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Help CEPR Educate the Public on the Real Issues Print
Written by Dawn Lobell   
Friday, 16 November 2012 12:45

As the holiday season approaches, CEPR decided that the best gift we could give would be to offer a free Econ 101 class to all those in need.  And since there are so many in need, we had a hard time deciding where to begin…

Erskine Bowles gets an F

We decided to start with the deficit hawks, that group of powerful elites who have continuously misled the public, the press, and the policymakers on the true nature of U.S. debt (while also convincing millions of Americans that Social Security won’t be there for them”).

With your help, we can teach the likes of Erskine Bowles, Alan Simpson, Peter Peterson and the rest of the class of 2013 these basic economic concepts:

Read more...

 

 
Shameless CEO Campaign Sends Debt-Laden Caesar’s CEO to Lecture the 99% on Fixing Debt Print
Written by Eileen Appelbaum   
Thursday, 15 November 2012 12:40

If there is one thing the recent presidential election made clear, it is that the 1% have no shame. So it’s no surprise that CEOs are drumming up "fiscal cliff" hysteria to protect their wealth. Their campaign to ‘Fix the Debt’ wants to retain the Bush-era tax cuts for the wealthy and expand tax breaks for corporations while fixing the debt through a Medicare/Medicaid system that "spends considerably less."  But choosing Caesar’s Entertainment CEO Gary Loveman to deliver their message on NPR’s ‘All Things Considered’ demonstrates once again how shameless the very rich are in their contempt for the 99% who depend on Medicare and Medicaid – and for the ‘elites’ who get their news from NPR. As for NPR, let’s give folks there the benefit of the doubt and just say they are clueless.

The CEO campaign sent Loveman to impress upon the rest of us the importance of fixing the debt so CEOs wouldn’t be forced to lay off millions of us and to make sure we understood the necessity of preserving tax breaks for the ‘job creators.’ You might think they would have chosen a CEO who leads a company that has created value for the U.S. economy and jobs for American workers. But you would be wrong.  Gary Loveman is the CEO of a company loaded up with debt by private equity that has ripped off its creditors, disappointed its shareholders, and laid off workers.

Loveman was CEO and President of Harrah’s Entertainment (now known as Caesar’s Entertainment Corporation), the world’s largest casino company with 30,440 unionized employees when it was acquired by private equity firms, the Apollo Group and the Texas Pacific Group (TPG) in 2006. The PE firms paid $90 a share to take the company private. By June 2007, the casino company’s long-term debt had more than doubled to $23.9 billion, resulting in an interest bill of $2.1 billion. Piling up debt magnifies private equity’s returns in good economic times, but it raises the risks of default and downsizing for the acquired companies when times are tough. Caesar’s Entertainment struggled under its debt burden when the recession hit. The company cut staff, reduced hours, outsourced jobs and scaled back operations.

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What We Can Still Learn from Germany and Denmark Print
Written by Alan Barber   
Wednesday, 14 November 2012 14:25

Unemployment remains stubbornly high, and even since the end of the Great Recession, millions of Americans continue to suffer from long-term unemployment. In the hopes of fostering a greater understanding of the problem of long-term unemployment, its consequences, and policies that can address the problem, The Upjohn Institute has just released a new edited volume by Lauren Appelbaum, "Reconnecting to Work: Policies to Mitigate Long-Term unemployment and Its Consequences." Included amongst the examination of different policies is a chapter from CEPR’s John Schmitt, “Labor Market Policy in the Great Recession: Some lessons from Denmark and Germany.”

Schmitt looked at the labor-market experience of 21 rich countries with a focus on Denmark and Germany.  The graph below represents the change in unemployment rates in these countries between the years 2007 – the beginning of the recession — and 2009.

labor-2011-05-fig1

Prior to the recession, Denmark had been one of the world’s most successful economies, but has struggled in recent years. Germany, on the other hand, has outperformed many of the rich countries since 2007 despite earlier labor market struggles. As Schmitt explains, labor market institutions seemed to be at the root of the recent developments in each economy. Denmark’s institutions and their extensive opportunities for education, training, and placement of unemployed workers, was positioned to perform well at or near full employment, but significantly less so in a downturn. And with a focus on job security by keeping workers connected to employers, Germany was able to spread the pain of the downturn and has outperformed many of the world’s other rich countries since 2007, though it was on less stable ground after reunification in the 1990s through the 2000s. It was through this program of “work sharing,” or companies cutting hours rather than workers while partially compensating the workers for lost hours, that Germany actually saw its unemployment level fall during the recession.

Schmitt and CEPR have argued that work sharing could be used to lower the unemployment rate here in the United States, as well — an idea that appears to have caught on. It was even alluded to in President Obama’s acceptance speech, having already been incorporated into the Middle Class Tax releif and Job Creation Act of 2012.

 
Labor Market Policy Research Reports, November 2 – November 9, 2012 Print
Written by Mark Azic   
Friday, 09 November 2012 16:48

Here’s a roundup of labor market research reports released in the past week:

Center for American Progress

Why Gay and Transgender Workers and Families Need Paid Sick Days

Kellan Baker and Crosby Burns

Center for Economic Policy and Research

Reducing Inequality and Insecurity: Rethinking Labor and Employment Policy for the 21st Century

Eileen Appelbaum

Married…Without Means

Shawn Fremstad

Center on Budget and Policy Priorities

Are Low-Income Programs Enlarging the Nation’s Long-Term Fiscal Problem?

Robert Greenstein and Richard Kogan

Economic Policy Institute

Polishing Apple: Fair Labor Association Gives Foxconn and Apple Undue Credit for Labor Rights Progress

Scott Nova and Isaac Shapiro

 
If the Deficit Disappeared, Where Would the Deficit Hawks Find Work? Print
Written by Dean Baker   
Friday, 09 November 2012 15:32

That doesn't seem likely at the moment, but there would be some real justice in this story. After all, the deficit hawks have used the deep pockets of their backers and their connections with prominent politicians and media figures to completely misrepresent the reality about the deficit.

The story of near-term deficit, as every real budget wonk knows, is the story of a collapsed economy. When the economy weakens, tax collections fall and payments for programs like unemployment insurance and food stamps rise. In addition, we also had explicit counter-cyclical policies, like the stimulus and the payroll tax cut, that were designed to boost the economy but also added to the deficit.

deficits-per-GDP-10-2012Source: Congressional Budget Office.

As can be seen, the deficit in 2007 was a modest 1.2 percent of GDP. An amount that can be sustained literally forever. Deficits were projected to remain low, until the scheduled ending of the Bush tax cuts in 2011 pushed the budget into surplus in fiscal 2012.

The reason that we didn't follow this path was the economic plunge that followed the collapse of the housing bubble. There were no big new permanent government programs or tax cuts pushing up the deficit in the last four years. It was the economic collapse pure and simple. The implication of this graph is that if we fix the economy we fix the deficit, end of story.

While this is fairly straightforward, our deficit hawk friends have their long-term deficit story hidden up their sleeve. This is the line that if we don't do something about Social Security and Medicare, then we will soon have an unbearable debt burden.

This one is misleading since it really is a story about rising health care costs making Medicare, Medicaid and other public sector health care programs unaffordable. The story here should be to focus on fixing the health care system, not running around yelling about soaring deficits.

But there is potentially bad news for the deficit hawks here also. Health care costs have moderated sharply in the last few years. While this undoubtedly is partly due to the impact of the recession, the moderation has continued long enough that it is difficult to believe that we are not already on a slower health care cost growth path. Certainly costs are coming in well below thhe projections of a few years ago.

rate-of-health-spending-11-2012

Source: Bureau of Economic Analysis.

If this is true then the deficit hawks are in a desperate race. At some point the Congressional Budget Office (CBO) will have to adjust its cost growth projections downward to correspond to a lower trend in health care cost growth.

When CBO does make this adjustment, the projections of long-term deficits will shrink by tens of trillions of dollars and the budget hawks' horror stories will vanish. They will no longer be able to tell us how we have to be responsible by gutting our childrens' Social Security and Medicare to save them from the burden of a crushing debt.

In this context it is easy to see the urgency around the message of the Campaign to Fix the Debt and the other organizations pushing for the overhaul of Social Security and Medicare. If they are not able to pull off their scam now, they may lose the opportunity forever. For them, that is a crisis.

 
Are the Labor Force and Employment Numbers Each Growing At 'About 171,000' Each Month? Print
Monday, 05 November 2012 12:45

Last month, when the Bureau of Labor Statistics released its report on the state of the September labor force, it showed a fall in the rate of unemployment from 8.1 percent of the labor force to only 7.8 percent.  In response, the Heritage Foundation’s J.D. Foster argued these numbers were not sufficiently reliable because “The household survey, a relatively small sample, reported an astounding 418,000 jobs jump in the labor force at a time when it has been steadily shrinking, and the survey reported an 873,000 jobs jump in employment at a time when the economy is stumbling.” Foster did not provide numbers he thought reasonable.

Friday morning, however, brought us a new report on employment in October, and inspired Heritage’s Amy Payne to write “the economy created about 171,000 jobs, roughly equal to the usual number of new workers in the labor force.” Apart from the fact that 171,000 new workers would only be usual given an economy far from full employment, what makes this assertion interesting is that Payne argues that the “October report partly reversed the mysterious drop in the unemployment rate in the September jobs report.”

These make for an odd collection of claims. If the labor force is growing by 171,000 per month, we should have expected the labor force to grow 171,000 from August to September, and again by 171,000 from September to October, for a total of 342,000 over the two months. The fact that the BLS reported a jump of 418,000 from August to September would suggest that Heritage have anticipated a fall of 76,000 in the size of the labor force in October to bring it back in line with the trend.  Instead, BLS reported 578,000 additional labor force participants in October. In other words, if the growth in the labor force was unreliable in last month’s report, it was much more so in this month’s.

Likewise, if the number of employed is growing by 171,000 per month, then the 873,000 increase in employed persons from August to September should have led to a 531,000 decrease in employment in October.  Instead, BLS reported a 410,000 increase. As with the labor force numbers, the employment numbers seem more surprising in this report than the previous.

It is true that the fall in the unemployment rate reversed itself in part, but more reliable numbers surely do not explain it.  At Heritage, it seems, two worse wrongs can make a right.

 
Labor Market Policy Research Reports, October 27 – November 2, 2012 Print
Written by Mark Azic   
Friday, 02 November 2012 15:25

Here’s a roundup of labor market research reports released in the past week:


Center for American Progress

The Many Benefits of Paid Family and Medical Leave
Heather Boushey and Sarah Jane Glynn


Economic Policy Institute

Migration and Domestic Labor Markets: Auctions and Employer Demand Versus Public Policy
Ray Marshall

More Extraordinary Returns
Josh Bivens


Political Economy Research Institute

The Working Poor: A Booming Demographic
Jeanette Wicks-Lim

 
Latest BLS Employment Report Shows Brighter Picture of Labor Market Print
Written by Dean Baker   
Friday, 02 November 2012 11:15

The establishment survey added 171,000 jobs in October, according to the Bureau of Labor Statistics' latest employment report. This increase coupled with sharp upward revisions to the prior two months of data brought the average over the last three months to 170,000. The employment-to-population rate (EPOP) also rose to 58.8 percent, its highest level since August of 2009. However, despite the increase and upward revisions, the unemployment rate slipped up to 7.9 percent, reflecting the fact that the September drop was an aberration.

Most of the other data in the household survey was also positive, showing a brighter picture of the labor market. The number of people involuntarily working part-time fell by 269,000 reversing most of the September rise. The number of discouraged workers was 154,000 below its year-ago level, continuing its recent pattern. The percentage of unemployment due to people who voluntarily quit their jobs, a key measure of workers’ confidence in their labor market prospects, rose to 8.3 percent. With the exception of the 8.7 rate reported in March, this is the highest share since December of 2008. Nevertheless, with the economy still down by more than 9 million jobs from its trend level of unemployment, the current rate of job growth implies that we may not reach full employment until the end of the decade.

For a more in-depth analysis, check out the latest Jobs Byte.

 
Katrina and Sandy Print
Written by Milla Sanes   
Friday, 02 November 2012 08:32

In the aftermath of Hurricane Katrina, the two states impacted the most, Louisiana and Mississippi, both had huge spikes in unemployment. The graph below shows the monthly unemployment rates of all 50 states and the District of Columbia from January 2000 through September 2012, with Louisiana in yellow, Mississippi in blue, and the rest of the states and DC in grayscale.

For several months after Katrina hit in August 2005, the unemployment rate in Louisiana and Mississippi rose to rates that the rest of the country would not experience until the Great Recession several years later.

With current unemployment rates well above where they were before Katrina, how will the latest natural disaster, Hurricane Sandy, affect employment in the states hit hardest?

Click to enlarge

Katrina Unemployment

 
CEPR News October 2012 Print
Written by Dawn Lobell   
Thursday, 01 November 2012 13:00

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

CEPR Launches The Americas Blog: Analysis Beyond the Echo Chamber
CEPR’s latest blog seeks to present a more accurate perspective on economic and political developments in the Western Hemisphere than is often presented in the United States. It provides information about Latin America that is often ignored, buried, and sometimes misreported in the major U.S. media. CEPR’s economic expertise also allows for analysis of important economic data and trends that are missed by other sources. CEPR has repeatedly been ahead of the curve in identifying important economic trends in the hemisphere, including the United States.

Recent blog posts have included these two posts by CEPR’s International Communications Director Dan Beeton on Honduras and this one on Latin American elections by CEPR Program Assistant Sara Kozameh. In addition, CEPR Research Associate Jake Johnston provides daily headlines – summaries of news items from across Latin America.


CEPR on Unemployment
A new issue brief by CEPR Co-director Dean Baker assesses the cause of U.S. unemployment. The brief, “The Problem with Structural Unemployment in the U.S.,” provides evidence that a lack of demand caused by the collapse of the housing bubble is at the root the unemployment crisis, not a mismatch between the skills of the unemployed and the types of jobs available as some have argued. The brief was mentioned several times in this piece in the Washington Post’s Think Tanked blog.

Dean schooled former chief executive of General Electric, Jack Welch, on how the BLS compiles the unemployment numbers in this op-ed on CNN.com.  Dean also explained the jobs numbers to Fox Business News. You can read Dean’s analysis of the September numbers in this Jobs Byte. And here’s a graph that shows the unemployment rate for select sectors.

Read more...

 

 
Year-round Vacancy Rate Fell in Third Quarter Print
Written by Dean Baker   
Thursday, 01 November 2012 11:45

While most housing vacancy measures are still well above pre-bubble levels, the vacancy rate continued to edge lower in the third quarter, according to the Census Bureau. The overall year-round vacancy rate fell to 10.2 percent in the third quarter — down from 10.8 percent in the third quarter of 2011 and a peak of more than 11.0 percent in the trough of the recession. Other recent housing news was also overwhelmingly positive. The number of new homes sold in September was up 27.1 percent from its year-ago level; although, it is still only a bit more than half of the pre-bubble level.

The Case-Shiller 20-City index rose by 0.5 percent in August, the seventh consecutive increase. It is now up by 2.0 percent compared with the year-ago level. Price increases continue to be seen primarily in the bottom tier of the market, especially in the cities hardest hit by the collapse of the bubble. These sharp price increases at the lower end of these markets probably should be viewed with some caution. There are accounts in Phoenix and some of the other markets of bidding wars for properties in distressed sales. It is likely that these price increases are being driven by speculators who may not have a clear sense of the market, meaning some of the recent price increases could be reversed in the near future.

For a more in-depth analysis, see the latest Housing Market Monitor.

 
Does the NYT Know that Much of the Working Class is Not White? Print
Written by Shawn Fremstad   
Wednesday, 31 October 2012 13:20

In a New York Times article with the headline “Ohio Working Class May Offer Key to Obama’s Reelection,” the reporters explain that “Mr. Obama’s ability to prevent erosion among working-class voters may be his best path to re-election.”

Given how rarely working-class Americans have been discussed by candidates and the media this election season, I was glad to see a NYT article focusing on them. In the 2006 General Social Survey, about 46 percent of Americans self-identified as “working class” and a roughly similar number self-identified as “middle class,” so they’re not a small group.

But then I read the second paragraph of the article, which made clear that by "working class" the NYT actually meant “white voters who do not have college degrees.” The real working class includes African-Americans, Latinos, Asians, and Native Americans, but you won’t know if from reading this article—or pretty much all of the media coverage of the “working class.” In fact, as the chart below shows, the majority of blacks and Latinos self-identify as working class, while the majority of non-Latino whites self-identify as middle class. Also worth noting, whites who self-identify as “working class” are substantially more likely to have education beyond high school—nearly 1 in 5 have a college degree or higher—than working-class blacks.

blacks-latino-class-10-2012

Source: Author's tabulations using General Source Survey Panel (2006 Sample) Wave 3.

 
Labor Market Policy Research Reports, October 19 – 26, 2012 Print
Written by Mark Azic   
Friday, 26 October 2012 15:15

Here’s a roundup of labor market research reports released in the past week:


Center on Budget and Policy Priorities

A Guide to Statistics on Historical Trends in Income Inequality
Chad Stone, Danilo Trisi, and Arloc Sherman


Employment Policy Research Network

The Most Egalitarian of All Professions
Lawrence Katz and Claudia Goldin


National Employment Law Project

Testimony on Problems in Pennsylvania’s Unemployment Compensation Service Center System
George Wentworth

 
GDP Growth in 3rd Quarter Accelerated by Consumption, Defense Spending Print
Written by CEPR   
Friday, 26 October 2012 12:00

GDP growth accelerated modestly in the third quarter to a 2.0 percent annual rate, driven by an 8.5 percent growth rate in durable good purchases, a 13.0 percent rise in defense spending, and a 14.4 percent rise in housing investment, according to the Bureau of Economic Analysis' latest report on the Gross Domestic Product. The increase in durable goods sales came after a modest drop in the second quarter. Most of the growth in durables was in the recreational goods and vehicles category, which expanded at a 13.4 percent annual rate. Defense spending surged after having fallen the prior three quarters. The timing of defense spending is always erratic and this increase is unlikely to be repeated.

Investment was extraordinarily weak in the quarter, shrinking at a 1.3 percent annual rate. Uncertainties surrounding tax and regulatory policy will clear up after the election, which will lead to more investment, but there is no other sector that is likely to see a substantial uptick any time soon. Deficit reduction that will take place in 2013 will be a damper on growth, making it unlikely that we will be able to sustain growth much above the economy’s 2.5 percent potential.

For a more in-depth analysis, check out the latest GDP Byte.

 
Fixing our Fiscal Health: Budget Deficits and Health Care Costs Print
Written by Mark Azic   
Thursday, 25 October 2012 08:00

Unless you live in a cave, you’ve no doubt heard about the impending “fiscal cliff” – which is actually much more slope than cliff – and the need for major steps to fix our nation’s financial future. While the fiscal showdown is overhyped, the long-term deficits projections aren’t. So does this mean we’ll need to give Big Bird a pink slip? No. Cutting funding for PBS, Pell Grants, and Acorn doesn’t make a dent in future deficits. Neither do bigger changes, like ending the war in Afghanistan or ending the Bush tax cuts for high earners. The reason for this is that projections of future deficits are driven almost entirely by health care costs. 

Next to other industrialized nations, the U.S. healthcare system is wildly inefficient. Despite only average results, the U.S. spends more per person – in many cases twice as much – on health care than any other OECD country. Between Medicare, Medicaid, and a few smaller programs, the government buys about half of all health care, and therefore savings from lower costs would have a dramatic effect on deficits.  

The graph below shows just how dramatic. The graph plots projections for US publicly held debt as a percentage of GDP, and what those projections would look like if the U.S. healthcare system had the same cost per person as Australia, Canada, or Germany. (The baseline projections come from the Congressional Budget Office’s relatively pessimistic alternative fiscal scenario, and projections include interest payments.) 

hc-spending-fig-1

If the US had the health care costs of Australia, we’d see public debt in 2022 fall from a projected 90 percent of GDP to a much more manageable 60 percent. Having the same costs as Canada and Germany would make that number only slightly higher, at around 64 percent of GDP. 

Read more...

 

 
CEPR: Taking on the Goliaths of the D.C. Think-Tank World Print
Written by Dawn Lobell   
Wednesday, 24 October 2012 14:30

CEPR has been called a “rather effective David”  when compared with other think-tanks in this town, and a recent listing of the top 50 D.C. think-tanks bears this out. CEPR ranked 16 out of 50 in the Linktank Blog’s recently published list of top D.C. think-tanks. 

We’re especially proud of our ranking when you compare our budget with the other contenders. Take, for example, the American Enterprise Institute: They are ranked only 2 places higher at number 14 on the list, yet they have a budget that is 15 times higher than CEPR’s. And we’re ahead of such well-known (and well-funded) names such as the Pew Charitable Trusts.

CEPR has consistently ranked first in media hits per budget dollar of all major think-tanks, based on an analysis of Fairness and Accuracy in Reporting’s think-tank media citation rankings and organizational budgets. We also ranked first in web hits per budget dollar. 

Maybe next year they will rate the think-tanks on effective use of funds.  If so, Heritage will have a real fight on their hands.

 
Labor Market Policy Research Reports, October 13 – 18, 2012 Print
Written by Mark Azic   
Friday, 19 October 2012 14:00

Here’s a roundup of labor market research reports released in the past week:


Economic Policy Institute

Paid Sick Days: Measuring the Small Cost to New York City Businesses
Elise Gould and Doug Hall


Employment Policy Research Network

Immigration Policy for Less Skilled Workers
Harry Holzer

 
Home Loans From Washington? A Simple Alternative Print
Written by Dean Baker   
Wednesday, 17 October 2012 11:45

In the good old days, we just had Fannie Mae, there was no Freddie Mac, nor were there mortgage-backed securities. Fannie Mae was a public company, no shareholders, just the government. And there were none of the privately issued mortgage-backed securities that blew up so spectacularly when the housing bubble collapsed.

During this period we saw an unprecedented surge in middle-class and working-class homeownership. It was during the decades after World War II that a majority of the country became homeowners. Then in the late 60s we moved away from this simple system. We privatized Fannie Mae and created its sibling Freddie Mac as a quasi-public corporation. Both provided dividends and capital gains for shareholders and Wall Street pay for top executives, while giving the risk to taxpayers. During the 40-plus years that we opened up the system to the private sector, we have made almost no progress in expanding homeownership.

It is reasonable to ask why we don’t just go back to the old system. After all, the system of home finance was supposed to make homeownership simple and cheap. The old Fannie model did just that. Given that Fannie Mae and Freddie Mac are now both effectively owned by the government, it would seem the simplest route is to just leave them owned by the government.

Many economists and policy analysts have been employed at six-figure salaries designing convoluted new public-private hybrids. And there will undoubtedly be many seven-figure jobs running these hybrids corporations if these plans are put in place. However, there is zero reason to believe that these convoluted schemes will better serve homebuyers than a simple government-run mortgage system.

The people who want to buy mortgages that resemble complicated lottery games will still have the option to go to Wall Street for whatever crazy products its wizards can dream up. But the vast majority of people who see a mortgage as a way to finance a home purchase will have a low cost alternative. What’s wrong with that?

This post originally appeared on the New York Times' Room for Debate.

 
Nanny State Conservatives Protect Drug Company Profits: Infant Formula Edition Print
Written by Shawn Fremstad   
Tuesday, 16 October 2012 15:15
The New York Times has a good article on the growing movement to limit the marketing of infant formula to new mothers while they’re in hospital maternity wards. In NYC, the Health Department has launched a “Latch on NYC” initiative to support breastfeeding mothers. Maternity hospitals that join the initiative agree to not distribute promotional infant formula provided by formula manufacturers. Instead, formula is treated like medications and other supplies, and provided when necessary on an individual basis.

The policy has been harshly criticized by Rush Limbaugh and other conservatives who have described it as a “nanny state” initiative. Their hero is Mitt Romney who, according to the NYT, made decisions as governor to "pressure the state’s Public Health Council to reverse a ban on formula giveaways and replace three council members who objected." (For more on Romney's decision, see this in-depth treatment by the Massachusetts Breastfeeding Council.)

What the NYT doesn’t explain is that Limbaugh and Romney are the real nanny-state proponents. U.S. infant formula is highly concentrated with three manufacturers (Abbott, Mead Johnson, and Nestle) accounting for 98 percent of the industry’s $3.5 billion in sales. The infant formula industry is massively subsidized through the Women, Infant, Children (WIC) program. The U.S. Department of Agriculture estimates that 57-68 percent of all infant formula sold in the United States by these three manufacturers was purchased through the WIC program.

Efforts like "Latch on NYC" and the Massachusetts ban vetoed by Romney would likely increase breastfeeding and reduce reliance on formula. This would be good for taxpayers who subsidize the formula market through WIC—and babies—but not for nanny-state conservatives who want to protect the profits of the big-3 infant formula manufacturers.

 
Family Leave Insurance in New Jersey Print
Written by Eileen Appelbaum   
Tuesday, 16 October 2012 09:45

As family and work patterns have shifted over recent decades, the demand for time off from work to address family needs has grown rapidly. “Work-family balance” has become an urgent but elusive priority for millions of Americans, driven by high labor force participation rates among mothers as well as the caregiving needs of an aging population.  Women—and increasingly men as well—often find themselves caught between the competing pressures of paid work and family responsibilities, especially when they become parents or when serious illness strikes a family member.

In the U.S., workers typically rely on a patchwork of employer-provided benefits to make ends meet, such as paid sick leave, vacation, disability insurance, and/or parental and family leave. However, such employer-provided benefits are by no means universally available. Managers and professionals, as well as public-sector workers and others covered by collective bargaining agreements, often do have access to benefits that provide some form of wage replacement during a family leave.  But vast sectors of the U.S. workforce have little or no access to paid sick days or paid vacation, and paid parental or family leave is even rarer. The situation is particularly acute for low-wage workers.

Against this background, California’s implementation of the nation’s first comprehensive Paid Family Leave (PFL) program in 2004 was a historic breakthrough. In 2009, New Jersey became the second state in the nation to implement a Family Leave Insurance (FLI) program to provide partial wage replacement for workers during periods of family leave. For up to 12 months after a birth or adoption, or at any time for the care of a seriously ill child, parent, spouse, or domestic partner, workers in these two states – both women and men – are eligible for six weeks of partial wage replacement per year. The programs in both California and New Jersey were designed in part to address the sharp disparities among workers in access to paid family leave. In particular, low-wage workers who previously had limited or no access to wage replacement during leaves stood to gain from family leave insurance, which promised to narrow the gap in access to paid leave between the “haves” and “have-nots.”

Read more...

 

 
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