- 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 April 2, 2013, SCEPA released a study, "Are Maryland Workers Ready for Retirement," that documents a downward trend in both employer sponsorship of retirement plans and employee participation rates in Maryland from 1995 to 2012, making it increasingly difficult for workers to prepare for retirement.
In 2010, 49% of Maryland's workers – 1.25 million residents – were not participating in an employer-provided retirement plan. The lack of access has immediate implications for those nearing retirement: 41% of households headed by someone near retirement age (55-64 years old) will have to subsist almost entirely on Social Security income or will not be able to retire at all due to negligible savings.
SCEPA's research attributes the downward trend in workers' financial security in retirement to three factors:
- A drop in employers' sponsorship of retirement plans for their workers. From 2000 to 2010, the availability of employer-sponsored retirement plans in Maryland declined by eight percentage points, from 67% to 59%.
- A shift away from traditional pensions, which are mandatory, defined benefit pension (DB) plans, to 401(k)-type defined contribution (DC) plans. Only 36% of workers aged 25-44 have a DB plan as their primary employer-sponsored retirement plan, compared to 43% of workers aged 45-54 and 53% of those aged 55-64. Based on financial data from the U.S. Census Bureau, the report concludes that those with DB plans are more likely to maintain a middle class lifestyle throughout retirement, whereas those with only DC plans will need to consider selling their homes to obtain adequate retirement income.
- A lack of participation in voluntary defined contribution plans. 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 age, race, and industry:
- Workers between 25 and 44 had the largest drop in sponsorship - 13% - among all age groups surveyed, suggesting this downward trend will continue as the population ages.
- By race, Hispanic workers lost the most ground with a 20% decline in sponsorship rates, more than double the decline of 9% experienced by White and Black Non-Hispanic workers.
- Traditionally, large employers offer more benefits. However, firms with 500 to 999 employees showed the biggest proportional drop in sponsorship of 16%. They also had the largest absolute decline, dropping from 75% to 63%.
SCEPA recently testified at a hearing in the Maryland House of Delegates regarding legislation sponsored by Delegate Tom Hucker that would increase access to a retirement savings plans by giving workers the option of opening an individual Guaranteed Retirement Account (GRA) through the existing Maryland State Retirement and Pension System. A similar bill, sponsored by Senator Jim Rosapepe, would establish a Maryland Private Sector Employees Pension Plan.
The Guaranteed Retirement Account (GRA) is based on Ghilarducci's STATE GRA plan, which was recently enacted in California. The proposal takes advantage of existing financial infrastructure in the state to give private sector workers access to the best financial managers and the lowest fees. The accounts would be separate from public sector retirement funds and come at no cost to taxpayers—workers would pay administrative fees. Since these are individual retirement savings accounts, there is no liability to the state. Workers take out what they and their employer put in, plus the returns they earn. Private capital markets offer expensive retirement accounts with high fees to lower income workers because the sums invested are low. By pooling the money from many private sector workers, the Maryland State Retirement and Pension System can invest in longer-term opportunities with higher rates of return and charge lower fees.
On March 22, 2013, SCEPA Faculty Fellow Rick McGahey testified at the New York City Council's hearing in favor of legislation to provide mandatory paid sick leave to all city workers, including city employees. Dr. McGahey testified that providing paid sick days for workers would benefit workers and businesses and that any negative economic impact would be slight and more than offset by positive gains for workers and businesses. In his testimony, titled, "The Economic Effects of Paid Sick Leave," he stated:
- In cities that have enacted paid sick day requirements, the implementation has been straightforward, with minimal impact on businesses.
- Empirical evidence from increases in the minimum wage strongly suggests that a policy of paid sick days will not have discernible effects on employment.
- There are economic benefits to workers and to businesses, through increased productivity and decreased turnover.
- To encourage good quality jobs and support good employers, the policy should be as uniform as possible, with no significant carve-outs for specific sectors.
On April 3, 2013, Artur Runge-Metzger, the European Union's Director of the European Commission's Climate Action Directorate joined SCEPA's lecture series on the Economics of Climate Change to present, "Towards 2020: A New Chapter in Europe's Climate Change Policy."
On January 1, 2013, the EU stepped forward to lead the movement for needed adaptation policies, including carbon pricing and renewables, by adopting its “20-20-20” package. The new program sets European-wide targets for 2020 that build on the Kyoto Protocol and impacts sectors falling under both the EU emissions trading system and renewable energy.
The event was generously supported by the Fritz Thyssen Foundation and the Macroeconomic Policy Institute (IMK).