Daily Digest - February 4: Looking to History to Understand Today's Civil Rights Movement

Feb 4, 2015Rachel Goldfarb

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How Radical Change Occurs: An Interview With Historian Eric Foner (The Nation)

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How Radical Change Occurs: An Interview With Historian Eric Foner (The Nation)

Roosevelt Institute Fellow Mike Konczal interviews Eric Foner about teaching the Civil War online and the relevance of the Civil War and Reconstruction eras to our current political moment.

Would FCC Plan Harm Telecom Investment? Even Industry Opinion Is Mixed (NPR)

Joel Rose speaks to Roosevelt Institute Fellow Susan Crawford, who says the telecommunications industry changes its tune based on audience: only regulators are told regulation will kill investment.

Is Ending Segregation the Key to Ending Poverty? (The Atlantic)

Alana Semuels takes a close look at programs that have helped families move to less segregated and wealthier neighborhoods, moves which have generally positive outcomes for children.

Obama’s Budget Puts Historic Focus on Child Care and Working Families (AJAM)

E. Tammy Kim and Joanna S. Kao suggest that the president's proposals around child care and other programs supporting working parents have the most bipartisan potential this year.

Walmart Cut My Hours, I Protested, and They Fired Me (MoJo)

Kiana Howard explains how Walmart illegally retaliated against her for union organizing, something she got involved in when they cut her hours for requesting a public transit-friendly schedule.

Americans Overestimate Class Mobility (Pacific Standard)

Tom Jacobs reports that in four new studies, Americans overestimate the extent to which working more or going to school can increase wealth by about 23 percent.

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Daily Digest - February 3: A New Kind of Budget

Feb 3, 2015Rachel Goldfarb

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Budget Day Feels a Lot Like Groundhog Day (Marketplace)

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Budget Day Feels a Lot Like Groundhog Day (Marketplace)

Roosevelt Institute Fellow Mike Konczal says that year after year, the president's budget tried to compromise with Republicans from the start, but this year's has broken off that routine.

Obamacare is Costing Way Less Than Expected (Vox)

Ezra Klein reports that the Congressional Budget Office's adjusted predictions show the government will spend $600 billion less than estimated on healthcare - and the original estimate was pre-Obamacare.

In Net Neutrality Push, F.C.C. Is Expected to Propose Regulating Internet Service as a Utility (NYT)

The Federal Communications Commission's new proposal will give it authority to enforce true net neutrality, including ending paid "fast lanes" on the Internet, writes Steve Lohr.

  • Roosevelt Take: Roosevelt Institute Fellow Susan Crawford argues against the GOP's recent embrace of open Internet, which she says is a bait and switch.

Labor Pains (TNR)

Rebecca Traister, currently on maternity leave at The New Republic, explains the impossible career situations created for women who want children under U.S. laws.

Banks See Stable Lending Landscape, But Some Auto Loans Signal Trouble (WSJ)

Kate Davidson looks at the results of a Federal Reserve survey of banks, which shows concern about the sub-prime auto loans that have become a larger and larger part of the market.

The City That Outlawed Free Food (The Nation)

Michelle Chen takes a close look at Fort Lauderdale, Florida's new policy restricting the distribution of free food. City officials claimed free food enabled homelessness.

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Daily Digest - February 2: Trade Shouldn't Mean Higher Drug Prices

Feb 2, 2015Rachel Goldfarb

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Don't Trade Away Our Health (NYT)

Roosevelt Institute Chief Economist Joseph Stiglitz argues that the Trans-Pacific Partnership's intellectual property agreements will raise drug prices unnecessarily and slow innovation.

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Don't Trade Away Our Health (NYT)

Roosevelt Institute Chief Economist Joseph Stiglitz argues that the Trans-Pacific Partnership's intellectual property agreements will raise drug prices unnecessarily and slow innovation.

Obama Veers Left (Politico)

Ben White speaks to Roosevelt Institute Fellow Mike Konczal about the president's budget. Konczal says this budget takes the focus off the deficit as a be-all,-end-all problem.

Obama's New Budget Proves the Grand Bargain is Finally Dead (Vox)

Matt Yglesias explains why the Obama administration has, in this budget, stopped playing to potential compromises and showdowns and focused on what the president actually wants to achieve.

A Simple Guide to Obama’s New Proposals for Spending and Taxes (WaPo)

Max Ehrenfreund breaks down the main points in the Obama budget and explains how taxes would change in order to pay for programs like funded preschool and investment in infrastructure.

U.S. Growth Rate Slips to 2.6% Raising Doubts About Strength of Economy (The Guardian)

Rupert Neate reports on the final numbers for the fourth quarter of 2014, which showed slower growth than economists had expected. Still, overall GDP growth for the year was higher than 2013.

How Tipping Helped Make Sexual Harassment the Norm for Female Servers (In These Times)

Jenny Brown says that workers who rely on tips often have no choice but to put up with harassment, as discussed in a new report from Restaurant Opportunities Centers United.

Uber and Lyft Drivers May Have Employee Status, Judge Says (Bloomberg)

In two different lawsuits, judges have indicated that they are unconvinced that drivers for these services are merely consumers of a software platform, reports Karen Gullo.

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Daily Digest - January 30: Where Did the Manufacturing Jobs Go?

Jan 30, 2015Rachel Goldfarb

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Wal-Mart’s Manufacturing Recovery? (The Hill)

Roosevelt Institute Senior Fellow Damon Silvers says that Wal-Mart's manufacturing initiative is really just an attempt to make people forget the company's influence on offshoring jobs.

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Wal-Mart’s Manufacturing Recovery? (The Hill)

Roosevelt Institute Senior Fellow Damon Silvers says that Wal-Mart's manufacturing initiative is really just an attempt to make people forget the company's influence on offshoring jobs.

Bernie Sanders Wants to Spend $1 Trillion on Infrastruture (WaPo)

Senator Sanders' proposal calls for investment in a full range of infrastructure projects, and he says it would put 13 million people to work, writes Ashley Halsey.

What the Sharing Economy Takes (The Nation)

Doug Henwood dives deep into the so-called sharing economy, pointing out how the utopian ideals of the companies involved fail to play out in the real economy.

Obama Has a Modest Plan to Tackle One of the Most Underrated Economic Problems in America (Vox)

Timothy B. Lee praises a proposed study of state occupational licensing. There's little evidence that licensing massage therapists and funeral attendants improves quality.

Rent to Own: Wall Street’s Latest Housing Trick (ProPublica)

Jesse Eisinger says rent-to-own housing schemes, which seem to take advantage of consumers' lack of knowledge, make a case for a stronger government role in overseeing the housing market.

Stop Trying to Make Financial Literacy Happen (Slate)

Helaine Olen argues that the financial services industry pushes financial literacy because it's a way around true consumer protection models with legal backing.

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Daily Digest - January 29: Without Food Stamps, How Many Kids Would Go Hungry?

Jan 29, 2015Rachel Goldfarb

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Census Says 16m U.S. Children are Living on Food Stamps, Double the Number in 2007 (The Guardian)

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Census Says 16m U.S. Children are Living on Food Stamps, Double the Number in 2007 (The Guardian)

One in five American children would go hungry without food stamps, writes Jana Kasperkevic, which makes continued Republican efforts to cut the program especially worrying.

The Tax Loophole (Almost) Everyone Should Want to Close (Medium)

James Kwak breaks down the step-up in basis for capital gains loophole and why he thinks it ought to be eliminated: because it's strange that our system rewards dying with unsold assets.

  • Roosevelt Take: In his white paper on tax reform, Roosevelt Institute Chief Economist Joseph Stiglitz also argues against this loophole.

Fed Says It Will Be Patient in Raising Interest Rates, Citing ‘Solid’ Growth (NYT)

Binyamin Appelbaum reports on the Federal Reserve's latest statement and what it will mean for raising interest rates. At this point, rates won't be raised until at least June.

Don’t Mess With Government Giveaways to the Well-Off (WaPo)

Paul Waldman says the uproar over a suggested change to 529 college savings plans shows which welfare programs are safest: those that are open to all, but give most of their financial benefits to the upper-middle class.

Subprime Bonds Are Back With Different Name Seven Years After U.S. Crisis (Bloomberg Business)

Now called "nonprime" mortgage bonds, Jody Shenn says that this time the investment firms that originate the deals plan to retain the bulk of the risk instead of shifting it to other parties.

Obama Is Finally Getting Credit for the Recovery (TNR)

Danny Vinik says that the Republican arguments claiming the recovery happened in spite of the president's policies are falling apart, leaving no other option but to give him credit.

'Housing First' Policy for Addressing Homelessness Hamstrung By Funding Issues (TAP)

Rachel M. Cohen says that "housing first" policies are pretty clearly a more effective way to fight homelessness, but without sufficient funding and housing stock, can't be fully put into action.

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Daily Digest - January 28: Raising Rates is a Rising Challenge

Jan 28, 2015Rachel Goldfarb

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Hard Choices on Easy Money Lie Ahead for Fed Chief (WSJ)

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Hard Choices on Easy Money Lie Ahead for Fed Chief (WSJ)

Janet Yellen's second year as Federal Reserve Chair begins with the difficult task of creating consensus on raising interest rates, write Jon Hilsenrath and Pedro da Costa.

U.S. Companies Cut More Than 1m Jobs a Month. When Did Workers Stop Mattering? (The Guardian)

Suzanne McGee points at large-scale layoffs at big name companies that seek to raise their stock prices as a sign that the U.S. economy no longer sees workers as a worthwhile investment.

You're Probably Richer Than You Think You Are: How Inequality Screws With Our Perspective (The Week)

Jeff Spross says that arguments over proposed changes to college savings accounts demonstrate just how easily some Americans lose sight of how high they sit within the economy.

How Bernie Sanders, In New Role, Could Make Wall Streeters Very, Very Unhappy (TAP)

Ari Rabin-Havt explains how Senator Sanders plans to use his new role as ranking member of the Senate Budget Committee to take on too-big-to-fail and other financial regulatory issues.

Shutting Down New York’s Subways Is Very Expensive (NYT)

If only 10 percent of New York's workforce was unable to work because of the subway shutdown, Josh Barro estimates that the cost in lost labor would be around $160 million.

Al Franken’s Massive New Target: Why He’s Taking on Shady Credit Rating Agencies (Salon)

A major fine for Standard & Poor's shows that Senator Franken's proposal to base credit ratings agencies' compensation on the accuracy of their ratings is still needed, writes David Dayen.

Answering President Obama’s Call, House Introduces Paid Sick Leave Bill for Workers (In These Times)

Kevin Solari reports on the introduction of the Federal Employees Paid Parental Leave Act, one of many ways to expand paid leave in order to attract top talent to government jobs.

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Daily Digest - January 27: For Some Workers, A Snow Day Puts Jobs at Risk

Jan 27, 2015Rachel Goldfarb

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No Snow Days for Low-Wage Workers (AJAM)

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No Snow Days for Low-Wage Workers (AJAM)

Most low-wage workers don't have the option of missing work during snowstorms, writes E. Tammy Kim, and may risk being fired if lack of public transit prevents them from getting there.

Supreme Court Rules Against Retirees in Union Health Benefits Case (NYT)

Adam Liptak reports on the Court's decision in M&G Polymers USA v. Tackett, which holds that a contract that doesn't specify whether retiree health benefits are for life shouldn't be assumed to do so.

The Dark Side of ‘Sharing Economy’ Jobs (WaPo)

Catherine Rampell points out that companies like Uber are shifting much of the risk inherent in their businesses to workers who are defined as independent contractors and lack protection.

A Staggeringly Lopsided Economic Recovery (The Nation)

Zoë Carpenter looks at a new study from the Economic Policy Institute about the 1 percent's gains during the recovery, which shows that group captured at least half of growth in most states.

Why de Blasio Was Right to Take on Criminal Justice Reform (Slate)

Jamelle Bouie says that since excessive policing caused economic problems, like job loss, in communities of color, Mayor de Blasio's criminal justice reform has also served as economic populism.

New on Next New Deal

Did Ending Unemployment Insurance Extensions Really Create 1.8 Million Jobs?

Roosevelt Institute Fellow Mike Konczal says probably not, because the study making this claim has problematic models and technique, as well as "noisy" confusing data.

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Did Ending Unemployment Insurance Extensions Really Create 1.8 Million Jobs?

Jan 27, 2015Mike Konczal

According to a new study by Marcus Hagedorn, Iourii Manovskii and Kurt Mitman (HMM), Congress failing to reauthorized the extension of unemployment insurance (UI) resulted in 1.8 million additional people getting jobs. But wait, how does that happen when only 1.3 million people had their benefits expire?

The answer is by going off the normal path of these arguments in models, techniques and data. The paper has a nice write-up by Patrick Brennan here, but it’s one that doesn’t convey how different this paper is compared to the vast majority of the research. The authors made a well-criticized splash in 2013 by arguing that most of the rise in unemployment in the Great Recession was UI-driven; this new paper is a continuation of that approach.

Gold Standard Model. Before we go further, let’s understand what the general standard in UI research looks like. The model here is that UI makes it easier for workers to pass up job offers. As a result they’ll take a longer time to find a job, which creates a larger pool of unemployed people, raising unemployment. In order to test this, researchers use longitudinal data for individuals to compare the length of job searches for individuals who receive UI with those who do not.

This is the standard in the two biggest UI studies from the Great Recession. Both essentially use individuals not receiving UI as a control group to see what getting UI does for people’s job searches over time. Jesse Rothstein (2011) found that UI raised unemployment “by only about 0.1 to 0.5 percentage point.” Using a similar approach, Farber and Valletta (2013) later found “UI increased the overall unemployment rate by only about 0.4 percentage points.” These are generally accepted estimated.

And though small, they are real numbers. The question then becomes an analysis of the trade-offs between this higher unemployment and the positive effects of unemployment insurance, including income support, increased aggregate demand and the increased efficiency of people taking enough time to get the best job for them.

This is not what HMM do in their research. Either in terms of their data, which doesn’t look at any individuals, or their model, which tells a much different story than what we traditionally understand, or their techniques, which add additional problems. Let’s start with the model.

Model Problems. The results HMM get are radically higher than these other studies. They argue that this is because they look at the “macro” effects of unemployment insurance. Instead of just people searching for a job, they argue that labor-search models show that employers must boost the wages of workers and create fewer job openings as a result of unemployment insurance tightening the labor market.

But in their study HMM only look at aggregate employment. If these labor search dynamics were the mechanism, there should be something in the paper about actual wage data or job openings moving in response to this change. There is not. Indeed, their argument hinges entirely on the idea that the labor market was too tight, with workers having too much bargaining power, in 2010-2013. The end of UI finally relaxed this. If that’s the case, then where are the wage declines and corporate profit gains in 2014?

This isn’t an esoteric discussion. They are, in effect, taking a residual and calling it the “macro” effect of UI. But we shouldn’t take it for granted that search models can confirm these predictions without a lot of different types of evidence; as Marshall Steinbaum wrote in his appreciation of these models, when it comes to business cycles and wages predictions they are “an empirical disaster.”

Technique Problems. The model’s vagueness is amplified by the control issue. One of the nice things about the standard model is that people without UI make a nice control group for contrast. Here, HMM simply compare high-UI and low-UI duration states and then counties, without looking at individuals. They argue that since the expiration was done by Congress, it is essentially a random change.

But a quick glance shows their high benefits states group had an unemployment rate of 8.4 percent in 2012, while their low benefits states had an unemployment rate of 6.5 percent. Not random. As the economy recovers, we’d naturally expect to see the states with a higher initial unemployment rate recover faster. But that would just be “recovery”, not an argument about UI, much less workers' bargaining power.

Data Problems. Their county-by-county analysis is meant to cover for this, but this data is problematic here. As Dean Baker notes in an excellent post, the local area data they use is noisy, confusing based on whether the state is where one works versus lives, and is largely model driven. The fact that much of it is model-driven is problematic for their cross-state county comparisons.

Baker replaces their employment data with the more reliable CES employment data (the headline job creation number you hear every month) and finds the opposite headline result:

It's not encouraging that you can get the opposite result by changing from one data source to another. Baker isn’t the first to question the robustness of these results to even minor changes in the data. The Cleveland Fed, on an earlier version of their argument, found their results collapsed with a longer timeframe and excluding outliers. The fact that the paper doesn’t have robustness tests to a variety of data sources and measures also isn’t encouraging.

So data problems, control problems, and the vague sense that this is just them finding a residual and attribute all of it to their “macro” element without enough supporting evidence. Rather than turning over the vast research already done, I think it’s best to conclude as Robert Hall of Stanford and the Hoover Institute did for their earlier paper with a similar argument: “This paper has attracted a huge amount of attention, much of it skeptical. I think it is an imaginative and potentially important contribution, but needs a lot of work to convince a fair-minded skeptic (like me).” This newest version is no different.

 
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According to a new study by Marcus Hagedorn, Iourii Manovskii and Kurt Mitman (HMM), Congress failing to reauthorized the extension of unemployment insurance (UI) resulted in 1.8 million additional people getting jobs. But wait, how does that happen when only 1.3 million people had their benefits expire?

The answer is by going off the normal path of these arguments in models, techniques and data. The paper has a nice write-up by Patrick Brennan here, but it’s one that doesn’t convey how different this paper is compared to the vast majority of the research. The authors made a well-criticized splash in 2013 by arguing that most of the rise in unemployment in the Great Recession was UI-driven; this new paper is a continuation of that approach.

Gold Standard Model. Before we go further, let’s understand what the general standard in UI research looks like. The model here is that UI makes it easier for workers to pass up job offers. As a result they’ll take a longer time to find a job, which creates a larger pool of unemployed people, raising unemployment. In order to test this, researchers use longitudinal data for individuals to compare the length of job searches for individuals who receive UI with those who do not.

This is the standard in the two biggest UI studies from the Great Recession. Both essentially use individuals not receiving UI as a control group to see what getting UI does for people’s job searches over time. Jesse Rothstein (2011) found that UI raised unemployment “by only about 0.1 to 0.5 percentage point.” Using a similar approach, Farber and Valletta (2013) later found “UI increased the overall unemployment rate by only about 0.4 percentage points.” These are generally accepted estimated.

And though small, they are real numbers. The question then becomes an analysis of the trade-offs between this higher unemployment and the positive effects of unemployment insurance, including income support, increased aggregate demand and the increased efficiency of people taking enough time to get the best job for them.

This is not what HMM do in their research. Either in terms of their data, which doesn’t look at any individuals, or their model, which tells a much different story than what we traditionally understand, or their techniques, which add additional problems. Let’s start with the model.

Model Problems. The results HMM get are radically higher than these other studies. They argue that this is because they look at the “macro” effects of unemployment insurance. Instead of just people searching for a job, they argue that labor-search models show that employers must boost the wages of workers and create fewer job openings as a result of unemployment insurance tightening the labor market.

But in their study HMM only look at aggregate employment. If these labor search dynamics were the mechanism, there should be something in the paper about actual wage data or job openings moving in response to this change. There is not. Indeed, their argument hinges entirely on the idea that the labor market was too tight, with workers having too much bargaining power, in 2010-2013. The end of UI finally relaxed this. If that’s the case, then where are the wage declines and corporate profit gains in 2014?

This isn’t an esoteric discussion. They are, in effect, taking a residual and calling it the “macro” effect of UI. But we shouldn’t take it for granted that search models can confirm these predictions without a lot of different types of evidence; as Marshall Steinbaum wrote in his appreciation of these models, when it comes to business cycles and wages predictions they are “an empirical disaster.”

Technique Problems. The model’s vagueness is amplified by the control issue. One of the nice things about the standard model is that people without UI make a nice control group for contrast. Here, HMM simply compare high-UI and low-UI duration states and then counties, without looking at individuals. They argue that since the expiration was done by Congress, it is essentially a random change.

But a quick glance shows their high benefits states group had an unemployment rate of 8.4 percent in 2012, while their low benefits states had an unemployment rate of 6.5 percent. Not random. As the economy recovers, we’d naturally expect to see the states with a higher initial unemployment rate recover faster. But that would just be “recovery”, not an argument about UI, much less workers' bargaining power.

Data Problems. Their county-by-county analysis is meant to cover for this, but this data is problematic here. As Dean Baker notes in an excellent post, the local area data they use is noisy, confusing based on whether the state is where one works versus lives, and is largely model driven. The fact that much of it is model-driven is problematic for their cross-state county comparisons.

Baker replaces their employment data with the more reliable CES employment data (the headline job creation number you hear every month) and finds the opposite headline result:

It's not encouraging that you can get the opposite result by changing from one data source to another. Baker isn’t the first to question the robustness of these results to even minor changes in the data. The Cleveland Fed, on an earlier version of their argument, found their results collapsed with a longer timeframe and excluding outliers. The fact that the paper doesn’t have robustness tests to a variety of data sources and measures also isn’t encouraging.

So data problems, control problems, and the vague sense that this is just them finding a residual and attribute all of it to their “macro” element without enough supporting evidence. Rather than turning over the vast research already done, I think it’s best to conclude as Robert Hall of Stanford and the Hoover Institute did for their earlier paper with a similar argument: “This paper has attracted a huge amount of attention, much of it skeptical. I think it is an imaginative and potentially important contribution, but needs a lot of work to convince a fair-minded skeptic (like me).” This newest version is no different.

 
Follow or contact the Rortybomb blog:
 
  

 

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Daily Digest - January 26: Taxing for the Common Good

Jan 26, 2015Rachel Goldfarb

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Obama Declares Recovery of American Economy (UP with Steve Kornacki)

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Obama Declares Recovery of American Economy (UP with Steve Kornacki)

Roosevelt Institute Chief Economist Joseph Stiglitz discusses the tax proposals in the State of the Union address, and explains where they could have done more to promote prosperity.

McDonalds Workers File Civil Rights Lawsuit (NOW with Alex Wagner)

Roosevelt Institute Fellow Dorian Warren, Friday's guest host, ties this new racial discrimination case to broader patterns of poor labor practices at McDonald's.

Why Obama Took the Lead on High-Speed Internet Access Policy (Medium)

Roosevelt Institute Fellow Susan Crawford says the president's take on Internet access has shifted to better align with his discussion of middle-class economics.

Report: Fast Food Industry Could Survive $15 Minimum Wage (AJAM)

A new report from economists at the University of Massachusetts at Amherst explains how fast food companies could maintain their profit margin while raising wages, writes Ned Resnikoff.

Why Wealthy Americans’ Delusions About the Poor Are So Dangerous (Salon)

David Sirota says that reliance on regressive tax policies, such as sales taxes instead of state income taxes, are harming state economies by giving poor families higher effective tax rates than rich ones.

Middle Class Shrinks Further as More Fall Out Instead of Climbing Up (NYT)

Dionne Searcey and Robert Gebeloff examine the data on the shrinking middle class, noting that only in recent decades has the middle class shrunk because people were moving down the ladder.

New on Next New Deal

Roosevelt Reacts: What Else Did We Need from the 2015 State of the Union?

Roosevelt Institute | Campus Network students and alumni respond to the State of the Union address, with a particular focus on what the president left out or could have taken further.

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Roosevelt Reacts: What Else Did We Need From the 2015 State of the Union?

Jan 23, 2015

Roosevelt Institute | Campus Network members and alumni weigh in on President Obama's sixth State of the Union address.

Brett Dunn, University of Alabama '17:

Roosevelt Institute | Campus Network members and alumni weigh in on President Obama's sixth State of the Union address.

Brett Dunn, University of Alabama '17:

In the face of strong Republican opposition, President Obama made his stance on many controversial topics quite clear. He outlined his views on topics such as the minimum wage, equal pay for women, LGBTQ+ rights, tax reform and more. These bold and somewhat ambitious goals for change in 2015 will require bipartisan compromise in Congress. It is likely, however, that there will be little correlation between President Obama’s bold vision for the future of the United States and Congress’ actions in the final two years of his presidency. No matter how wonderful or ambitious President Obama’s plans are for the country, the likelihood of any these issues being independently addressed by a Republican controlled Congress is very slim. Yet the president’s plans do not fall on deaf ears. President Obama’s speech gives Democrats in Congress and, more importantly, the American public, ammunition against the Republican’s inevitable inaction, which could potentially help set the stage for the 2016 election.

Chisolm Allenlundy, University of Alabama '16:

It was difficult to miss the amount of politics that happened on Tuesday at President Obama’s next-to-last State of the Union address. What might have been easy to miss, however, was the meaning of it all.

President Obama knows that his days of passing game-changing progressive legislation are over. This is a common position for 4th-quarter presidents to find themselves in, and Obama did exactly what such presidents do when they can no longer effectively push for policy change: they push for culture change.

But most Americans don’t watch the political process so much as they hear about it from media sources, which put their own spin on material. According to consumer watch company Nielson, 31.7 million people tuned in for the SOTU, and even that figure is at a 15-year low. While the president has attempted to set the direction for progressive politics for the next year, policy change will be a struggle, and he needs to reach many more Americans to steer the course on our political culture. 

Tarsi Dunlop, Middlebury College '09:

Middle class economics played a key role in the President’s 2015 State of the Union. He explained that middle class economics is about the policies needed for average American families to get ahead. These policies aren’t handouts, but they make daily life better, easier, more fulfilling. For example, what if students could graduate from K-12 with good grades and know they had the option of going to community college without the staggering cost of debt? Granted, there are certain investments that must be made to make sure that community colleges are, as an institution, prepared for the role the President wants them to serve for our nation’s youth.

The President also touched on other elements of middle class economics: key policy proposals that will help young people, new families, and the elderly. He emphasized affordable day care (right now monthly costs can run higher than a mortgage payment), as well as paid family leave and sick leave. Families shouldn’t have to choose between time with new babies and paid work, nor between working and staying home with a sick child. We need a vision and a budget to help the middle class thrive and it was great to hear concrete proposals in the President’s speech.

Hayley Brundige, University of Tennessee, Knoxville '17:

Obama's State of the Union Address illustrated just how far we still have to go in the fight for gender equality. I was ecstatic when Obama asserted that the right to quality childcare and paid maternity and sick leave are not just “women's issues” — as they are often brushed aside as — but a “national economic priority.” But in the back of my mind, I was dismayed that this concept that is so obviously a human right is still so far from being obvious to our elected officials. 

Noticeably missing from the speech was any mention of preventing sexual assault, especially on college campuses. This was particularly surprising seeing as the administration has made this issue a point of focus recently, creating a White House task force on sexual assault and investigating colleges for Title IX violations. Obama even had a readily supplied anecdote, as campus activist and sexual assault survivor Emma Sulkowicz was literally in the audience. As a college student, I applaud Obama's efforts to make community college more accessible, but it's disheartening for him to not address the importance of keeping our campuses safe. No president on record has discussed sexual assault in a State of the Union address.

Zachary Agush, Wheaton College '12:

Over the years, President Obama has always integrated personal stories into his annual State of the Union addresses to paint a visual about the troubles individuals may be facing or to explain how a certain effort can help spark further growth and development for others. I have always considered that a major strength. This year’s speech focused in particular on young families. The President knows that the new generation is quickly becoming the majority of the nation's population and that the lingering inequalities and economic hardships will definitely make it increasingly difficult for them to have the quality of life they desire. This generation is also going to struggle to maintain Social Security and Medicare for those entering these safety net programs in the coming decade. I think those stories in particular hit some members of Congress, even those of the new Republican majority, that something needs to be done to at least give the next generation a chance at success. I am cautiously optimistic that something may happen - but it will only happen if this Congress can actually stop and think about how their gridlock is directly affecting the next generation. Maybe then, there can be progress.

Sarah Hilton, Wheaton College '16:

President Obama made huge strides for education policy on Tuesday night; even raising the issue of rising college tuition is a positive step forward. However, the President hardly mentioned the K-12 system. He praised rising graduation rates and higher test scores then ever before, but ignored the staggering inequality and lack of student performance when compared internationally. Obama’s two-year community college plan, while economically beneficial for the middle class, shows that our base expectations for education continue to require more time and expense.

The focus instead should be on improving the K-12 system we already have by creating more diverse programs that train students for a variety careers from academic to vocational. Today, about half of students begin community college in remedial classes. We should be making our high schools more effective at reaching students. Vocational training for profitable and interesting jobs can be done in high school, and academic programs should be strengthen to reduce the need for remedial classes in community colleges. Strengthening the underlying K-12 system and increasing vocational training would have an earlier impact on our students’ lives.

Jas Johl, University of California, Berkeley '08:

The main rhetorical touch point for the state of the union was 'middle class economics.' Throughout the address, Obama repeatedly turned to that concept, presenting policy ideas designed to bolster it.  Of paramount importance to the ongoing success of middle class, he argued, would be to make the first two years of community college free for all. This proposal does address some of the symptoms of growing economic inequality, namely rising student debt. Nonetheless, it overlooks the underlying, systemic issues at the core of the problem: the broken state of our current education system. 

As The Institute for College Access & Success and the Brookings Institute have both argued, the majority of those attending community college are already getting their tuition covered through Pell Grants and other means of financial support. I’d argue the more pressing issue is the fact that many of the students who enroll in community colleges are ill-prepared for 4-year universities, and spend the first two years of college taking remedial college (read: high school) courses that they didn't do well in or even pass the first time. Free college doesn’t help a student who isn’t ready for it.

Obama makes the very valid point that making those colleges free would assuage the financial burden of a large number of young adults, and likely precipitate a better-prepared workforce. But a glaring absence in the president's speech was acknowledgement of the fundamental cracks in our institutions, namely, our already free K-12 educational system. Real middle class economics necessitate not just free education, but better education for all.

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