Daily Digest - August 16: Even Federal Jobs Aren't Always Good Jobs

Aug 16, 2013Rachel Goldfarb

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How President Obama Could Move Millions Into The Middle Class (Our Future)

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How President Obama Could Move Millions Into The Middle Class (Our Future)

Roosevelt Institute Senior Fellow Richard Kirsch presents a simple solution for shifting over two million workers into living wage jobs. By executive order, the President could require that workers on federal contracts get better wages and paid sick days.

The Light And Dark of Social Entrepreneurship (CSRwire)

Francesca Rheannon interviews Roosevelt Institute Fellow Georgia Levenson Keohane about the challenges of using private money for social needs. Georgia is concerned with scale, and whether a social mission can stay in the forefront as an enterprise grows.

ALEC Convention Met With Protests in Chicago (The Nation)

Micah Uetricht reports on protests against the ALEC convention, organized by a coalition of labor, community, and environmental groups. They hope that the protesters will shine a brighter light on ALEC's far-right austerity agenda and influence on legislators.

New Conservative Plan: Repeal Obamacare or We'll Default on the National Debt (Slate)

Matt Yglesias looks at the various ways the GOP has created debt ceiling crises in recent years. He doesn't think there's much to worry about in the current threat, but won't dismiss the possibility of this debt ceiling crisis turning into something nasty.

Dems Defy Obama on Mortgage Protections (MoJo)

Erika Eichelberger critiques the thirteen Democrats who joined Republicans to cosponsor bills that would demolish new Consumer Financial Protection Bureau mortgage rules, but cannot explain why they want to allow sub-prime mortgages to continue.

Houston Rockets Pre-K to Top of the Priority List (TAP)

Abby Rapoport examines a new plan in Houston to expand early childhood education. Proponents are pushing a ballot initiative to increase property taxes by one hundredth of one percent to fund daycare teacher training and they're finding broad support.

The Many, Many Jobs That Won't Earn You Enough to Live in Your City (The Atlantic Cities)

Emily Badger thinks that many of these jobs are necessary for a city's function, including bank tellers, fire fighters, janitors, and school bus drivers. If these workers can't afford rent in their cities, who is going to do these jobs?

Why Are Walmart Stores Underperforming? Blame Their Terrible Wages. (The Daily Beast)

Daniel Gross questions why Walmart's same-store sales fell this quarter. He suggests that Walmart pays such low wages that their employees can't afford to shop there as much, and recent protests against Walmart and other low-wage employers can't help.

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Guest Post: O Canada and Its Housing Market

Aug 14, 2013David Min

Mike here. Over the weekend I wrote a post at Wonkblog, "In Defense of the 30 Year Mortgage." Many people have responded to this idea by bringing up the housing market of our neighbors in Canada. In order to keep this conversation running, I have a guest post by David Min, friend of the blog and a University of California, Irvine law professor. Take it away, David:

Does Canada prove the 30-year fixed-rate mortgage is of limited value? Here’s Matt Yglesias from last week:

If you cross the border into Canada it's not like people are living in yurts. It works fine. But since homebuyers have to carry a bit more interest rate risk, they seem to purchase slightly smaller houses. Alternatively if you imagine a jumbo loan scenario where the 30-year fixed rate mortgage lives but with systematically higher interest rates, you'd find that people would have to respond by purchasing slightly smaller houses. And it's not a coincidence that Americans live in the biggest houses in the world.

As I’ve outlined in the past, the dominant mortgage product in Canada is a five-year fixed-rate mortgage, amortized over 25 years, that essentially requires refinancing every five years. This product leaves borrowers open to two important types of mortgage-related risk.

First, there is the risk that interest rates will rise significantly between the time the loan is first originated and the time that it must be refinanced, causing a payment shock that the borrower may not be able to afford. Second, there is the risk that when the loan comes due, there may not be refinancing options available to the borrower, either because the property has declined in value so much that the loan does not meet loan-to-value requirements, or perhaps because banks have reduced their lending due to a credit contraction.

For what it’s worth, Canada has historically had a greater government involvement in its housing finance system, through a combination of government-backed mortgage securitization and mortgage insurance offered by the Canada Mortgage and Housing Corporation (an entity similar in many ways to Fannie and Freddie), as well as governmental reinsurance for all mortgage insurance, which in total accounts for some 70-80 percent of all Canadian home loans. So if you’re looking to Canada as a model of getting the government out of housing finance, look again (and don’t look to Europe, which also has very high levels of government guarantees for housing finance, as I explained recently in congressional testimony).

As to Matt’s broader point about Canadian mortgage finance, there is no question that we can have a housing finance system without the 30-year FRM that drives sufficient capital into housing to meet our needs (both for owner-occupied and rental housing), but that’s not the point of the debate over the 30-year FRM. The key difference between Canada’s five-year FRM and the American 30-year FRM is that the former leaves interest rate risk (and refinancing risk) with consumers, whereas the latter leaves rate risk (and prepayment risk) with financial institutions such as banks, pension funds, and insurance companies.

The key question is whether interest rate risk is better placed with households or with banks and investors. Those of us who favor the 30-year FRM argue that this risk should be placed with the latter, who are better equipped to handle this risk. The available evidence suggests that average mortgage borrowers do not attempt to predict what mortgage rates will be five years down the line. And even if they could do this, they lack access to the financial instruments that might allow them to hedge against this risk. Conversely, banks and MBS investors already spend quite a lot of resources trying to protect against interest rate volatility.  

Moreover, when households are unable to deal with interest rate risk, they are unable to make their mortgage payments. This creates a double whammy insofar as higher rate risk for borrowers means higher credit risk for banks and investors. Thus, from a systemic stability standpoint, it seems to make more sense to place rate risk with financial institutions rather than with consumers.

Neither the U.S. nor Canada has experienced significant interest rate increases since the early 1980s, so the difference between the five- and 30-year FRMs has largely been a theoretical debate since that time. But as Karl Case (the economist who helped create the eponymous Case-Shiller home price index) has noted, we have at least one important data point from that last episode of interest rate volatility that suggests the 30-year FRM is preferable from a financial stability standpoint.

Both Vancouver and California had housing booms in the late 1970s, and both of course went through the double-digit interest rate increases of the early 1980s, which led to U.S. mortgage rates settling at about 17-18 percent. Then, as now, the dominant mortgage in the U.S. was the 30-year FRM and the dominant mortgage in Canada was the five-year FRM. Vancouver and California experienced starkly different housing markets in response to this interest rate volatility. Because Canadian mortgages were designed to be refinanced every few years, Canadian borrowers faced enormous payment shocks (with mortgage payments doubling or tripling), which resulted in a huge housing bust, with Vancouver experiencing a 60 percent (!) home price decline in the early 1980s. Conversely, California experienced a few years of a stagnant housing market in which potential sellers simply held onto their existing mortgages, and prices never fell in nominal terms.

This limited historical data suggests that the U.S. 30-year FRM is a more systemically stable product than the shorter duration rollover loan that is popular in Canada. Within the United States, of course, there is ample evidence that the 30-year FRM performs far better than short-term rollover loans. During the Great Depression, the delinquency rates on short-term rollover loans reached 50 percent, as underwater borrowers were unable to find sources of refinancing (sound familiar?). More recently, adjustable-rate mortgages experienced delinquency rates that were two to three times higher than fixed-rate mortgages made to comparable borrowers, as both the Federal Housing Finance Agency and the Mortgage Bankers Association have found.

All of this evidence suggests that critics of the 30-year FRM need to be treading a little more carefully in trashing the benefits of this particular product.

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Mike here. Over the weekend I wrote a post at Wonkblog, "In Defense of the 30 Year Mortgage." Many people have responded to this idea by bringing up the housing market of our neighbors in Canada. In order to keep this conversation running, I have a guest post by David Min, friend of the blog and a University of California, Irvine law professor. Take it away, David:

Does Canada prove the 30-year fixed-rate mortgage is of limited value? Here’s Matt Yglesias from last week:

If you cross the border into Canada it's not like people are living in yurts. It works fine. But since homebuyers have to carry a bit more interest rate risk, they seem to purchase slightly smaller houses. Alternatively if you imagine a jumbo loan scenario where the 30-year fixed rate mortgage lives but with systematically higher interest rates, you'd find that people would have to respond by purchasing slightly smaller houses. And it's not a coincidence that Americans live in the biggest houses in the world.

As I’ve outlined in the past, the dominant mortgage product in Canada is a five-year fixed-rate mortgage, amortized over 25 years, that essentially requires refinancing every five years. This product leaves borrowers open to two important types of mortgage-related risk.

First, there is the risk that interest rates will rise significantly between the time the loan is first originated and the time that it must be refinanced, causing a payment shock that the borrower may not be able to afford. Second, there is the risk that when the loan comes due, there may not be refinancing options available to the borrower, either because the property has declined in value so much that the loan does not meet loan-to-value requirements, or perhaps because banks have reduced their lending due to a credit contraction.

For what it’s worth, Canada has historically had a greater government involvement in its housing finance system, through a combination of government-backed mortgage securitization and mortgage insurance offered by the Canada Mortgage and Housing Corporation (an entity similar in many ways to Fannie and Freddie), as well as governmental reinsurance for all mortgage insurance, which in total accounts for some 70-80 percent of all Canadian home loans. So if you’re looking to Canada as a model of getting the government out of housing finance, look again (and don’t look to Europe, which also has very high levels of government guarantees for housing finance, as I explained recently in congressional testimony).

As to Matt’s broader point about Canadian mortgage finance, there is no question that we can have a housing finance system without the 30-year FRM that drives sufficient capital into housing to meet our needs (both for owner-occupied and rental housing), but that’s not the point of the debate over the 30-year FRM. The key difference between Canada’s five-year FRM and the American 30-year FRM is that the former leaves interest rate risk (and refinancing risk) with consumers, whereas the latter leaves rate risk (and prepayment risk) with financial institutions such as banks, pension funds, and insurance companies.

The key question is whether interest rate risk is better placed with households or with banks and investors. Those of us who favor the 30-year FRM argue that this risk should be placed with the latter, who are better equipped to handle this risk. The available evidence suggests that average mortgage borrowers do not attempt to predict what mortgage rates will be five years down the line. And even if they could do this, they lack access to the financial instruments that might allow them to hedge against this risk. Conversely, banks and MBS investors already spend quite a lot of resources trying to protect against interest rate volatility.  

Moreover, when households are unable to deal with interest rate risk, they are unable to make their mortgage payments. This creates a double whammy insofar as higher rate risk for borrowers means higher credit risk for banks and investors. Thus, from a systemic stability standpoint, it seems to make more sense to place rate risk with financial institutions rather than with consumers.

Neither the U.S. nor Canada has experienced significant interest rate increases since the early 1980s, so the difference between the five- and 30-year FRMs has largely been a theoretical debate since that time. But as Karl Case (the economist who helped create the eponymous Case-Shiller home price index) has noted, we have at least one important data point from that last episode of interest rate volatility that suggests the 30-year FRM is preferable from a financial stability standpoint.

Both Vancouver and California had housing booms in the late 1970s, and both of course went through the double-digit interest rate increases of the early 1980s, which led to U.S. mortgage rates settling at about 17-18 percent. Then, as now, the dominant mortgage in the U.S. was the 30-year FRM and the dominant mortgage in Canada was the five-year FRM. Vancouver and California experienced starkly different housing markets in response to this interest rate volatility. Because Canadian mortgages were designed to be refinanced every few years, Canadian borrowers faced enormous payment shocks (with mortgage payments doubling or tripling), which resulted in a huge housing bust, with Vancouver experiencing a 60 percent (!) home price decline in the early 1980s. Conversely, California experienced a few years of a stagnant housing market in which potential sellers simply held onto their existing mortgages, and prices never fell in nominal terms.

This limited historical data suggests that the U.S. 30-year FRM is a more systemically stable product than the shorter duration rollover loan that is popular in Canada. Within the United States, of course, there is ample evidence that the 30-year FRM performs far better than short-term rollover loans. During the Great Depression, the delinquency rates on short-term rollover loans reached 50 percent, as underwater borrowers were unable to find sources of refinancing (sound familiar?). More recently, adjustable-rate mortgages experienced delinquency rates that were two to three times higher than fixed-rate mortgages made to comparable borrowers, as both the Federal Housing Finance Agency and the Mortgage Bankers Association have found.

All of this evidence suggests that critics of the 30-year FRM need to be treading a little more carefully in trashing the benefits of this particular product.

Follow or contact the Rortybomb blog:

  

 

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Daily Digest - August 13: Fighting Poverty in the Land of Success

Aug 13, 2013Rachel Goldfarb

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The Offline Wage Wars of Silicon Valley (Next City)

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The Offline Wage Wars of Silicon Valley (Next City)

Roosevelt Institute | Pipeline Fellow Nona Willis Aronowitz writes on the fight to increase the minimum wage in San Jose, where poverty exists in sharp contrast to Silicon Valley successes. This piece was published on a pay-to-read platform, and I've linked to an excerpt.

Inequality is Hindering Economic Growth (Baltimore Sun)

Roosevelt Institute | Campus Network founder Nate Loewentheil and Jacob Hacker denounce the "Big Trade-Off" between equality and efficiency. Economic inequality prevents the growth our economy needs, so people and poverty must come before the deficit.

Why the Anger? (Robert Reich)

Robert Reich suggests that income inequality is causing the polarization of our political system. People have many good reasons to be angry, from falling wages to government bailouts, but he fears that anger is pitting Americans against the wrong targets.

Your Mortgage Documents are Fake! (Salon)

David Dayen reports on a newly unsealed lawsuit, which reveals that banks faked documents to establish ownership of mortgages when trying to foreclose. He questions whether banks should control mortgages when they can't track who owns which loan

Lobbyist Secretly Wrote House Dems' Letter Urging Weaker Investor Protections (MoJo)

Erika Eichelberger reports on a letter to the Department of Labor signed by 32 Democrats opposing new regulations on retirement advisors and written by a financial services lobbyist. These regulations are meant to protect the populations the signatories represent.

The Return of One of the GOP's Dumbest Ideas (TAP)

Paul Waldman finds it strange that when proponents of the balanced budget amendment explain why the deficit is so bad, they claim it's due to draconian budget cuts that will be needed one day. Apparently, that means we should make those cuts today instead.

Remember the JOBS Act? (U.S. News and World Report)

Pat Garofolo thinks that any bipartisan jobs plan should be carefully scrutinized, considering what we got last time. The JOBS Act, signed in April 2012, reduces reporting requirements, so we're seeing more fraud and shell companies, but no new jobs.

The Workers Defense Project, a Union in Spirit (NYT)

Steven Greenhouse looks at the successes of the Workers Defense Project, which is organizing workers outside the traditional union setting for basics like workers' compensation. Their model is seen as a potential future for organized labor.

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Daily Digest - August 12: Detroit Wasn't a Market Inevitability

Aug 12, 2013Rachel Goldfarb

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The Wrong Lesson From Detroit’s Bankruptcy (NYT)

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The Wrong Lesson From Detroit’s Bankruptcy (NYT)

Roosevelt Institute Chief Economist Joseph Stiglitz sees Detroit as an example of the problems with our increasing economic segregation. The greater Detroit area isn't doing so badly, just the city, which the upper classes have abandoned.

In Defense of the 30-Year Mortgage (WaPo)

Roosevelt Institute Fellow Mike Konzcal wants to keep fixed-rate 30-year mortgages on the table. Since these loans help maintain macroeconomic stability and keep rental rates lower, they affect even those who will never own a home.

Fannie, Freddie, and the Destructive Dream of the 'Ownership Society' (The Atlantic)

Zachary Karabell argues that our dreams of homeownership might not be possible in this economy. He wouldn't mind keeping Fannie and Freddie, which make profits for the government today, if we could recalibrate those dreams.

How Unpaid Interns Aren’t Protected Against Sexual Harassment (ProPublica)

Blair Hickman and Christie Thompson explain one of the most horrifying side effects of unpaid internships. Federal law protecting against sexual harassment and discrimination only affects employees, and interns who aren't paid aren't legally employees.

This Week in Poverty: The Expert Testimony of Tianna Gaines-Turner (The Nation)

Greg Kaufmann shares the words of activist Gaines-Turner, who was not permitted to testify at a recent House Budget Committee hearing on the war on poverty. Her written testimony demonstrates that cutting SNAP is really just a battle against the poor.

No, Walmart Doesn’t Create Jobs (Washington Monthly)

Kathleen Geier considers the factor that pro-Walmart forces in Washington, DC have been ignoring: when Walmart enters a new region, the economy doesn't gain jobs. The best result is no net change, just a shift from jobs at local retail to Walmart.

Rand Paul Doesn't Know What He's Talking About (In Charts) (TAP)

Paul Waldman gives Senator Paul a lesson on the deficit, which is not "a trillion dollar[s] ... every year." In fact, the deficit has been falling for the past few years, and is projected to continue in that pattern through 2015.

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Mortgage Rule Debate Pits Dreams of Homeownership Against Market Fears

Aug 8, 2013Jack Houghteling

New models for mortgage standards out of Dodd-Frank have banks insisting that they cannot do without federal support, just as we begin to look to the end of Fannie Mae and Freddie Mac.

New models for mortgage standards out of Dodd-Frank have banks insisting that they cannot do without federal support, just as we begin to look to the end of Fannie Mae and Freddie Mac.

As the first decade of the 2000s ushered in industry-wide privatization of the housing market, banks began to transition from more reliable long-term loans to less reliable adjustable rate mortgages (ARMs). This shift created vast uncertainty. Without any requirement that forced lenders and security holders to retain risk on their own products, or a guarantee that interest rates and housing prices would remain stable, ARMs were left subject to external forces. If the market did well, borrowers would be okay; however, if the market went under, they were in serious trouble.

In the wake of the financial crisis, which led to a slew of housing foreclosures nationwide, legal experts and consumer activists felt a growing need to address this issue of uncertainty. The fact that lenders naively thought that the optimal market forces of 2005-06 would last - while the mortgage market remained over-leveraged and un-diversified – was not only delusional but also downright dangerous, they argued. Worst of all, mortgage debt often ended up falling on taxpayers, many of whom lost their most valuable asset (their home) in the process.

The Qualified Mortgage (QM) and Qualified Residential Mortgage (QRM) standards of the Dodd-Frank Act served as a reassurance that mortgages, irrespective of market forces, would not continue to default as many did during the crash. QM was a way to limit credit risk. It mandated that lenders could only sell loans that could be repaid by borrowers, and adopted a number of rules pertaining to down-payments, fixed-interest rates, debt-to income ratios and other “ability to repay” criteria. QRM forced lenders and security holders to either retain risk on their products (roughly 5-10 percent) or adopt ability to repay rules that were even stricter than the normal QM standards. The key idea was that by realigning incentives, by emphasizing the importance of quality over volume, the private mortgage market could be regulated without being hindered or altogether shutdown.

There is now a new debate brewing on QRM between those who insist on such standards and the large lobbying cohort of lenders, brokers, developers, and construction magnates who argue that QRM would curtail the ability of lower-income borrowers to access mortgage credit. Specifically, they argue that QRM should be more in line with QM, which has broader, less strict rules. “Failing to align these rules,” according to a report written by the Mortgage Bankers Association of America, “will further entrench the market’s dependence on federal programs,” and thus keep private capital from returning to the market.

To understand the larger context surrounding this debate, there are two important functions of QRM to consider. The first is its role as the last line of defense against housing foreclosure. QRM, in this regard, is less geared toward providing access to credit than it is toward the long-term viability of the market. Sure, providing borrowers with the opportunity to purchase a home is important, but so is making sure that those borrowers are buying into a reliable, stable market. It would be foolish to ignore the lessons learned in 2008.

QRM's second function is to get lenders to retain more risk. Some banks, including Wells Fargo, have actually called for raising down-payment rates to 30 percent for mortgages exempt from risk-retention rules. The suggestion, while a bit lofty, sheds light on an important point: the end goal is not to push consumers out of the market, but to find a way to get lenders to put more skin in the game.

Why, then, are mortgage interest groups advocating for fewer requirements? Do they actually want to provide opportunity for lower-income families? In part, yes. But it is also possible that lenders are simply trying to evade risk-retention rules, and that "opportunity" is just financial self-interest under the guise of a euphemistic slogan.

QRM standards could certainly be improved. Large down-payment requirements, in particular, have shown little proof of actually working. As the Coalition for Sensing Housing Policy points out, “The QRM rule ignores compelling data that demonstrate sound underwriting and product features, like documentation of income and type of mortgage, have a larger impact on reducing housing rates than high income.”

We should therefore start coming up with alternate ways to promote market stability: incentivizing lenders and banks to sell fewer ARMs, subsidizing 30-year fixed-rate mortgages, forcing banks to assume greater financial responsibility for interest rate spikes, etc.

Part of the reason the housing issue is so sensitive is because of its cultural and emotional roots. Houses maintain a special place in the American imagination. They are the central unit of private life, where families take shape and values are taught. In the post-war years, a house was a source of great pride for any homeowner and the ultimate affirmation of making it into the middle class. We find the idea that some are unable to enjoy such a signature feature of American life, for good reason, to be both unfathomable and unacceptable.

However, more important than any cultural preconception is the substantive need to make sure that mortgages don’t default and that 2008 doesn’t happen again. There seem to be two possible routes that could be taken on the housing issue. One would be for lenders and security holders to agree to take on more risk, while providing access to affordable loans. This would satisfy the “dual mandate” of mortgage stability and broad consumer access to credit. The second option, if banks choose not to cooperate with risk-retention rules, would be to proceed with stricter, inflexible payment requirements as outlined under QRM. Most would prefer the former option. But then again, we live in an era of political sclerosis, where conciliation time and again takes a backseat to conflict. So don’t cross your fingers.

Jack Houghteling is a research intern working with Roosevelt Institute Fellow Mike Konczal and is a rising senior at Claremont McKenna College.

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Daily Digest - August 8: Labor Working Local

Aug 8, 2013Rachel Goldfarb

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Veto Decision Looms for DC Retail Living Wage Bill (The Nation)

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Veto Decision Looms for DC Retail Living Wage Bill (The Nation)

Josh Eidelson speaks to Roosevelt Institute Fellow Dorian Warren, who thinks that it's fine if DC's living wage bill targets Wal-Mart, because it sets standards for its industry. He suggests that initiatives like this one are the most successful way to raise labor standards today.

More Than a Quarter of Fast-Food Workers Are Raising a Child (The Atlantic)

Jordan Weissmann looks at the details of some surprising statistics about fast food workers. The numbers show that those who claim fast food workers are teenagers or young people working for pocket change are just plain wrong.

Helping Low-Income Renters (Off The Charts)

Douglas Rice explains just how out of balance housing policies are today. More than one third of American households are renters, but less than a quarter of housing assistance funds go to those households.

Washington Steps Warily on Housing (NYT)

Binyamin Appelbaum examines the challenges that face the federal government in altering its role in the mortgage business. It's possible that without government support, the 30-year mortgages that are so common here could disappear.

Obama Bets on Private Market in Housing Recovery (MSNBC)

Ned Resnikoff reports on the details of the President's housing policy, revealed in a roundtable discussion on Wednesday. Obama calls for the private market to step into the space that Fannie Mae and Freddie Mac will leave, which puts a lot of trust in the banks.

The Fed Could Still Let Wall Street Sneak Back Into the Commodities Business (MoJo)

Lina Khan lays out how big banks got started in oil, electricity, and other physical commodities. This allows them insider access to industries they trade on, and she thinks it would be safest if banks were forced out of these riskier, more speculative fields.

New on Next New Deal

Debunking the Minimum Wage Myth: Higher Wages Will Not Reduce Jobs

Emily Chong discusses evidence supporting the fight to increase the minimum wage. Multiple studies show that a higher minimum wage will have no negative effects on employment, and she thinks the increase would work as an anti-poverty program.

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Daily Digest - August 7: Who Owns Your Rental?

Aug 7, 2013Rachel Goldfarb

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Obama Suggests Re-Examination of America's Renters Policy (All In With Chris Hayes)

Roosevelt Institute Fellow Mike Konczal considers some of the implications of the President's housing speech. He notes that any changes to the mortgage markets also affects renters, because someone owns that home too.

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Obama Suggests Re-Examination of America's Renters Policy (All In With Chris Hayes)

Roosevelt Institute Fellow Mike Konczal considers some of the implications of the President's housing speech. He notes that any changes to the mortgage markets also affects renters, because someone owns that home too.

The R-Word (The Daily Show)

Roosevelt Institute Engagement Editor Dante Barry appears in a segment on race relations in America. Dante (who sits on the right, in the front row) brings up the intersectionality of this issue: it's not just black people who face racial discrimination in their daily lives.

Jeff Bezos Can Make Newspapers Profitable (Bloomberg)

Roosevelt Institute Fellow Susan Crawford bets that a single large investor, like Bezos, has the best opportunity to make a newspaper succeed in this digital era. She suggests focusing on the local needs and opportunities, which have less competition.

What Should the Minimum Wage Be? (The Week)

Keith Wagstaff speaks to Roosevelt Institute Senior Fellow Richard Kirsch, who agrees with fast-food strikers that $15 an hour is necessary for a worker to do more than survive. Those who approach this question as one of profits instead of people disagree.

President Obama's Amazon Jobs Pitch is Hard to Buy with One Click (The Guardian)

Helaine Olen sees heavy irony in the President's choice to discuss good jobs at an Amazon warehouse, which creates temporary, low-income, unreliable jobs. These aren't jobs to be celebrated, no matter how hard Obama tries to pitch it as such.

  • Roosevelt Take: Roosevelt Institute Senior Fellow Richard Kirsch is similarly concerned by the President's attempt to spin Amazon warehouses as good jobs.

L.A. Story (TAP)

Harold Meyerson looks at the work of the Los Angeles Alliance for a New Economy. He thinks that their model of organizing workers in their communities and working with municipalities could be a model for labor, or even progressives as a whole, to follow.

California Considers Ending Rule That Penalizes Low-Income Women For Having Kids (ThinkProgress)

Bryce Covert reports that California might remove a limit that prevents families on benefits from getting increases with new children. This rule puts unpleasant limits on poor women's reproductive choices, and punishes children for the sin of being born into poverty.

New on Next New Deal

Whatever Happened to the Economic Policy Uncertainty Index?

Roosevelt Institute Fellow Mike Konczal questions why the Economic Policy Uncertainty Index is falling to 2008 levels, but the recovery isn't speeding up. Mike suggests that this is proof of the limited effects of uncertainty on the economy.

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Daily Digest - July 29: Prisons in a Recession

Jul 29, 2013Rachel Goldfarb

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Prisons are Shrinking. That Won’t Necessarily Last. (WaPo)

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Prisons are Shrinking. That Won’t Necessarily Last. (WaPo)

Roosevelt Institute Fellow Mike Konczal questions whether the Great Recession has had an effect on our incarceration system. It seems that the slow decline in incarceration rates started before the recession, but we could use this moment to continue that trend.

Why Progressives Hate the Idea of Larry Summers for Fed Chair (MSNBC)

Ned Resnikoff speaks to Mike Konczal about all the reasons Larry Summers isn't the right choice for the next Federal Reserve Chair. Mike points out that Summers has never shown any great interest in monetary policy to begin with.

The Cost of Austerity: 3 Million Jobs (MoJo)

Kevin Drum reports that Republican austerity policies since 2011 have reduced employment by nearly 3 million. The unemployed aren't any better off with this obstructionist, anti-growth behavior, but with a Democrat in the White House, he says Republicans don't care.

Helping America’s Renters (Reuters)

David Abromowitz questions how much profit Fannie Mae and Freddie Mac need to make before we can fund the National Housing Trust Fund. The fund was created to support low-income housing just before the crash, but has never had actual funds to work with.

Fighting Back Against Wretched Wages (NYT)

Steven Greenhouse looks at the low-wage workers nationwide who have decided they are tired of corporations who refuse to pay a living wage. But as one CEO quoted says, there is no such thing as too-high profits, and apparenty there's no need to pass that on to the workers.

Fast Food Strikes Intensify in Seven Cities (Salon)

Josh Eidelson looks at the expansion of fast food worker strikes that is coming today. The short-term strikes in seven cities are aimed to decrease risk for strikers, because fast food corporations haven't taken well to employees who dare to mention unions.

How to Ease Inequality on the Cheap (Pacific Standard)

Michael Fitzgerald appreciates the sentiment behind President Obama's call for universal Pre-K, but there may be a cheaper option in the short run. A World Bank working paper finds that weekly hour-long sessions with a childcare aid can have a massive effect on the child's adult income.

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Daily Digest - July 16: Missing Mortgage Modifications

Jul 16, 2013Rachel Goldfarb

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Bank vs. America (U.S. News & World Report)

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Bank vs. America (U.S. News & World Report)

Pat Garofalo pulls from Roosevelt Institute Fellow Mike Konczal's work to explain why the failure of the Home Affordable Modification Program matters. Areas with more mortgage debt have higher unemployment and weaker recoveries, making mortgage modifications essential.

This Week in Poverty: Confronting Congressional Hunger Games (The Nation)

Greg Kaufmann discusses the coming cuts to food stamps, which are currently up in the air thanks to the SNAP-less farm bill the House passed on Thursday. He looks at other coalitions to work on hunger and food insecurity, but they can't fill the gap.

Prepare for the New Permanent Temp (Harvard Business Review)

Michael Schrage looks at the jump in part-time and temporary employment in recent years. He suggests that while many are grateful for any employment, since employers don't invest in the people in these categories, the trend is bad for workers.

In Labor Board Filibuster Fight, Republicans Kindly Offer To Take Over Agency (HuffPo)

Dave Jamieson examines at the Senate's fight over filling the National Labor Relations Board, and the GOPs recently proposed deal. That deal would shortly give Republicans control of the board, which would not be good for workers and organized labor.

McDonalds Tells Workers To Budget By Getting A Second Job And Turning Off Their Heat (ThinkProgress)

Annie-Rose Strasser reports on McDonalds' new budgeting website for its employees. Apparently employees should have no trouble paying all of their expenses - if they have a second job, and a heating bill of $0.

How to Fearmonger About the Fed (In 2 Easy Steps) (The Atlantic)

Matthew O'Brien is frustrated by inflation hawks' continued insistence that the Fed's bond-buying policies are destroying our economy. The data shows that the Fed's policies are working, but by just mentioning the 1970s the fearmongers get attention.

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Daily Digest - May 28: Global Economy, Global Loopholes

May 28, 2013Rachel Goldfarb

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Globalisation isn't just about profits. It's about taxes too (The Guardian)

Click here to receive the Daily Digest via email.

Globalisation isn't just about profits. It's about taxes too (The Guardian)

Roosevelt Institute Senior Fellow Joseph Stiglitz argues that in today's global economy, all countries suffer when major corporations take advantage of tax loopholes, and that reform is needed so that corporations pay a fair income tax rate internationally.

The Facts (Captive Audience)

Roosevelt Institute Fellow Susan Crawford corrects what Comcast's Executive Vice President told the U.S. Conference of Mayors about how great high-speed Internet access is in the U.S. If the mayors believed him, they must not look at what household Internet costs in their cities.

See How Citigroup Wrote a Bill So It Could Get a Bailout (MoJo)

Erika Eichelberger spoke to Roosevelt Institute Fellow Mike Konczal about Citigroup's attempt to gut the "push-out rule," which would forbid banks from trading certain derivatives. This prevents banks from protecting risky trades with FDIC insurance, and Konczal says we need it "more than ever."

This Week in Poverty: Homeowners Take the Foreclosure Fight to the DOJ (The Nation)

Greg Kaufmann spoke to activists involved in protests last week to fight illegal foreclosures and push for principal reductions for homeowners at risk of foreclosure. These newly minted reformers first fought to keep their own homes; now they’re fighting for others.

  • Roosevelt Take: The jobs crisis hasn't helped people struggling to keep their homes. Roosevelt Fellows and other distinguished guests will discuss A Bold Approach to the Jobs Emergency on June 4th.

America is the only rich country that doesn’t guarantee paid vacation or holidays (WaPo)

In honor of Memorial Day, Ezra Klein reminds us that in the U.S., poorer workers are less likely to have any paid time off, and if they do, they get less. Compared to European countries' paid time off guarantees, yesterday's barbeques seem a little less exciting.

Let Them Make Their Own Jobs (NYT)

Nancy Folbre considers that statement to be the new "let them eat cake," because entrepreneurs and start-ups struggle as much as established businesses with the lack of demand. Creating your own job doesn’t guarantee you've created any income for yourself.

The Falling-Bridge Lesson: The U.S. Infrastructure Failure Is Still Totally Inexcusable (The Atlantic)

Matt Thompson thinks the bridge that collapsed near Seattle last week needs to be a wake-up call to increase spending on infrastructure. Maybe some members of Congress will take family road trips this summer and notice how the roads just end at that big blue space on their map now.

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