- 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, there is ongoing debate about how the positions of the “poor” (say households in the bottom one or two quintiles of the size distribution of income), the “rich” (the top decile or top percentile), and the “middle class” (households “between” these two groups) will be affected by fiscal and other initiatives such as raising the minimum wage.
In a new SCEPA/INET paper prepared for the Eastern Economics Association (EEA) conference in May, 2013, "U.S. Size Distribution and the Macroeconomy, 1986-2009," the authors use a social accounting matrix, or SAM, and a simple demand-driven model to investigate rising inequality and the effects of redistributive economic policies. The database for the paper is made available as a spreadsheet.
They find that the resulting simulations of macroeconomic policy measures do not markedly affect the distribution of household disposable income. Only policies directed at explicit wage equalization in the form of rising wages at the bottom lead to significantly greater equality.
Is austerity good for business? Not if you want people to have enough money to be customers, says SCEPA Director Teresa Ghilarducci.
On April 24, 2013, Ghilarducci joined host Chris Hayes and Bloomberg View Writer Josh Barro on the MSNBC program, All In With Chris Hayes. The three discussed the idea that employers are lobbying for austerity measures as a means to keep unemployment high and wages low. According to Ghilarducci, employers face a conflict of interest in times of crisis: while high unemployment decrease workers' bargaining power, lowering wages, it also erodes consumer spending, leading to less sales. For this reason, corporate interests largely support austerity measures, while small- and medium-sized firms feel the consequences when their customers can't afford to spend. Ghilarducci says strengthening worker protections, not eliminating them, is the solution. "We do need policies. You need minimum wage policies. You need other kinds of protections. However, how does that happen? It happens when people are on the street. That's always happened."
On April 10, 2013, President Obama introduced his budget proposal for Fiscal Year 2014, which includes a controversial change in how the Social Security program determines benefits for seniors. In short, the President wants the program to determine cost of living adjustments based on a "chained" Consumer Price Index (CPI), rather than a traditional CPI.
The chained CPI assumes that people can easily substitute cheaper goods for households necessities. However, SCEPA Director and retirement expert Teresa Ghilarducci joins the PBS Newshour blog, "Does Obama Have it Right or Wrong on Social Security?," to argue that seniors face the opposite as they age, as more and more of their income is taken up by expensive healthcare services and other products that do not have cheaper substitutes. It is also increasingly difficult for the elderly, especially those with health problems or disabilities, to buy in bulk or go from store to store bargain shopping. This fact is well-documented and led the U.S. Department of Labor's Bureau of Labor Statistics (BLS) to develop a measure of inflation that reflects the true costs of aging: the Current Price Index for the Elderly (CPI-E).
On April 13, 2013, Ghilarducci was also interviewed on the Real News by Paul Jay, where she called the chained CPI proposal "heartless," stating that it ignores research on seniors' rising living expenses. She notes that the chained CPI would disproportionately affect elderly women who live longer than men and earn less over their lifetime.
The differences between the chained CPI and the traditional CPI are only .03% lower per year. However, these small cuts year after year would mean that the average retiree would lose $1,147 a year by age 85. The cumulative cuts to people on Social Security reach $28,000 by the time a retiree is 95 according to Social Security advocates. In contrast, linking Social Security benefits to CPI-E would raise benefits by 6% for a 95-year-old rather than cut them by tens of thousands of dollars.