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CEPR News February 2012

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Written by Dawn Lobell   
Wednesday, 29 February 2012 16:00

The following highlights CEPR's latest research, publications, events and much more.

CEPR on Greece

Two days after the Greek government and European authorities announced a new €130 billion bail-out agreement, CEPR released a paper that looks at Greece's experience with “internal devaluation” and finds there's a high risk of continued prolonged recession. The paper, “More Pain, No Gain for Greece: Is the Euro Worth the Costs of Pro-Cyclical Fiscal Policy and Internal Devaluation?” by Co-Director Mark Weisbrot and Research Assistant Juan Antonio Montecino, argues that Greece should consider default and an exit from the euro.  “The IMF has consistently underestimated the depth of the Greek recession,” said Mark. Referring to the program of ongoing austerity being pushed on the Greek people by the “troika” (the European Central Bank, the European Commission, and the IMF), Mark said, “At some point, it becomes rational for Greeks to ask, is the euro worth this kind of punishment?”

The paper was cited at length by the London Telegraph (UK) which stated, “Unlike the troika’s messy efforts, the CEPR’s arguments are clear and compelling.” Mark was quoted in stories on ABC News.com and CNN.com and this report by the Associated Press, which appeared in dozens of U.S. newspapers. Mark was also interviewed about the Greek crisis by the BBC News and the radio show “This is Hell” out of WNUR (Chicago).

The paper also received a great deal of attention in Greece, where it was the focus of a much reprinted article in leading business daily IMERISIA as well as in other European countries.

CEPR has been writing on the eurozone crisis for two years, as CEPR Co-director Dean Baker mentions in this article for Al Jazeera English. In the article, Dean notes that people in Greece and other peripheral European countries must “wake up to the fact that they are not dealing with reasonable people on the other side of the negotiating table.” Mark noted that the ongoing eurozone crisis is affecting the U.S. as well as the European economy, and could present a significant challenge to President Obama’s reelection hopes if it continues to worsen, in a column for U.S. News and World Report. Mark was also interviewed at length about the eurozone crisis by the New Left Project.

CEPR on Work Sharing

Dean Baker released this statement applauding the signing of the Middle Class Tax Relief and Job Creation Act by President Obama, which included a provision on work sharing. Dean has been a prominent supporter of work sharing, which provides employers an alternative to layoffs. He also wrote about work sharing in this column for the Guardian.

CEPR on Low-Wage Workers, the Minimum Wage, and Rebuilding the Middle Class

CEPR recently released a paper jointly with the Georgetown University Kalmanovitz Initiative for Labor and the Working Poor that looks at low-wage workers and health insurance. The paper, “Health-insurance Coverage for Low-wage Workers, 1979-2010 and Beyond” was written by CEPR Senior Economist John Schmitt, used data from the Current Population Survey to review trends in health-insurance coverage rates for low-wage workers. Three-fourths of low-wage workers (defined as workers in the bottom fifth of the wage distribution in each survey year) do not have health insurance through their employer and almost 40 percent have no health insurance from any source.

Schmitt’s earlier paper, “Low-Wage Lessons,” continues to receive attention. The paper, which, was recently featured on the Russell Sage Foundation’s website, cites five lessons on low-wage work, drawn from the recent experiences of the United States and other rich nations.

John Schmitt and Eileen Appelbaum took part in a panel discussion on "The Impact of Social Policies and Workplace Law" as part of a larger two-day conference titled "What Works for Workers? A Conference on Public Policies and Innovative Strategies for Low-Wage Workers." The conference, which was held on February 23-24, 2012, was sponsored by Georgetown University's Kalmanovitz Initiative for Labor and the Working Poor. The agenda can be found here.

John testified before the House Subcommittee on Commerce, Manufacturing, and Trade in the first of a series of hearings entitled “Where the Jobs Are.” The hearing focused on “Employment Trends and Analysis." You can read his testimony here and watch a video of the full hearing here.

John also participated in a panel discussion titled "Rebuilding the Middle Class," sponsored by the Center for American Progress. The event featuredSenator Tom Harkin (D-IA), chairman of the Health, Education, Labor, & Pensions Committee, who spoke about what he's learned from the series of HELP Committee hearings and events on the decline of the middle class, and outlined a policy agenda that puts the middle class first. John was part of a panel of economists and policy experts that followed Senator Harkin's remarks with a discussion on how the middle class is a key engine of economic growth. A video of the event can be found here.

CEPR joined with the National Employment Law Project and the Economic Policy Institute to co-sponsor a well-attended briefing for congressional staffers on the minimum wage. John Schmitt walked congressional staffers through the extensive body of economic research that suggests that moderate increases in the minimum wage have little or no measurable impact on employment. Look for more work from CEPR on the minimum wage as the national debate heats up in the spring.

CEPR on Aid Accountability for Haiti

A video is now available of Mark Weisbrot’s appearance of the January 24th congressional briefing sponsored by the offices of Rep. Yvette Clarke, Rep. Barbara Lee, and Rep. Donald M. Payne. The briefing followed the screening of excerpts of the documentary "Haiti: Where Did the Money Go?" which focuses on the status of relief efforts and steps towards increasing accountability of aid organizations.

CEPR’s Relief and Reconstruction Watch blog continues to monitor relief efforts in Haiti, with posts such as this one on procurement. The blog was among the first sources to report on the results of a recent survey of Port-au-Prince residents’ attitudes about UN troops in Haiti (MINUSTAH), noting that overwhelming majorities (over 70%) of respondents want the forces to leave Haiti within a year, and for the UN to provide compensation to cholera victims.

CEPR on the Dollar

As Dean Baker explains in his latest book, The End of Loser Liberalism: Making Markets Progressive, the U.S. Treasury could choose to bring the value of the dollar down against other currencies, and thereby produce a huge improvement in the country’s trade balance. In turn, this would create millions of new manufacturing jobs. A boost to manufacturing would increase the demand for non-college-educated workers and push up their wages relative to those of more highly educated workers. Dean elaborated on that point in the recent paper, “The Necessity of a Lower Dollar and the Route There.”

The paper demonstrates how a reduction of the value of the dollar would not only correct the large trade deficit in the United States, but would also lead to a boom in the manufacturing sector, potentially creating millions of jobs. "Any serious discussion of U.S. competitiveness has to begin with the value of the dollar," said Dean. "This is the single most important factor in determining the relative cost of U.S. goods against goods produced elsewhere."

CEPR’s Primer on Private Equity

A new working paper by CEPR Senior Economist Eileen Appelbaum and Rosemary Batt of Cornell University pulls from a widely-cited body of research to illuminate some of the major controversies surrounding private equity including whether private equity creates or destroys jobs, whether it provides better returns than the broad stock market to investors, and whether the debt burden assumed by firms acquired by private equity substantially increases the risk of bankruptcy. The paper was mentioned in this piece in the New York Times’ Economix blog.

CEPR New and Noteworthy

-- Eileen Appelbaum participated in a webinar on "What Employers Can Learn from the California Experience," which compliments her 2011 paper with Ruth Milkman on the nation’s first comprehensive Paid Family Leave (PFL) program. The webinar focused on employer’s experience with the CA PFL program. On February 28th, Eileen spoke at the AARP Roundtable on “Caregiving and Work: How Public Policies and Employers Can Help Working Caregivers.”

-- CEPR is now a weekly contributor to U.S. News and World Report. Look for articles by CEPR staff like this recent one on President Obama’s suggested tax code changes by Eileen Appelbaum, this one by Dean Baker on the work sharing provision in the jobs bill, and this one by Mark Weisbrot on how the situation in Europe might impact President Obama’s re-election bid.

-- Dean Baker was on the Diane Rehm show on February 28th, debating the causes and implications of rising gas prices. Dean wrote about the issue in this piece for Truthout and here he schools Thomas Friedman on the subject in Beat the Press.

-- CEPR Senior Research Associate Shawn Fremstad was part of a panel discussion on economic mobility with Scott Winship, fellow in economic studies at the Brookings Institution and former research manager with the Economic Mobility Project. Video of the event, which was held on February 10, 2012 at New America Foundation, can be found here.

-- Dean Baker appeared on CNBC’s Kudlow Report a record three times in February. Here he is discussing gas prices; here he is weighing in on the payroll tax compromise, while here he critiques the Republican candidates’ tax plans.

-- On February 3rd, Dean debated Jeffrey Tucker, an Austrian economics advocate, executive editor of Laissez Faire Books and former editorial vice president of The Mises Institute, at an event titled “Empire Unplugged: A Salon with Dean Baker & Jeffrey Tucker on the Federal Reserve.” On the 1st, Dean squared off against Rob Atkinson, President of the Information Technology and Innovation Foundation, in a debate focusing on “Progressive Economics and the Great Recession.” Video of that event can be seen here.

Tags: Greece | Haiti | inequality | jobs | minimum wage | paid family leave | private equity | work sharing

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