How to Make Work Pay Again

Sep 13, 2012Richard Kirsch

The latest Census data prove that we need to start rebuilding the American middle class, and a new report shows how it can be done.

The latest Census data prove that we need to start rebuilding the American middle class, and a new report shows how it can be done.

Yesterday the U.S. Census Bureau reported that family income in the U.S. dropped to its lowest level in 16 years. The key thing in this news is that the drop is not just over the last three years, during the Great Recession. The squeeze on the middle class isn’t new, it wasn’t caused by the recession, and it won’t be fixed as we come out of the recession. If we’re going to rebuild the middle class, we need an agenda aimed at making work pay in the 21st century.   

That’s why I worked with more than 20 groups who understand the daily struggles of working families on a new report we’re releasing today, 10 Ways to Rebuild the Middle Class for Hard Working Americans: Making Work Pay in the 21st Century. The report is a road map for addressing the truth that we don’t just have a jobs problem; we have a good jobs problem.

Before we get to what we do about it, we need to confront the fact that even though the proportion of Americans with a college education doubled in the past three decades, the share of working people with a decent job dropped. Six out of ten (58 percent) jobs now emerging from the recession are low-wage. On top of that, the jobs projected to have the most openings between now and 2020 are mostly low-wage and require no more than a high school education. So there is no reason to think things will get better unless we act.

One set of solutions proposed in 10 Ways to Rebuild the Middle Class is to tackle the lack of support and protections for low-wage workers. A first step is to restore the minimum wage, which buys 30 percent less now than it did 40 years ago. The minimum wage for tipped workers is $2.13 an hour, the same as it was in 1991. One in five workers would get a pay raise if the minimum wage were increased. That includes workers who get paid just above today’s minimum wage, who would also benefit as the legal floor got raised.

Remarkably, four out of ten private sector jobs – including the great majority of low-wage jobs – do not give employees any paid time off if they are sick or need to care for an ill family member. In response, Connecticut and several cities have passed paid sick days ordinances. The federal government and states and localities should update basic labor standards to include this essential benefit to working families.

The report recommends tough enforcement, with meaningful penalties, of laws that unscrupulous employers now routinely flout. Many employers of low-wage workers routinely steal wages by not paying the minimum wage, not paying for overtime, or simply not paying workers at all. Other employers misclassify workers as “independent contractors” in order to get out of paying payroll taxes or benefits and hire “permatemps.” Worker safety and health is another area where measly penalties, weak enforcement, and widespread retaliation against workers who dare to speak up allow employers to keep low-wage workers in hazardous work conditions every day. 

It will take systemic solutions to address the broader problem of stagnant wages. A crucial step is to uphold the freedom of workers to organize a union by modernizing the National Labor Relations Act and stopping employers from harassing organizing efforts with virtual impunity. Nothing in our nation’s history has done more to bring workers decent pay, benefits, and dignity at work than organized labor. The factory workers of the mid-20th Century didn’t have a college education; they organized unions. The low-wage workers of the 21st Century – the housekeepers and janitors and home health aids and retail clerks – will only be able to get decent wages and become part of the middle class when they are able to effectively organize to bargain collectively.

Other proposals in the 10 Ways to Rebuild the Middle Class report would create new social insurance protections for the 21st Century, just as Medicare, Social Security, and Medicaid were key to fighting poverty and building the middle class in the last century. The nation took one major step in 2010 with the passage of the Affordable Care Act, which in 2014 will enable working families to get affordable health coverage even if they don’t get it on the job.

The report proposes two other steps to provide families more security in their work and in their retirement. Though today’s norm is for all the adults in a family to be in the workforce, only one in ten workers (12 percent) has paid family leave through work to care for a new child or a sick family member. A solution is to establish a national family and medical leave insurance program, similar to Social Security and successful programs in California and New Jersey, for workers to draw on when they are out on family leave.

To address the fact that pensions have been replaced by thread-bare 401Ks over the past 30 years, the report recommends establishing new pooled and professionally managed retirement plans for those who rely solely on Social Security and 401Ks, which would pay a defined amount – a pension – each month.

In addition to these and other steps, 10 Ways to Rebuild the Middle Class recognizes that a foundation of improving work is full employment. That is why we need to stop laying off public workers and outsourcing jobs overseas.  It's also why we should create millions of jobs now by investing in infrastructure and a green economy.

Rebuilding the middle class is about more than assuring that every working American can support his or her family with dignity and security. It’s about powering the economy forward in the 21st Century. The middle class is the engine of our economy, an engine that can only be rebuilt by making today’s jobs good and tomorrow’s jobs better.

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.

 

Construction worker image via Shutterstock.com.

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The Michigan Clean Energy Roadshow: Success Stories Pave the Road for a Clean Energy Future

Sep 12, 2012Cory Connolly

Michigan, once the industrial capital of the United States, has the opportunity to create jobs and economic opportunity while paving the way forward for a clean energy future. 

Michigan, once the industrial capital of the United States, has the opportunity to create jobs and economic opportunity while paving the way forward for a clean energy future. 

In 2008, the state of Michigan made a commitment to clean energy, to the environment, to economic opportunity, and – most of all – to people. Public Act 295, passed in 2008, set the framework for the development of Michigan’s clean energy economy by establishing a renewable portfolio standard (RPS). A renewable portfolio standard (also called a renewable electric standard or clean energy standard) mandates that electric providers generate a certain percentage of electricity from renewable resources by a set date. For Michigan’s RPS, the percentage was 10 percent and the date was 2015. A renewable portfolio standard is the most popular strategy for promoting the development of clean energy sources like wind, solar, and hydro in the United States today. There are 28 other state-level renewable portfolio standards in the U.S. with varying goals and timelines.

At the federal level, in 2011, President Obama called for a “clean energy standard” of 80 percent by 2035 and a similar act called the “Clean Energy Standard Act” was proposed this past spring in the Senate. This past week at the Democratic National Convention, the Democratic Party endorsed such a standard as well. Global investment reached $263 billion in 2011, and is expected to continue to grow. A national RPS or clean energy standard has the potential to make the United States a leader in the global clean energy market, and Michigan has the potential to lead this charge. 

In Michigan, the adoption of an RPS has caused a significant uptake in clean energy installations and investment in the industry. Since 2008, Michigan has installed over 1,200 megawatts of new generating capacity – that’s enough power to run 240,000 homes. While the numbers are exciting, in Michigan the clean energy economy is about more than just numbers and figures – it’s about the people and the opportunities behind clean energy. Two weeks ago, I traveled Michigan as a part of MiGrid, a Michigan-based company, and we started telling the story of the state’s clean energy opportunities through the Michigan Clean Energy Roadshow. The MiGrid team visited over 25 clean energy sites and interviewed over 25 business owners, experts, and Michigan residents. Highlighting the successes of Michigan’s RPS and other clean energy efforts in the state, MiGrid is educating, engaging, and empowering people and helping to build clean energy jobs and economic opportunities.

Without a doubt, Michigan’s 2008 RPS is one of the most modest in the country; however, it was designed with that intention. In 2008, a more aggressive RPS wasn’t politically feasible, so policymakers chose an incremental approach that could serve as a proof of concept for Michigan. Currently, Michigan only receives 3.6 percent of its energy from renewable sources, but is on pace to increase that to 8.4 percent by 2013 and to 10 percent – the RPS goal – by 2015. This incremental approach has proven not only that clean energy can succeed in Michigan, but that Michigan is ready for an even more ambitious approach to clean energy moving forward – as is the rest of the country.

In fact, clean energy has been a bright spot in the Michigan economy. Home to an industry cluster of advanced battery manufacturers, Michigan is reclaiming its place in the automobile industry. In 2010, according to Clean Edge, Michigan had the most clean energy patents of any state. And, according to Environmental Entrepreneurs, Michigan, with 1,319 anticipated jobs created, ranked fourth among states in new clean energy jobs this quarter.  In total, according to a recent Bureau of Labor and Statics report, Michigan is home to over 80,000 “green collar” jobs.

While these industry-wide statistics speak loudly, possibly the most convincing evidence of Michigan’s clean energy economy are the numerous wind and solar installations popping up across the state. Whether it’s the recent solar installation at IKEA in Canton, wind turbine blades coming through the port in Muskegon, or the introduction of solar at Ypsilanti’s Corner Brewery, there are stories of clean energy all over the state. Innovative manufacturers and companies are also redefining Michigan’s economic landscape. The Detroit-based PowerPanel is a prime example; the new company is manufacturing an innovative combined solar hot water and solar photovoltaic panel that simultaneously generates electricity and hot water.  Energetx Composites, a company highlighted in this year’s State of the Union, was started by the owners of S2 Yachts – a manufacturer of Tiara Yachts and Pursuit Boats – and now manufactues wind turbine blades. These are just a handful of the types of success stories that were captured during the Michigan Clean Energy Roadshow and that continue to provide a foundation for a more radical energy transition in Michigan. 

Building from these successes, the Michigan Energy, Michigan Jobs campaign (also known as 25 by 25) is supporting a more ambitious path forward for Michigan. Included as a ballot initiative this November, the campaign is supporting an increased RPS or RES of 25 percent by 2025. Included in November’s election as a ballot initiative, the 25 percent by 2025 is anticipated to attract 10 billion dollars in investment to Michigan and create 74,000 jobs. Such an increase would nearly double the clean energy jobs in Michigan and may show what job-creating potential a clean energy standard could have nationally. Additionally, for Michigan, the initiative would reduce the $1.7 billion that Michigan spends importing coal from out of state each year. As Michigan’s installed clean energy capacity nearly triples in the next three years, the clean energy economy will continue to move forward with or without the passage of the ballot initiative. However, the passage of 25 by 25 this November would catapult Michigan to the forefront of the clean energy economy in the United States and, in turn, help the United States compete globally.

From seeing these businesses, job creation, and installations and hearing their stories throughout the state, it is clear that a transition to clean energy is inevitable in Michigan. Still, citizens and policymakers in many cases remain unaware of the economic opportunity and stories behind clean energy. As Skip Pruss points out in a recent op-ed in the Detroit Free Press, Michigan has the opportunity lead in this sector, but it must seize it.

The clean energy economy should be about people, and therefore it should start with people. Through increased awareness of and familiarity with clean energy systems, Michigan residents and Americans more generally will be able to fully engage in the clean energy economy. A recent report documents the “contagious” nature of solar installations: “there is a positive, statistically significant, causal effect of previous nearby installations on a household’s decision to adopt solar panels…A one percent increase in the zip code installed base leads to approximately a one percent increase in the zip code adoption rate.” As the report points out, the results of increased exposure to clean energy systems add up. Taking this idea to a broader level, broadcasting and uncovering the successful strategies and the benefits of clean energy in Michigan can serve to stimulate growth in this sector in other states and at the national level.

Clean energy, in Michigan and across the globe, has the potential to transform how economies work and where and how energy is generated. This November, when Michigan votes on the 25 by 25 ballot initiative, it won’t be determining whether clean energy has a place in Michigan; what will be on the line is the degree and the trajectory of Michigan’s clean energy transformation. Michigan was once one of America’s industrial capitals with the automotive industry. Can it pave the way forward again?

MiGrid will be releasing videos, interviews, and pictures from the Michigan Clean Energy Roadshow in the coming weeks. For more information about the MiGrid and the Roadshow please go to to mi-grid.com

Cory Connolly is a Roosevelt Institute | Pipeline Fellow focusing on the development of the clean energy economy and a member of MiGrid.

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Konczal and Grunwald: Could the Stimulus Have Been Better Without Being Bigger?

Sep 10, 2012

We've all heard the standard arguments about the stimulus: progressives think it should have been bigger, while conservatives think it was a pork-filled monstrosity.

We've all heard the standard arguments about the stimulus: progressives think it should have been bigger, while conservatives think it was a pork-filled monstrosity. But in the latest episode of the Roosevelt Institute's Bloggingheads series, Fireside Chats, Mike Konczal talks to Michael Grunwald, author of The New New Deal, about four stronger criticisms of the bill from the left.

Konczal notes that it probably wouldn't have been possible to pass a larger stimulus through Congress, but his first question is "Why didn't we have a WPA? President Roosevelt went out in one month and hired like four million people," so if we're facing a similar jobs crisis now, "why don't we just go and hire five million people to do whatever?"

Next, the Michaels discuss President Obama's rhetorical pivot toward deficit reduction and "the idea that you couldn't pass the first stimulus, you couldn't do more to expand the economy, without also bringing down the long-term debt," which led Obama to "straitjacket himself on this issue of worrying about the bond market."

Third, Konczal argues that "President Obama very much looked at how to attack the problem of unemployment as a budgetary phenomenon as opposed to using every lever at his disposal," including the Federal Reserve and the nationalized GSEs. Rather, he chose to "kick the can on housing, hoping unemployment would come down in two years."

Finally, Konczal says "the New Deal brought in kind of a new contract with government" that involved the creation of a safety net and a much stronger role for the federal government in the economy. He and Grunwald explore whether Obama's policies have the potential to create another paradigm shift that is "fundamentally a new kind of social reality, a political reality."

For more, including details on what was actually in the stimulus and how it reflected President Obama's broader agenda, check out the full video below:

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Konczal and Grunwald: Could the Stimulus Have Been Better Without Being Bigger?

Sep 10, 2012

We've all heard the standard arguments about the stimulus: progressives think it should have been bigger, while conservatives think it was a pork-filled monstrosity. But in the latest episode of the Roosevelt Institute's Bloggingheads series, Fireside Chats, Mike Konczal talks to Michael Grunwald, author of The New New Deal, about four stronger criticisms of the bill from the left.

We've all heard the standard arguments about the stimulus: progressives think it should have been bigger, while conservatives think it was a pork-filled monstrosity. But in the latest episode of the Roosevelt Institute's Bloggingheads series, Fireside Chats, Mike Konczal talks to Michael Grunwald, author of The New New Deal, about four stronger criticisms of the bill from the left.

Konczal notes that it probably wouldn't have been possible to pass a larger stimulus through Congress, but his first question is "Why didn't we have a WPA? President Roosevelt went out in one month and hired like four million people," so if we're facing a similar jobs crisis now, "why don't we just go and hire five million people to do whatever?"

Next, the Michaels discuss President Obama's rhetorical pivot toward deficit reduction and "the idea that you couldn't pass the first stimulus, you couldn't do more to expand the economy, without also bringing down the long-term debt," which led Obama to "straitjacket himself on this issue of worrying about the bond market."

Third, Konczal argues that "President Obama very much looked at how to attack the problem of unemployment as a budgetary phenomenon as opposed to using every lever at his disposal," including the Federal Reserve and the nationalized GSEs. Rather, he chose to "kick the can on housing, hoping unemployment would come down in two years."

Finally, Konczal says "the New Deal brought in kind of a new contract with government" that involved the creation of a safety net and a much stronger role for the federal government in the economy. He and Grunwald explore whether Obama's policies have the potential to create another paradigm shift that is "fundamentally a new kind of social reality, a political reality."

For more, including details on what was actually in the stimulus and how it reflected President Obama's broader agenda, check out the full video below:

 

Construction image via Shutterstock.com.

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New Deal Numerology: Conventional Methods

Sep 7, 2012Tim Price

This week's numbers: 60; 45; 10; 26; 15

60... is a predestined number. That’s how many years it’s been since either party had a brokered convention in which its candidate was not chosen by the first ballot. And the last candidate to win afterward was FDR, which was step one in his plan to make all his successors feel inferior.

This week's numbers: 60; 45; 10; 26; 15

60... is a predestined number. That’s how many years it’s been since either party had a brokered convention in which its candidate was not chosen by the first ballot. And the last candidate to win afterward was FDR, which was step one in his plan to make all his successors feel inferior.

45... is a subliminal number. That’s how many times the words “job” or “jobs” were mentioned in Barack Obama and Mitt Romney’s acceptance speeches. They both even gave a shout-out to the founder of Apple just to juke the stats.

10... is a faithful number. That’s how many times the Republican Party’s 2012 platform mentions God, who commanded His followers, "thou shalt not take my name in vain unless you think it could score some bad headlines for your political opponents."

26... is a representative number. That’s how many women spoke at the Republican convention, including entertainers. Democrats topped that on day one, but to be fair, they weren’t asking speakers to submit to an ultrasound before taking the stage.

15... is a trashy number. That’s how many hours Charlotte’s sanitation workers were expected to work for seven days a week leading up to and during the DNC. The Democrats didn’t do anything to help, but hopefully they at least sorted their recyclables.

Tim Price is Deputy Editor of Next New Deal. Follow him on Twitter @txprice.

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Romney Will Solve the Crisis with the Exact Same GOP Plan of 2008, 2006, 2004...

Aug 31, 2012Mike Konczal

Romney's five-point plan to adress the specific aspects of our current jobs crisis recycles, nearly word for word, plans from far different economic times.

Romney's five-point plan to adress the specific aspects of our current jobs crisis recycles, nearly word for word, plans from far different economic times.

I've been watching the 2012 Republican National Convention, trying to get a sense of what the conservative diagnosis is for our weak economy and what they'd do in response. Is it the bizarro stimulus of raising interest rates, balancing the budget, and forcing foreclosures? Is there a secret housing plan? Or will it be a program of Reactionary Keynesianism, with an expanded military, massive tax cuts for the rich, and a SuperDuperCommittee to recommend tax expenditures that will go nowhere?

I take these arguments seriously -- I actually really enjoy making maps to help explore them. One argument worth bringing up is the idea that they are just proposing to do the policies they want all the time anyway -- the policies they wanted in 2008, or 2006, or 2004 -- but are pretending there's a reason it would be extra important given our current recession.

So on August 30th, 2012, with unemployment at 8.3 percent and with a serious long-term unemployment problem, Mitt Romney gives the RNC acceptance speech. He outlines a plan to create 12 million jobs in the next four years. As Jared Bernstein pointed out, that's what Moody's says will be created anyway. But forget that. How will Mitt Romney do this? He has a five point plan (numbers in [brackets] here and in the rest of the post are added by me):

And unlike the president, I have a plan to create 12 million new jobs. It has 5 steps.

[1] First, by 2020, North America will be energy independent by taking full advantage of our oil and coal and gas and nuclear and renewables.

[2] Second, we will give our fellow citizens the skills they need for the jobs of today and the careers of tomorrow. When it comes to the school your child will attend, every parent should have a choice, and every child should have a chance.

[3] Third, we will make trade work for America by forging new trade agreements. And when nations cheat in trade, there will be unmistakable consequences.

[4] Fourth, to assure every entrepreneur and every job creator that their investments in America will not vanish as have those in Greece, we will cut the deficit and put America on track to a balanced budget.

[5] And fifth, we will champion SMALL businesses, America’s engine of job growth. That means reducing taxes on business, not raising them. It means simplifying and modernizing the regulations that hurt small business the most. And it means that we must rein in the skyrocketing cost of healthcare by repealing and replacing Obamacare.

So his plan focuses on domestic energy production, school choice, trade agreements, cutting spending, and reducing taxes and regulations. This must be a set of priorities reflecting our terrifying moment of mass unemployment, right?

Let's flash back to September 4th, 2008, at the RNC where John McCain is giving his speech accepting the 2008 Republican presidential nomination. Unemployment is 6.1 percent, though the Great Moderation is coming to an end; within a year it'll be close to 10 percent. Two weeks later, as Lehman Brothers was collapsing, McCain would say "the fundamentals of our economy are strong." What were his recommendations for the economy in that nomination speech?

I know some of you have been left behind in the changing economy, and it often sees that your government hasn't even noticed... That's going to change on my watch...

[3] I will open new markets to our goods and services. My opponent will close them...

[4] I will cut government spending. He will increase it...

[5] We all know that keeping taxes low helps small businesses grow and create new jobs...

[4] Reducing government spending and getting rid of failed programs will let you keep more of your own money to save, spend, and invest as you see fit...

[2] Education -- education is the civil rights issue of this century. Equal access to public education has been gained, but what is the value of access to a failing school? We need to shake up failed school bureaucracies with competition, empower parents with choice...

[1] We'll attack -- we'll attack the problem on every front. We'll produce more energy at home.. Senator Obama thinks we can achieve energy independence without more drilling and without more nuclear power. But Americans know better than that.

It's the same exact agenda. Specifically, the Romney agenda for job creation in 2012 is stuff that John McCain wanted to do anyway in 2008.

Let's go back further. On September 2nd, 2004, George W. Bush is at the RNC, giving his speech accepting the nomination to run for a second term as President of the United States. Unemployment is 5.4 percent. A major housing bubble is kicking into high gear, and the country is debating the aftermath of the invasion of Iraq and the future of the War on Terror. A few months later, people will be talking about a permanent Republican majority. What are some priorities for a second George W. Bush term in creating jobs?

To create more jobs in America, America must be the best place in the world to do business.

[5] To create jobs, my plan will encourage investment and expansion by restraining federal spending, reducing regulation and making the tax relief permanent.

[1] To create jobs, we will make our country less dependent on foreign sources of energy.

[3] To create jobs, we will expand trade and level the playing field to sell American goods and services across the globe.

[5] And we must protect small-business owners and workers from the explosion of frivolous lawsuits that threaten jobs across our country. Another drag on our economy is the current tax code, which is a complicated mess...

[4]  To be fair, there are some things my opponent is for. He's proposed more than $2 trillion in new federal spending so far, and that's a lot, even for a senator from Massachusetts.

It's the same agenda, mentioned back to back almost in the same order. Bush mentioned No Child Left Behind several times, though I'm not sure if that matches up with the school choice of [2] in Romney's economic plan for school choice, so I excluded [2]. It's always time for cutting spending, more oil drilling, free trade, and lower taxes and regulation to fix the economy.

Let's do one last one. January 31st, 2006, George W. Bush is giving his State of the Union address. Unemployment is 4.7 percent. With the economy healthy and growing (in Bush's mind), now is the time to build on the strengths and address the weaknesses of the economy. What does he suggest?

Our economy is healthy and vigorous, and growing faster than other major industrialized nations...

[5] Because America needs more than a temporary expansion, we need more than temporary tax relief. I urge the Congress to act responsibly and make the tax cuts permanent.

[4] Keeping America competitive requires us to be good stewards of tax dollars. Every year of my presidency, we've reduced the growth of nonsecurity discretionary spending. And last year you passed bills that cut this spending.

[3] Keeping America competitive requires us to open more markets for all that Americans make and grow... With open markets and a level playing field, no one can out- produce or out-compete the American worker...

[1] Breakthroughs on this and other new technologies will help us reach another great goal: to replace more than 75 percent of our oil imports from the Middle East by 2025.

Again, President Bush mentions No Child Left Behind, but I'm not sure whether it overlaps with [2].

But the same exact playbook is there in 2006, as it was in 2004 and 2008, and as it is in 2012. Domestic oil production, school choice, trade agreements, cut spending and reduce taxes and regulations -- it's been the conservative answer to times of deep economic stress, times of economic recovery, times of economic worries, and times of economic panic. Which is another way of saying that the Republicans have no plan for how to actually deal with this specific crisis we face.

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George W. Bush image via Shutterstock.com.

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Bryce Covert: Lack of Ambition Isn't to Blame for the Gender Wage Gap

Aug 28, 2012

In the latest episode of the Roosevelt Institute's Bloggingheads series, Fireside Chats, NND Editor Bryce Covert talks to National Review's Ramesh Ponnuru about what's behind the gender wage gap.

In the latest episode of the Roosevelt Institute's Bloggingheads series, Fireside Chats, NND Editor Bryce Covert talks to National Review's Ramesh Ponnuru about what's behind the gender wage gap. Their discussion began with a recent Bloomberg View column in which Ramesh argued that there may be factors other than discrimination, such as career choices, that account for women receiving lower pay. Bryce responded at The Nation by citing studies that show discrimination is a real problem, and Ramesh followed up with her at The Corner. In the video below, the two finally come face to face (sort of) to get to the bottom of what's keeping women down.

Responding to Ramesh's suggestion that women may be paid less at least partly because they are "not as aggressive as men in asking for salaries," Bryce concedes that "the idea that women aren't ambitious enough is not one that you find only on one side" and that "society does tend to shape men to be more aggressive and women to be more cooperative, for lack of a better word." But she notes that studies have found that "even if there is some sort of ambition gap," women who are just as ambitious as their male peers are "still not getting the money. The ones that ask still are not rewarded for asking." She also cites a study that shows managers are likely to offer men more as a baseline in salary negotiations, which means that "if a woman's going to go in and try to negotiate and be aggressive and ask for the money, she's already at a disadvantage before she even gets there." Given that the same behavior has been observed in female managers, Bryce argues that this "is not just the patriarchy keeping women down," but an "unconscious bias" shared by both men and women in the workplace.

For more on this debate, including our employers' Leave It to Beaver mindset and why fair pay laws alone aren't enough, check out the full video below:

 

Gender gap image via Shutterstock.com.

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Bryce Covert: Lack of Ambition Isn't to Blame for the Gender Wage Gap

Aug 28, 2012

In the latest episode of the Roosevelt Institute's Bloggingheads series, Fireside Chats, NND Editor Bryce Covert talks to National Review's Ramesh Ponnuru about what's behind the gender wage gap.

In the latest episode of the Roosevelt Institute's Bloggingheads series, Fireside Chats, NND Editor Bryce Covert talks to National Review's Ramesh Ponnuru about what's behind the gender wage gap. Their discussion began with a recent Bloomberg View column in which Ramesh argued that there may be factors other than discrimination, such as career choices, that account for women receiving lower pay. Bryce responded at The Nation by citing studies that show discrimination is a real problem, and Ramesh followed up with her at The Corner. In the video below, the two finally come face to face (sort of) to get to the bottom of what's keeping women down.

Responding to Ramesh's suggestion that women may be paid less at least partly because they are "not as aggressive as men in asking for salaries," Bryce concedes that "the idea that women aren't ambitious enough is not one that you find only on one side" and that "society does tend to shape men to be more aggressive and women to be more cooperative, for lack of a better word." But she notes that studies have found that "even if there is some sort of ambition gap," women who are just as ambitious as their male peers are "still not getting the money. The ones that ask still are not rewarded for asking." She also cites a study that shows managers are likely to offer men more as a baseline in salary negotiations, which means that "if a woman's going to go in and try to negotiate and be aggressive and ask for the money, she's already at a disadvantage before she even gets there." Given that the same behavior has been observed in female managers, Bryce argues that this "is not just the patriarchy keeping women down," but an "unconscious bias" shared by both men and women in the workplace.

For more on this debate, including our employers' Leave It to Beaver mindset and why fair pay laws alone aren't enough, check out the full video below:

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How Does Education Help in the Great Recession?

Aug 21, 2012Mike Konczal

There's a new report from Anthony Carnevale, Tamara Jayasundera, and Ban Cheah, "Weathering the College Storm," that has attracted some attention in the economic blogs.

There's a new report from Anthony Carnevale, Tamara Jayasundera, and Ban Cheah, "Weathering the College Storm," that has attracted some attention in the economic blogs. Dylan Matthews wrote about it here and again here, with Dean Baker and Larry Mishel adding in critical commentary.

The report looks at who has gained the most jobs since the "recovery" started, a period they benchmark to January 2010. They find that people with bachelor's degrees and some college have gained all the jobs, while people with just a high-school diploma or less haven't gained any jobs over this time period. They also find that about 80 percent of the new jobs created since January 2010 have gone to men.

What should one conclude? Well, one conclusion is that we wouldn't have any unemployment if we had fewer women and more men. Since men are gaining all the jobs, it stands to reason that if we, on net, had more men and fewer women, we'd have a lot more people employed. Public policy should involve job-training programs where unemployed women get boyish haircuts and study movies like the cult 1980s hit Just One of the Guys and other high school movies loosely based on Twelfth Night. They should learn about swagger, sports metaphors, and that thing where dudes treat job requirements as suggestions when they apply for them, while women don't apply unless they have all of the requirements.

You might point out that I must have skipped a step somewhere. When we are so far away from full employment, does this analysis make sense? Instead of actually reflecting the proper allocation of labor this is just reflecting the fact that, for a variety of reasons including discrimination, men are jumping to the front of the queue to take all of the new jobs that are created. But the report seems to go in the other direction and argue that if there were a lot more college-educated workers we'd have more employment; alternatively, the lack of properly educated workers is a check on recovery.

Dean Baker and Larry Mishel focus on the fact that unemployment rates have gone up for college-educated workers and that most of the big net job increases have gone to those with post-bachelor degrees. I'm interested in the issue of line-jumping. How much does growing employment for college-educated workers in this recession have to do with being prepared for a variety of new, cutting-edge jobs that require a high level of education? And how much is education like a zero-sum hedge that puts the person in question at the front of the line for the limited jobs the economy is creating, even if those jobs require less education?

This chart from the report is interesting:

These are numbers since the recovery began in January 2010. Here people with bachelor's degrees have substantial growth in "high education" occupations. But they also have substantial growth in middle-education ones as well. Meanwhile, those with associate degress have significant growth in "low education" occupations. All the while those with high school diplomas are falling out of middle-education occupations. So two big trends are those with a high-school diploma being kicked out of middle-education (and presumably middle-class) jobs, combined with a down-tier move in education -- those with bachelor's degrees taking middle-education jobs and those with associate degrees taking low education jobs.

The 866,000 jobs lost in middle-education for those with a high school diploma or less are largely a function of the job category "office and administrative support occupations" (see Table 9 of the main report). There were 502,000 jobs lost for high-school diploma or less education in this category; if this is excluded it is a significantly different analysis. Bryce Covert and I flagged this category of work as explaining a lot of missing jobs for women and a broader change in the work environment for GOOD Magazine (data supplement here). This is a function of both longer-term trends and a speedup that has taken place in workplaces since the recession, where people are expected to do more with less. Workplaces keep the same amount of work even as they lose their support staff. So these changes aren't just the result of technological change, but reflect the way that recessions are reworking office environments to put more pressure on workers.

There's no denominator in the graphic above. Is the percentage of those with an associate degree working in the low-education occupations increasing, or has it held constant? What do these changes look like? Though not definitive, it would give us a clue as to whether or not this hedge aspect of education, the ability to jump to the front of the line for jobs, even crappy jobs, is in play in this weak recovery. I take education by occupation for all workers over 25, first quarter 2010 and first quarter 2012, from BLS/CPS, using the reports division of education levels, and compare the percentage of each education group in an occupation before and after to see how they are changing:

As we can see, there is a movement downward in education. BAs gain in their share of medium-education jobs, while AAs and some college gain in the low-education jobs.

In a buried part of the report, the authors anticipate this, noting "increased hiring of more educated workers in low- and middle-education occupations raises a valid concern about whether the workers need more education to perform the tasks or whether workers are being 'underemployed' in a slack labor market. This concern is addressed in detail in the Center on Education and the Workforce report, The Undereducated American....The analysis found a Bachelor’s degree wage premium in jobs at all education levels. The simple fact that employers are willing to pay more for educated workers suggests that they see added benefit in such workers."

I'm willing to believe this, though it still wouldn't directly address the underemployment issue. However, the analysis cited (page 28) only looks at 2007 through 2009, and doesn't look at people specifically hired in that period, much less the recovery. That premium has a lot to do with differentiation within occupations that analysis isn't capturing, like rookie cops and veteran detectives falling under the same occupation, but the second more likely to have more education and pay. But to the extent that premium exists, it isn't clear that it is going to people who now require some college to get even the most menial jobs our economy is producing.

When the economy is stalled, the limited number of new jobs will create certain winners and certain losers. But the first priority for us isn't to make sure that we help people fight for the scraps of a weak economy; it's that we grow the economy and demand full employment to provide for all.

Mike Konczal is a Fellow at the Roosevelt Institute. Follow or contact the Rortybomb blog:

  

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Romney's Failed Unemployment Strategy and the Bizarro Stimulus of Paul Ryan

Aug 13, 2012Mike Konczal

Mitt Romney aired an ad last summer titled "Bump in the Road." It attacked President Obama's record on mass unemployment by linking it to a comment he made about there being bumps in the road to economic recovery. A group of people stood on a road in a desert, holding signs explaining their years of unemployment, their student debts, and their struggling families (something not dissimilar to the We Are the 99% Tumblr that started later that year).

Mitt Romney aired an ad last summer titled "Bump in the Road." It attacked President Obama's record on mass unemployment by linking it to a comment he made about there being bumps in the road to economic recovery. A group of people stood on a road in a desert, holding signs explaining their years of unemployment, their student debts, and their struggling families (something not dissimilar to the We Are the 99% Tumblr that started later that year). They pointed to the real suffering that goes on beyond numerical aggregates like the unemployment rate.

I remember this ad, because I remember several liberals being worried about this type of Romney campaign. Why? Because the liberals in question basically agreed with it. President Obama was trying to make a Grand Bargain with unemployment above 9 percent. The weak recovery was accepted as a given by the administration instead of the problem that had to be tackled. There was a lot of debate over what could be done and how, but at that point unemployment was off the table. President Obama would pivot back to jobs that fall, but it would remain a quiet priority, especially after so much time had been wasted. And it was a worry that if Mitt Romney ran a campaign that was all about unemployment all the time, President Obama would lose. I thought this was correct at the time.

That has changed with Paul Ryan now announced as Romney's vice presidential running mate. This appears to signal that the Romney campaign will move away from the previous focus on unemployment towards arguing for the conservative transformation of the federal government and the social safety net. This move is being interpreted as a sign of weakness from the campaign, one where they are worried that their previous strategy was failing. But why was the unemployment message failing? The economy isn't much stronger, so it hasn't lost its potency. Mitt Romney's job creation record was being attacked, but that only gets you so far. I think a major reason why is because of an odd contradiction one can see from the recent "Romney Program for Economic Recovery, Growth, and Jobs" released by Romney's economics team. Romney has no actual interest in trying to bring unemployment down faster, which blunts the ability to really say anything about unemployment, but his economics team also wasn't signing off on the far-right's bizarro stimulus plans.

There's already been a lot written on how the paper distorts the research it cites. The paper claims to "speed up the recovery in the short run." How? "By changing course from the policies of the current administration and ending economic uncertainty." What are the bold policies to help those unemployed people President Obama ignored? Tax code reform, block-granting Medicaid, and repealing Dodd-Frank and Obamacare while making "cost-benefit analysis important features of regulation."

Which is to say that Romney wanted to focus on unemployment, but had no real serious plan on how to get unemployed people jobs. I can, quickly, come up with a set of conservative stimulus ideas on how to get the economy going again, but the wide range of these programs are missing from Romney's economics report. They aren't going to hire market monetarists to run the Federal Reserve. Mitt Romney just publicly said the Federal Reserve shouldn't go ahead with another round of quantitive easing [1]. There isn't the argument that the government should just not collect taxes for a year or two with borrowing costs so low, which will also make it that much harder to raise taxes to Clinton-era rates afterwards. There's nothing in the paper about housing, even though one of Romney's advisors is well known for his mass refinancing program to help boost demand. And there's no conditional lending to states to prevent layoffs on the condition that they dismantle public sector unions, or privatize certain government services, or whatever.

Ideas have consequences, and the fact that Romney has no actual ideas for how to get the unemployed jobs means that making unemployment a big issue is only going to have so much traction with the electorate. "The long-term unemployed should vote for me so I can go after financial regulations," or "Vote for me, because I'll just ignore mass unemployment outright rather than not do enough and then pivot away" aren't political strategies that capitalize on the big vunerability Obama has on economic weakness.

Given the number of policy entrepreneurs on the right, it's almost shocking how little effort I've seen to get creative with getting unemployment down. The policy for unemployment is just a set of conservative reforms conservatives would want to see anyway regardless of the economy. And the general message seems to be that unemployment is unfortunate, but the downside risks of trying to combat it are far too high. Better to just get through this period and focus on the long-term economy. The unemployed are, in fact, just bumps in the road.

But the Romney Program document is interesting because it avoids embracing something I'll call "bizarro stimulus." These are arguments that doing things traditionally thought of as the opposite of economic stimulus will be the real stimulus and help bring unemployment down. Romney's economics team doesn't seem to want to go in that direction, yet that is the direction of the House Republicans and of Paul Ryan.

Many economists believe that the Federal Reserve should lower rates, but that a "zero lower bound" holds conventional monetary policy in check. The debate is whether and how unconventional monetary policy can help. In bizarro stimulus, the problem is that the rate is at zero. If you were to raise that rate, you would get capital going again. Here's Paul Ryan from Summer 2010, arguing that "I think literally that if we raised the federal funds rate by a point, it would help push money into the economy, as right now, the safest play is to stay with the federal money and federal paper." This is usually thought of as incorrect by most economists, but that's why it is bizarro stimulus. Ryan has also promoted bills to drop the dual mandate of the Federal Reserve, even though the problem is the Federal Reserve not taking its dual mandate seriously enough.

When the economy is weak and we are far away from full employment, we should run a larger deficit in order to boost demand. Austerity and the slashing of government spending will actually make the economy worse in these times. Unless you are in bizarro economics, under which austerity can expand the economy. David Brook wrote back in 2010, in an article called "Prune and Grow," that “Alberto Alesina of Harvard has surveyed the history of debt reduction. He’s found that, in many cases, large and decisive deficit reduction policies were followed by increases in growth, not recessions.” Though this research has many serious problems, it became part of the core of the new conservatives in the House, a group Paul Ryan is influential with. Republicans' economic policy in 2011 was all about expansionary austerity, with their JEC report making several references to the possibility of austerity being offset by confidence and certainty. Romney actually pointed out the absurdity of expansionary austerity back in May of this year, noting "I don’t want to have us go into a recession in order to balance the budget." Nobody could tell if Romney was going off message with that statement.

It's interesting that Romney's advisors don't touch either of these ideas, yet they are an important part of how the House Republicans approach the economy. Will the Ryan pick also signal that Romney will move much further to the right on economic issues? We've rarely ever had to ask if a presidential candidate agrees with the views of his vice-presidential running mate, rather than the other way around, but that is now a relevant question.

[1] Can you imagine the debate and coverage that would happen if President Obama encouraged Bernanke to move with QE3? Yet Mitt Romney calling out against QE3 doesn't get noticed, and certainly isn't thought of as "politicizing the Federal Reserve," even though it obviously is.

Mike Konczal is a Fellow at the Roosevelt Institute. Follow or contact the Rortybomb blog:

  

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