- On Capitol Hill
- On Wall Street
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- Policy Reform Work
Our projects are designed to empower policy makers to create positive change. With a focus on collaboration and outreach, we provide original, standards-based research on key policy issues.
SCEPA joined with the Economic Policy Institute on Capitol Hill to brief congressional staff and policy experts on tax expenditures, or incentives given through the tax code without scrutiny by Congress.
SCEPA economists are working on the prospects for a more progressive economic order to emerge from the shock of the recession. They have published papers and documents that place current events in a longer-term context as well as policy proposals to deal with short-term concerns. They are also documenting the emerging discussion of how the discipline of economics is reacting to the Great Recession and the questioning of conventional economic analysis.
Lance Taylor, a SCEPA Faculty Fellow, presents an overview of his new book, Maynard’s Revenge, in a Google Tech Talk.
The book, published this November by Harvard University Press, is a timely analysis of mainstream macroeconomics, posing the need for a more useful and realistic economic analysis that can provide a better understanding of the ongoing global financial and economic crisis.
The government spends $143 billion through tax breaks in an effort to expand pension coverage and security. Yet, over half of the American workforce does not have a pension. Retirement insecurity hurts business plans, workers’ lives and retiree well-being. Reform is needed.
SCEPA’s Guaranteeing Retirement Income Project, sponsored by the Rockefeller Foundation and in collaboration with Demos and the Economic Policy Institute, has a plan to guarantee safe and secure retirement income for all Americans.
SCEPA Director Teresa Ghilarducci was named to Next Avenue’s 2016 list of Influencers in Aging for her work to reform the broken retirement savings system by giving every American a Guaranteed Retirement Account. Each year, the Influencers in Aging list recognizes 50 thought leaders at the forefront of changing how we age and how we think about aging. Influencers are leaders in improving the lives of older adults and their families and communities. Below is Next Avenue's insert describing Ghilarducci's work.
Institutions embody the “rules of the game in a society,” according to Nobel Laureate Douglas North. These humanly devised constraints shape people’s interactions – political, social and economic – and establish a stable social structure. But what if the rules are deeply unequal, devised largely by the powerful? And is stability which entrenches inequality even desirable?
Noted economist Bina Agarwal’s lecture on October 25th, 2016 demonstrated how women face deep inequalities in rules and norms, which, in turn, create severe inequalities in their access to both private and public property. Based on her research, she challenged standard economic analysis to show how these inequalities undermine both economic efficiency and social justice. She also outlined pathways to change, such as by enhancing women’s bargaining power in multiple arenas: the family, community, markets, and state.
Agarwal is an award-winning author whose three volume compendium, “Gender Challenges,” unravels the nature of gender inequality in multiple institutions: those governing agriculture, property, and the environment. She is professor of development economics and environment at the University of Manchester, UK. Prior to this, she was director and professor of economics at the Institute of Economic Growth at Delhi University.
The Robert Heilbroner Memorial Lecture on the Future of Capitalism:
The Heilbroner lecture honors the work of Robert Heilbroner, who was both a student and a professor in the economics department of The New School for Social Research. This event is dedicated to understanding questions of economic justice and how the profit-seeking activities of private firms might also serve broader social goals. To use Heilbroner’s words, “capitalism’s uniqueness in history lies in its continuously self-generated change, but it is this very dynamism that is the system’s chief enemy.”
The event is free and open to the public.
GRAs Would Supplement an Expanded Social Security
GRAs would not compete with or supplant Social Security. As social insurance against disability and poverty in old age, Social Security must be protected and expanded.
As I wrote in the Huffington Post, "The first step to solve the coming retirement crisis is to make Social Security solvent, without reducing benefits for lower- and middle-income persons....Instead of cutting benefits for these persons, we believe it would make more sense to expand the revenue available to finance Social Security. In our judgment, this represents a far better approach to improving retirement security for all Americans."
GRAs are individual accounts that would supplement Social Security. Social Security was not designed nor intended to provide an individual with all the income they would need in retirement. Rather, Social Security is considered one leg of a three-legged stool. The other legs are income from a retirement plan and personal savings. Over the last 40 years, traditional employer-provided defined benefit (DB) pensions have been displaced by defined contribution (DC) plans, including 401(k)s. Not only are 401(k)s ineffective retirement savings vehicles, they are only provided to half of American workers.
The result of this trajectory is a retirement crisis. Workers without retirement plan coverage cannot save enough for retirement. 401(k) participants are often little better off than those without any coverage, as evidenced by the numbers. Those nearing retirement, including those without access to plan, have a median retirement savings of $12,000.
GRAs are Designed Like Traditional Pensions to Lower Fees
GRAs are designed to mimic the best practices of traditional DB pensions. DBs provide workers with the benefits of pooled savings, low fees economies of scale, and lifelong income in retirement. These characteristics also allow DB plans to provide better investment returns than 401(k)s or IRAs.
The GRA doesn't obligate fund managers to invest in private equity. It merely allows the trustees, operating under the GRA's fiduciary requirements, the opportunity to invest in private equity if it benefits the participant. DB's have proven this to be true - that the inclusion of alternative asset classes has earned participants higher returns at lower risk.
GRAs would require that private investment managers compete against each other for the work, keeping fees as low as possible. Professional fund managers, including private equity funds, are in DB funds now. The issue is not whether they should be used, but whether or not they receive excessive compensation for poor returns. The GRA ensures that taxpayers and GRA contributors are not taken advantage of and get the best possible deal. This is done through transparent governance, pooled accounts and competition – three hallmarks of DB plans.