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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.
University of Massachusetts Amherst economist Gerald Friedman is at the center of a heated debate on the economic impact of presidential candidate and U.S. Senator Bernie Sanders’ economic platform and the role of outside policy experts in political campaigns.
Friedman analyzed Sanders’ proposals and found large, positive economic effects from increased government spending, such as a real GDP-growth rate of 5.3%, which is higher than the U.S. economy has ever sustained. To some, Friedman’s results seem implausible. However, his GDP growth rate is the result of standard modeling techniques and the size a consequence of the scale and scope of Sanders’ ambitions.
In response, four former chairs of the Council of Economic Advisors (CEA) under Presidents Obama and Clinton called on Sanders to distance himself from Friedman’s proposals on the basis of their apparent implausibility. Rather than disputing Friedman’s methods, they claimed the exorbitant results risk damaging the Democrats’ reputation as the “party of evidence-based economic policy.” The former CEA economists equated Friedman’s conclusions regarding the growth rate with the “grandiose predictions” made by outside experts supporting Republican’s economic proposals, including those using a supply-side, tax-cut model to support the growth potential of tax cuts.
In turn, the CEA letter and Krugman’s columns generated a backlash of their own. Jamie Galbraith responded with an open letter. Friedman himself wrote directly to Krugman and Mother Jones’ Kevin Drum summarized the controversy.
New School economists and scholars are dedicated to scrutiny and debate, and believe this process should apply to Friedman’s results just as it should apply to any economist’s results. In this case, the quick jump to questioning political motives appears to have skipped over this exercise in rigor that is the hallmark of economists’ professional ethos.
This is why we have invited Gerald Friedman to speak at The New School Department of Economics seminar series at 4:00pm on May 3, 2016. Friedman’s lecture is tentatively titled, “What would Sanders Do? Or, How a Naive College Professor Stumbled into a Professional and Media Buzzsaw." The lecture will be held at 6 East 16th Street in room 1009.
SCEPA Director Teresa Ghilarducci spoke with The New York Times’s Noam Scheiber about the retirement savings initiatives in President Obama’s 2017 budget proposal. She believes they are an admirable attempt to make up for the long decline in employer provided retirement benefits, but don’t go far enough.
American workers are facing a retirement crisis. Experts recommend we have at least eight times our salary in savings by the time we retire. But the median account balance among families on the verge of retirement is only $12,000. Few have even close to enough savings. Many have none whatsoever.
President Obama’s 2017 budget proposal includes a few modest attempts at improving working Americans’ ability to save for retirement. One is the “auto-IRA,” which would that require all companies who don’t offer a retirement plan to enroll their workers in an IRA. Another is a proposal to make it easier for small businesses to join together and offer their employees pooled 401(k) plans at a lower cost than if they purchased them on their own.
These are notable attempts at reform, but will not solve the retirement crisis even if they make it through Congress. Instead, Ghilarducci calls for Guaranteed Retirement Accounts, managed by the Social Security Administration, to which employers and employees would split a mandated 3% of their income and which would generate a guaranteed rate of return. This is the best way to ensure all Americans can enjoy a comfortable and secure retirement.
The average unemployment rate is down. But it is up for older workers. Today’s jobs report from the Department of Labor reports an unemployment rate of 3.7% for workers over 55 in January, up from 3.2% last month, an increase of 0.5 percentage points. The overall unemployment rate went down by 0.1 percentage points from 5.0% to 4.9%.
Last month, we reported that unemployed older workers took longer to find a new job than younger workers. Drilling down to the different experiences of men and women, we find that that the long-term unemployment rate - defined as being unemployed more than 27 weeks - increased faster for older women.
In 2007, before the recession, a larger share of jobless men ages 55 to 64 (26%) were long-term unemployed than jobless women of the same age (21%). By 2015, well into the recovery, 37% of unemployed men and 35% of unemployed women were long-term unemployed. The share of unemployed women who are long-term unemployed increased 14 percentage points compared to an increase of 11 percentage points for men. For comparison, in 2015, 22% of unemployed 20- to 24-year-olds were unemployed long term.
Other studies confirm that older women face a harsh labor market. The National Bureau of Economic Research (NBER) found that older, college-educated women face more discrimination finding work than both younger women and older men. The Federal Reserve Bank of St. Louis also found that after the Great Recession, older job seekers, especially women, were hit hardest and longest by both unemployment.
It’s no surprise that long-term unemployment decreases bargaining power by increasing a worker’s willingness to accept a less desirable job. Older women nearing retirement already experienced a lifetime of wage disparity that makes it harder to adequately save for retirement during their working years. For women ages 50-64 without enough retirement income, cutting Social Security by raising the retirement age makes the situation worse. They will be forced to work or look for work longer in a labor market characterized by both age and sex discrimination.
Rather, we need to provide Americans with an adequate, secure income in old age. This will level the labor market playing field, allowing all older Americans to choose between retiring with dignity and taking the time to look for decent jobs that best match their skills. Guaranteed Retirement Accounts (GRAs)are one means of achieving this goal.