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@CEPRDC on the #SOTU Print
Tuesday, 28 January 2014 13:29

Tonight the bars of DC will fill up with folks watching the President's annual State of the Union address.  There are even a bunch of SOTU drinking games to play -- including CEPR's #SOTUBingo

On a serious note, predictions abound about what the President will talk about. Two economic policy issues that may be front and center are inequality and the minimum wage.



SOTU Minimum Wage FAQ Print
Monday, 27 January 2014 12:52

In Tuesday's State of the Union address President Obama will likely repeat the call made he made in last year's speech to raise the federal minimum wage. Just in case, here's an FAQ on the minimum wage.



Cities and Minimum Wages Print
Written by Jeffrey Gianattasio   
Monday, 27 January 2014 10:35

In recent months, the minimum wage has moved to the center of the economic policy debate. Proposals for minimum-wage increases are being introduced at the local, state, and national levels of government. Nationally, President Obama is working alongside Congressional Democrats on a push to raise the federal minimum wage from its current level of $7.25 to $10.10 by 2016.

At the state level, 20 states and the District of Columbia have minimum wages above the federal level, and on January 1, 2014, 13 states raised their minimum wage, with California set to follow suit with an increase to $9 in July. Of these 14 state increases, 9 are automatic adjustments based on indexing the value of the minimum wage to the cost of living, while 4 (NJ, CT, NY, RI) are the product of either ballot-measures or legislative action.



More on Meer and West's Minimum Wage Study Print
Friday, 24 January 2014 16:18

In July, economists Jonathan Meer and Jeremy West made a splash with a new paper arguing that even though the minimum wage doesn’t appear to have much effect on the level of employment (a position that should make more traditional critics of the minimum wage feel uncomfortable), a higher minimum wage does lower future growth in employment.



Union Membership, 2013 Print
Written by Janelle Jones and John Schmitt   
Friday, 24 January 2014 11:43

The number of union members rose 162,000 in 2013, reflecting a drop of 118,000 in the public sector that was offset by a rise of 281,000 in the private sector. Expressed as a share of the workforce, the union membership rate was unchanged in 2013, at 11.3 percent.

In 2013, the share of public-sector workers who were in a union decreased by 0.6 percentage points, from 35.9 percent in 2012 to 35.3 percent in 2013. In the private sector, the unionization rate did not change significantly, increasing from 6.6 percent in 2012 to 6.7 percent in 2013.




Brookings EITC Proposal Mostly Moves in the Wrong Direction Print
Wednesday, 22 January 2014 10:56

Isabel Sawhill and Quentin Karpilow of the Center on Children and Families at the Brookings Institution recently proposed what they call a “no-cost” way to reduce poverty and inequality. The proposal combines an increase in the minimum wage with some fairly radical and mostly unwise changes to the Earned Income Tax Credit.



Minimum Wage and Poverty Print
Monday, 13 January 2014 10:19

University of Massachusetts economist Arindrajit Dube (on leave this spring at MIT) has an excellent new paper looking at the impact of the minimum wage on the federal poverty rate.

In the past, I have generally relied on analyses along the lines of this recent chart prepared by the Economic Policy Institute’s David Cooper to assess the distributional impact of increases in the minimum wage.



#ShriverReport: A Woman's Nation Pushes Back From the Brink Print
Monday, 13 January 2014 00:00

Yesterday an important study by Maria Shriver, in partnership with the Center for American Progress, was released nationwide. The Shriver Report: A Woman's Nation Pushes Back From the Brink.

"is a groundbreaking investigation into the millions of women who are doing it all and barely scraping by, struggling to provide and parent in a nation that hasn’t kept pace with the modern realities of their lives. It combines research, analysis and ideas from the nation’s top academic institutions and think tanks, essays by leading thinkers, stories of real women struggling with our modern economy, and a comprehensive poll."


Robert Samuelson Blames “Failure” of War on Poverty on Women’s and Latino’s Insufficient Focus on Self-Improvement Print
Monday, 13 January 2014 00:00

On Robert Samuelson’s latest on poverty, I wanted to add a couple of points to my colleague Dean Baker’s excellent piece —which I see was posted at 6 am today, which just shows you have to get up pretty early in the morning to beat Baker to Samuelson.



Kevin Drum on Marco Rubio’s Poverty Plan: Two Quick Reactions Print
Sunday, 12 January 2014 10:07

Two quick reactions to Kevin Drum’s mostly critical piece on Marco Rubio’s recent poverty plan (or what I’ve decided to more accurately call his Big-Ass Block Grant plan).



Sharp Drop in Unemployment Due to People Leaving the Labor Force Print
Written by Dean Baker   
Friday, 10 January 2014 08:46

The headline unemployment rate fell sharply to 6.7 percent in December. However, this is not good news. The drop was almost entirely due to people leaving the labor force as the number of people reported employed in December only rose by 143,000, just enough to keep the employment-to-population ratio constant.

Blacks disproportionately left the labor market, with the labor force participation rate for African Americans dropping by 0.3 percentage points to 60.2 percent, the lowest rate since December of 1977. The rate for African American men fell 0.7 percentage points to 65.6 percent, the lowest on record.

The data on the establishment side was not any brighter with the survey reporting an increase of just 74,000 jobs. Some of this weakness was due to unusually slow growth in health care and restaurant employment. This is likely an anomaly that will be reversed in future months. However, there was also a decline in the index of average weekly hours. This suggests that the economy may be weaker than some of the more  recent optimistic accounts indicated.

Something Republicans and Democrats Agree On: Work-Sharing Print
Thursday, 09 January 2014 15:43

One of the most unheralded examples of Democrats and Republicans working together has been the passage of work-sharing laws at both the national and state levels over the past few years.



Does Cutting Unemployment Insurance Benefits Promote Job Growth? Print
Written by Dean Baker   
Thursday, 09 January 2014 10:17

Many of those arguing against extending unemployment insurance (UI) benefits claim that by shortening benefit duration we will give people more incentive to find jobs. This view is that we are effectively allowing people to avoid seriously looking for work by providing benefits for an extended period of time. If this were true, then it would be a good argument for not extending benefits.

The extent to which access to benefits is keeping people from finding jobs is actually an extensively researched topic. Insofar as this claim is true, we should expect that workers who are approaching the end of their benefit period end up taking jobs before or just after their benefit period expires. In fact, the research (Rothstein 2012 and Farber and Valletta 2013) finds that the overwhelming majority of people reaching the end of their benefit period simply leave the labor force.

The reason is that UI requires that people look for work in order to continue to receive benefits. After unsuccessfully looking for work for more than a year, many workers undoubtedly decide the effort is futile; therefore they stop looking.

Since a number of states have reduced their period of benefit duration during the downturn, we actually have a quick way of examining the extent to which the job creation story holds water. We can compare the job growth of states that have reduced benefits in the period before the duration was shortened with the period after it was shortened. For comparison, we looked at the rate of job growth for other states in the region that did not change benefit duration over the same period.

Table 1 shows the states where cuts in benefit duration have already gone into effect. While the shortening of benefit duration only applies to new applicants, if it has the effect of increasing incentives to work, it should be felt quickly. Workers who know that they have a shorter period to find employment before losing benefits are not likely to wait until the expiration of the benefit period before seriously looking for work. This means that any incentive effect should be visible in the data long before workers actually hit the end of the period of benefit duration.




Is Paid Sick Leave Good for Business? Print
Monday, 06 January 2014 11:22

Connecticut made history in 2011 as the first state to require employers to provide paid sick leave to all full-time and part-time employees.  The law, which took effect on January 1, 2012, applies to around 400,000 Connecticut workers in businesses in service industries with fifty or more employees and allows these employees to earn 5 paid sick days a year.



CEPR News December 2013 Print
Monday, 23 December 2013 11:00

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

CEPR on Paid Family Leave
Twenty years ago, the Family and Medical Leave Act, or FMLA, was signed into law. The FMLA granted certain workers new and important rights, including the ability to take up to 12 weeks of job-protected leave after a birth or adoption, but it fell short in at least two important respects. CEPR and the Center for American Progress (CAP) released a joint report titled “Job Protection Isn’t Enough: Why America Needs Paid Parental Leave” to mark the occasion. It was authored by Heather Boushey and Jane Farrell of CAP and CEPR Senior Economist John Schmitt.



Labor Market Policy Research Reports, December 14- December 20, 2013 Print
Friday, 20 December 2013 11:13

The following labor market policy research reports were recently released: 



What Was (Is) the “War on Poverty” Anyway and Does it Matter Today? Print
Thursday, 19 December 2013 00:00

With January 8, 2014 marking the 50th anniversary of the State of the Union speech given by LBJ declaring war on poverty, we are likely to hear a fair amount of debate about whether it was a success or failure in coming months. The quality of this debate would be much improved if there were a historically grounded, non-symbolic definition of the war on poverty, so here’s my quick attempt at one (with apologies to real historians).



Have Economists Underestimated the Impact of Fiscal Stimulus? Print
Written by Sebastian Gechert, Rafael Mentges, and Dean Baker   
Wednesday, 18 December 2013 11:06

The effects of fiscal policy on growth and employment are central to the debate on deficit reduction and stimulus. Unfortunately, there are sharp divisions among economists over the size of fiscal multipliers.

A major problem is identifying deliberate changes in fiscal policy, since the size of the budget deficit is in large part dependent on the state of the economy. Therefore it is necessary to find a way to distinguish between changes in the deficit that are the result of cyclical fluctuations and changes that are attributable to conscious policy.

Several identification schemes have been used to resolve the issue of endogeneity regarding the business cycle in fiscal multiplier estimations, among them a measure of the cyclically adjusted budget deficit, the cyclically adjusted primary balance (CAPB) in event studies (Alesina and Ardagna 2010), as well as the recursive approach (Fatás and Mihov 2001) and the one by Blanchard and Perotti (2002) in structural vector autoregressive (SVAR) models. However, adjusting for business cycle movements may not be enough in the presence of pronounced asset and credit market movements that influence the budget and GDP over and above what is generally recognized as business cycle swings.



Parental Leave 20 Years After FMLA Print
Monday, 16 December 2013 11:04

It has been 20 years since the passage of the Family and Medical Leave Act (FMLA), a landmark piece of legislation that guaranteed covered workers the right to take up to 12 weeks of job-protected leave in the event of a birth or adoption or to deal with a serious health problem affecting the worker or a close relative.



Rep. DeLauro Cites Eileen Appelbaum's New Book Unfinished Business at Press Conference Introducing the FAMILY Act Print
Friday, 13 December 2013 16:44

On Thursday, December 12 legislation was introduced in the House and Senate that would provide workers with up to 12 weeks paid leave to recover from their own serious illness or disability or from childbirth or to care for seriously ill family members.



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