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Labor Market Policy Research Reports, February 12 – February 19 Print
Written by Nicholas Buffie   
Friday, 20 February 2015 10:11

The following reports on labor market policy were recently released:

Economic Policy Institute

2014 Continues a 35-Year Trend of Broad-Based Wage Stagnation
Elise Gould

National Women’s Law Center

Moving Women & Families Forward: A State Roadmap to Economic Justice
National Women’s Law Center

Political Economy Research Institute

Improving Population Health by Reducing Poverty: New York’s Earned Income Tax Credit
Jeannette Wicks-Lim and Peter S. Arno

Center on Budget and Policy Priorities

States Can Adopt or Expand Earned Income Tax Credits to Build a Stronger Future Economy
Erica Williams and Michael Leachman

Disunited States of America Print
Written by John Schmitt   
Wednesday, 18 February 2015 12:14

disunitedstates I have a chapter on state-level labor-market regulations in a new ILR Press book edited by David Jacobs (Morgan State University) and Peggy Kahn (University of Michigan, Flint). The book is called Disunited States of America: Employment Relations Systems in Conflict, and the title of my chapter is “Differences in the ‘inclusiveness’ of state labor market institutions.”

My chapter compiles and presents a lot of data on differences in minimum wages, unionization rates, earned income tax credits, unemployment insurance systems, employment protection legislation, and other dimensions of labor-market regulation at both the state and international levels. The main conclusion is that, while there is substantial variation across the U.S. states along many of these dimensions, these differences are small relative to the gap between the United States and the rest of the world’s rich economies.

To give just one example, the figure below shows an OECD-calculated measure of the generosity of unemployment insurance benefits in the core OECD economies, together with my own roughly comparable estimates for the U.S. state with the most generous unemployment insurance system (Rhode Island) and the least generous system (District of Columbia). By the OECD’s calculation, the United States as a whole has one of the least generous unemployment benefit systems. But, the figure illustrates that even the most extravagant U.S. state program would still look miserly by international standards. A similar pattern holds for the other indicators I examine: even the most “inclusive” U.S. labor-market systems compare poorly to our peer economies.

disunited states fig3

The other chapters in the volume include: “The persistent effects of slavery in the United States: culture, legal policy, and the decline of American labor unions,” by Raymond L. Hogler; “Labor in the world of cynical conservative federalism,” by Nathan Newman; “Worker centers as an inflection point? An introduction and an interview with Kimi Lee,” by Peggy Kahn and Kimi Lee; “Beyond the Family and Medical Leave Act: the pluralization of leave rights from below,” by Peggy Kahn; “Labor and class in a neo-mercantile context: a view from the U.S. Midwest,” by Roland Zullo; “Health insurance coverage of low-income workers in the United States,” by Sara R. Collins and Tracy Garber; with a conclusion on “Reconstituting laborist capitalism,” by David Jacobs.

The U.S.A. as Number 1? Print
Written by Dean Baker and Nicholas Buffie   
Friday, 13 February 2015 14:23

It’s standard practice in public discussions to refer to the United States as being the richest country in the world. Even though this is repeated all the time, it’s worth asking if it is true.

In terms of having the largest economy in the world, it is no longer true. If we measure the size of economies by assigning the same price to all goods and services they produce (purchasing power parity GDP), China passed the United States last year. Of course China has more than four times the population as the United States, so on a per capita basis it is still much poorer.



Labor Market Policy Research Reports, February 5 – February 12 Print
Written by Nicholas Buffie   
Friday, 13 February 2015 10:25

The following reports on labor market policy were recently released:

Center for American Progress

The Effect of Rising Inequality on Social Security
Rebecca Vallas, Christian E. Weller, Rachel West, and Jackie Odum

Center for Economic and Policy Research

Failing on Two Fronts: The U.S. Labor Market Since 2000
John Schmitt


Financialization & Equal Opportunity
Wallace Turbeville

Economic Policy Institute

The Federal Reserve and Shared Prosperity
Thomas Palley

Employment Continues Its Steady But Slow March Towards Recovery Print
Written by Nicholas Buffie   
Thursday, 12 February 2015 16:09

Last Friday the Bureau of Labor Statistics (BLS) released its “Employment Situation Summary” for the month of January. The Bureau’s data show that both employment and unemployment increased last month; seasonally adjusted employment increased from 147.4 million workers in December to 148.2 million in January, while unemployment increased from 8.7 million workers to 9.0 million. Because of the uptick in the number of unemployed workers, the unemployment rate rose 0.1 percentage points to 5.7 percent. 

But as I wrote last month, the unemployment rate is an imperfect measure of labor market health. My own preferred measure, as I explained in January, is the employment-to-population ratio (EPOP) of the working-age population, consisting of Americans aged 25 to 54.

By this measure, the job market is recovering, but is doing so slowly. The working-age EPOP actually fell from 77.0 percent in December to 76.7 percent in January; however, this measure doesn’t take into account seasonal effects. And it’s tremendously important to consider these effects in January, which has historically been the single weakest month for working-age employment. Between 1948 and 2013, January’s working-age EPOP averaged about 72.2 percent, compared with 73.0 percent for the period as a whole. In both 2013 and 2014, January’s working-age EPOP lagged the annual working-age EPOP by about 0.8 percentage points, fully consistent with the long-run historical trends.



When Unemployment Gets Worse Print
Written by Nicholas Buffie   
Monday, 09 February 2015 15:56

In December of 2007, the unemployment rate rose above 5 percent for the first time in over two years. That same month, the economy entered its longest recession since the Great Depression.

By the official end of the recession in June 2009, unemployment had risen to 9.5 percent. The rate peaked at 10.0 percent in October of that year before finally beginning to come back down.

As I’ve written elsewhere, the unemployment rate is a poor measure of the condition of today’s labor market. In particular, the drop in the unemployment rate since 2009 greatly overstates the labor market’s recovery.

But just as importantly, the unemployment rate doesn’t tell us much about the misery of those who actually experience unemployment. If spells of unemployment are short and don’t substantially decrease a worker’s standard of living, unemployment may not actually inflict much harm on those who experience it; but if spells of unemployment are long and are associated with substantial drops in income, they can be devastating for the unemployed.



Labor Market Policy Research Reports, January 29 – February 5 Print
Written by Nicholas Buffie   
Friday, 06 February 2015 14:16

The following reports on labor market policy were recently released:

Center for American Progress

Men, Fathers, and Work-Family Balance
Erin Rehel and Emily Baxter

Economic Policy Institute

Currency Manipulation and the 896,600 U.S. Jobs Lost Due to the U.S.-Japan Trade Deficit
Robert E. Scott

“Right to Work” Is the Wrong Answer for New Mexico’s Economy
Gordon Lafer and Alyssa Davis

Center for Law and Social Policy

WIOA: What Human Service Agencies and Advocates Need to Know
Helly Lee

National Employment Law Project

The Job Ahead: Advancing Opportunity for Unemployed Workers
Claire McKenna

Urban Institute

Reducing Child Poverty in the U.S.
Linda Giannarelli, Kye Lippold, Sarah Minton, and Laura Wheaton

Expanding Economic Opportunity for Young Men and Boys of Color through Employment and Training
Shayne Spaulding, Robert I. Lerman, Harry Holzer, and Lauren Eyster

Data Flash: Another Solid Jobs Report in January Print
Written by Dean Baker   
Friday, 06 February 2015 08:53

The Labor Department reported that the economy added 257,000 new jobs in January. With upward revisions to the prior two months' data, this brings the average over the last three months to 336,000 jobs. The growth was widely spread across industries, but it is noteworthy that the goods producer sector remained strong. Construction added 39,000 jobs, bringing the average over the prior three months to 37,700.

Manufacturing added 22,000 jobs bringing the average over the last three months to 31,000. Retail added 45,900 jobs in January, while health care added 38,300. The latter figure continues an uptick in job growth in the health care sector since the fall. Job growth had been averaging less than 25,000 a month in 2013 and the first half of 2014.

There was a 12 cent jump in average hourly pay, but this reflects the erratic movement of this series, not a real development in the economy. Taking the last three months together, compared with the prior three months, wages have grown at just a 2.0 percent annual rate, down from a 2.2 percent increase over the last year. In other words, there is still no real evidence of wage acceleration in the data.

The household side was mostly positive as well. The unemployment rate was essentially unchanged at 5.7 percent. Adjusting for changes in population controls, employment still rose by 435,000 in January. The situation for most groups was little changed. It is striking that less-educated workers continue to be the largest beneficiaries of the recovery. In the last year, the employment rate (EPOP) for workers without high school degrees has risen by 2.1 percentage points, while their unemployment rate has dropped by 1.1 percentage points. High school grads have seen a similar drop in their unemployment rates, although their EPOP has risen by just 0.2 percentage points. By contrast, the unemployment rate for college grads has fallen by 0.5 percentage points, while their EPOP has dropped by 0.7 percentage points. The unemployment rate for college grads is still 0.8 percentage points above its average for 2007.

Labor Market Policy Research Reports, January 22 – January 29 Print
Written by Nicholas Buffie   
Friday, 30 January 2015 15:36

The following reports on labor market policy were recently released:

Center for American Progress

A Fair Shot for Workers with Disabilities
Rebecca Vallas, Shawn Fremstad, and Lisa Ekman

Economic Snapshot: January 2015
Christian E. Weller and Jackie Odum

A Subsidized Jobs Program for the 21st Century
Rachel West, Rebecca Vallas, and Melissa Boteach

Economic Policy Institute

“Right to Work” Is the Wrong Answer for Wisconsin’s Economy
Gordon Lafer

Urban Institute

State Economic Monitor: January 2015
Richard C. Auxier

Center on Wisconsin Strategy (COWS)

Pulling Apart 2015 – Focus on Wisconsin’s 1%
Wisconsin Budget Project and COWS

Slower GDP Growth in Fourth Quarter Brings Year-round Rate to 2.5 Percent Print
Written by Dean Baker   
Friday, 30 January 2015 08:49

A weak trade performance and a sharp reversal in military spending held GDP growth to 2.6 percent in the fourth quarter. This brought the full year growth (Q4 to Q4) to 2.5 percent, only slightly above the growth rate of the prior three years. The growth rate of final demand in the fourth quarter was even weaker at 1.6 percent, as inventory accumulations added 0.82 percentage points to growth.

The slowdown in the fourth quarter was predictable as third quarter growth was driven by 16.0 percent jump in military spending. These numbers are highly erratic and sharp swings are usually reversed, as was the case in this quarter. Military spending declined at a 12.5 percent annual rate subtracting 0.58 percentage points from growth in the quarter.

Trade was also a big subtraction from growth, as imports grew much more rapidly than exports. After adding 0.76 percentage points to growth in the third quarter, net exports subtracted 1.02 percentage points from growth in the fourth quarter. Trade is likely to be an ongoing drag to growth in future quarters as the higher dollar makes U.S. goods and services less competitive and austerity policies in Europe continue to depress growth in a major trading partner.

Investment spending was also weak in the quarter. Non-residential investment rose at just a 1.9 percent annual rate with equipment investment actually shrinking at a 1.9 percent annual rate.

On the whole, this report suggests that the economy will continue on a modest growth path that is not qualitatively different from prior years in the recovery. The relatively weak 4th quarter numbers may be a surprise to fashion driven economists, but it was predictable given the composition
of growth in prior quarters.

Did Cutting the Duration of Unemployment Benefits Lead to Faster Job Growth in 2014? Print
Written by Dean Baker   
Monday, 26 January 2015 15:36

A new NBER working paper by Marcus Hagedorn, Iourii Manovskii, and Kurt Mitman (HMM) argues that end of extended unemployment benefits at the start of 2014 explains much of the pick up in employment growth in 2014 compared with 2013. The story would be that the end of benefits gave people an incentive to find work. Their method is to compare the change in employment in states that previously had lengthy periods of benefit duration with states where benefit duration was already short prior to January of 2014.

The argument is that in the states that previously had long benefit duration we should expect the cut in duration to have a large effect. By contrast, in the states where benefit duration was relatively short, we would expect to see little effect. This means that we should see a bigger uptick in job growth in 2014 relative to 2013 in the states that previously had long periods of benefit duration than in states that had short periods.



Who’s Competing for Whom? Print
Written by Nicholas Buffie   
Monday, 26 January 2015 10:48

CEPR’s Dean Baker recently took Neil Irwin to task for claiming that wages are going to rise soon. Irwin argued that the growing number of job openings is a significant plus for American workers. According to Irwin, if firms are looking to hire, they may begin raising wages in order to fill current vacancies. Matthew Yglesias of Vox made the same point here.

There is some logic to this point. A greater number of job openings means that more employers are looking to hire. And if employers are competing to hire workers, they will have to bid up wages to attract workers to their firms. So other things equal, a higher number of vacancies should benefit workers by pushing up wages.

But the problem is that “other things” are not equal in today’s economy. In particular, we have a large number of unemployed Americans competing for those vacancies.



Labor Market Policy Research Reports, January 5 – January 22 Print
Written by Nicholas Buffie   
Friday, 23 January 2015 10:20

The following reports on labor market policy were recently released:

Center for American Progress

Valuing All Our Families: Progressive Policies that Strengthen Families Commitments and Reduce Family Disparities
Shawn Fremstad and Melissa Boteach

Report of the Commission on Inclusive Prosperity
Lawrence H. Summers and Ed Balls

Economic Policy Institute

Wage Stagnation in Nine Charts
Lawrence Mishel, Elise Gould, and Josh Bivens

The Erosion of Collective Bargaining Has Widened the Gap Between Productivity and Pay
David Cooper and Lawrence Mishel

Causes of Wage Stagnation
Lawrence Mishel

The Manufacturing Footprint and the Importance of U.S. Manufacturing Jobs
Robert E. Scott

Political Economy Research Institute

 A $15 U.S. Minimum Wage: How the Fast-Food Industry Could Adjust Without Shedding Jobs
Robert Pollin and Jeannette Wicks-Lim

Center on Budget and Policy Priorities

Geographic Pattern of Disability Receipt Largely Reflects Economic and Demographic Factors
Kathy A. Ruffing

Health Reform Not Causing Significant Shift to Part-Time Work: But Raising Threshold to 40 Hours a Week Would Make Sizeable Shift Likely
Paul N. Van de Water

Center for Law and Social Policy

Strengthening the “Work” in Federal Work-Study: Improving Access to Financial Aid and Career-Related Work Experience for Low-Income and Post-Traditional Students
Elizabeth Kenefick

Urban Institute

The Labor Force in an Aging and Growing America
Austin Nichols, Steven Martin, Nan Marie Astone, H. Elizabeth Peters, Rolf Pendall, Kaitlin

Franks Hildner, and Allison Stolte

Local Taxes Are Naturally Regressive Print
Written by Nicholas Buffie   
Tuesday, 20 January 2015 16:53

E.J. Dionne had a very nice piece in the Washington Post last Thursday on how the U.S. tax code is less progressive than most reporting indicates. Dionne’s main point is that by focusing on federal taxes, many journalists miss out on state and local taxes, which tend to tax the poor at higher rates than the rich:

“It is thus a public service that the Institute on Taxation and Economic Policy (ITEP) has issued a report showing that, at the state and local level, government is indeed engaged in redistribution — but it’s redistribution from the poor and the middle class to the wealthy.

“The institute found that in 2015 the poorest fifth of Americans will pay, on average, 10.9 percent of their incomes in state and local taxes and the middle fifth will pay 9.4 percent. But the top 1 percent will pay states and localities only 5.4 percent of their incomes in taxes.”

Dionne attributes the regressive nature of state and local taxes to the types of taxes that these areas tend to impose. As he notes, states and localities often rely heavily on sales and excise taxes; according to the ITEP report, both taxes are quite regressive. Property taxes are also regressive, though state-level income taxes tend to be progressive.

But there’s another way in which state and local taxes tend to be regressive: they contribute to inequality between states.



December Was a Good Month, but We’re Far From Fully Recovered Print
Written by Nicholas Buffie   
Thursday, 15 January 2015 12:26

Last Friday, the Bureau of Labor Statistics released its December 2014 jobs report. Most media outlets have focused their reporting on the U-3 unemployment rate, which fell to 5.6 percent last month.

However, the U-3 unemployment rate is an imperfect measure of joblessness. In order to be counted as unemployed, a prospective worker must “have actively looked for work in the prior 4 weeks.” This means that if someone has been searching for work for a long period of time, but has become dissatisfied with their job prospects and hasn’t applied for any jobs over the previous month, he or she is no longer counted as “unemployed.”

Some have tried to correct for this bias by looking at labor force participation rates (LFPR); this is also misleading, mostly because labor force participation doesn’t distinguish between employment and unemployment. (A prospective worker is counted as being part of the labor force if he or she is either employed or unemployed and searching for work. This means that if 50 percent of a country’s citizens were employed and 30 percent were unemployed, its LFPR would be 80 percent; however, the LFPR would also be 80 percent if 75percent were employed and only 5 percent were unemployed. Obviously it’s important to distinguish between these two scenarios.)



No, the ACA Isn’t Forcing Firms to Cut Workers’ Hours Print
Written by Nicholas Buffie   
Friday, 09 January 2015 15:12

Earlier this morning, CEPR’s Dean Baker reported on the good news about the Affordable Care Act (ACA) in today’s jobs report:

“Most of the other news in the household survey was positive. The number of people involuntarily working part-time fell by 60,000 and is now almost 1 million below its year-ago level. The number of people who chose to work part-time also fell from the November level, but it is still 1.1 million higher than its year-ago level. This is likely due to the ACA, which has allowed workers to get health care insurance outside of employment.”

This directly contradicts critics’ claims that the ACA would force firms to cut their workers’ hours. As can be seen from the graph below, the number of workers involuntarily working part-time has come down drastically since last April, while the number of workers choosing to work part-time has increased. (I use April as my start date because many of the ACA’s 2014 enrollees only purchased insurancein March, even though the exchanges had been open since October 2013.)



JOBS FLASH: Unemployment Edges Down to 5.6 Percent as Workers Leave Labor Force Print
Written by Dean Baker   
Friday, 09 January 2015 08:37

The unemployment rate edged down from 5.7 percent in November (revised from an earlier reported 5.8 percent) to 5.6 percent in December. However, the main reason was that 273,000 workers reportedly left the labor force. The employment-to-population ratio was unchanged at 59.2 percent, roughly 4.0 percentage points below the pre-recession level.

Most of the other news in the household survey was positive. The number of people involuntarily working part-time fell by 60,000 and is now almost 1 million below its year ago level. The number of people who chose to work part-time also fell from the November level, but it is still 1.1 million higher than its year-ago level. This is likely due to the ACA, which has allowed workers to get health care insurance outside of employment.



The Keystone Job Mirage Print
Written by Dean Baker   
Monday, 05 January 2015 15:01

The Keystone pipeline could have a serious impact on our children’s future, since it will facilitate the removal of high carbon oil from western Canada. This comment must be qualified, since if oil prices stay near $50 a barrel, then it is likely that most of this Canadian oil will stay in the ground whether or not the pipeline is built. However, the environmental issues should be front and center in the decision as to whether or not to build the pipeline.



Trends in the Labor Force 1999-2014: Seniors Increase Participation, Younger Workers Withdraw Print
Written by David Rosnick   
Monday, 22 December 2014 14:52

In early 2000, the civilian labor force participation rate peaked at a post-war high of 67.3 percent of the population aged 16 and over. Despite flattening out in the latter part of the decade at about 66 percent, participation rates never recovered and have steadily fallen since the onset of the Great Recession. At 62.8 percent as of November 2014, labor force participation is now at its lowest level since 1978.



Last Chance to Promote Everything That's Good and True in 2014 Print
Written by Dawn Lobell   
Monday, 22 December 2014 11:27

Dear Friend,

As you may know, we here at CEPR like to think of ourselves as the Underdog of the Washington think tank world, fighting the economic and policy powers that be on behalf of the 99%.  We even convinced one of Dean’s dogs to pose as our mascot. Like Biscuit, we’re used to fighting above our weight (which is why we consistently rank number one in media hits and web traffic per budget dollar).

But as we celebrate our 15th anniversary, we’re re-thinking our image. A new congress means even more challenges ahead for progressives. We’re going to have to work even harder and stand tougher. And we’re going to need more support to ensure that all of the gains we’ve made - from exposing the myth that private equity expands the economic pie to ensuring that aid to Haiti is going where it’s supposed to go– are not reversed.  We’re asking you to stand with us, to contribute what you can, to help us put up the strongest fight possible.

So while we’ll always love Biscuit, we think it may be time to recruit one of Dean’s other dogs to the CEPR cause.


Don’t let the calm, peaceful pose fool you.  She’s ready to stand tough. And with your help, so are we.

Thanks, and happy holidays,
Mark, Dean and CEPR staff, including dogs.

PS Donate $75 or more and receive a CEPR 15th Anniversary tote bag, featuring Biscuit, as our gift.

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