2021 Annual Report
(2 MB)
Director’s Message
The pandemic’s unequal effects on American families and workers laid bare fault lines in the systems and institutions that organize our lives, including the labor market and economy. Shutdowns in response to the virus wiped out jobs and livelihoods for many, required others to risk their lives as essential workers, while enabling some to work from home.
At the Schwartz Center, we see the intersections between these inequitable outcomes and the policy issues we need to create a better future. Our team of engaged scholars based at The New School for Social Research in New York City led the effort for change in the service of two goals: 1) helping those who suffered or are still suffering; and 2) changing the systems that exposed these individuals, families, and communities to inequitable policies that have always had disparate impacts.
Our economists meet these challenges by providing research and policy insights to help policymakers, the media, and the public understand how our economy affects people, and by developing equitable solutions for working families. As we emerge and heal from the pandemic’s threat to our health and communities, SCEPA views this research as a starting point to advance opportunities that allow workers and families to prosper, by reforming systems that serve a privileged few rather than the many. These systems include retirement and healthcare, workers’ rights and bargaining power, public infrastructure investments, and renewable energy, among others. This work advances our belief that a just transition is the only way to ensure a more sustainable and equitable future for our workers and our planet.
Highlights of our team’s achievements in 2021 include:
Working to make the teaching of economics more relevant to today’s social and economic issues, through a research collaboration with the William and Flora Hewlett Foundation on the “Future of Heterodox Economics.”
Presenting testimony on wealth and retirement inequality before the U.S. Senate Committee on Banking, Housing, and Urban Affairs, and the U.S. House Committee on Education and Labor.
Generating more than 100 press hits on our research from outlets including Bloomberg, the Los Angeles Times, NBC News, The New York Times, and The Washington Post, among others, including a two-series profile of SCEPA’s retirement research in Barron’s.
Obtaining a grant from One Project, a nonprofit dedicated to progressive systems change, to bring diverse perspectives into mainstream economic thought by reorienting how future economists are trained.
Presenting an “Economics of Climate Change” workshop sharing new research on climate policy, including green bonds, climate justice, the carbon wealth tax, and cryptocurrency.
Celebrating the Schwartz Center’s 25th anniversary by continuing our tradition of using our network’s mission-based research to support policies that improve the lives of the working class.
Our team’s accomplishments in 2021 lay the foundation for moving forward in action. But we do not do it alone. We are grateful to our many supporters, partners, and stakeholders, including Bernard L. Schwartz and our colleagues at The New School.
Teresa Ghilarducci,
Director
Research Highlights
Better Economics for a Better Economy
Important shifts are occurring in the understanding of capitalism, the political economy of aging, labor markets, climate change, and inequality. As the world changes, our economic thinking and training must keep up to remain useful for building a more inclusive society and economy that are resilient. Heterodox economics, the cornerstone of The New School’s economic teaching, is a framework that responds to these needs. In the Future of Heterodox Economics, the authors assess the flaws and strengths of heterodox economic theory and how students are trained. They find that it is essential to deepen our engagement with mainstream actors, strengthen heterodox theory, encourage the use of large data and policy work, and combine theories of institutions, power, racism, and sexism within economics.
Climate Change and Economic Policy
One of the most important contributions of economic policy analysis is to bring the future forward. Often, what we need in society has short-term costs but promises significant future gains. Without an economic analysis of the costs and benefits of potential investments (and the costs of not making those investments), we may never spend what it takes to build a sustainable and equitable future.
One economic policy that brings the future forward is investing now to mitigate and adapt to climate change. Meaningful policy solutions must account for the consequences of climate change and shocks. In Climate Shocks & Child Labor, New School economists Feridoon Koohi-Kamali and Amit Roy find that climate disasters increase the use of child labor and that higher levels of education and better health can help protect children from having to work when environmental disasters strike. Because current social safety net programs are insufficient to provide for the basic needs of climate-shocked poor households, Fiscal Policies for a Low-Carbon Economy is also necessary to achieve a low-carbon future. The report finds clear evidence that green bonds can support carbon taxation by acting as a bridge financing instrument, smoothing the path to transition.
Older Workers and Retirement Security
Another area of economic policy that brings the future forward is assessing the short-term costs and long-term gains of increasing older workers’ bargaining power in the labor market. Older workers are a growing share of the workforce—over 42 percent of the 11 million jobs created in the next ten years will be filled by workers 55 and older. Their pay and working conditions will not increase if the workforce doesn’t have bargaining power and financial resiliency. Of course, these challenges affect workers at all ages. In an economy defined by bargaining relationships and power, workers need a strong fallback position to command stronger wages, benefits, rights, and conditions on the job. But in Trends in Employer-Sponsored Retirement Plan Access and Participation, Radpour, et al. find that retirement plan participation is low and stagnating, primarily because employers choose not to offer employees access to these plans. The current American retirement system leaves out half of workers, especially low-income workers and minorities.
As a result of this grim reality, working longer is often proposed as the solution to the retirement crisis. But in Working Longer Can’t Solve the Retirement Crisis, Ghilarducci, et al. find that retirement doesn’t lead to the promised benefits, due in part to early Social Security claiming to supplement low wages. In their report, Is the Adjustment of Social Security benefits Actuarially Fair, and If So, for Whom? Irena Dushi, Leora Friedberg, and Anthony Webb find that while Social Security is designed to deliver benefits that are equal in expectation, regardless of whether they are claimed as early as age 62 or as late as age 70, this is no longer the case. An inequality in lifetime benefit payouts has arisen due to increasing disparities in lifespans, the relationship between lifespan inequality and earnings inequality, and widening disparities in claim ages.
In previous years, we identified 10 policies to strengthen older workers’ power to negotiate better pay and working conditions. Negotiators with lower costs of “walking away” from the bargaining table have stronger bargaining positions. One such policy—expanding the Earned Income Tax Credit (EITC), which targets refundable tax credits to low-income workers—would benefit 1.5 million older workers, according to Ghilarducci and her co-authors. Tempering this finding, however, in Who Does the EITC Benefit? Research Associates Owen Davis and Aida Farmand find that the EITC reduces wages for workers without college degrees. These findings prompt a reconsideration of the redistributive effects of the EITC, particularly for groups like older low-wage workers who face slower wage growth because of the policy.
Employment and Retirement During the Covid-19 Pandemic
The pandemic compounded many of the challenges facing older workers and workers at large. As we continue to recover from the recession, the drastic job loss experienced by older workers reveals the risk they face when working longer is the policy substitute for an effective retirement security system. In Dissecting the Pandemic Retirement Surge, SCEPA Research Associate Owen Davis finds that employment declines among older workers were greatest for low earners, women, non-whites, and non-college-educated workers.
What’s more, as SCEPA analysis revealed, The Pandemic Retirement Surge Increased Retirement Inequality. At earlier ages, vulnerable older workers retired sooner while more privileged workers delayed retirement. Black workers without a college degree experienced the highest increase in the share who are retired before age 65.
In previous years, we identified 10 policies to strengthen older workers’ power to negotiate better pay and working conditions. Negotiators with lower costs of “walking away” from the bargaining table have stronger bargaining positions. One such policy—expanding the Earned Income Tax Credi t (EITC), which targets refundable tax credits to low-income workers—would benefit 1.5 million older workers, according to Ghilarducci and her co-authors. Tempering this finding, however , in Who Does the EITC Benefit? Research Associates Owen Davis and Aida Farmand find that the EITC reduces wages for workers without college degrees. These findings prompt a reconsider ation of the redistributive effects of the EITC, particularly for groups like older low-wage workers who fac e slower wage growth because of the policy.
Employment and Retirement During the Covid-19 Pandemic
The pandemic compounded many of the challenges facing older workers and workers at large. As we continue to recover from the recession, the drastic job loss experienced by older workers reveals the risk they face when working longer is the policy substitute for an effective retirement security system. In Dissecting the Pandemic Retirement Surge , SCEPA Research Associate Owen Davis finds that employment declines among older workers were greatest for low earners, women, non-whites, and non-college-educated workers.
What’s more, as SCEPA analysis revealed, The Pandemic Retirement Surge Increased Retirement Inequality. At earlier ages, vulnerable older workers retired sooner while more privileged workers delayed retirement. Black workers without a college degree experienced the highest increase in the share who are retired before age 65.
Policy Highlights
In 2021, the Schwartz Center’s Retirement Equity Lab (ReLab)—underpinned by its research on older workers and the causes and consequences of retirement insecurity—served as a leading voice in efforts to improve equity and enhance retirement security.
In testimony before the U.S. Senate Committee on Banking, Housing, and Urban Affairs, Teresa Ghilarducci noted that home equity and retirement wealth, including Social Security, are the largest components of wealth. She concluded that to boost retirement security, Americans need access to what we know works—professionally managed retirement coverage that allows everyone to benefit from stock markets.
Before the U.S. House Committee on Education and Labor, Teresa Ghilarducci spoke on the progress made in the past century on equalizing retirement and the current threats facing the system, including an unfair tax code and the shift to 401(k)-type pensions. Finally, ReLab’s Associate Research Director Siavash Radpour and Teresa Ghilarducci discussed their research on the causes of retirement wealth inequality with the Department of Labor’s Advisory Council on Employee Welfare and Pension Benefit Plans. They testified that voluntary participation in our employer-based system and the resulting lack of access to plans at work is the primary cause of retirement wealth inequality, resulting in wide gaps in retirement wealth by race.
Since 2012, ReLab has produced frequent reports on older workers’ experiences in the labor market. Using our economic policy expertise, these reports dig deeper into the experiences of this large and growing segment of the labor force to support evidence-based policymaking. Our report in 2021 tracked decreasing labor force participation of older workers and deepening inequality experienced by Black, Hispanic, and Asian workers. To facilitate older workers’ return to work, the report cited policy solutions including aggressive anti-age discrimination enforcement and expanded unemployment benefits.
At the 2021 G-20 summit, economist Willi Semmler, the director of SCEPA’s Economics of Climate Change project, co-authored SCEPA research included as briefing materials provided to each summit participant. The paper addresses how to rebuild the European Union’s willingness to address challenges such as long-term scarring of the labor market, climate change, social and healthcare systems, and sustainability of sovereign debt. To ensure the EU’s progressive future, the authors advocate for a shared policy agenda for recovery.
Press
Economic policy analysis can help bring the future forward by providing insights that allow leaders to better decide what is needed today to chart a path toward tomorrow’s desired results. This includes making infrastructure investments now to prevent future damage from climate disasters. SCEPA economists work with journalists and the media to share trends revealed in our data, and to break down how these trends affect people by race, class, and age—and how we can change course if needed. In 2021, SCEPA’s research was covered in more than 100 news articles, providing evidence to support the narratives that will ultimately define future policy.
SCEPA’s ReLab produces reports on trends in older workers’ experience in the labor market that often reveal older workers’ unique experiences. In 2021, ReLab’s report on older workers resulted in 33 articles in outlets including The Financial Times, Los Angeles Times, and NBC News. These reports and the resulting media stories called out deepening racial inequalities in job recovery for older workers and explained that older workers were not, as originally assumed, part of the “Great Resignation,” but were retiring early, most likely due to age discrimination.
The high-profile work of our economists led to a two-part series in Barron’s on SCEPA Director Teresa Ghilarducci’s proposal to reform retirement. Originally intended to be a single interview, the magazine received so many impassioned comments they gave it additional coverage to allow for more debate on the importance of how to reform our broken retirement system.
SCEPA economists also share their research with the public by penning opinion pieces, a format that allows for more in-depth discussions while responding to current events in the policy area. This year, SCEPA op-ed headlines included SCEPA Senior Fellow Stephanie Kelton’s “Biden Can Go Bigger and Not ‘Pay for It’ the Old Way” in The New York Times; SCEPA Director Teresa Ghilarducci’s co-authored piece in The Washington Post, “Everyone Should Have the Retirement Plan Federal Employees Enjoy;” and SCEPA Senior Fellow Rick McGahey’s column in Forbes titled, “Are States And Cities Taking On Too Much Debt?”
Engagement
As with many organizations, pandemic shutdowns required SCEPA to pivot online to engage with our collaborators, the public, fellow academic scholars, policymakers and experts, nonprofit advocates, foundations, and fellow thought leaders. Through these convenings and conversations, we found that the economic consequences of the pandemic motivated both experts and impacted individuals to probe further into the connections between today’s economic challenges and the steps needed to pave a better path forward.
SCEPA hosts regular workshops dedicated to the “Political Economy of Aging.” These small convenings are organized by our academic fellows and focus on sharing new research from expert scholars. The events build leadership and community among The New School’s young scholars, academics, and policy experts working on the front lines of policy change. In 2021, SCEPA welcomed the following scholars:
Dr. Courtney Coile, from Wellesley College, to present her work on the effects of COVID-19 on retirement behavior;
Dr. Leora Friedberg, of the University of Virginia, to present her work on mandatory retirement savings
Dr. Joelle Abramowitz, from the University of Michigan’s Institute for Social Research Survey Research Center to present her work on the effects of paid family leave on older adults;
and Dr. Richard W. Johnson from the Urban Institute, who presented his research with Dr. Melissa Favreault on the impact of disability, health, and marital status shocks later in life.
At another convening aimed at building leadership and community, Research Associates Aida Farmand and Owen Davis organized a two-part series of sessions at the Labor and Employment Relations Association conference. The sessions focused on older workers' experiences in labor market, with research exploring job loss patterns amongst older workers, age discrimination, involuntary retirement, and the impacts of Covid-19. Participants included David Neumark (University of California, Irvine), Richard Johnson (Urban Institute), Joelle Abramovitz (University of Michigan), and Gal Wettstein (Boston College, Center for Retirement Research).
In November, SCEPA’s project on the Economics of Climate Change, led by New School economist Willi Semmler and supported by the Thyssen Foundation, organized the conference, Climate Change & Macroeconomics: New Perspectives on Climate Economics. The event presented new research from NSSR graduate students and alumni that laid out new ideas for climate policy, including green bonds, greener financial portfolios, comparative studies of climate justice across countries, the carbon wealth tax, and even cryptocurrency. It featured a presentation by Princeton Professor Markus Brunnermeier on his new book, The Resilient Society, investigating how societies bounce back from shocks.
SCEPA’s 25th anniversary celebration also moved online. Since its inception, SCEPA has served as a leader in providing progressive economic research that challenges mainstream economic doctrines that have created economic inequities and insecurities. In honor of our 25 years, we shared the stories of our history, team, and supporters—past and present—and the impact of SCEPA's research in academia and public policy. The anniversary celebration culminated in an event featuring top heterodox economists discussing how to provide an alternative to neoclassical mainstream economics, both in the academy and in policy. The conversation focused on SCEPA’s research on the “Future of Heterodox Economics” with the William and Flora Hewlett Foundation. Speakers included Stephanie Kelton, Deirdre McCloskey, Mark Setterfield, and Anwar Shaikh.
Partnerships & Support
Partnerships and coalitions are essential for creating broad-based and lasting economic and social change. SCEPA is grateful for early backing from Bernard L. Schwartz, whose vision helped shape our growth, and for Tony James’ support and guidance. With the help of our funders and partners, SCEPA continues to foster research collaborations, host convenings, and promote dialogue between our students, academics, policymakers, and activists.
As the economic policy think tank within The New School’s Department of Economics, SCEPA’s team of faculty and research associates is uniquely placed to think beyond the assumptions, values, and technicalities of the neoliberal era. With the emergence of new dynamics and values, the heterodox framework of economic thinking has become an increasingly vital counterbalance to capitalism and mainstream economic theory. Previous funding from the Hewlett Foundation supported early steps in identifying how to improve heterodox thinking; and with new support from the One Project initiative, we are building on that research and rethinking how we teach economics to the next generation.
We recognize a thirst for the tools to make sense of lived economic experience, to have greater capacity to rethink economic justice and how to attain fairness and security. Today’s teaching of economics falls short in this regard, so we are creating a course that centers the major issues of the day to engage students in consideration of social values, power, justice, democracy, and equity. This course will help prepare the next generation to evaluate issues on technical and ethical levels, empirically and philosophically; how to mold an economy that is fair and provides the social protections and shared prosperity that will sustain our democracy and our climate for the future.
With support from the RRF Foundation for Aging, SCEPA is partnering with the Economic Policy Institute (EPI) to advance awareness of older workers’ experiences and retirement inequalities, and to foster discussion among researchers, advocates, and policymakers that will lead to meaningful reform. To that end, SCEPA and EPI are creating an Older Workers and Retirement Chartbook to provide the diverse universe of organizations working with older Americans with the latest economic data and trends in retirement income security. Our aim is to provide an informative, relatable, and accessible narrative with visually appealing graphics to the general public while providing researchers, policymakers, advocates, and journalists with authoritative and easily shareable charts and statistics. The Chartbook will illustrate systemic failures within the employer-based retirement system and link challenges facing older workers to retirement insecurity. It will highlight the disparate impact of these failures on workers of color, women, non-college-educated workers, small business employees, older workers in onerous jobs, and other workers at greater risk of facing hardship at older ages.
Finally, continued funding from the Thyssen Foundation supports new research and events spotlighting New School graduate students and alumni who focus on climate policy and climate economics, among other areas.