Daily Digest - August 21: How to Plan for the Future In Today's Economy

Aug 21, 2013Rachel Goldfarb

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Working Class Millennials Have Extra Challenges in Tough Economy (Daily Circuit)

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Working Class Millennials Have Extra Challenges in Tough Economy (Daily Circuit)

Roosevelt Institute | Pipeline Fellow Nona Willis Aronowitz talks about the precariousness of the American Dream in today's economy on Minnesota Public Radio. Many young people see the traditional markers of adulthood as unreachable with such an uncertain future.

The High Probability of Being Poor (TAP)

Matt Bruenig examines more detailed data that refutes some critiques of last month's AP report on economic insecurity. The aggregate life span poverty experience in this country is surprising, and in some demographics, poverty touches almost everyone.

Freelance Nation: When Good Jobs Turn to Bad (Salon)

Barbara Garson examines how jobs that used to provide a solid middle-class lifestyle have lost wages, benefits, and long-term security. Employers have turned many jobs into part-time or contract work, which takes away everything that made a job good.

Should White House Interns be Paid? (The Week)

Carmel Lobello speaks to organizers who are campaigning to get political interns in Washington wages. They see a disconnect between calling for a higher minimum wage and running the administration with unpaid workers.

North Carolina Could Be Next To Throw A Wrench Into Paid Sick Leave (Think Progress)

Bryce Covert reports on the preemption bills popping up across the country that prevent cities and counties from enacting local paid sick leave laws. ALEC, which pushes this bill, doesn't seem to care that paid sick leave saves employers the cost of lost productivity.

Women Shortchanged In Retirement Earnings (NPR)

Celeste Headlee and guests discuss how policy contributes to the gender gap in retirement funds. When women leave the workforce to have children, even temporarily, they reduce their personal contributions to retirement and have fewer work years to base Social Security on.

Why the White House is Uneasy with Picking Janet Yellen as Fed Chair (WaPo)

Neil Irwin sees Janet Yellen as an independent thinker who is methodically prepared in her work. That style and her emphasis on unemployment instead of financial bubbles may be what is keeping her off the top of the White House short list.

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Daily Digest - August 20: Everyone Loses These Policy Debates

Aug 20, 2013Rachel Goldfarb

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Breaking Out of a Cramped Economic Policy Debate (NYT)

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Breaking Out of a Cramped Economic Policy Debate (NYT)

Jared Bernstein questions the continued false choices presented by our partisan policy debates. These arguments can't be about who wins, because then our policy is focused on winners and losers instead of fairness, opportunity, and growth.

Stop Worrying about Food Stamp "Fraud" (TAP)

Matt Bruenig points out that when we give a family SNAP, we're giving them dollars to spend, not Monopoly money. The fraud in question involves swapping SNAP money for dollars, and he thinks we should accept that we were already giving them money.

Sequestration Cuts Head Start for 57,000 Children (MSNBC)

Suzy Khimm explains the extent of the cuts that Head Start has to make. They were advised not to "compromis[e] the quality of [their] services," but that's not easy when Head Start already ran on a bare-bones budget.

Fast-Food Workers Call for Nationwide Walkout Aug. 29 (WaPo)

Michael Fletcher reports on the planned next steps for fast food strikes around the country. Organizers expect the August 29th protests, which will continue to call for a living wage, to include at least 35 cities.

Why Jobs Go Unfilled Even in Times of High Unemployment (The Atlantic)

Amy Sullivan talks to René Bryce-Laporte of Skills for America's Future about the supposed skills gap, and community college partnerships that are trying to fill it. Of course, these programs have tuition that usually falls on the unemployed person, not the employers.

Obama to Meet with Regulators Over Stalled Dodd-Frank Reform Act (The Guardian)

Heidi Moore discusses the coming meeting of the financial stability oversight council, where they are expected to discuss Dodd-Frank. The big question is why so many rules are still unwritten after three years of work.

New on Next New Deal

Why Carried Interest Reform Should Be a No-Brainer

Roosevelt Institute | Campus Network alumnae Lydia Austin thinks that it's time for the tax code to recognize that carried interest, the share of profits received by private equity fund managers, is income, and should be taxed accordingly.

Roosevelt Institute Event

How Chicago Attracts Millennials in a Tough Economy

Tonight, join Roosevelt Institute | Pipeline Fellow Nona Willis Aronowitz and local stakeholders for a discussion on how Chicago has made itself a "land of opportunity" for Millennials, and how we can make that opportunity accessible to all.

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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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Daily Digest - August 14: Disrupting Cable Not So Simple

Aug 14, 2013Rachel Goldfarb

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The Future Of Television (Diane Rehm Show)

Roosevelt Institute Fellow Susan Crawford discusses the limits of how web-based models like Netfix can disrupt traditional cable television. Without high-speed internet access, none of these models work, and the cable companies control most broadband.

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The Future Of Television (Diane Rehm Show)

Roosevelt Institute Fellow Susan Crawford discusses the limits of how web-based models like Netfix can disrupt traditional cable television. Without high-speed internet access, none of these models work, and the cable companies control most broadband.

Bash Brothers: How Globalization and Technology Teamed Up to Crush Middle-Class Workers (The Atlantic)

Derek Thompson explains a new study that found that the monolith "globalizationandtechnology" is actually two forces working in tandem. Globalization increases unemployment overall, while technology increases inequality by replacing middle-class jobs.

U.S. Budget Cuts Hitting Long-Term Unemployed Hard (Reuters)

Paige Gance reports on the struggles facing the long-term unemployed as their benefits are cut due to sequestration. A study shows that callbacks for job interviews dramatically decrease after long stretches of unemployment, which doesn't help her interview subjects.

Parents Losing Jobs a Hidden Cost to Head Start Cuts (Bloomberg)

William Selway reminds us that Head Start exists to provide preschool to low-income kids, so now that sequestration is cutting spots, the parents have no where else to turn. Without the means to pay for childcare, they can't go to work.

Paying It Forward on Student Debt (TAP)

Monica Potts reports that following Oregon's new pay-it-forward plan for college tuition, a number of other states are proposing similar plans. The plans are becoming more sophisticated, and begin to address the critiques of Oregon's model.

Don’t Take My Pension!: The Looming Public Worker Nightmare (Salon)

Adam J. Levitin suggests that public pensions ought to be insured, just like private guaranteed-benefit pension plans. That would solve the problems facing municipalities like Detroit as they face difficult decisions regarding retirees during bankruptcy.

Best-Paid Women in S&P 500 Settle for Less Remuneration (Bloomberg)

Carol Hymowitz and Cécile Daurat look at the compensation of top female executives, and find that even on that level, women are being paid less than men. Their 82 cents to men's dollar can't be explained by levels of experience or skill.

The Justice Department is Blocking the US Airways-American Merger. Here’s Why. (WaPo)

Brad Plumer says that the Department of Justice lawsuit claim that the merger would reduce competition in several key markets is probably true. The merged airline would have absolutely no nonstop competition on seven routes.

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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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Daily Digest - August 9: Uncertainty Isn't Holding Us Back

Aug 9, 2013Rachel Goldfarb

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Uncertainty Isn't Killing the Recovery The Atlantic)

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Uncertainty Isn't Killing the Recovery The Atlantic)

Matthew O'Brien draws on Roosevelt Institute Fellow Mike Konczal's work to discuss why the Economic Policy Uncertainty (EPU) index is not a useful measure of recession and recovery. There is no statistically significant tie between the index and jobs.

  • Roosevelt Take: Mike wrote about the EPU earlier this week, arguing that we shouldn't look to changes in EPU to predict what is to come.

The Yellen/Summers Fight Is Important . . . and Not Just for the Reasons You Think (Blog of the Century")

Harold Pollack looks to Mike Konzcal's work for support in explaining why Larry Summers's past in politics really matters in choosing the next Fed Chair. Summers's history treating those he works with disrespectfully ought to be discussed.

Out of Work Over 9 Months? Good Luck Finding a Job (WSJ)

Ben Casselman details the concerns of economists who find that long-term unemployment dramatically reduces job interviews for low- and medium-skilled workers. Some go as far as to suggest that these workers may never work again.

Is Obamacare Forcing You to Work Part-Time? (Bloomberg)

Evan Soltas points to the data errors that conservatives are using when they claim Obamacare is causing employers to shift workers into part-time work. There have been no surges in work weeks just under 30 hours, nor drops in work weeks over 30 hours.

The Economics of a Higher Wage Floor (NYT)

Jared Bernstein strikes down the usual arguments against raising the minimum wage. The arguments make it clear that the opposition isn't interested in improving the lives of minimum wage workers at all, and instead want to maintain the status quo.

  • Roosevelt Take: Roosevelt Institute | Campus Network Summer Academy Fellow Emily Chong agrees with Bernstein, and also lays out the data for how a minimum wage increase will serve as a poverty reduction tool.

The Curse of Student Loan Debt: Owe While You're Young, Live When You're Old (The Guardian)

Helaine Olen reports on the significant struggles revealed by new analysis of student loan data, which shows that about one in five borrowers can't repay their federal student loans. This debt is slowing down the entire economy, from housing to savings to entrepreneurship.

New on Next New Deal

Mortgage Rule Debate Pits Dreams of Homeownership Against Market Fears

Jack Houghteling explains new models for mortgage standards debuted by Dodd-Frank. These rules should stabilize the market, but banks claim they won't be able to help Americans achieve their dreams of homeownership under these regulations.

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

Aug 7, 2013Emily Chong

As fast food workers strike across the nation, progressives must separate fact from fiction in order to secure a living minimum wage.

Fast food workers are going on strike from New York to Seattle to demand higher wages, highlighting the never-ending controversy over the consequences of raising the minimum wage. Many news stories seem to suggest that economists have decided a higher minimum wage will cause job loss. However, with more analysis, we undercover the truth: there is no clear link between a higher minimum wage and reduced employment.

As fast food workers strike across the nation, progressives must separate fact from fiction in order to secure a living minimum wage.

Fast food workers are going on strike from New York to Seattle to demand higher wages, highlighting the never-ending controversy over the consequences of raising the minimum wage. Many news stories seem to suggest that economists have decided a higher minimum wage will cause job loss. However, with more analysis, we undercover the truth: there is no clear link between a higher minimum wage and reduced employment.

John Schmitt, a Senior Economist at the Center for Economic and Policy Research, reported in February 2013 that multiple meta-studies (studies that use statistical techniques to analyze a large amount of separate studies) found that for both older and current studies alike, there is no statistical significance in the effect of an increased minimum wage. Put plainly, if the effect is not statistically significant, then there is no proven effect— increases in the minimum wage do not cause job loss.

Accordingly, a few weeks ago, over 100 economists at organizations ranging from the Center for American Progress to Boston University signed a petition in support of increasing the minimum wage. They present current research from well-established organizations such as the National Bureau of Economic Research that shows there are no negative employment effects from minimum wage increases. This includes the most comprehensive data available, based on the increasingly accurate testing that has occurred as more and more states increase minimum wage levels. Even more importantly, this recent series of studies use cutting-edge econometric techniques to control for extraneous variables such as economic downturns and geographic effects. When economists do that, they find that minimum wage increases do not reduce employment.

Logically, this makes a lot of sense. A higher minimum wage is a win-win situation economically: employees have more money to be consumers and are more productive, while businesses wind up reducing costs in the long run, since they won’t have to spend as much money hiring and training new workers (by analyzing data from five separate studies, economists representing the Political Economy Research Institute found that McDonald's could easily make up for the costs of a higher minimum wage with a mere five cent price increase on Big Macs). It’s just as Henry Ford realized—when he paid his workers more, they became part of his customer base, making his company even more profitable. Increasing the customer base and expanding customer pockets helps stimulate the entire economy, badly needed in the current recession.

So if we have no evidence linking high wages to job loss, our next question is: are higher wages needed as a poverty reduction tool?

Currently, the 2013 Federal Poverty guidelines stipulate $23,550 for a family of four as poverty level. A $7.25 minimum wage currently nets the protesting fast food workers $15,080 a year if the workers are lucky enough to work 40 hours a week. In a typical household with two parents and two children, parents who make $7.25 earn far below the living wage of $13.55, according to an MIT wage calculator. The numbers become even starker when you separate out true living expenses: food, medical care, housing, transportation, and other needed expenses add up to a required $37,540 annual income before taxes, which is notably different than the poverty guidelines that the U.S. Department of Health & Human Services set. Even if the two parents worked 40 hours a week for 52 weeks, they would only earn $30,160 in total, significantly below the resources they need to live. Moreover, these estimates are only for a typical nuclear family. The struggle that single-income families, large families, or families living in high-cost cities go through is exponentially higher.

The buying power of minimum wage has steadily been waning due to the effects of inflation for the past 40 years. When prices increase, a worker’s paycheck buys less and less. To put it in perspective, we look to another brief by John Schmitt: if minimum wage had continued to match productivity growth, it would have been $21.72 per hour in 2012. If we only adjust for the cost of living, a minimum wage pegged to inflation would be $10.52.

A huge bulk of evidence makes the case that increasing the minimum wage is a doable, efficient, and necessary change for the economy. This change needs to happen now. We as Americans have a moral obligation to make sure that other Americans who are working hard to support themselves and their families are able to make a living.

Emily Chong is a junior at Vanderbilt University and a Roosevelt Institute | Campus Network Summer Academy Fellow interning with the Rediscovering Government initiative.

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The Amazon Economy Undercuts Obama's Message

Aug 2, 2013Richard Kirsch

The president is promoting a business model that puts everything we want just a click away -- except for good jobs with decent wages.

On Tuesday, President Obama gave a great speech on why good jobs are the foundation for his middle-out economic strategy... from a huge Amazon warehouse where the workers do not have good jobs. I’m still stuck on the setting.

The president is promoting a business model that puts everything we want just a click away -- except for good jobs with decent wages.

On Tuesday, President Obama gave a great speech on why good jobs are the foundation for his middle-out economic strategy... from a huge Amazon warehouse where the workers do not have good jobs. I’m still stuck on the setting.

There is so much in President Obama’s speech that I’ve been wanting him to say. While the press focused on his announcement of a proposal on corporate taxes, the speech was almost entirely about jobs. After Obama described “what it means to be middle-class in America” as “A good job. A good education. A home to call your own. Affordable health care… A secure retirement,” he pointed out, “It’s hard to get the other stuff if you don’t have a good job.”

He told the Amazon warehouse workers, “we should be doing everything we can as a country to create more good jobs that pay good wages.”

But as The New York Times reported, “the White House came under fire because many Amazon jobs pay only $11 an hour, and the pace of the work in these warehouses has been described as exhausting.”

Mr. President, those are not good jobs. Not even for a single person. The BEST (Basic Economic Security Table) data calculates that to meet the basics of housing, food, transportation, health care, personal items, plus putting aside a little for emergencies and retirement, a single person would need to earn $14 an hour. That is if he or she gets health care at work. Add one child – and the cost of child care – and the calculation jumps to $23 an hour.

That is not what we would really call a good job. There’s no provision to save for that child’s higher education, for instance. And a vacation, even a modest one? Not in the BEST budget.

The way warehouse workers are treated represents all that is wrong with the new American economy. A new study from U.C. Berkeley found that the average wage of warehouse workers in California is $14,500 a year. But the industry also employs many temp workers, who earn on average under $10,000. You can learn more about the often abusive treatment of workers in the warehouse industry at warehouseworkersunited.org.

Of course, the president made no acknowledgement of the working conditions in the Amazon warehouse. He did call on America’s CEOs to “help get these workers back on their feet,” saying that companies who make the 100 Best Companies to Work for in America list “know if a company has employees that are motivated and happy, that business is more likely to succeed.” Amazon is not on the list.

There are so many other places the president could have chosen to speak, including one of the new manufacturing facilities he talked about. But he chose Amazon, according to the Times article, because the company recently announced that it would add 5,000 jobs at 17 warehouses around the country. The president also delighted in Amazon’s new consumer model, opening his speech by saying, “Last year, during the busiest day of the Christmas rush, customers around the world ordered more than 300 items from Amazon every second, and a lot of those traveled through this building. So this is kind of like the North Pole of the south right here. Got a bunch of good-looking elves here.” With elven paychecks, he might have added.

Amazon is a great example of how the new economy has created a crisis in good jobs, in which most of the jobs being created are low-wage: a highly-profitable information technology firm that drives local stores out of business while paying low wages to its non-union workers.

Of course, Amazon has been great for consumers, with convenience, selection, great service, and lower prices. Throughout our history, those kinds of innovations have driven the economy forward, and we are not going to stop them. But low-wages and poor working conditions do not have to be part of the story. We have also, in our history, transformed a low-wage economy to an economy that paid decent wages and created a huge middle class.

One of Amazon’s initial investors, Nick Hanauer, is the coiner with his colleague Eric Liu of the “middle-out” economics phrase, which the president has adopted. But Hanauer has a very different view of what workers should be paid than the CEO of Amazon or President Obama do. While the president has proposed a $9-an-hour minimum wage, Hanauer is proposing a minimum wage of $15 an hour.

As Hanauer wrote for Bloomberg News in a post titled "The Capitalist’s Case for a $15 Minimum Wage," “The fundamental law of capitalism is that if workers have no money, businesses have no customers.” Hanauer backs up his argument with a simple example:

My investment portfolio includes Pacific Coast Feather Co., one of the largest U.S. manufacturers of bed pillows. Like many other manufacturers, pillow-makers are struggling because of weak demand. The problem comes down to this: My annual earnings equal about 1,000 times the U.S. median wage, but I don’t consume 1,000 times more pillows than the average American. Even the richest among us only need one or two to rest their heads at night.

He concludes, “Raising the minimum wage to $15 an hour would inject about $450 billion into the economy each year. That would give more purchasing power to millions of poor and lower-middle-class Americans, and would stimulate buying, production and hiring.”

Given the huge obstacles to passing any part of his middle-out economics program through Congress, it will be very tough for the president’s campaign to produce legislative results. He can educate the country about the challenges of the new economy and why we need the kind of middle-out economics he and Hanauer both describe, but he will only breed more cynicism and resignation if Americans see an Amazon warehouse job as his vision for their future.

Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

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Where's the Beef?: The First Thing Obama Can Do By Himself to Create Good Jobs

Jul 25, 2013Richard Kirsch

The president's big economic address had some good lines, but he should back them up with real action through executive orders.

The president's big economic address had some good lines, but he should back them up with real action through executive orders.

I am of course glad to see President Obama focus the country on what he correctly identifies as the most pressing national problem, the crushing of the middle class. The solution he laid out in his address at Knox College, a middle-out economics which sees the middle class as the engine of the economy, is both good economics and a powerful political message. It is what progressives and Democrats need to keep emphasizing over and over again, both rhetorically and in their legislative agendas.

When it came to the broad foundations of policy, the president's outline of the pillars of a strong middle class was on point: good jobs, quality education and job training, affordable health care, good housing, retirement security, and strong neighborhoods.

Still, I found the speech disappointing. The president only nibbled at the biggest change in our economy, the relentless decline in good jobs. 

Not that the president didn't correctly identify the issue. Early in his address he explained, "The link between higher productivity and people’s wages and salaries was severed – the income of the top 1 percent nearly quadrupled from 1979 to 2007, while the typical family’s barely budged." He went on to acknowledge that even as the economy recovers, the earnings of the average worker are down.

But when it came to further analysis or solutions, the speech was thin. He did repeat his call for an increase in the minimum wage and remind the public that the Affordable Care Act will provide coverage for people who don't get health insurance at work. However, his solutions made assumptions that ignore the profound changes in the economy that have undermined job quality.

A good lens for this is his discussion – really lack of discussion – about the role of unions, which he only mentioned by commenting, "It became harder for unions to fight for the middle class." A great example of using the passive voice to avoid explaining that unions were not decimated by an act of nature, but by a concerted attack by corporations and the right, backed by government policy.

The president pointed out that "The days when the wages for a worker with a high school degree could keep pace with the earnings of someone who got some higher education are over." But why did workers with just high school educations used to get paid well? Because they organized unions through which they fought together for better wages. 

Today, most of the new jobs being created are low-wage jobs with no benefits, which also don't require more than a high school education. If these workers were enabled – with the help of modernized labor laws and aggressive enforcement of the labor laws now on the books – to organize, they too could win decent wages and benefits. The president talked about global competition as an explanation for job loss, but that’s not an issue for the service industries that employ most low-wage workers.

It is also no longer true that another of the president's pillars, education, will mean more good jobs. The fact that a higher proportion of Americans have a college education than ever before has not stopped the deterioration of job quality. In the new economy, college grads have maintained low unemployment by taking jobs that they are overqualified for, upping joblessness among Americans who aren't college grads.

Even the president's assumption that creating more manufacturing and infrastructure jobs will mean more good jobs is not as solid as it has been in the past. While most of these jobs are decent, they pay less than before. For example, newly hired auto workers make a fraction of what the industry historically paid; it would take two new auto worker jobs to support a family at the same middle-class level as the workers paid at traditional rates. More broadly, the drop in unionization in manufacturing and construction, one cause among many of the overall downward pressure on wages, means job quality in traditional good job sectors is declining.

A middle-out economy must be anchored by good jobs. There are clearly huge legislative challenges to winning a good jobs agenda, which would include robust labor law strengthening, updated labor standards that guarantee paid sick leave and family leave, and enforcement of the labor laws already on the books. But the president doesn't have to wait for Congress to provide better jobs for millions of workers and set a new example for the country.

In his speech, Obama promised, "Whatever executive authority I have to help the middle class, I’ll use it." That’s great. He can start with an executive order to boost job quality for at least 2 million workers whose pay is financed by the federal government. 

The federal government has a history, by legislation and executive order, of protecting wages for workers paid for with federal funds. However, the prevailing wage protections put in place over the three decades from the 1930s to the 1960s now cover only 20 percent of federally funded private-sector work. Even for those workers still covered, wage rates can be little higher than the federal minimum. According to a recent study by Demos, the federal government now funds over 2 million jobs paying under $12 per hour – more than Wal-Mart and McDonald’s combined – in such industries as food, apparel, trucking, and auxiliary health care.

In another report on the federal contract workforce, the National Employment Law Project (NELP) interviewed over 500 contract workers and found that 74 percent are paid less than $10 per hour and 58 percent receive no benefits from their employer. The NELP report includes one gripping story after another of workers like Lucila Ramirez, who, after 21 years as a janitor at the federally owned Union Station, earns $8.75 an hour.

A presidential executive order could directly help Lucila and the millions like her who manufacture uniforms for our military, care for our elders under Medicare, work as security guards at federally leased buildings, or are laborers on federally funded construction projects. The order would require that jobs financed by federal funds require living wages (not just minimum wage or prevailing wage in a low-wage sector), paid sick days, and prohibitions against employers fighting unionization.

I am looking forward to the president spending "every minute of the 1,276 days remaining in [his] term to make this country work for working Americans again." He can start by backing up great lines like that with an executive order for the millions of hardworking Americans whose pay comes from the government he leads. 

Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

 

Barack Obama banner image via Shutterstock.com

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Daily Digest - July 25: Minimum Wage Doesn't Pay the Bills

Jul 25, 2013Rachel Goldfarb

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Barely Making Ends Meet (All In With Chris Hayes)

Roosevelt Institute Fellow Dorian Warren corrects commonly held misconceptions of the minimum wage. Half of minimum wage workers are over 25, and studies show that increasing the minimum wage will not affect employment.

Click here to receive the Daily Digest via email.

Barely Making Ends Meet (All In With Chris Hayes)

Roosevelt Institute Fellow Dorian Warren corrects commonly held misconceptions of the minimum wage. Half of minimum wage workers are over 25, and studies show that increasing the minimum wage will not affect employment.

The ‘Obamacare Is a Job Killer’ Myth (U.S. News & World Report)

Pat Garofalo argues that the employer mandate isn't harming employment, no matter how often the GOP makes that claim. Changes in employment practices would have been noticeable this year, but there has been no increase in part-time employment.

The Depressing Reality of ‘The Recovery’: Americans Aren’t Getting Jobs. They’re Retiring. (WaPo)

Dylan Matthews agrees with the Century Foundation's argument that the decrease in unemployment in the recovery is almost all due to retirement, not job creation. The employment-population ratio, which shows the proportion of working adults, hasn't changed.

Are the Suburbs Where the American Dream Goes to Die? (The Atlantic)

Matthew O'Brien looks at the ties between sprawl, race, and income mobility. He argues that when suburbs sprawl, wealthy, mostly-white suburbanites have little desire to support public goods that help everyone succeed, like mass transit, due to racist fears of blacks in their neighborhoods.

More Americans Living in Others' Homes (WSJ)

Josh Mitchell looks at the increase in so-called missing households, which occur when adults do not own or rent their own homes. A large proportion of this phenomenon can be tied to Millennials who are living with parents, because it's just more affordable.

New on Next New Deal

Where's the Beef?: The First Thing Obama Can Do By Himself to Create Good Jobs

Roosevelt Institute Senior Fellow Richard Kirsch thinks that the President's speech ignored the structural changes that have caused a decline in good jobs. He suggests that Obama could starting by ensuring all federally subcontracted employees get a living wage, via executive order.

Yellen, Summers and Rebuilding After the Fire

Roosevelt Institute Fellow Mike Konczal looks at the important questions to consider in choosing a new Federal Reserve chair, and makes his own recommendation.

Why the Right Doesn’t Really Want Euro-Style Reproductive Health Care

Roosevelt Institute Fellow Andrea Flynn points out that when right-wing pundits call for European-style abortion laws, they're forgetting that those come along with a full range of progressive reproductive health care policies.

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