CEPR - Center for Economic and Policy Research


En Español

Em Português

Other Languages

Home Publications Blogs CEPR Blog

Deflators and the Purchasing Power of the Minimum Wage Print
Written by Dean Baker   
Monday, 03 February 2014 09:13

Recently some opponents of an increase in the minimum wage have argued that we are using an inaccurate measure of inflation when we say the 1968 minimum wage would be equal to about $10.00 an hour in today’s prices. They argue that if we use the Personal Consumption Expenditures Deflator (PCE) to measure inflation --instead of the Consumer Price Index (CPI-U, modified slightly to reflect current methods back as far as 1968-- we would need a minimum wage of just $8.50 an hour to have the same purchasing power as in 1968. Furthermore, if we take the average value of the minimum wage over the years 1960-1980, the current minimum wage of $7.25 would already be roughly equivalent in purchasing power.



CEPR News January 2014 Print
Friday, 31 January 2014 14:08

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



Rand Paul and the Extent of Marital Poverty in Kentucky Print
Thursday, 30 January 2014 13:59

Via Bryce Covert , I see that Senator Rand Paul told a Chamber of Commerce audience recently that being “married with kids versus unmarried with kids is the difference between living in poverty and not” and that the government “should sell that message.”

As you might imagine, Paul’s claim is widely off base. The table below shows the number of parents (caring for kids under age 18) who live below the poverty line in Paul’s state of Kentucky. There are about 70,000 people in Kentucky who are “married with kids”, not counting an additional 16,000 people who are also “married with kids” but separated. By comparison, there are about 62,000 never-married parents with kids living in poverty in Kentucky (and some of them are poor despite living with a partner who they will go on to marry). In short, the vast majority of poor parents in Kentucky are either currently married with kids (48%) or have been married (15% are divorced and 2% widowed). Only about one out of every three Kentucky parents living in poverty have never married.



Fourth Quarter GDP Driven By Consumption, Health Care Spending Continues to Slow Print
Written by Dean Baker   
Thursday, 30 January 2014 08:46
The economy grew at a 3.2 percent annual rate in the fourth quarter following a 4.1 percent rise in the third quarter. This is the best two quarter performance since the fourth quarter of 2011 and the first quarter of 2012 when the economy grew at 4.9 percent and 3.7 percent annual rates, respectively. Consumption grew at a 3.3 percent rate, accounting for 70.6 percent of the growth in the quarter. Investment continued the weakness it has shown over the last two years, growing at just a 3.8 percent annual rate. Somewhat surprisingly, housing fell at a 9.8 percent annual rate, its first decline since the third quarter of 2010.
Interestingly, the rate of inventory accumulation increased to $127.2 billion, one of the most rapid paces on record. This likely means slower growth in future quarters as slower accumulations will be a drag on growth. Imports were little changed in the quarter. As a result, trade added 1.33 percentage points to growth. Much of this was offset by a sharp drop in spending at the federal level which subtracted 0.98 percentage points from growth. This will not be repeated in future quarters.
One item of clearly positive news was the slow growth in health care costs. Spending on health care services rose at just a 3.6 percent annual rate in the quarter. This means that health care spending is continuing to fall as a share of GDP.
Hoffman on Sabia, Burkhauser, and Hansen on the Minimum Wage Print
Wednesday, 29 January 2014 12:09
In a 2012 paper published in the peer-reviewed Industrial and Labor Relations Review (ILRReview), economists Joseph Sabia, Richard Burkhauser, and Benjamin Hansen concluded that the 39 percent increase in the New York state minimum wage in 2005-2007 (from the federal rate of $5.15 to $7.15) had “substantial adverse labor demand effects for low-skilled individuals.” (p. 350)

But, a new working paper by University of Delaware economist Saul Hoffman suggests that Sabia, Burkhauser, and Hansen's (SBH) results were an artifact of the relatively small dataset they used to perform their analysis. When Hoffman uses a much larger version of the same data, he finds “no evidence whatsoever of a negative employment impact.”



@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.



<< Start < Prev 1 2 3 4 5 6 7 8 9 10 Next > End >>

Page 8 of 56

Support this blog, donate
Combined Federal Campaign #79613
budget economy education employment Haiti health care housing inequality jobs labor labor market minimum wage paid family leave poverty recession retirement Social Security taxes unemployment unions wages Wall Street women workers working class

+ All tags