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.
- Published on Tuesday, October 16, 2012
The decision of the Ford Motor Company to raise wages from $2 a day to $5 a day inspired economists to theorize about the efficiency wage – how much to pay workers to ensure productivity and profitability. At the same time as this dramatic wage increase, Ford Motor Company also invested in large-scale, state-of-the-art machinery for assembly line production. The legacy of the Ford Motor Company and their tactics to ensure high productivity raises deeper questions about what firms can do to motivate workers to maximize profits.
The SCEPA Working Paper, “Work Effort, Firm Closure and Signaling through Excess Capacity Investment,” by New School PhD candidate Johann Jaeckel, addresses these questions. Are workers still motivated to work hard if they believe the company may close? How does the motivation of workers change when they have more or less information about the probability that a company will close? Does the purchasing of new equipment signal to workers that a firm is unlikely to go out of business and therefore impact the effort of workers?
This research is part of the Sustainability, Distribution and Stability Project supported by the Institute for New Economic Thinking (INET) and seeks to contributes to our understanding of motivations for technical change.
- Published on Monday, October 08, 2012
Working longer is often posed as a solution to the retirement crisis, or the systemic lack of savings for those nearing retirement. However, an often overlooked factor in policy debates calling for a raise in the retirement age is the clear evidence that life expectancy rates have not improved equally for all Americans.
Average life expectancy has increased markedly since World War II. The average American born in 1950 would live to 68 years old. By 1980, life expectancy would increase to 73.88 years and to nearly 78 years by 2007.
These remarkable increases, however, belie a growing disparity of life expectancies among different socio-economic groups. The longevity of people in the top half of the income distribution has improved much more than those in the bottom half. This increasing inequality of outcomes has occurred with remarkable speed. For example, the Inter-American Development Bank estimates that from the 1983-1997 period to the 1998-2003 period the differences in life expectancy between the highest 20% and lowest earning 20% of Americans (for those ages 35-76) grew from 0.7 to 1.5 years among women, and from 2.7 years to 3.6 years among men.
- Published on Monday, October 08, 2012
by Rick McGahey, SCEPA Faculty Fellow
The report on September's labor market had some better news for the economy, and President Obama. But while it may help the President politically, it is still very weak. Payroll employment is rising by an average of 146,000 per month this year, compared to a slightly higher monthly average of 153,000 in 2011.
One sad by-product of the improved numbers is a burst of idiotic attacks on the Bureau of Labor Statistics' (BLS) integrity, as some Republicans rush to add misunderstanding of basic statistics to their disbelief in evolution, climate change, and the President's birth certificate. I worked with the monthly employment report in Congress and in the Department of Labor, and like many others I can testify to the integrity and absolute non-partisan nature of the data analysis and release process.
But first, the numbers: the unemployment rate, drawn from surveys of households, fell to 7.9 percent, the first time it has been below 8 percent since January of 2009. And the drop in the rate wasn't due primarily to people leaving the labor force, but to actual reports of new jobs.
Payroll employment, based on a survey of employers, rose by 114,000. And August's anemic job number of 96,000 was revised upward by 48 percent, with BLS now reporting that August's job number was a more robust 142,000. (July's job numbers were also revised upwards, by 22,000.) But the number of people who reported being employed part-time for economic reasons actually rose, and the long-term unemployed stayed at about 40 percent of all workers.
146,000 jobs per month will keep the economy ahead of population growth, but it simply is not enough to restore the economy's health. According to the Atlanta Federal Reserve's jobs calculator, it would take about 66 months at that job growth rate to get us to 6 percent unemployment. That's five and a half years. If jobs continue to grow only at the August rate, then when President Obama leaves office, unemployment will still be around 6.5 percent.
But the actual numbers have been rapidly overtaken by partisan attacks on the integrity of BLS itself. Jack Welch, the retired CEO of General Electric, tweeted "Unbelievable jobs numbers..these Chicago guys will do anything..can't debate so change numbers."
Rush Limbaugh, that paragon of fair-minded analysis, said that "There's no evidence of any job creation. You'd sense it. You would know it. You would feel it." (Next up on Limbaugh—the world is flat, not round, and you can tell by just going outside and looking at it.)
These attacks on BLS, and the survey and reporting process, are conspiracy theories, as well as divisive, partisan nonsense. In the 1990s, I was the Executive Director of the Joint Economic Committee of Congress, which gets the unemployment report just before its public release. I later served as Assistant Secretary of Policy at the Department of Labor, where we had to be ready to respond to the BLS report, but didn't see it until it was just about to be released. BLS is one of the most professional and non-partisan agencies in government, and it simply isn't possible to manipulate their numbers.
So why do the numbers fluctuate so much? BLS polls 144,000 employers every month, but they don't all get their data in on time; as more information comes in, BLS revises the data to reflect a fuller sample.
And the US economy has about 133 million jobs, so a sample revision of 20,000 jobs or so isn't very much. In fact, jobs can vary by up to 100,000 for the monthly establishment survey at a 90 percent level of confidence. That is why experts know not to put too much stock in any month-to-month change reported by BLS, but instead look to three-month rolling averages and the trends of the data, not the specific estimates in any one month.
This uproar over the revisions in the numbers may actually help Obama, by diverting attention from the continuing weakness in the economy and the labor market. But although it is good to see the numbers improved from the awful August report, this is not a strong employment report, and there shouldn't be too much celebrating about it.