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Labor Market Policy Research Reports June 2 – June 8, 2012 Print
Written by Eric Hoyt   
Friday, 08 June 2012 13:27

Employment Policy Research Network
Labor Market Four Years Into the Crisis:  Assessing Structural Explanations
Jesse Rothstein

A Reconsideration and Evaluation of Wellington's and Winter's 'The Unions and the Cities' (1971)”
Jeffrey Keefe

National Employment Law Project
Chain of Greed:  How Walmart’s Domestic Outsourcing Harms Workplace Rights of Warehouse Workers
Eunice Hyunhye Cho, Anasasia Christman, Maurice Emsellem, Catherine K. Ruckelshaus, Rebecca Smith

State-level Evidence that Unions Are Associated with Higher Economic Mobility Print
Written by Eric Hoyt and John Schmitt   
Tuesday, 05 June 2012 13:40

In a recent post at The Atlantic Cities blog, sociologist Richard Florida provides an interesting analysis of some of the findings of a new study by the Pew Center on the States on economic mobility in the United States.  Florida shows that, across the 50 states, there is a positive correlation between the degree of residents' upward mobility and state: median household income; high school graduation rates; public education spending per pupil; and openness to immigrant and LGBTQ communities.  His results help to expand the view of the sort of institutional and cultural contexts that support --or are at least associated with-- high economic mobility.

On the other hand, Florida also demonstrates that states with a higher share of their labor force in what he defines as “working class professions” have lower rates of upward mobility. But, his analysis overlooks the role of the most important working class institution: labor unions. The figure below uses the same Pew data analyzed by Florida to compare upward mobility across states with different levels of unionization. The graph shows a strong, positive relationship between the share of a state's workforce that is unionized and the Pew measure of upward mobility. The union data in the graph refer to 2011, but this is a long-standing relationship and a similar pattern holds for 1983, too (the earliest year for which comparable data are available).


CEPR in the NEWS May 2012 Print
Written by Dawn Lobell   
Monday, 04 June 2012 10:28

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

CEPR on Work Sharing
CEPR Co-director Dean Baker teamed up with the American Enterprise Institute's Kevin Hassett to pen this Sunday op-ed on the benefits of work sharing for the New York Times.  Dean appeared with Hassett on PBS' NewsHour with Jim Lehrer to discuss the issue.  Dean has written extensively on work sharing as a means to address continuing long-term unemployment, most recently in this issue brief co-written with CEPR’s Director of Domestic Policy Nicole Woo that looks at how work-sharing provisions signed into law by President Obama in February 2012 as part of the Middle Class Relief and Job Creation Act could help states reduce their unemployment rates and also save $1.7billion per year.

Senator Herb Kohl referred to the op-ed in his opening statement at a May 15th Aging Committee hearing titled "Missed by the Recovery: Solving the Long-Term Unemployment Crisis for Older Workers": “And as a bipartisan opinion piece in the New York Times over the weekend stated, this problem “nothing short of a national emergency.”  Work sharing was also featured in this article in the Cleveland Plain Dealer and this one in the West Virginia Gazette.

CEPR on Jamaica
CEPR’s recent release, “Update on the Jamaican Economy,” by CEPR Research Assistants Jake Johnston and Juan Antonio Montecino, looks at Jamaica’s stalled agreement with the IMF, its economic performance over the past year and examines its persistently high debt burden. The paper argues that Jamaica’s economic performance and development prospects have been seriously damaged by an unsustainable debt burden, with the economy stagnating for decades.  The paper updates a similar report released in May 2011.



Right to Rent Picked Up by Big Bank and Underwater Homeowners Print
Written by Nicole Woo   
Friday, 01 June 2012 17:42

Yesterday there was quite a bit of media coverage -- in outlets such as Marketplace and the Guardian -- about the launch of a new "national movement of underwater homeowners and their allies," the Home Defenders League (HDL).

With numbers last week showing that there are more than 15 million underwater households in the U.S., this movement seems long overdue. The HDL is pushing for a well-reasoned slate of ideas to to help those who are stuggling with foreclosures and underwater mortgages, including Right to Rent, allowing homeowners to stay in their homes, after foreclosure, paying the market rent (emphasis added below):


Here's what we stand for:

  • Resetting of mortgages (principal reduction) to current market value
  • Families have the right to stay in homes, paying rent, post foreclosure
  • Families, post foreclosure, have the right of “first refusal” to buy back their home at real current value
  • A moratorium on foreclosures until due process and fairness can be ensured

This comes just a few days after news articles from California to Pennsylvania popped up about Bank of America's Mortgage to Lease pilot program, which is essentially Right to Rent as well, as noted in this statement by CEPR's Dean Baker. As BofA executive Ron D. Sturzenegger describes it:

It's good for us, it's good for the borrower and ultimately good for the community.

The news is that this pilot has started to roll out in California, and will tested in Arizona, Nevada and New York soon. A BofA spokesman says that their program will be expanded if their pilot "works out for enough borrowers" and that they expect to get some test results in 60 days. Rest assured that CEPR will be on the lookout for that!

Dean has been advocating for his Right to Rent plan for years. It's rewarding to see entities from across the spectrum -- mega-corporate Bank of America to a league of underwater homeowners -- endorse, and indeed, start to implement his idea. We can only hope it'll continue to get picked up by more mortgage-holders, advocates, and policy makers!

Unemployment Edges Up Print
Written by Alan Barber   
Friday, 01 June 2012 17:31


Though the economy only saw a slight rise in the unemployment rate to 8.2 percent, revisions of the march and April jobs numbers showed much slower job creation than previous reported. The public sector continues to shed jobs – 657,000 have been lost over the last four years.The current pace of recovery lags behind that of any of the previous four recoveries.  More in this month’s Jobs Byte.

Labor Market Policy Research Reports Through June 1, 2012 Print
Written by Eric Hoyt   
Friday, 01 June 2012 15:23

New labor market research from last week:

Center for Economic and Policy Research
Who’s (Still) Above the Social Security Payroll Tax Cap?
Nicole Woo, Janelle Jones, and John Schmitt

The Retirement and Savings Drain:  The Hidden and Excessive Costs of 401(K)S
Robert Hiltonsmith

Economic Policy Institute
Can Workers Offset Social Security Cuts By Working Longer?
Eric Kingson and Monique Morrissey

National Employment Law Project
Fact Sheet:  Phase Out of Federal Unemployment Insurance

Labor Market Policy Research Reports May 18 - 25, 2012 Print
Written by Eric Hoyt   
Friday, 25 May 2012 12:00

The following are the latest labor market policy research reports from the past week.

Center for Economic Policy and Research

Size and Characteristics of States’ Union Workforces
John Schmitt and Marie-Eve Augier

Economic Policy Institute

Labor force participation: Cyclical versus structural changes since the start of the Great Recession
Heidi Shierholz

Employment Policy Research Network

The Dismal State of the Nation's Teen Summer Job Market, 2009-2011, and the Outlook for the Summer of 2012
Andrew Sum and Walter McHugh

Institute for Women’s Policy Research

Paid Time Off: The Elements and Prevalence of Consolidated Leave Plans
Andrea Linderman and Kevin Miller

Valuing Good Health in Massachusetts: The Costs and Benefits of Paid Sick Days
Kevin Miller and Claudia Williams

National Employment Law Project

Letter to USDOL: Changes to Florida Unemployment Program Cause Serious Decline in Access to Benefits
Christine Ownes

CEPR Long-term Unemployment Research Published in Outside Journals Print
Written by CEPR   
Thursday, 24 May 2012 16:14

Two CEPR papers by John Schmitt and Janelle Jones released earlier this year on long-term unemployed were published in the spring issues of Challenge and New Labor Forum. In the newest issue of Challenge, “Down and Out: Measuring Long-Term Hardship in the Labor Market” (behind a paywall here) proposes several ways to rethink our understanding of long-term unemployment. In New Labor Forum, “America’s “New Class”: A Profile of the Long-Term Unemployed” (behind a paywall here) uses the framework from the Challenge piece to paint a demographic portrait of those still suffering from long-term unemployment in the labor market.

The Challenge article is based on this January 2012 CEPR briefing paper. The New Labor Forum piece is based on this March 2012 CEPR briefing paper.

Unions in the States Print
Written by John Schmitt and Marie-Eve Augier   
Wednesday, 23 May 2012 14:30

Unionization rates — and the gender and racial composition of unionized workers — vary widely across the 50 states and the District of Columbia. In a newly released issue brief, based on an analysis of the Current Populations Survey, we give an overview of the size and basic demographics of the unionized workforce in each state. The brief is a partial update of some of the numbers that appeared in a 2010 release CEPR report called “Unions of the States.”

Size of the States' Union Workforces

The figure below (Figure 2 in the new brief) shows the average unionization rate in each state over the years 2007-2011. We define a unionized worker as anyone who is a member of a union or represented by a collective bargaining agreement.

In 2007-2011, the 13.3 percent of the U.S. workforce was unionized. New York state had the highest unionization rate, at 26.4 percent. Alaska (24.3 percent) and Hawaii (24.0 percent) followed closely. Only one other state had a unionization rate above 20 percent and that was Washington (21.2 percent). The rest of the top ten most unionized states were Michigan (19.2 percent), New Jersey (18.8 percent), California (18.5 percent), Connecticut (17.6 percent), Oregon and Rhode Island (17.4 percent each), and Nevada (17.3 percent). Eight states had a unionization rate that was less than half of the national average: Tennessee (6.2 percent), Texas (6.1 percent), Arkansas and Louisiana (5.9 percent each), South Carolina (5.7 percent), Virginia (5.3 percent), Georgia (5.1 percent) and North Carolina (4.4 percent).


See the full brief for data on the number of union workers and their racial and ethnic background, by state.

Labor Market Policy Research Reports May 14 - 18, 2012 Print
Written by Marie-Eve Augier   
Friday, 18 May 2012 13:00

The following are the latest labor market policy research reports from the last week.

Center for American Progress

The American Middle Class, Income Inequality, and the Strength of Our Economy: New Evidence in Economics
Heather Boushey and Adam Hersh

Center for Law and Social Policy

Paid Time Off: The Elements and Prevalence of Consolidated Leave Plans
Andrea Lindemann and Kevin Miller

21st-Century Public Benefits: Emerging Options, Great Promise, and Key Challenges
Stan Dorn and Elizabeth Lower-Basch

Center on Budget and Policy Priorities

Testimony Of Ladonna Pavetti, Ph.D. Vice President, Family Income Support Policy, Before The House Ways And Means Committee, Subcommittee On Human Resources, Hearing On “State Tanf Spending And Its Impact On Work Requirements”

Economic Policy Institute

The Ryan Budget versus The Budget for All: Exacerbating versus alleviating our serious economic challenges
Andrew Fieldhouse, Rebecca Thiess, and Ethan Pollack

Institute for Women’s Policy Research,
Social Security & Medicare Foundation and NOW Foundation

Breaking the Social Security Glass Ceiling: A Proposal to Modernize Women's Benefits
Carol Estes, Terry O'Neill, and Heidi Hartmann

Consumer Price Index Remains Flat in April as Price of Energy Commodities Falls Print
Written by David Rosnick   
Tuesday, 15 May 2012 10:00

The Consumer Price Index remained flat in April as energy prices showed large declines, falling 2.6 percent, according to the latest Bureau of Labor Statistics' reports on the consumer price, U.S. import/export price and producer price indexes. Excluding volatile food and energy prices, the core index of consumer prices rose 0.2 percent in the month and at a 1.9 percent annualized rate over the last three months.

With core consumer price inflation both low and stable and with little hint of price pressures coming from earlier stages of production, there can be little reason for inflationary fears. An increase in the rate of inflation would actually be welcome economic news, since additional deflation of nominal debts and lowering of real interest rates actually would help spur demand in the economy and induce additional hiring. This would be particularly important to the United States if the deflationary crisis in Europe should cause both a fall in demand for American exports compounded by a sharp rise in the dollar.

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

Labor Market Policy Research Reports, May 7 - 11, 2012 Print
Written by Marie-Eve Augier   
Friday, 11 May 2012 13:45

Here is this week's roundup of labor-market policy research reports:

Center for Economic and Policy Research

States Could Save $1.7 Billion per Year with Federal Financing of Work Sharing
Nicole Woo and Dean Baker

Center on Budget and Policy Priorities

What the 2012 Trustees’ Report Shows About Social Security
Kathy A. Ruffing

Are Low-Income Programs Enlarging the Nation’s Long-Term Fiscal Problem? : Programs outside Health Care Projected To Decline as Share of Economy
Robert Greenstein and Richard Kogan

Toomey Budget Similar To House-Passed Ryan Budget: Contains Deep Cuts in Low-Income and Non-Defense Discretionary Programs and Likely Tax Cuts for the Most Well-Off
James R. Horney, Chye-Ching Huang, Edwin Park, and Paul N. Van de Water

Testimony Of Stacy Dean: Vice President for Food Assistance Policy before the House Committee on Agriculture’s Subcommittee on Nutrition and Horticulture

National Employment Law Project

Modernizing Unemployment Insurance: Federal Incentives Pave the Way for State Reforms

39 States Claim $4.4 Billion in Recovery Act’s UI Modernization Funds

Should We Cut Cancer Research to Pay for More Bombers? Print
Written by Dean Baker   
Thursday, 10 May 2012 13:45

This is the agenda of many Republicans as we start to get closer to the date where the sequestration rules from a 2011 budget agreement will actually bite. The deal was structured so that the immediate budget cuts were limited. The big hit was scheduled to take place in January 2013. At that point, spending on both the military and discretionary portion of the federal budget were scheduled to fall by roughly 10 percent.

There are good economic reasons for questioning the wisdom of cutting the federal budget while the economy is still saddled with high rates of unemployment and large amounts of excess capacity. While it would be great if the private sector would fill the gap, hiring the government workers who lose their jobs, there is no reason to think this would be the case.

Businesses hire people when they see more demand for their products, not because the government is laying off workers. It is more likely that these cutbacks will slow the rate of private sector hiring by pulling money out of the economy. The government workers who lose their jobs will not be spending as much money at restaurants, malls, and other places where their spending creates jobs. In a weak economy, this is likely to mean less hiring in the private sector.

Apart from the size of overall spending, there is also the division of the spending. Many Republicans are now upset about the deal they agreed to back in 2011 that provided for roughly equal cuts for the defense and nondefense portions of the budget. They would rather see more money come out of areas like government support for college and preschool education, the national parks, and even cancer research rather than allow the cuts to the military budget to go through as specified.

While the proponents of cuts to cancer research are trying to scare people into believing that the sequestration of the military budget will leave the country defenseless, this is not based on an analysis of the numbers. Even if the cuts go into effect, after adjusting for inflation, military spending will still be more than 20 percent higher in 2013 than it was back in 2000. This should leave us plenty secure assuming the budget is properly managed.

Of course the Defense Department has a long history of getting ripped off by private contractors who charge high prices for complex weapon systems of questionable value. When funding for these weapon systems is threatened with cuts, the contractors run to their friends in Congress for protection.

This is likely what we are seeing now. The issue is not defending the country, it is about defending defense contractors' profits.

This post originally appeared on U.S. News & World Report's Debate Club.

How An Investor's Gain Can Be Your Loss Print
Written by Dean Baker   
Monday, 07 May 2012 13:30

In Sunday's New York Times Magazine, Adam Davidson writes about Ed Conard, a friend of Mitt Romney's and a defender of extremely wealthy investors. Conard argues that investors contribute far more to society than their own bank accounts. In a guest post on NPR's Planet Money blog, Dean Baker disagrees.

In his new book, Unintended Consequences: Why Everything You've Been Told About the Economy Is Wrong, Mitt Romney's former business partner Ed Conard claims that for each dollar of wealth pulled in by investors, society gets up to $20. I took issue with this claim, saying that the ratio is closer to 5 to 1. However even this lower number caught many by surprise, thinking it to be an endorsement of Conard's view of the economy, albeit in a bit toned down form. It's worth clarifying what is at issue.

First, the 5 to 1 number is simply a reference to the ratio of labor income to capital income (after taxes). For example, in 2011 after-tax corporate profits were just under $1.1 trillion, while labor compensation was over $5 trillion. If we add the corporate tax revenue to the labor income side, the total is more than $5.5 trillion. The take-away from this is that when companies have productive investment and it actually leads to economic growth, then everyone can benefit.

Even when we talk about productive investment, much of the individual investors' gain is at the expense of other investors. For example in the case of Apple, perhaps the country's most innovative company, we would still have smart phones, tablet computers, and downloadable music if Apple never existed. The products just would not be quite as good. Much of Apple's profit would simply show up elsewhere in the tech sector if the company did not exist. While Apple's innovations have clearly benefited society it would be inaccurate to say that the benefit is five times Apple's profits.



Labor Market Policy Research Reports, April 30 – May 4, 2012 Print
Written by Marie-Eve Augier   
Friday, 04 May 2012 15:00

Here is this week's roundup of labor-market policy research reports:

Center for American Progress

Women and Obamacare: What’s at Stake for Women if the Supreme Court Strikes Down the Affordable Care Act?
Jessica Arons

Preparing All Teachers to Meet the Needs of English Language Learners: Applying Research to Policy and Practice for Teacher Effectiveness
Jennifer F. Samson and Brian A. Collins

Center for Law and Social Policy

Workforce Investment Act Reauthorization May Move Youth Development Field Back a Decade: Analysis of H.R. 4297 through a Youth Advocacy Lens
Linda Harris and Kisha Bird



April Jobs Numbers Continue Slowing Trend Print
Written by Dean Baker   
Friday, 04 May 2012 10:30

The economy added 115,000 jobs in April, according to the latest Bureau of Labor Statistics' employment report. While the March number was revised up to 154,000, the 135,000 two-month average is well below the 252,000 average for the prior three months. The economy needs 100,000 jobs a month to keep pace with labor force growth

In spite of the slower job growth, the unemployment rate edged down again to 8.1 percent. However, this is not a case of the household survey showing a different picture than the establishment survey. As was the case last month, the drop in unemployment was entirely attributable to people leaving the labor force.

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

Public Pensions as Stimulus and the Problem of Recession Deniers Print
Written by Dean Baker   
Friday, 04 May 2012 04:16

Most of the country is well aware of the fact that the United States is still suffering from the effects of the recession. The 8.2 percent unemployment rate is extraordinarily high. More importantly, the employment-to-population ratio, the percentage of people who hold jobs, is still almost 5 percentage points below its pre-recession level.

The fact that the country is still suffering from the recession is essential in assessing Andrew Bigg's dismissal of the idea that public pensions can provide stimulus to the economy. Biggs is a prominent conservative economist who served in the Bush administration and is now at the American Enterprise Institute.

Biggs ridicules the idea that public pensions can provide stimulus, deriding it as the "broken window" fallacy in economics. This is the idea that economic growth could be increased by breaking windows, because we would then have to spend money to repair the windows.

In fact, because the economy is still suffering from recession -- it has large amounts of unemployed workers and idle capacity -- breaking windows would in fact generate demand and employment right now. The main problem facing the U.S. economy at the moment is a lack of demand and anything that creates demand would in fact increase growth and jobs.



CEPR in the News April 2012 Print
Written by Dawn Lobell   
Monday, 30 April 2012 15:45

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

CEPR on Low-Wage Workers
A recent CEPR paper on the low-wage labor force finds that the average low-wage worker today is both older and much better educated than in the past.  The paper’s authors, CEPR Senior Economist John Schmitt and Research Assistant Janelle Jones, point out that the minimum wage has not kept pace with increases in workers’ educational levels. Their research was mentioned in this column by Harold Meyerson in the Washington Post (the article also cites John’s March issue brief on the minimum wage). John’s January paper, “Low-Wage Lessons”, was featured in this recent piece on CBSNews.com’s Money Watch. 

In this CEPR blog post, John and Janelle looked at the data by state, finding that this same educational upgrading is evident across all 51 states (including the District of Columbia). John and Janelle also wrote a blog post highlighting low-wage Latino workers, finding that while Latinos are over-represented among low-wage workers,  they are still only about one-fourth of the total in that wage range; and even after the increase in immigrants over the last three decades, Latinos are still much better educated today than they were in 1979. And CEPR Senior Economist Eileen Appelbaum wrote about the impact of low-wage jobs on the economic recovery in this piece for U.S. News and World Report.

CEPR on the IMF and the World Bank
It’s spring in Washington, and that means IMF and World Bank meeting time. In conjunction with the Spring Meetings, CEPR Co-director Mark Weisbrot debated the Deputy Director of the European Department at the International Monetary Fund, Mahmood Pradhan, on the role of debt, fiscal policy, and the European Central Bank in the current European recession. This was the latest in a series of CEPR debates with senior IMF officials on austerity and alternatives to austerity in the eurozone crisis. Video of this latest debate is here; videos of past debates with IMF officials are here. Mark also discussed the IMF meetings with WBAI’s Wake Up Call (in New York). CEPR Co-director Dean Baker weighed in with his thoughts on the ECB in this Guardian op-ed.



Labor Market Policy Research Reports, April 23 - 27, 2012 Print
Written by Marie-Eve Augier   
Friday, 27 April 2012 15:00

Here is this week's roundup of labor-market policy research reports:

Center for Law and Social Policy

Refocusing Adult Education on Career and Postsecondary Success: An Analysis of Adult Education (Title II) Provisions in WIA Reauthorization Proposals
Marcie Foster

Center on Budget and Policy Priorities

President’s Budget Would Reduce Pell Grant Shortfall; Ryan Budget Would Nearly Triple It
Richard Kogan and Kelsey Merrick

House Bill Would Cut Medicaid Funding For Puerto Rico by About $5.5 Billion Through 2019
Edwin Park and Matt Broaddus

Recent Studies Find Raising Taxes on High-Income Households Would Not Harm the Economy: Policy Should Be Included in Balanced Deficit-Reduction Effort
Chye-Ching Huang



Growth in GDP Falls to 2.2 Percent in First Quarter Print
Written by David Rosnick   
Friday, 27 April 2012 10:50

Growth in the Gross Domestic Product (GDP) fell to 2.2 percent in the first quarter of 2012, according to the Bureau of Economic Analysis' latest report. GDP had increased at a 3.0 percent annualized rate in the fourth quarter of 2011 and 1.8 percent in the quarter before that, but an across-the-board fall in government consumption and investment subtracted 0.60 percentage points from overall economic growth.

The weak growth in GDP combined with weak job growth makes it clear the economy is not performing especially well. The economy should be capable of higher-than-normal growth coming out of a deep recession. From recent lows, there may be an increase in the pace of nonresidential investment. However, with the recent good weather providing a temporary boost to both consumption and investment and continued drag in the public sector, there is not much promise for sustained growth in the immediate future.

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


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