- 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.
In the United States, approximately one-third of jobs do not pay enough for full-time workers to provide for their families. One of the major barriers to implementing policies to ensure sufficient wages is the conventional argument that increasing the minimum wage would cause increased unemployment, making it more difficult for low-skill workers and young people to find jobs.
SCEPA Working Paper, "Low Pay, Employment and Labor Market Regulation: Lessons from France?" by SCEPA Faculty Fellow David R. Howell, Bert M. Azizoglu, and Anna Okatenko, finds that the conventional assumption about the relationship between the minimum wage and unemployment rates is false. In fact, the authors find that France has been able to increase the minimum wage without causing adverse effects on employment rates.
This research challenges assumptions about labor policy in the United States. Specifically, the authors find that French policymakers have "all but outlawed low-wage work" by increasing the minimum wage above the standard low-wage threshold, ensuring that even low-education and low-skill jobs provide sufficient wages. While wages were increasing in the mid-1990s, unemployment and employment rates have remained stable or even improved.
The paper contributes three major findings that have significant policy implications in the United States:
- Due to a lack of regulation in the U.S. labor market, the share of low-wage jobs in the United States has been stable at around 30 percent over the last three decades, but there are significant increases in the number of low-paying jobs for young workers, especially men.
- The aggregate data from France offers no suggestion that increases to the minimum wage will raise levels of unemployment, even for less-educated or young French workers.
- Despite an increase in wages and higher labor costs for employers in France during the last two decades, French labor market performance, as measured by the adequate employment rate (AER), has improved relative to the United States. In other words, the percentage of the French workforce that earns above the low-wage threshold and is not underemployed has increased relative to the United States.
These findings suggest revisiting the conventional debate on wages and employment.
On September 22, 2012, a New York Times editorial urged Governor Jerry Brown to sign into law a proposal that would provide retirement plans to California's 6.3 million employees who are not offered a plan at work. The legislation, known as the "California Secure Choice Retirement Savings Program" and sponsored by Senator Kevin deLeon, was recently passed by the California Legislature.
Based on SCEPA's policy proposal, State Guaranteed Retirement Accounts (GRAs), the editorial succinctly describes the goals of the program: "The new law is aimed at finding a way to cover the uncovered without the considerable expense and market risks inherent in 401(k)'s."
The Times notes that Governor Brown's signature could lead to much-needed national reform:
"The plan also could serve as a model for addressing a national problem: Americans for the most part are ill-prepared for retirement, either because they have risky 401(k) plans or inadequate savings or no retirement coverage at all.
Memo to Gov. Jerry Brown: Please sign this bill."
On September 20, 2012, CNN ran an op-ed by SCEPA Director Teresa Ghilarducci and SCEPA Faculty Fellow Rick McGahey, “Americans are Not Moochers.” Ghilarducci and McGahey dispel Republican Presidential Candidate Mitt Romney’s claim that 47 percent of Americans expect government programs to provide for their basic needs.
According to Ghilarducci and McGahey, “Digging deeper into why 47 percent don't pay federal income tax, what we find are many former taxpayers: twenty-two percent are the elderly, living mostly on Social Security, a benefit they got by working and paying payroll taxes. Others are unemployed or are paid close to the minimum wage, so they don't have enough income to file any taxes.”
They point out that what is missing from the discussion is the fact that the lack of progressivity in the U.S. tax system. While in theory, higher income individuals pay a higher tax rate, it is the middle class that pays the highest percentage of their income in total taxes due to lower tax for capital gains and larger deductions that reduce taxes for the highest earners.
Ghilarducci and McGahey conclude that Romney’s suggestion that older Americans and low-income households feel entitled to government assistance is a theory that does not fit the data. In fact, less than 4% of the U.S. population has received a year’s worth of income-based assistance programs such as food stamps, and more than 50 percent of older people looking for work are too young to receive social security, leaving them vulnerable.