Posts Tagged ‘Economic Policy Institute’

The U.S. inequality problem in one graph

February 28, 2019

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This is an updated version of an Economic Policy Institute chart I’ve posted before.  It shows that from 1948 through 1979, the hourly wages of American workers rose almost as fast as worker productivity.  From 1979 on, productivity continued to rise, although at a slower rate, but wages hardly increased at all.

If you include the increased debt, including student debt, that most families have taken on, the average wage-earner’s buying power may be even less than in 1979.

What happened?  The EPI cites three things:

  1. A greater share of national income to holders of financial assets and a smaller share to wages and salaries.
  2. A greater spread between wage-earners and highly paid managers and professionals.
  3. A greater increase in the prices of things wage-earners buy (consumer goods and services) than in the things they product (consumer goods, but also capital goods.

What is the answer?  The EPI says the U.S. needs stronger labor unions and enactment of pro-labor government policies, including a higher minimum wage, higher taxes on top incomes and a jobs program based on repairing the nation’s infrastructure.

LINKS

The Agenda to Raise America’s Pay by the Economic Policy Institute.

First Day Fairness: An agenda to build worker power and ensure job quality by Celine McNicholas, Samantha Sanders and Heidi Shierholz for the Economic Policy Institute.

Understanding the Historic Divergence Between Productivity and a Typical Worker’s Pay: Why It Matters and Why It’s Real by Josh Bivens and Laurence Mishel for the Economic Policy Institute.

The Survival of the Richest by Nomi Prins for TomDispatch.

Economic snapshots of 2015

December 26, 2015

I thank my e-mail pen pal Bill Harvey for pointing me to these charts from the Economic Policy Institute.  Any candidate for national office who ignores the issues raised by these charts isn’t worth listening to.

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How to give American workers a pay raise

March 24, 2015

incomegrowthdistributionThe majority of American workers are getting less and less benefit from the growth of the American economy.

The pro-labor Economic Policy Institute notes that, since 1979, the U.S. economy (gross domestic product) has grown by 149 percent and productivity has grown 64 percent, but actual wages of most American workers, adjusted for inflation, are flat or declining.

Recently the EPI published an 11-point program for boosting American wages.   Here it is, with my comments.

1. Raise the minimum wage.

2. Update overtime pay rules.

3. Strengthen collective bargaining rights.

Stronger labor unions give workers power over their wages and working conditions independently of laws and regulations.  This is the most important change and a key to all the other changes.

4. Regularize undocumented workers.

Hiring unauthorized immigrants and relocating business activities to low-wage countries are two ways of doing the same thing—escaping the requirements of American labor law.   It is almost like competing with slave labor.  Since it is not feasible to deport the millions of unauthorized immigrants now in the United States, the only choice is to bring them under protection of the law.

5. Provide earned sick leave and paid family leave.

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Public employment fails to keep up

October 14, 2014

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My e-mail pen pal Bill Harvey sent me links to articles with the charts shown above, both from the Economic Policy Institute, whcih the seriousness of the current attack on the public sector and the decline of public employment.

Public employment, unlike in previous economic recoveries, is still depressed, especially at the state and local level.  In and of itself, this creates a drag on the whole economy, just like job losses in any other category.

And after a certain point there aren’t enough public employees left to do their jobs adequately.   Teachers with too-large classes teach less effectively.  Firefighters with too-long shifts and too-small crews fight less effectively.  Nurses with too many patients may not be able to keep track of them as they should.  Public roads and public utilities aren’t maintained.

While there can be featherbedding in public employment, this is not the situation now.  Public services in many places are in dire straits.

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Recession over? Not for working people

September 12, 2012

The Economic Policy Institute, a non-profit research organization which studies trends in wages and employment, has just issued its latest State of Working America.  Its facts and figures show that conditions were not good for wage-earners even before the Great Recession, and that, even though the recession is officially over, the United States has a long way to go before working people recover lost ground.

The Great Recession was by far the worst in the United States since the end of World War Two.

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And while there has been recovery in economic output, and in the financial markets, the United States is a long way from getting back to a full employment economy.

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There has been some improvement in jobs, perhaps partly because of President Obama’s stimulus program, maybe partly because of the natural turn of the economic cycle, but not to pre-recession levels.

I believe that the reason the Great Recession was so bad and the recovery is so weak is that it is more than a routine downturn in the economic cycle.  I believe the United States has reached the limits of creating spending power by substituting credit for income, and we Americans need to somehow recreate an economy based on production rather than finance.

I think President Obama’s economic stimulus program kept things from being worse than they otherwise would have been.  I don’t think Mitt Romney’s and Paul Ryan’s economic philosophy, which is essentially make rich people richer and poor people poorer, would help.  But I do criticize Obama for giving free rein to the too-big-to-fail banks whose fraud and follies were the immediate cause of the crash, and thereby setting the stage for a new and bigger crash.

Click on Economic Policy Institute for the EPI home page.  Click on The State of Working America to read the digital edition of the EPI report.  A print edition is scheduled for publication in November.

Click on Did the stimulus work? for summaries of 15 economic studies by Dylan Matthews of the Washington Post’s Wonkblog.  Matthews’ scorecard is that 12 studies said the stimulus was beneficial, two said it was useless and one said the effect is uncertain.

Click on Obama, Romney and the Low-Wage Future of America for an article by Dan Froomkin for Huffington Post Nieman Reports on the lack of a plan from either candidate for a full-employment, high-wage economy.

America’s low-wage recovery

September 4, 2012

When and if employment in the United States gets back to what it was before the recession, American working people will still be worse off than before, because on average they’ll be working in lower-paying jobs.

The National Employment Law Project, a liberal think tank, reported that about three out of five of the new jobs gained during the current economic recovery were in low-wage occupations, with median pay less than $13.52 an hour, or $28,122 for someone working full-time, year-round.   But about four out of five of the jobs lost during the recession were in occupations with median wages above that level.

There is good growth in occupations such as retail clerk, kitchen worker, laborer, freight handler, waiter and waitress, home health aide, office clerk and customer service representative.  The low-wage occupations would provide $15,621 to $28,121 a year to someone working full-time year-round.

The moderate-wage jobs would pay $28,142 to $42,973 a year.  They’re mostly in construction, information industries and banking, insurance and real estate.

Median wages in the high-wage jobs would be $42,994 to $110,906 a year.  A relatively small number of these jobs were lost during the recession, but the loss hasn’t been made up.

The NELP researchers said the shift reflects a hollowing out of the middle level of the U.S. economy which has been going on for a long time, plus layoffs of government workers during the recession.

Back in April, the Economic Policy Institute, a labor-oriented think tank, issued a report predicting that 28 percent of American workers will be in low-paid jobs in 2020, about the same as in 2010.  The EPI defined a low-paid job as one insufficient to keep a family of four above the poverty line.  In 2011, that was $23,005, or $11.06 an hour for someone working full-time year-round.  In yet another report, NELP researchers estimated that one in four American workers currently has a job that pays less than $10 an hour.

What all this shows is that economic stimulus is not enough to bring about prosperity.  Unless we Americans are resigned to growing steadily poorer, we have to figure out not just how to restart, but how to rebuild, our economy.

Click on The Low-Wage Recovery and Growing Inequality PDF for the NELP report.

Click on Majority of New Jobs Pay Low Wages, Study Finds for a summary of the NELP report in the New York Times.

Click on The Future of Work: Trends and Challenges for Low-Wage Workers PDF for the EPI report.

Click on Welcome to Your Low-Wage, Temp Work Future for a summary of the EPI report in Forbes.

Click on Obama, Romney and the Low-Wage Future of America for an article by Dan Froomkin of Huffington Post on the failure of either President Obama or Governor Romney to address this issue.

Hat tip to Think Progress.