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Data Flash: Strong Job Growth Continues in June Print
Written by Dean Baker   
Thursday, 03 July 2014 07:39

The economy added 288,000 jobs in June, making it the fifth consecutive month in which the economy added over 200,000 jobs. This is the longest stretch of 200,000 plus job growth since before the recession. The job gains were broadly based. Retail was the biggest gainer, adding 40,200 jobs, with professional and technical services adding 30,100 jobs. Manufacturing added 17,000 jobs for the second month in a row.

The news was also positive in the household survey with the unemployment rate falling to 6.1 percent, a new low for the recovery. This was due to people entering the labor force and finding jobs; the employment-to-population ratio rose to 59.0 percent. This is a new high for the recovery, but still 4.0 percentage points below its pre-recession level. Another piece of positive news is that the percentage of people who are unemployed because they voluntarily quit their jobs rose to 9.0 percent, the highest since the collapse of Lehman. This is a sign of growing confidence in the labor market.

CEPR News June 2014 Print
Written by Dawn Lobell   
Wednesday, 02 July 2014 15:16

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

CEPR on Women and Unions
Just in time for the June 23rd White House Summit on Working Families, CEPR released a new report that explores the role unions play in addressing the challenges facing working women and families in balancing their work and family responsibilities. The paper,  “Women, Working Families, and Unions” by CEPR Research Associate Janelle Jones, CEPR Senior Economist John Schmitt and CEPR Director of Domestic Policy Nicole Woo, looks at trends in unionization for women; the impact of unions on wages, benefits and access to family and medical leave; and the role of unions in addressing work-life balance issues.



By the time Hillary Clinton leaves the White House, China's economy could be 50 percent larger than the US economy Print
Written by Ben Wolcott   
Wednesday, 02 July 2014 14:35

The World Bank’s updated estimates of GDP based on purchasing power parity (PPP) show a sharp upward revision to the numbers for China. As a result of these revisions, the Chinese economy is now larger than the U.S. economy by this measure. 



2014 Job Creation Faster in States that Raised the Minimum Wage Print
Written by Ben Wolcott   
Monday, 30 June 2014 14:21

The experience of the 13 states that increased their minimum wage on January 1st of this year might provide some guidance for what to expect here in Washington, DC when the city-wide minimum wage increases to $9.50 on July 1.



Private Equity at Work: Too Much of a Good Thing? Print
Thursday, 26 June 2014 08:57

The run-up in the stock market over the last two years has been good to private equity funds. The U.S. stock market has more than doubled from its 2009 lows, and the Dow and S&P 500 were both in record territory on Friday. High valuations commanded by publicly traded companies have enabled private equity firms at last to exit many of the ‘mature’ investments in companies acquired at heady prices in the 2005 -2007 boom years. Apollo CEO Leon Black told participants at a Milken Institute conference in April that the rising stock market has created “a fabulous environment to be selling.” Apollo, he noted, sold about $13 billion in assets since the beginning of 2013. “We’re selling everything that’s not nailed down,” he told the audience.



Vacation as a Job Creator Print
Wednesday, 25 June 2014 09:33

Basic economic logic predicts that an increase in the productivity of American workers should lead to some reduction in work time, the logic being that workers would take some of the benefits of higher income in the form of more leisure. Despite substantial productivity growth over the last four decades, time-use studies show the opposite trend, average hours worked in a year have actually risen somewhat over this period. It is worth noting that the United States is very much an outlier in this respect. Average hours worked have declined sharply in other wealthy countries over this period, with workers in countries like the Netherlands and Germany now putting in 20 percent fewer hours than workers in the United States.



Labor Market Policy Research Reports, June 14 – June 20 Print
Friday, 20 June 2014 14:58

The following reports on labor market policy were recently released:



Unions: A Way for Feminism to Overcome Its “Class Problem” Print
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.



When Will It Pay to Take Family and Medical Leave? Print
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.



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.



Questions for Janet Yellen's June 18 Press Conference Print
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.


Labor Market Policy Research Reports, June 6 – June 13 Print
Friday, 13 June 2014 11:53

The following reports on labor market policy were recently released:



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).



Private Equity at Work: Limit Leverage to Limit Risk Print
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.



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

The following reports on labor market policy were recently released:



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
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.



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
Monday, 02 June 2014 13:54

The following reports on labor market policy were recently released:



CEPR News May 2014 Print
Friday, 30 May 2014 16:04

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



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