on the chart shows. But that might just be wishful thinking on EPI’s part.)
In the end, we’re talking about a policy that would give roughly one in seven employed workers a raise.
The Atlantic December 17, 2013