- On Capitol Hill
- On Wall Street
- In the Press
- 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.
by Rick McGahey, SCEPA Faculty Fellow
The employment report for December 2013 came out today, and what a shocker. Analysts were predicting continued job growth around 200,000 with a gradual reduction in the unemployment rate, but instead we got a sharp drop in the rate—from 7 to 6.7 percent—and a very weak jobs number—only 74,000 net new jobs added to the economy.
And the sharp drop in the unemployment rate provides no comfort—indeed, it seems strange when taken with the weak jobs number. But jobs aren't driving the unemployment rate in this report—labor force participation is. The rate is calculated by dividing the number of people with jobs by the total of those with jobs and those actively seeking work. If people stop looking for work, that brings the rate down, even with slow job growth.
And that's what happened in December. The number of people looking for work declined by 347,000, resulting in the lower unemployment rate. And the drop isn't due to older baby boomers retiring. Labor force participation among workers 45 to 54 years old dropped to 79.2 percent, the lowest rate in 25 years.
Some analysts were quick to blame the low jobs number on bad winter weather or an anomaly driven by the statistical procedures used to calculate the jobs numbers. And the Bureau of Labor Statistics (BLS) did increase the job gain number for November 2013 by 38,000; monthly job number often are revised upward as more data come in from smaller employers.
But even if December turns out to be a very weak month, employment in the U.S. is still weak. The average monthly job growth in the last quarter of 2013 was 172,000 and at that rate, it would take over two years for the economy to reach a full employment level of 5.5. percent. Even if job gains averaged 200,000 per month going forward (a monthly level rarely reached during 2013), it would take another year and a half to reach full employment.
February will tell us whether this report is a one-month blip, or whether the economy is once again weakening. Even if the projected jobs number had been reached, that would be a weak result. We should be investing more in job creation, unemployment benefits, and other social spending, not cutting government spending back.
On December 4, 2013, The New York Times published an op-ed, "Federal Law Requires Job Creation" written by William Darity, Jr., professor and director of the Research Network on Racial and Ethnic Inequality at Duke University.
Darity's piece reflects research done with co-authors Alan Aja, Daniel Bustillo and Darrick Hamilton for an essay published in The New School's Fall 2013 edition of the Social Research journal, "Austerity: Failed Economics but Persistent Policy." In their article, "Jobs Instead of Austerity: A Bold Policy Proposal for Economic Justice," the authors propose policies to address the consequences of austerity, including high unemployment and increasing inequality.
Specifically, Darity holds the United States accountable to comply with the Full Employment and Balanced Growth Act of 1978, commonly known as the Humphrey-Hawkins Act. The law requires the public sector to create jobs if the private sector doesn't bring the economy to full employment.
Darity and his co-authors argue that the only way to accomplish and enforce full employment is through Keynesian stimulus spending and the creation of a federal job guarantee. To do so, they call for the creation of a "National Investment Employment Corps" to both fulfill the mandate of the federal job guarantee and address the nation's need for environmentally-friendly infrastructure. This would put the United States on the road to full employment while mitigating against the adverse effects of climate change.
They estimate that - 25 years later - the Humphrey-Hawkins Act mandate of zero unemployment could finally be fulfilled.
Lance Taylor, SCEPA Faculty Fellow and Emeritus Professor of Economics at The New School for Social Research, will join the keynote panel for the annual conference hosted by the Institute for New Economic Thinking (INET) and the Centre for International Governance Innovation (CIGI).
The conference will be in Toronto, Canada, from April 10-12. The event will highlight INET and CIGI's work to promote "new economic thinking" by identifying pervasive flaws in existing economic paradigms, promoting innovative interdisciplinary research, creating a strong global community for young scholars, and pushing the economics discipline to meaningfully address challenges of the 21st century.
Taylor will join the panel discussion, "Innovation and Inequality: Cause or Cure," to discuss his work with Professor Duncan Foley on an INET grant investigating the long-term consequences of economic growth, including the effects on climate change, the shift toward a service-centered economy, and the potential for financial and fiscal instability.