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Labor Market Policy Research Reports, June 14 – June 20 Print
Written by Ben Wolcott   
Friday, 20 June 2014 14:58

The following reports on labor market policy were recently released:

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Unions: A Way for Feminism to Overcome Its “Class Problem” Print
Written by Nicole Woo   
Thursday, 19 June 2014 11:06

The Nation sparked a robust discussion last week with its incisive online conversation, Does Feminism Have a Class Problem?, featuring moderator Kathleen Geier, Demos’ Heather McGhee, the Center for American Progress’ Judith Warner, and economist Nancy Folbre.

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When Will It Pay to Take Family and Medical Leave? Print
Written by Helene Jorgensen   
Thursday, 19 June 2014 00:00

What does the United States have in common with the countries of Liberia, Sierra Leone, Swaziland, Samoa, and Papua New Guinea? Not much, other than being the only six countries in the world that do not mandate paid maternity leave. In fact, the Unites States does not provide for paid leave to employees who become sick with a serious illness either, nor to parents to care for a sick child or adult children tending to an ailing parent.

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PRIVATE EQUITY AT WORK: For Red Lobster’s Workers, It’s out of the Frying Pan and into the Fire Print
Written by Eileen Appelbaum   
Wednesday, 18 June 2014 08:42

A nasty fight is brewing between Darden Restaurants, Inc.’s management team and hedge fund shareholders Starboard Value LP and Barington Capital Group LP over Darden’s sale of its Red Lobster chain to private equity firm Golden Gate Capital. Same store sales at Red Lobster have been declining, raising pressing questions about what to do to reinvigorate the chain which, with 706 locations in the US and Canada, accounts for 30 percent of Darden’s sales revenue. Unfortunately, the dispute between Darden’s management and its activist shareholders is not about the best way to turn the restaurant chain around, but centers instead on disagreement over the best use of financial engineering to maximize shareholder value.

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Questions for Janet Yellen's June 18 Press Conference Print
Written by Nicole Woo   
Monday, 16 June 2014 10:46
With the U.S. Senate confirming three Federal Reserve Board governors since last month, following three resignations this year, there will be a new mix of voices at the Fed's Open Market Committee meeting this week.

Last week, the Brookings Institution released Janet Yellen's Dashboard, featuring charts illustrating several of the "most important measures of the economy's vigor" -- for example, that the unemployment rate remains above, while the inflation rate remains below, the Fed's targets.
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Labor Market Policy Research Reports, June 6 – June 13 Print
Written by Ben Wolcott   
Friday, 13 June 2014 11:53

The following reports on labor market policy were recently released:

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Austerity and the Employment Rate Print
Written by Ben Wolcott   
Monday, 09 June 2014 16:07

In 2010, after an initial round of coordinated stimulus from both wealthy and developing countries, deficit hawks around the world regrouped. Pointing to growing deficits and debt, they demanded that countries reverse course and begin moving toward balanced budgets. The deficit hawks argued that deficit reduction could be accomplished without impairing growth because of the effect it would have in boosting confidence among businesses and consumers.

Many economists argued against this drive towards austerity at the time. They noted and rigorously explained the fallacious logic in the idea that deficit reduction could be expansionary. They also pointed out how fiscal policy had already saved the economy from a second depression and that more stimulus would likely be necessary. However, now we have more than three years of data, so we no longer have to speculate. A simple picture can be worth a thousand words (or in this case, billions).

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Private Equity at Work: Limit Leverage to Limit Risk Print
Written by Eileen Appelbaum   
Monday, 09 June 2014 15:28

The 2008-2009 financial crisis ended well for Wall Street, with little in the way of financial reform and Wall Street veterans in positions of influence on regulatory bodies. Perhaps, though, the provisions of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act and more recent financial reform efforts, modest as they are, have begun to bite. The limited oversight the Dodd-Frank Act provides to the Securities and Exchange Commission (SEC) has already led to suspicions of misbehavior or even fraud. Half the reviews conducted by the SEC to date revealed a failure of PE firms to share fees charged to portfolio companies with investors in their PE funds. Of even greater consequence, perhaps, are actions taken by regulatory agencies in the last year to limit the excessive use of debt in leveraged buyouts of Main Street companies.

Post-mortems of the financial crisis make clear the dangers to the financial system of gambling with other people’s money, making excessive use of debt (leverage), and shifting the risks of failed investments to others. This could as well describe today’s private equity business model.

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Labor Market Policy Research Reports, June 3-6, 2014 Print
Written by Ben Wolcott   
Monday, 09 June 2014 11:31

The following reports on labor market policy were recently released:

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Update on Low-wage Workers Print
Written by Janelle Jones and John Schmitt   
Saturday, 07 June 2014 15:07

In a 2012 Issue Brief and a 2013 blog post, we reported on the dramatic change since 1979 in the composition of the low-wage workforce. Low-wage workers today are much older and much better educated than they were at the end of the 1970s. 

Here are the numbers updated through 2013. 

 

low-wage workers 1979 2013

 

(Note that if you compare across all three sources, the 1979 numbers change slightly with each new set of numbers. This is because the same dollar cut-off in the most recent year --2011, 2012, or 2013-- corresponds to a slightly different inflation-adjusted value of that cut-off in 1979. The 2011 numbers differ further --though, again, only slightly-- because we initially used a $10.00 cut-off for 2011 and then switched to a $10.10 cut-off for 2012 and 2013 to reflect the level currently under consideration in Congress.)

 
Piketty in One Graph Print
Written by Colin Gordon   
Friday, 06 June 2014 09:52

This graphic summarizes the key inequality and policy trends (for the U.S.) traced in Thomas Piketty’s Capital in the Twenty-First Century. Scrolling through the inequality metrics suggest the key themes in Piketty’s examination of the U.S. case: the now-familiar “suspension bridge” of income inequality, dampened only by the exceptional economic and political circumstances of the decades surrounding World War II; the growing share of recent income gains going to the very high earners (the 1% or .01%); the stark inequality within labor income (see the top 1% and top 10% wage shares) generated by the emergence of lavishly-compensated “supermanagers”; and a concentration of wealth that fell little over the first half of the twentieth century and has grown steadily since then.

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Jobs Flash: Labor Force Participation Rate Unchanged in May Print
Written by Dean Baker   
Friday, 06 June 2014 07:21

The May employment report showed another healthy month of job gains, with the economy adding 217,000 jobs. This brings the three month average to 234,000. If this rate is sustained, it will lead to a substantial decline in unemployment in the months ahead. However, this is difficult to reconcile with the weak growth the economy has seen in recent quarters, hence the fall in reported productivity in the first quarter. The job gains were concentrated in health care (33,600), restaurants (31,700), social assistance (21,300) and employment services (20,200).

To the surprise of many, the unemployment rate was unchanged in May. This is due to the fact that the 0.4 percentage point plunge in labor force participation reported for April was not reversed. The labor force participation rate remained at 62.8 percent.

Other news in the household survey was more positive. The number of involuntary part-time workers fell again, while the number of voluntary part-time workers rose. Also the percent of workers who are unemployed due to the fact that they voluntarily quit their jobs jumped to 8.9 percent, the highest level since October of 2008.

 
Labor Market Research Reports, May 19 – June2 Print
Written by Ben Wolcott   
Monday, 02 June 2014 13:54

The following reports on labor market policy were recently released:

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CEPR News May 2014 Print
Written by Eileen O'Grady   
Friday, 30 May 2014 16:04

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

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#AAPI Workers the Least Likely to Be in Private Sector #Unions Print
Written by Nicole Woo   
Wednesday, 28 May 2014 09:48

Since it's Asian American and Pacific Islander (AAPI) Heritage Month, CEPR decided to take a look at some Census data about AAPI workers. Last week, we talked about low-wage AAPI workers and how an increase in the minimum wage could affect them.

Another interesting story is that of labor unions and AAPI workers. Along with Latinos, AAPIs are the fastest growing sector of the overall workforce as well as unions. The most recent data reveals that 1 in 9 AAPI workers is unionized, which is significantly lower than the rate for whites and blacks, and slightly higher than that of Latino workers.

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Why Don't More People Go To College? Print
Written by John Schmitt   
Tuesday, 27 May 2014 15:35

At the Upshot today, David Leonhardt asks if college is “worth it” and answers with a resounding “clearly,” citing data he obtained from the Economic Policy Institute. Leonhardt's answer, however, raises a bigger question, which he leaves unexamined: if college is such a good investment, why aren't more people making it?

The data he presents show a big increase between 1979 and 2013 in the earnings of college graduates relative to high school graduates (the top line in the chart below). The gap, which has always been large, grew steadily for more than 20 years from the end of the 1970s into the early 2000s before slowing down in the 2000s. Leonhardt makes much of the uptick in the last couple of years, which puts the returns to college at an all-time high, but the growth in the college premium has clearly decelerated somewhat since about 2002, even with the finishing flourish in the chart.

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1 Million #AAPI Workers Would Get a Raise if the #MinimumWage Were $10.10 Print
Written by Nicole Woo   
Wednesday, 21 May 2014 10:39

Since May is Asian American and Pacific Islander (AAPI) Heritage Month, CEPR's looked into Census data about AAPI workers and found some interesting tidbits.

For example, the President and some Congressional leaders would like to see the federal minimum wage go up to $10.10 per hour.  If that were to happen, the data show that just over 1 million AAPI workers would be directly affected (that's 13.7% of AAPI workers).  And economic research shows that a significant number of workers making just above the $10.10 line would also get raises.

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Summers’ Review of Piketty’s Book Gets Private Equity Wrong Print
Written by Eileen Appelbaum and Rosemary Batt   
Monday, 19 May 2014 10:49

Larry Summers in his review of Capital in the Twenty-First Century gives Thomas Piketty high marks for demonstrating “absolutely conclusively” that those at the very top – the top 1 percent, top .1 percent, and top.01 percent – have claimed an increasing share of income and wealth since 1980. Indeed, as Summers notes, the disparity between the top 0.1 percent and the rest of the top 10 percent has grown wider than the gap between the income of the top 10 percent and that of average income earners. As Summers acknowledges, this cannot be explained by a lack of worker skills.

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Labor Market Research Reports, May 5 – 16 Print
Written by Jeffrey Gianattasio   
Friday, 16 May 2014 19:10

The following reports on labor market policy were recently released:

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New Book on Private Equity Tackles Myths About the Industry Print
Written by Alan Barber   
Friday, 16 May 2014 11:05

The private equity industry is often at the center of a debate over whether it saves failing businesses or undermines healthy companies at the expense of creditors, vendors, workers and retirees. This should not be surprising. Since modern private equity got its start with the first leveraged buyout of a publicly traded company in 1979, the industry’s complex organizational structures allowed for little oversight and government regulation. Much of the analyses available on PEs are positive accounts by industry insiders and slightly more modest takes by finance economists, and as a result, it has been difficult to assess the economic impact of this $3.5 trillion dollar industry.

Noting this lack of transparency, the Securities and Exchange Commission (SEC) recently began an investigation of industry practices. Since 2012, SEC staffers have reviewed roughly 400 PE funds and the results are striking. Of the firms reviewed, general partners at 200 firms collected fees and expenses from the companies they managed without disclosing or sharing these fees with investors.

While the SEC examinations focus on the need for greater oversight of the industry, Private Equity at Work: When Wall Street Manages Main Street, by CEPR’s Eileen Appelbaum and Cornell University’s Rosemary Batt offers a broader and more comprehensive examination of the private equity business model and its impact on the U.S. economy and labor market. Their analysis draws on original cases, interviews with PE and pension fund managers, legal documents, bankruptcy proceedings and academic scholarship.

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