- 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.
On Tuesday, April 23, 2013, the PBS program Frontline aired "The Retirement Gamble," a news investigation into how the financialization of retirement savings via 401(k)-type accounts has eroded individuals' ability to retire. SCEPA Director Teresa Ghilarducci and Robert Hiltonsmith, a policy analyst at Demos, were interviewed on their work documenting the structural failure and high fees of the 401(k).
Frontline's investigation reveals:
- On any given street, one household may be paying 10 times as much to invest in a 401(k) as the household next door;
- Over the course of a lifetime, a seemingly low annual fee of 2 percent can reduce what your balance would have been by more than 60 percent—potentially adding years to your working life;
- Popular 401(k) providers often charge a plethora of hidden fees, burying them under opaque names like "Expense Ratio";
- Many financial advisers are not required to provide advice that is in their clients' best interest; they are only obligated to give advice that is "suitable"; and
- The best way to maximize your return might be to cut Wall Street out of the equation and invest in low-cost, unmanaged index funds.
On April 15, 2012, researchers at the Political Economy Research Institute published a paper that found that the Reinhart and Rogoff's influential paper Growth in the Time of Debt contained faulty research methods, including coding errors. Despite initial concerns about causation in their research - high public debt could be the consequence and not the cause of slow growth - this paper has informed austerity measures in the United States and Europe.
Before the knowledge of coding errors came to light, SCEPA research revealed that cutting government spending in a crisis comes with serious risks. SCEPA research found empirical evidence that reducing deficits will inhibit economic activity in the short-run, and may lead to higher debt-to-GDP ratios in the medium-run. SCEPA has also hosted a number of events on austerity politics and economics held in late 2011, "Do Budget Cuts Lead to Growth" SCEPA also held a second panel discussion on this theme "What the US Should Learn From Austerity's Fallout in Europe and Latin America" (April 17, 2012). The continued crisis in Europe demonstrates the realization of these risks.
In addition, SCEPA research also reminds us that the increase in U.S. fiscal deficits and U.S. government debt after the recession was not only the result of the fiscal stimulus program. Due to the operation of automatic stabilizers, the severe downturn in economic activity substantially reduced government revenues and increased spending, contributing to a higher fiscal deficit
On April 18, 2012, SCEPA released the study, "Are Connecticut Workers Ready for Retirement" which documents a downward trend in both employer sponsorship of retirement plans and employee participation rates in Connecticut from 1998 to 2012, making it increasingly difficult for workers to prepare for retirement.
In 2010, 50% of Connecticut's workers – 740,000 residents – were not participating in an employer-provided retirement plan. The lack of access to retirement plans is falling for workers in almost all demographic and economic categories, including those nearing retirement and young workers, as well as those with middle and high income levels.
SCEPA's research attributes the downward trend in workers' financial security in retirement to two factors:
- A Drop in Employer Sponsorship - From 2000 to 2010, the availability of employer-sponsored retirement plans in Connecticut declined by eight percentage points, from 66% to 59%. Four out of ten workers in the state do not have access to a retirement plan at work.
- A Lack of Participation - Of the 59% of workers who had access to a retirement plan at work,14% did not participate, either due to personal choice or structural rules that exclude part-time workers, those with under a year of service, or those under 25.
The report broke down the trend by income, age, race, and industry:
- Sponsorship is decreasing fastest for lower-income workers, but those at all income levels are experiencing a drop in access. Lower-income workers saw a decrease in sponsorship rates from 46% to 31% over the ten year period. Workers in the middle 50% and top 50% income groups saw decreases of 8% and 7%, respectively.
- Workers between 55 and 64 had the largest drop in sponsorship - 15% - among all age groups surveyed. However, young workers (25-44) were close behind, with a drop in sponsorship of 13%.
- Asian workers lost the most ground with a 31% decline in sponsorship rates, almost triple the decline of 11% experienced by white workers and almost eight times the decline of 4% of black workers.
- Small firms have the lowest sponsorship rates, and this trend is accelerating in Connecticut. Of all firms, small firms with 1 to 24 employees showed the biggest proportional drop in sponsorship from 2000 to 2010. Sponsorship rates dropped from 34% to 27% in 2000, a change of 20%.
Connecticut's State Senate Majority Leader Martin Looney (D-New Haven) introduced legislation, SB 54, to create a retirement savings plan for low-income workers in the private sector. Passed by the Joint Committee on Labor and Public Employees in March, it would create a retirement plan for all Connecticut workers without access to a retirement savings plan at work. The legislation is modeled after SCEPA's proposal for state Guaranteed Retirement Accounts (GRAs), a plan that was recently enacted in California.