The following newsletter highlights CEPR's latest research, publications, events and much more.
CEPR on Capital in the Twenty-First Century
French Economist Thomas Piketty’s recent best-selling book Capital in the Twenty-First Century was on CEPR’s required reading list this past month. As CEPR Co-director Mark Weisbrot wrote in this post for CEPR’s Americas Blog: “The book itself, whose author has made enormous contributions over the past 15 years analyzing the distribution of income and wealth, is very rich in historical and data-driven economic analysis and has been widely reviewed. It could very well become one of the most influential books on economics in decades.”
CEPR’s Co-director Dean Baker was a panelist with Kevin Hassettof the American Enterprise Institute at a book discussion held at the Urban Institute on April 15th that featured opening remarks by Piketty. Tax Policy Center DirectorLen Burman moderated the discussion (a video of the event can be found here and Dean’s comments are here). That same evening CEPR Senior Economist John Schmitt attended a dinner sponsored by the Washington Center for Equitable Growth to honor PIketty and later wrote a CEPR Blog post commenting on the policy implications of the book. John argued: “Piketty makes one core recommendation: a high, progressive, tax on wealth, preferably implemented on a global scale to minimize evasion. I know very few on the left that would disagree with that as a policy goal. I know even fewer people of any political stripe who think that such a policy stands much of a chance of happening any time soon.”
Dean laid out an alternative strategy for fighting inequality: “If we want to counter the rise in inequality that we have seen in recent decades we are going to have to find other mechanisms for reversing this upward redistribution. Specifically, we will have to look to ways to reduce the rents earned by the wealthy.” Dean’s recommendations include breaking up the too big to fail banks, curtailing tax breaks for the private equity industry, eliminating patent monopolies for prescription drugs, and imposing a modest financial transaction tax, to name but a few.
Dean wrote a related op-ed that appeared in the Huffington Post and Truthout.
CEPR on Paid Sick Days, Paid Family Leave and the Minimum Wage
CEPR’s recent paper “Expanding Family and Medical Leave to Small Firms" shows that an expansion of the Family Medical Leave Act (FMLA) to firms with fewer than 50 employees would extend coverage to 34 million working Americans without posing undue hardships on business.The FMLA provides eligible employees job-protected, unpaid leave. While the FMLA covers about 60 million private sector employees, roughly two-in-five private sector workers are not covered because don't meet the eligibility requirements imposed by the FMLA, either because their employers are too small or they have not been on the job long enough
The report, by CEPR Senior Economist Eileen Appelbaum and CEPR Research Associate Helene Jorgensen, analyzes the Department of Labor’s 2012 FMLA Worksite Survey to paint a fuller picture of leave policies already in place at small U.S. firms, and business’s experiences with those policies.
“Our analysis found that small firms with leave policies that met the standards of the FMLA rarely reported any negative impacts on their business as a result of offering leave to their employees,” said Helene. Eileen added, “Less than one percent of small firm worksites characterized their experience complying with the FMLA standard as very difficult or even somewhat difficult. Extending coverage to all firms would provide job-protected leave to an additional 35 million workers.”
The new study was cited in this article in Eurasia Review. Eileen’s previous study of paid family leave in California was recently mentioned in this piece on the Pew Charitable Trust’s website. Eileen and CUNY’s Ruth Milkman (co-author of the previous report) were also mentioned in a recent piece on policies to address the rise in inequality for the New York Times’ Opinionator blog, which noted that they “have found that access to paid leave has kept families out of bankruptcy, and kept low-wage workers in their jobs.”
And CEPR’s March 2014 publication titled “Good for Business? Connecticut’s Paid Sick Leave Law” by Eileen continues to receive attention from the media. This article by the Associated Press appeared in the Detroit News. Eileen also wrote an op-ed titled “Paid Sick Days in Connecticut Not a Burden for Employers” that was published in Spotlight on Poverty and Opportunity,and the study was featured in this piece on the Center for American Progress’s labor news page.
CEPR’s work on the minimum wage also received attention this past month. John participated in a press call organized by Faith in Public Life and Interfaith Worker Justice on the minimum wage that included Secretary of Labor Thomas E. Perez, Senator Corey Booker and several religious leaders.
CEPR Director of Domestic Policy Nicole Woo and CEPR Domestic Intern Jeffrey Gianattasio ‘s March 28th post for the CEPR Blog was cited in this recent piece for CBS’ MoneyWatch, which noted thatthe 13 states that increased their minimum wage in January had faster employment growth than the remainder of the states where the minimum wage was unchanged. And CEPR’s April 2012 paper on the demographics of low wage workers was cited inthis recent article in the San Francisco Gate.CEPR on Trade
President Obama’s recent trip to Asia and the administration’s renewed push for the Trans-Pacific Partnership has put the TPP back in the news. This recent article
in the Washington Post
cited CEPR’s September 2013 paper by Economist David Rosnick, noting that the research indicated that “90 percent
of workers in the United States would see a decrease in real wages under the TPP.” The piece also reported CEPR’s findings that “cumulative GDP gains in the United States won't be much more than 0.13 percent
by 2025 -- not much more than a rounding error.” Campaign for America’s Future also cited the same CEPR report in a recent blog post
Dean discussed the TPP with NPR’s Morning Edition, where he made the point that the secretive agreement would include many costly protections in terms of patents and trade in highly-paid professionals, and also would threaten sovereignty with an investor-state dispute mechanism allowing corporations to directly sue governments over perceived “barriers to trade.”
Dean also talked trade deals on BBC’s Business Daily [mp3] as well as the Workers Independent News’ Labor Report. Dean took on David Ingnatius in Beat the Press: “David Ignatius' column in the Washington Post touting the Trans-Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Pact (TTIP) is badly mistaken in connecting these deals with free trade. The agreements have very little to do with free trade, rather they are about imposing a business-friendly regulatory structure that would almost certainly not be approved through the normal democratic process in the countries that are parties to the deal.”
CEPR on Private Equity and Taxes
Eileen and co-author Rosemary Batt of Cornell University’s new book, "Private Equity at Work: When Wall Street Manages Main Street," will be published today, May 1st. (The book can be ordered here, from Powells or on Amazon.)The book provides an unprecedented analysis of the little-understood inner workings of private equity and of the effects of leveraged buyouts on American companies and workers.
In advance of the publication, Eileen and Rose gave several book talks, one in Los Angeles at UCLA's Institute for Research on Labor and Employment on April 2nd, and another on April 9th at Rutgers University sponsored by Rutgers School of Management and Labor Relations and Rutgers Center for European Studies. The also participated in a press conference call with members of the national press from Dow Jones, the Wall Street Journal, and Bloomberg BNA.
Eileen has written several op-eds and articles on the topic of private equity. In this op-ed for the Bratleboro Reformer, Eileen and co-author Elaine McCrate, Professor of Economics at the University of Vermont, discuss the implications of the acquisition of 22 drug treatments centers by a chain of 154 centers owned by private equity firm Bain Capital.
The book was mentioned in this piece in the Wall Street Journal’s At Work Blog. Eileen was also quoted in this post on the WSJ’s Private Equity Blog, which included a critique by a representative of the Private Equity Growth Capital Council, who admitted that he hadn’t yet read it. And this article in the Pittsburgh Post-Gazette includes numerous quotes from Eileen and Rose as well as examples of private equity at work in Pittsburgh.
And just in time for April 15th, Eileen wrote this op-ed for Fortune that asked “Private equity tax breaks: How long will they last?” Eileen and Rose wrote an op-ed for The Hill titled “Time to Close Private Equity’s ‘Carried Interest’ Loophole”. Dean also weighed in with an op-ed in Truthout titled “The Hedge Fund Managers Tax Break: Because Wall Streeters Want Your Money.”
Dean penned several other op-eds on the issue of taxes, including this one for the McClatchy News Service that appeared in 20 newspapers across the country, which highlighted “four simple tax changes that could raise lots of money by taking away subsidies for rich people.” He also wrote a piece for Truthout that asked whether taxpayers should subsidize the bloated salaries paid to some top executives at non-profits (he points to the reported $1 million a year paid to former Senator Jim DeMint heading up the Heritage Foundation as a prime example).
CEPR on Venezuela
CEPR continued to follow events in Venezuela. Mark penned this op-ed for U.S. News and World Report on Venezuela’s new exchange rate system that was also published in Opera Mundi and Venezuela’s largest-circulation daily, Últimas Noticias. Mark noted that the “SICAD II system is off to a good start and may succeed in drawing currency exchanges away from the black market, and putting a circuit-breaker into the inflation-depreciation cycle that we have seen over the last year or so. So far, it seems to have tamed the black market.”
Mark discussed the exchange rate system in this interview with the Real News, and he wrote this op-ed for Brazil’s leading newspaper Folha de São Paulo on the true story behind the recent protests in Venezuela. Mark critiqued Human Rights Watch’s recent statements that overlooked serious human rights violations by anti-government protesters in this post for the CEPR’s Americas Blog. Mark also wrote this detailed rebuttal of a post on Nate Silver’s new site FiveThirtyEight.com that looks at economic growth in Venezuela both pre and post-Chavez and compares that with the rest of Latin America. As the title of Mark’s post suggests, they got it wrong on both accounts.
CEPR on Mothers’ Work
CEPR and the Center for American Progress (CAP) released a report that puts a dollar value on the economic importance of women’s rising work hours. According to the report, by Eileen Appelbaum, John Schmitt and Heather Boushey, Executive Director and Chief Economist at the Washington Center for Equitable Growth and a Senior Fellow at CAP, GDP would have been roughly 11% lower in 2012 if women’s employment patterns had remained unchanged over the past three decades. In today’s dollars, this translates to more than $1.7 trillion less in output—roughly equivalent to combined U.S. spending on Social Security, Medicare, and Medicaid in 2012.
The paper was presented at the 75 Years of the Fair Labor Standards Act Conference at the Department of Labor on November 15, 2013.
Eileen and Heather wrote a recent op-ed for U.S. News and World Report on the need for workplace flexibility, stating “Our workplace laws and business employment practices date back to a far different, male-centric era, yet our economy and our society today rely on women to support their families at work and at home. It’s time for Congress to recognize this massive social shift by updating our workplace laws to match these new workplace realities.”
CEPR on Vacation*
CEPR’s May 2013 report “No Vacation Nation Revisited” continues to be mentioned in the press (as does the original 2007 version). The 2013 report was cited in this clip from the Today Show, which noted that CEPR’s paper shows that the U.S. is the only highly-developed nation that doesn’t require employers to offer paid vacation time.This piece for MarketWatch includes a chart from the report and quotes the study’s co-author, John Schmitt. The study was also cited in this piece in Forbes and this one for WWLP.
And CEPR Economist David Rosnick was quoted in a piece for CNN Money titled “The Leisure Revolution That Never Came” that compared predictions about leisure made in 1970 with current data on American’s work hours. The article called back to David’s paper last year examining the U.S. and European models of more work hours and more “stuff”, versus less stuff and more leisure time, respectively.
*not literally, although CEPR does offer paid vacation time to its hard-working staff.We just don’t all take it at the same time…
CEPR on USAID
CEPR’s international team responded to reports that the U.S. Agency for International Development (USAID) had established a project to create a Twitter-style social media network in Cuba. The Associated Press reported that the “ZunZuneo” project was overseen by USAID’s Office of Transition Initiatives (OTI), and that it was “aimed at undermining Cuba's communist government.” Mark was quoted in this article about the revelations for the Gulf Times and was interviewed on the U.S.-Cuba policy for this episode of Al Jazeera English’s “Empire.”
CEPR Director of International Communications Dan Beeton wrote a post titled “USAID Subversion in Latin America Not Limited to Cuba” for CEPR’s Americas Blog. Dan’s analysis of State Department cables recently made public by Wikileaks reveal details of USAID/OTI subversion in Venezuela and other countries. As Dan writes in the post, “Mark Weisbrot described in an interview with radio station KPFA’s ‘Letters and Politics’… USAID and OTI in particular have engaged in various efforts to undermine the democratically-elected governments of Venezuela, Bolivia, and Haiti, among others, and such ’open societies’ could be more likely to be impacted by such activities than Cuba.”
The Latest From the CEPR Blogsosphere:
The CEPR Blog
Jeffrey wrote this post on the recent allegations that executives number of Silicon Valley firms may have colluded to hold down workers’ wages by agreeing to refrain from recruiting each other’s employees.Jeff collected a number of relevant quotations from Silicon Valley executives on the ‘skills shortage,’ which he contrasted with text from emails that showed cartel-behavior. (Just last week it was announced that the companies agreed to settle the wage suit.)
Nicole penned this post announcing an event that was held at the National Press Club on April 2nd. Lawrence Summers, former U.S. Treasury Secretary gave the keynote address at the event, which focused on importance of full employment as a goal for this nation. The event was convened by Jared Bernstein (Dean’s co-author and Senior Fellow at the Center on Budget and Policy Priorities) and featured a panel that included Dean and economists Laurence Ball, Kevin Hassett, and Susan Houseman, and other renowned public policy experts. The post also includes a video of a recent book talk by Dean and Jared that was moderated by AFL-CIO President Richard Trumka.
The Americas Blog: Analysis Beyond the Echo Chamber
In addition to the posts already mentioned, CEPR Research Associate Jake Johnston wrote this post on the controversial ouster of Bogotá mayor Gustavo Petro by Colombian President Juan Manual Santos.
Beat the Press
In the April edition of Beat the Press, Dean writes about Fred Hiatt’s misguided love affair with Bowles-Simpson and he explains how Robert Samuelson is misguided on the unemployment rate and the well-being of seniors. Dean also takes on David Brooks for not believing that Wall Streeters should be jailed for stealing, and he notes that Casey Mulligan has left him baffled, again. And here, he takes on Joe Scarborough for taking on Paul Krugman on the ACA.
Dean also takes the New York Timesto task for more bad budget reporting, and he asks why they think that doctors and other professionals need protection from foreign competition? He also notes that the NYT reports Republican misrepresentations without comment and he calls them out for misrepresenting Medicare scam stories as well.
He says that the Washington Post is confused about inflation, but he also gives the WaPo some credit for running a “nice piece on work sharing,” adding “Those of us who have been working on work sharing forthe last five yearsmight be a bit frustrated with the delay, but if even the Washington Post can learn, there is hope for America.”
Tie for best headlines this past month: High Speed Trading and Slow-Witted Economic Policy vs.The Economy Is Far Too Simple for Economists to Understand #47,654
Haiti: Relief and Reconstruction Watch
This past month, CEPR’s Haiti blog included this post on the report “Haitian labor movement struggles as workers face increased anti-union persecution and wage suppression,” by the Institute for Justice and Democracy in Haiti (IJDH) and its Haiti-based partner Bureau des Avocats Internationaux (BAI). The report documents attacks and firings of union organizers in Haiti by both public and private sector companies.The Haiti blog also reported on a new report from USAID’s Office of the Inspector General (IG) that found that a U.S. government program to build thousands of new homes in Haiti after the earthquake of 2010 is woefully behind schedule and over budget. (These shortcomings were also the subject of an article published in the Boston Review in January 2014 by HRRW contributor Jake Johnston.)
Another post revealed that two privately-owned companies received millions of dollars from the USAID’s Office of Transition Initiative, yet very little is known about where the money went.
CEPR’s Director Watch (and its sister site, the Huffington Post’s Pay Pals) featured several “Directors of the Day” this past month. Some highlights include:
Ernesto Zedillo was the president of Mexico from December 1994 to 2000, the last of a line of presidents who, with the Institutional Revolutionary Party, held a monopoly of state power for the majority of the twentieth century. He had previously served as Undersecretary of Budget, Secretary of Economic Programming and the Budget, and Secretary of Education.
Zedillo was elected to Citigroup’s board of directors in April 2010. Two years later, in an extraordinary move, shareholders voted by a margin of 55-45 percent to reject the board of directors’ $14.9 million pay package. Less than 3.0 percent of CEO pay packages received a no vote from shareholders that year. The stunning, albeit nonbinding, rejection of the directors’ and CEO’s performance was understandable, given that in the 12 months since the previous shareholders meeting Citigroup had woefully underperformed the S&P average. During Zedillo’s tenure thus far as a Citigroup director, the financial giant has fared far worse than the S&P average.
And Judith Rodin:
Judith Rodin is president of The Rockefeller Foundation. Rodin has also sat on Citigroup's board of directors since 2004. At the 2012 annual meeting, shareholders voted by a margin of 55-45 percent to reject the board of directors' CEO pay package. Less than 3.0 percent of CEO pay packages received a no vote from shareholders that year. Rodin, though not on the compensation committee, was the company's longest-tenured returning director at the time of the vote. Since the end of the recession, Citigroup's stock has performed much worse than the market average.
Other Directors of the Day included Reed Hundt, Lisa Caputo and Elaine Chao.
(Dean also wrote about issue of excessive CEO pay in this op-ed for Al Jazeera, and he reiterated those thoughts in this Beat the Press post.)
In other CEPR News…
--CEPR Director of International Programs Deborah James was interviewed by the Real News during the World Bank and IMF meetings held recently in Washington. Deborah discussed the delay of IMF reforms aimed at giving more governance weight to emerging economies, among other topics.
-- CEPR Senior Research Associate Ha-Joon Chang was recently voted one of the top 10 world thinkers by the U.K.’s Prospect Magazine. And CEPR Senior Research Associate Shawn Fremstad was recently named a 2014 Ford Foundation Public Voices Fellow for his “history and commitment to advancing the rights of women and other underrepresented groups.” Congratulations to both Ha-Joon and Shawn!
--Dean was on Fox business News talking pensions (there is no pension “crisis,” argues Dean). And here is a link to Dean’s interview with North Carolina’s Policy Watch on NC’s unemployment rate.
--Dan wrote a review of a new book from former New York Times correspondent Stephen Kinzer, The Brothers: John Foster Dulles, Allen Dulles, and Their Secret World War, for NACLA’s Report on the Americas.
--In an op-ed that garnered the top spot at the Huffington Post, Dean asks “What Problem Is Privatizing Fannie and Freddie Meant to Solve?” And in this piece for CNN Money, he says it’s silly season at the Fed.
--CEPR Senior Associate for International Policy Alex Main wrote this article for Dissent Magazine. In the piece, titled “Honduras: The Deep Roots of Resistance,” Alex writes about the rise of the Honduran resistance movement and the LIBRE party, and he explains how it is related to political developments in other parts of Latin America.
--John and former CEPR Program Assistant Kris Warner’s 2010 paper, “The High Budgetary Cost of Incarceration” was mentioned in this recent article in the Financial Times, that included the following quote from John: “The broader macroeconomic climate is the biggest barrier that workers with a criminal record face.”
CEPR On the Road
--Dean was in Madison, WI on April 4thfor a public forum titled "Unemployment and Inequality: A Path Forward". He then flew to California for two book events. On April 8th Dean spoke about his latest book “Getting Back to Full Employment: A Better Bargain for Working People" at the University of California Santa Barbara as part of a year-long programming series at UC Santa Barbara, "The Great Society at Fifty: Democracy in America 1964/2014. The next day he was at UCLA in Los Angeles for a book talk with discussant Andrew Atkeson.
--Dean was back in LA at the end of the month for a panel on “Jobs in the Developed World” at the Milken Institute’s annual Global Conference. Dean was joined by Steven Rattner, Kevin Hassett, Diana Farrell and Beth Ann Bovino at the April 29th event.
--In addition to her work with CEPR, Eileen is also Visiting Professor in the Department of Management at theUniversity of Leicester, UK. On April 29th she was one of the keynote speakers at the inaugural conference for the University of Leicester's Centre for Sustainable Work and Employment Futures. She spoke about ‘Work Futures in the United States.’
--Eileen will be in San Francisco on May 27th for a discussion on working families. The event is sponsored by the U.S. Department of Labor and is one of several regional events held around the country in advance of the June 23rd White House Summit on Working Families.The regional discussions will help inform the national Summit, which will build momentum around key policy goals and best practices to help both workers and businesses succeed. Please stay tuned to CEPR’s Events page for more details.
CEPR’s Graphic Economics
Here is an infographic from CEPR’s just released report “Scrapping the Social Security Payroll Tax Cap: Who Would Pay More?” The report, written by Nicole Woo, CEPR Research Associate Janelle Jones, and John Schmitt, looks at the numbers to ascertain how many workers would be affected if the Social Security payroll tax cap were raised or phased out.