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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America's Future in an Enduring Recession

Aug 9, 2012Herbert J. Gans

Americans have been taught to hope for the best, but to avoid a bleak future, we need to push for policies that support job creation.

Americans have been taught to hope for the best, but to avoid a bleak future, we need to push for policies that support job creation.

America's national optimism is so pervasive that not much public thought has yet been given to the possibility that the Great Recession could endure for many years. Even if GDP, the Dow Jones, and other standard economic indicators suggest that the overall economy is healthy once more, labor markets may not recover. Thus, all employment-related indicators could remain low to the end of the decade and beyond, justifying a guess about the social and political effects of an enduring recession. (Guess must be underlined because many unexpected happenings can always wreck predictions.)

If the country faces a continuing labor market recession, short- and long-term unemployment are likely to rise. So will underemployment, such as involuntary part-time work and shorter work weeks for full-time workers. Discouraged workers will continue to drop out of the labor market, older ones will head for involuntary retirement, and some young people may not obtain a steady job during the entire period. The total number of labor market victims will rise well above the current official estimate of close to 15 percent of the labor force. And this estimate leaves out other victims of the recession -- people brought down by foreclosures, humongous debt, and lost pensions, as well as poor people driven into more severe poverty. 

If the numbers rise sufficiently, the social effects of the enduring recession, which are now still mostly hidden, will become apparent. High levels of depression and other emotional illnesses and related physical ones will multiply, as will family conflict and breakup, interpersonal and criminal violence, and other kinds of self and social destruction. Militant extremists threatening bodily destruction of immigrant and other vulnerable populations may increase in number as well. The medical community and the media are likely to be talking about post-traumatic economic stress disorder. America will be full of very unhappy people.

Of course, November 6, 2012 could bring a Democratic victory of sufficient proportions so that the advocates of serious government action to revive the economy could get their way. If the Democratic majority in the Senate is filibuster-proof and the president is prepared to be transformative, only the conservative House Republicans can effectively sabotage their agenda. If all went well, a new, large, and targeted stimulus, complemented by tax reforms and related policies, would enable the federal government to help create decent jobs and provide sufficient income support for the still-jobless victims of the recession. In the process, consumer demand would be stimulated and the consumer economy would be revived.

But in the event that government continues to be polarized and dysfunctional, politics could worsen economic victimization. In hard economic times, even the economically secure citizens tend to become less generous toward victims, worrying that government funds for the suffering would be taken out of their income and wealth. Some will fear that they will become economic victims too. The greater the shrinkage in public generosity, the greater also the readiness to demonize the economy's victims. The better off and even some not so well off are already describing the needy as moochers or takers and the jobless as too lazy to work. The recession's victims will be described as undeserving of help. Since the better off are more likely to be white and the economic victims disproportionally nonwhite, the latter will probably also experience more intense racial antagonism.

Since many Americans still see no difference between family and governmental budgets, and since recessionary times require familial belt-tightening, many people even outside the GOP base might support additional governmental belt-tightening as well. As a result, elected officials who are required to cut their budgets can further reduce the welfare state and welfare programs without suffering political consequences. And despite what people tell the pollsters about the desirability of higher taxes on the rich, the citizens that matter politically do not seem to contest the GOP argument that the wealthy need further tax reductions so that they can be "job creators."

So far, my long range guessing has emphasized the dark side of the future, but some corrective measures could take place, too. Three such developments seem most likely.

The first is new economic growth. All recessions and depressions, great or small, must end some day, and presumably so will the present one. They could end as a result of the pent up demand that is unfulfilled during deflationary times; for example, as people's necessities wear out and the population increases.

Demand may also return as a result of unpredictable new economic growth resulting from technological and other innovations. New products resulting from cyberspace breakthroughs, including robots as standard equipment at work and at home, are possible examples. So are new industries and businesses to help people survive 105 degree summers.

To be sure, American innovations that can be copied by lower wage economies are eventually copied, and even correlations that once existed between a high GDP and a healthy labor market can no longer be guaranteed. If global competition and an expensive dollar, high U.S. worker productivity, employer reductions in wages and working conditions, and other current impediments to job security and a "middle class" income remain in place, America's standard of living will not return to past levels.

The Great Depression was ended by World War II, which eventually brought about full employment at high wages. Although possible future wars are presumably on the Pentagon's drawing boards, they will not be labor-intensive and can no longer rescue a crippled labor market.

The second possibility is business community protest. Despite the business community's never-ending demand for reductions in taxes and "onerous" regulations, one could imagine that eventually at least the big corporations that earn their profits from consumer demand will begin to hurt. As a result, they might support the public pressure on government to stimulate that demand. They might even do so while continuing to ask for lower taxes and less regulation; giving up such a once profitable ideology will take time. However, some might be ready to trade, supporting stimuli, infrastructure projects, and anything else that provides purchasing power to the people they need to buy their goods and services.

If the business community's economic pain is sufficient, it might support a revival of the moderate Republican wing. Under such conditions, the rest of the party may agree to direct stimulation of the country's purchasing power. Conceivably, such a GOP might even initiate some of the economic policies they have long prevented Democrats from implementing. One must remember that nearly half a century ago, President Nixon was able to persuade his party to let him initiate relations with Communist China.

The third possibility is popular protest. Although the Left has traditionally believed that eventually the general public will demand economic relief, America's voters have only rarely pressed for such change. Right now, they seem to be angered more by social and related issues than economic ones. Or maybe they suspect that demonstrating for economic change is unlikely to be successful.

Moreover, mainstream America has become more diverse, more spread out, and harder to organize than in the past, and the radical unions that mobilized workers during the Great Depression no longer exist. New sociopolitical movements that fit the times are conceivable, but so far only some of the remaining Occupy groups are working toward economic goals, and none yet look as if they could turn into national movements. The victims of the current economy remain politically passive, if only because they must devote themselves to surviving economically and emotionally. In addition, they may feel (rightly) that they have nowhere to turn. Trust in government is at an all-time low, and other political organizations of the needed magnitude do not exist. Liberals and the left stand ready to offer help, but they have not shown that they can transcend the class and ideological differences that separate them from the economy's victims.

Historians still do not agree about the political effects of the popular protests that occurred during the Great Depression. The ghetto uprisings that took place in the 1960s, some simultaneously all across the country, did not produce immediate economic results. Since then, the de facto national incarceration policy has helped to keep the ghettos "quiet," and in recent years, the poor young men not (yet) in jail seem to have more often taken their discontents out on each other.

Perhaps effective political responses to the recession will emerge when more affluent sectors of the population are seriously hurt by the economy, notably the professional and managerial classes that have flourished economically in recent decades. They are politically skillful and know how to make themselves heard. Even Republicans might pick up their ears if the Tea Party and related groups, as well as the evangelicals who have previously concerned themselves only with "social" issues, indicate they now also need economic help. What if they hinted strongly that they will now have to vote their pocket books? Then it is even possible to imagine an election that unites many of the economically victimized and brings them together with liberals and liberally inclined independents, at least temporarily. If they can coalesce with others who stand to gain from a healthier labor market, they might be able to persuade the incumbent president to turn into a contemporary FDR or LBJ.

One would think that if a recessionary or deflationary economy endures, eventually something has to give. Although a dystopian welfare state in which the economy's many victims will live at bare subsistence level is conceivable, perhaps America will instead elect a government devoted above all to saving and creating jobs. However, such ideas are credible only in a country in which ordinary people exercise more political clout than entrepreneurs and speculators.

Herbert J Gans is the Robert S. Lynd Professor Emeritus of Sociology at Columbia University. His most recent book is Imagining America in 2033 (2008).

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Is Education a Silver Bullet for Fixing the Economy?

Aug 3, 2012Richard Kirsch

Education is certainly important, but if it doesn't go hand-in-hand with the creation of good jobs, we'll have an economy built on quicksand.

Education is certainly important, but if it doesn't go hand-in-hand with the creation of good jobs, we'll have an economy built on quicksand.

We all know that the key to our economic future is a more educated workforce, right? Here, for example, are the “Guiding Principles” of President Obama’s education policies: “Providing a high-quality education for all children is critical to America’s economic future. Our nation’s economic competitiveness and the path to the American Dream depend on providing every child with an education that will enable them to succeed in a global economy that is predicated on knowledge and innovation.”

Now it’s certainly true that a good education is still the best ticket – other than inheriting wealth – to entering the middle class. In the simplest terms, Americans with a Bachelor’s degree or more earn more than the average wage and those with an Associate’s degree earn less. So it makes sense for us to encourage our children to get a good education. But is the president’s assertion that the path to the American Dream in the new global economy depends on providing every child with a good education true?

As an important new report underscores, if that is the only path we rely on, our economy will come up way short and so will the great majority of Americans who are striving to live the American Dream – with and without a good education.  

In Where Have All the Good Jobs Gone?, Center for Economic and Policy Research economists John Schmitt and Janelle Jones make a simple and powerful point: over the past three decades, the workforce in the United States has gotten a lot more educated and productive, but fewer of us have a good job. The standard that Schmitt and Jones set for a good job is pretty basic: earning the median wage for men of $37,000 a year and having some sort of health insurance and retirement fund at work. Of course, that isn’t a lot of money, and with most workers forced to pick up a bigger share of shrinking health benefits and pensions giving way to 401Ks, not a lofty benefit plan. Which is what makes the results of the study so striking. Even though the typical American worker is twice as likely to have a college degree than 30 years ago, the share of the workforce that has a good job declined, from 27.4 percent to 24.6 percent. The kicker here is that the decline occurred at every education level, although it was worse for those with a scanty education. But even workers with a four-year college degree or better were less likely to have a minimally decent job.  

The CEPR researchers take the data a bit further to make two compelling points. If we had not increased our educational level, it would have been a lot worse: only 17 percent of workers would have good jobs. The second point is that if job quality had kept up with increases in education, then 34 percent of workers would have a good job.

I want to throw one more scary statistic into this brew before drawing the implications for building an economy that will work for everyone: most of the jobs that will be created in the next decade don’t require much of an education. Of the 10 occupations expected to create the most jobs, eight of them require a high school degree or less. There will be almost four million job openings for retail clerks, home health aides, and the like compared with one million for nurses and college professors, the only two jobs in the 10 that require more than a high school degree.

These numbers foretell an economy where even workers with a good education are barely making it and most Americans don’t have a prayer of living the American Dream.

The guiding principle for a different economic path is making the middle class the engine of the economy. Our economic policy must be driven by a commitment to make every job a middle-class job, regardless of the educational level of the worker. That means sharing our economic progress broadly, not concentrating it among a shrinking sliver of the rich.

As the authors of Where Have All the Good Jobs Gone? point out in the first paragraph of their report, we have gotten a lot richer as a nation – 60 percent richer – over the 30 years in which good jobs dissolved. A more educated workforce, and an increase of about 50 percent in physical capital growth, led to a big jump in productivity. If that growth in productivity had been shared fairly, that $37,000 median wage would be a lot higher: $68,000 by one calculation. Even by a more modest measure, if inequality had not increased, median family income would be $9,000 more. By either calculation, if that extra income were in the pockets of Americans – instead of sitting in the investment portfolios of the super-rich and big corporations – the economy would be booming.

There are a host of policy solutions to build an economy in which our growth is broadly shared. A huge step would be to increase unionization. The manufacturing and construction workers of the mid-20th century didn’t have a high school education – they had a union. We should boost pay for low-income workers by increasing the minimum wage and enforcing wage laws so that employers pay workers for overtime and meal breaks and don’t steal their wages or pretend they are independent contractors. We need to use public dollars to invest in job creation, from construction workers to school teachers, all with good wages and benefits. And yes, we should make it possible for many more of our young people to get a good and affordable education. But whether they get that education or not, all workers should get enough to live a dignified, secure life so they can take that path to the American Dream. 

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.

 

Screaming college grad image via Shutterstock.com.

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The Young and the Jobless

Jul 10, 2012Ilyssa Weingarden

By taking innovative steps, the government can help recent college graduates who are confronted by the most daunting job market in recent history. 

By taking innovative steps, the government can help recent college graduates who are confronted by the most daunting job market in recent history. 

As a college student, every new statistic and report on the increasing difficulty for college graduates to find a full time job terrifies me. Haven’t I done everything I was told? I worked hard in high school, applied and was accepted to a reputable university, and now I take the right classes, chose the right major, and get the right grades. I deserve my just reward: a well-paying upper middle class white-collar job in my chosen field. Right? Isn’t that what my parents and society have always promised?

Unfortunately it seems that having a college degree is no longer a guarantee for success in the way it once was. In 2000, 41% of recent college graduates were unemployed or underemployed. Today, we are at 53.6% of degree-holders under the age of 25.

Although certain fields like education and medicine have ever-increasing demand (currently 5.4% unemployment rate, not including underemployment), non-technical degrees in the arts or humanities face rates closer to the national average (11.1 and 9.4% respectively). It seems that the value of having a bachelor’s degree alone has become almost non-existent. It is only the specific skills, experience, and knowledge that a technical degree or prestigious internships provides that employers look for.

While having a bachelor’s degree does give you a statistical advantage, however slight, over those with only a high school education, it also often saddles you with overwhelming debt. The pressure to pay back student loans coupled with an increasingly depressed job market and expected wages for graduates paints a bleak future for current college students. This begs the questions: is getting a degree worthwhile? Is there a way to fix this? Can the government do anything? Should the government do anything?

It is my firm belief as a progressive that the government’s purpose is to respond to issues exactly like this one. Already the government has made strides toward making college a more realistic dream for bright kids across the country. Pell Grants and other need-based aid on the national level supplement state-specific scholarship opportunities. The next step is to focus this aid money as incentives for majors that will be viable in the current job market.

There are students at every university who choose a major solely on earning potential, and there are students that study what they love, regardless of the likelihood of getting a job post-graduation. Then there are those that are unsure, that decide on a major at the last possible moment, and these are the students who can be targeted.

Our country is in desperate need of teachers, nurses, and highly skilled engineers. We graduate thousands of virtually unemployable history and English majors every year. What if those students had monetary incentives to study what the country needs? Programs like this are already in place, like the National SMART Grant that offers money based on need to students majoring in sciences, technology, engineering, or critical foreign languages. What I propose is expanding and marketing these aid programs through the national and state levels. High school students might work more diligently in their math and science classes if they know they can have a more affordable college career by applying to engineering schools. Nursing programs that guarantee jobs after graduation have been around for over 20 years and should be promoted and expanded through government funding.

Funding for this project would involve little to no new funds, because the government could simply reappropriate money from general or merit-based scholarships to more specialized scholarships, or write new requirements into existing aid packages.

Each state should conduct research to find out which industries have the most unfilled positions and are growing the quickest, and issue grants to deserving students who study those subjects. Within a few years, the pool of recent graduates can be more streamlined and viable in the job market so students can flow seamlessly into the working world.

Other ways to make college graduates more attractive to possible employers is to encourage and possibly require greater work-study and internship opportunities at state schools. Employers are more likely to hire a candidate with real-world experience and professional skills. Policy changes on a state level would be helpful, and private institutions would likely jump onboard to keep their graduates competitive in the job market.

These solutions, while certainly helpful in the near future, will not help the current graduates who have already chosen their major and completed (or not completed) their internships. Jena McGregor suggests that a big part of the problem is employers, not the candidates. Many companies rely on software programs that rule out qualified candidates based on restrictive requirements. Candidates without experience in a very specific field can be thrown out despite being a good fit for the job.

Hiring recent college graduates or other young people without much experience can actually be beneficial for the company by exposing them to new and fresh ideas, as well as allowing them an opportunity to train the employees to the company’s specific standards. The government can incentivize hiring less experienced people and giving them on-the-job training by giving tax breaks to companies that hire employees right out of college. This would cost the government very little, and be balanced out (hopefully) by a lower unemployment rate for recent graduates.

The government and some private institutions already have some projects in place that make education more affordable. The next step is to prioritize education to be more applicable to the real world. Getting young educated people into well-paying jobs and off of unemployment has never been more relevant, and taking steps to turn these suggestions into realities should start with people like me; high school and college students who will be facing these issues in the not-too-distant future. The harder we work now, the easier it will be when it’s time for us to enter the real world.

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Ilyssa Weingarden is a Roosevelt Institute summer intern and a rising junior studying International Affairs at George Washington University. 

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The Rebirth of Unions

Jul 2, 2012Hye Mi Ahn

Unions are a crucial aspect of the U.S. economy and should be adapted to be made more efficient rather than dismissed or eliminated. 

Unions are a crucial aspect of the U.S. economy and should be adapted to be made more efficient rather than dismissed or eliminated. 

In a letter to the president of the National Federation of Federal Employees in 1937, President Roosevelt wrote: "Organizations of government employees have a logical place in government affairs. The desire of government employees for fair and adequate pay, reasonable hours of work, safe and suitable working conditions, development of opportunities for advancement, facilities for fair and impartial consideration and review of grievances, and other objectives of a proper employee relations policy, is basically no different from that of employees in private industry." 

But the days of elected officials supporting organized labor may be behind us for good. Scott Walker, the Governor of Wisconsin who stripped government employees of collective bargaining rights, easily survived a recall election recently, inciting Republicans to declare that the backbone of the American labor union had been finally and truly broken. The discussion then turned to the implications for Democrats in the 2012 election, but the uncertain future for labor unions should not be dismissed so easily. 

Unions played a vital role in buoying the middle class throughout the 20th century, and they still remain a prominent fixture in countries around the world. During the 1950s—the height of unionization in the United States—membership rates hovered around 35p ercent and the public attitude toward unions was generally favorable. Progressives like President Roosevelt understood the importance of healthy unions to level the playing field between labor and management, and as a necessary check on the free market, so that employers would be beholden to their workers as well as shareholders and profits.

But in the following decades, several factors contributed to the steady decline of unions. As the United States began to move away from manufacturing, the middle class that supplied unskilled labor to the economy began to lose its collective power and political clout. Stonemasons, construction workers, and machine operators were laid off as the skills-focused service industry dominated the economy. Globalization led to the mass outsourcing of traditional middle class jobs. The relentless advent of technology required employees to have specific training or college degrees, when their positions weren’t replaced entirely by machines.

Unsurprisingly, income inequality grew larger as union membership rates fell during this time. And when union membership rates slow down, so do blue-collar wages. The middle class share of aggregate income has been in consistent decline since the 1960s, to an alarmingly low level today. 

In light of the Occupy Wall Street movement and the ongoing discussion of class warfare, it would be easy to presume that the "99%" would support labor unions that have been the historical equalizer between management and the working class. However, the fact that Scott Walker remains governor today is a sure sign that the existing model of unions, especially in the public sector, is unsustainable in an era of global economic turmoil. Eventually, budget deficits must be dealt with at every level of government, and austerity will spare few of the perks, like pensions and health benefits, that are associated with union membership.

But the election results should not be taken as the final word. Just as the motive for profit does not drive all employers to act ruthlessly, unions should not be assumed to exploit powers like collective bargaining to freeze out non-union members or hold employers hostage with strikes. Likewise, unions do not inherently cause inflation, unemployment, or state budget deficits, according to leading economists.

Here are some findings from a report by the Economic Policy Institute that show how unions benefit society as a whole:

  • “Unions raise wages of unionized workers by roughly 20% and raise compensation, including both wages and benefits, by about 28%.”
  • “Unions reduce wage inequality because they raise wages more for low and middle-wage workers than for higher-wage workers, more for blue-collar than for white-collar workers, and more for workers who do not have a college degree.”
  • “Strong unions set a pay standard that nonunion employers follow. For example, a high school graduate whose workplace is not unionized but whose industry is 25% unionized is paid 5% more than similar workers in less unionized industries.”
  • “Unionized workers receive better pension plans. Not only are they more likely to have a guaranteed benefit in retirement, their employers contribute 28% more toward pensions.”

There was a spurt of experimentation in the 1990s when companies and unions from AFL-CIO cooperated to form teamwork strategies that improved efficiency. Industry giants like Xerox Corp. found the initiatives to be so successful that they moved hundreds of jobs back to the United States and invested in their unionized workers for higher quality output and increased competitiveness. This is a norm in other industrialized nations; the history of modern European states shows a robust relationship, not fatal incompatibility, between organized labor and firms.

In the United States over the past few decades, unions have become saddled with an unsavory reputation of being ineffective, stubborn components of the economy that prioritize membership benefits at the expense of efficiency. The cozy, symbiotic financial relationship between public unions and elected Democrats hasn’t helped either. Instead of fanning the flames of the management-labor divide, as the unions tried to do with the recall effort in Wisconsin, unions should direct their energy to adapting and becoming cooperative elements in the free market by working with firms to generate productivity.

As the nation grapples with growing inequality, we should not categorically reject the place of unions in our economy. And as technology and changing business models reshape the global economy and feed the growing income gap as they have in the past, unions could prove to be critical at resuscitating the middle class now and protecting workers’ rights in the future. 

Hye Mi Ahn is a rising senior at Carleton College, and a Roosevelt Institute summer intern. 

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Why Obama’s New Immigration Policy is Good for the Economy

Jun 21, 2012Tim Price

Protecting undocumented workers doesn't mean they'll "steal" American jobs. Quite the opposite.

Protecting undocumented workers doesn't mean they'll "steal" American jobs. Quite the opposite.

Last Friday, the Obama administration announced that it would halt the deportation of young undocumented immigrants who would qualify for the DREAM Act and grant them work permits. The usual suspects leaped into action with shouts of “amnesty!” and charges that President Obama was once again selling out his country to serve his cosmopolitan principles. One reporter from the right-wing Daily Caller was so irate that he started heckling Obama during the statement announcing the new policy, asking whether it was “good for the American people.” But this move will in fact benefit Americans, and anyone concerned about America’s workers and the health of its economy should be pushing the administration and Congress to go even farther.

In the ongoing battle between the 1 percent and the 99 percent, undocumented immigrants undoubtedly fall into the latter category. According to Pew research, 62 percent of undocumented workers are employed in construction, hospitality, manufacturing, or wholesale and retail trade, and “in specific occupations like cooking, painting, washing cars, packaging by hand and installation of carpets and floors, they may make up 20 percent or more” of the total workforce. Although the same study finds that many of these workers make at least minimum wage, the Urban Institute reports, “About two-thirds of undocumented workers earn less than twice the minimum wage, compared with only one-third of all workers.” Moreover, research from the Dallas Fed notes that although they are covered by minimum wage laws, “undocumented workers paid less than the minimum wage are probably unlikely to seek legal redress for fear of revealing their undocumented status.”

In short, these workers perform lousy jobs for lousy pay, with little bargaining power, limited legal recourse if they’re mistreated by their employers, and no safety net to catch them if they get sick or lose their jobs. Dirt cheap, easily exploited, and readily disposable, they represent the model American worker for elites who rail against organized labor, social programs, and business regulations.

Bringing undocumented immigrants out of the shadows and acknowledging them as full and active participants in the workforce is essential, not just to improve their own economic standing but to increase economic justice for all workers. Conservatives often cast this as an us-versus-them conflict, warning that undocumented workers are out to “steal” our jobs and that granting them legal status will only create more competition for low-income Americans. But they're already here whether we choose to acknowledge them or not, and as Cristina Jimenez writes at The American Prospect (h/t Travis Waldron), “As long as a cheap, compliant pool of undocumented labor is available, employers have every reason to take advantage of the situation, keeping wages as low as possible.” No one’s out picking fruit under the hot California sun because of the great dental benefits; they’re doing what they need to get by, and their employers have them over a barrel. To put it another way, Terence O’Sullivan of the Laborers’ International Union of North America says, “Workers don’t depress wages. Unscrupulous employers do.”

The alternative to granting undocumented workers the legal protection they need to combat this exploitation is mass deportation, but rounding up and expelling 11 million people at a cost of $23,480 a head would be both inhumane and totally unaffordable. On the other hand, allowing them to stay and granting them legal status would actually help to reduce the deficit. According to a report from the National Council of La Raza, undocumented workers already contribute about $8.5 billion into Social Security and Medicare each year in addition to paying sales and property taxes. Far from being freeloaders, they pay $80,000 more in taxes per capita during their working lives than they take in from government services. But even if some of these workers were to achieve legal status through the DREAM Act and begin receiving the full benefits they deserve, the CBO and the Joint Committee on Taxation estimate that factors including their newly reportable income and decreased Homeland Security costs would generate $1.7 billion in new revenue and reduce the deficit by $2.2 billion over the next 10 years. The question of “Which do I loathe more, deficits or immigrants?” may represent a real Sophie’s Choice for some on the right, but it’s clear that deficit hawkery is incompatible with opposition to immigration reform.

Even if you’re not one of those people who wakes up in a cold sweat thinking about the debt-to-GDP ratio, there’s reason to believe the American economy has holes these undocumented immigrants could fill. (Not literally, though they do that too.) As President Obama has emphasized, the U.S. is falling behind other developed countries in college completion rates, which could soon lead to a shortfall in high-skilled workers. Luckily for us, among the undocumented immigrant population there are millions of young men and women who grew up in America, identify as American, and want to go to college and pursue their careers here. We just need to stop giving them reasons to be afraid to do so.

The DREAM Act, if it were ever passed, would give undocumented immigrants who arrived in the U.S. before age 16 a path to citizenship if they meet certain criteria, including the completion of a college degree or military service. It’s been introduced several times in Congress (originally by Republican Orrin Hatch) but blocked by the GOP on the grounds that it would grant amnesty to those who entered the country illegally – an idea so radical only a bleeding heart liberal like Ronald Reagan could support it. President Obama’s new plan doesn’t even go that far. It will allow some undocumented immigrants to work here legally, but it provides no clear path to citizenship or the rights and privileges that come with it. They won’t be able to vote, for instance, although taxation without representation has been something of a sore spot in American history.

As the president himself admitted in his Rose Garden address on Friday, this new policy is only “a temporary stopgap measure” until Congress can pass a comprehensive immigration reform plan. And while the politics of setting the age limit for the policy at 30 are clear, since the “crime” of immigrating here as children is harder to hold against them, it’s cold comfort for the millions of older undocumented workers who need and deserve some relief. But it’s still an important step forward, and not just on the moral grounds that, as the president stated, “We are a better nation than one that expels innocent young kids.”

Instead of blaming undocumented workers for taking American jobs (and casually referring to them as “illegal aliens,” which criminalizes their existence and makes them sound like something that’s going to abduct and probe us in the middle of the night), we should recognize them as victims of the same exploitative system that Occupy protesters have been grappling with since last fall. Is giving legal recognition to undocumented workers good for the American people? It’s a step toward acknowledging that there’s no such thing as a second-class citizen and that all working men and women deserve fair compensation. What could be more American than that?

Tim Price is Deputy Editor of Next New Deal.

Immigration services image via Shutterstock.com.



 

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Mike Konczal and Sarah Leonard on the Myth of American Meritocracy

Jun 11, 2012

On the latest episode of "Fireside Chats," Roosevelt Institute Fellow Mike Konczal brings in Sarah Leonard, editor at Dissent and The New Inquiry, to discuss the ways that student debt and unpaid internships have completely skewed the labor market.

On the latest episode of "Fireside Chats," Roosevelt Institute Fellow Mike Konczal brings in Sarah Leonard, editor at Dissent and The New Inquiry, to discuss the ways that student debt and unpaid internships have completely skewed the labor market. Mike used to think of internships as an equal opportunity mechanism, but then realized "you have to be able to feed yourself, you have to be able to survive," something that's hard to pull off when you're deep in debt and not making any money.

As Sarah bluntly puts it, "American meritocracy has always been a myth," but now these two forces have conspired even more to allow "people who make it to the top" to consolidate power there and "consolidate it for their children." Not only does a young person need money to take an unpaid position, but those who go into debt to get through college have an even harder time doing so if they need to work to pay off those loans. "Internships are absolutely a reinforcer of privilege," she concludes.

Mike compares student debt to the indenture system that brought Europeans to America's shores: it was set up "to solve an economic problem, a problem of travel," and now we have a similar problem in which we need to "get people who have significant talents to grow the economy to the spaces where they have their talents fully developed and they’re capable of exercising those talents." The biggest question? "How do we pay for it?" In other words, how do we make it affordable for everyone to have people get the education they need to best contribute to the economy?

Compounding this, Sarah notes that the language around student debt is about "investing in yourself," but in reality the need to take on massive amounts of debt to get an education isn't a way to open up opportunities at all. "It restricts your freedom after college," she says.

Watch the full segment below for their discussion of precarious work, the future of organized labor, and "Sex in the City" feminism:

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