- 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.
Workers in New York City Less Prepared for Senior Years Than Rest of U.S.
A study released today shows a growing number of New Yorkers don't have enough money to retire. Over one-third of older residents are expected to either subsist on social security, or not be able to retire at all.
The study, entitled Are New Yorkers Ready for Retirement, is part of a research initiative by New York City Comptroller John C. Liu and SCEPA. Using recent New York City and New York State metropolitan-area data, the report examines whether New York City residents are financially prepared for their senior years. The answer, increasingly, is no.
The study found:
- • Between 2000-2009, the percentage of employees in New York City who had access to employer-sponsored retirement plans declined from 48% to 40% – below the U.S. average, which is 53% (2009).
- • Only 35% of New York City workers participated in an employer-based retirement plan in 2009.
- • More than one-third of New York City households in which the head is near retirement will have to subsist almost entirely on Social Security income or will not be able to retire at all due to the fact that they have less than $10,000 in savings.
"This report sounds an alarm bell," said Comptroller Liu. "When a significant percentage of New Yorkers can't afford to fund their own retirement, it not only creates stress and suffering for them but also affects the health of the City's economy as a whole and has profound implications for policymakers. More workers need access to employer-sponsored plans."
The report found that employers have become less willing or able to sponsor pensions – a trend that is true across most industries and occupations, and affects New Yorkers of nearly all ages and income groups. The brewing retirement crisis cuts across racial, ethnic and gender lines.
"The deck is becoming increasingly stacked against New Yorkers in their efforts to retire," said SCEPA Director Teresa Ghilarducci, Ph.D. "Fewer New Yorkers have access to the convenience and affordability of employer-sponsored retirement plans. More and more residents now face a choice between retiring into poverty or continuing to work in old age. Without significant policy reforms, the economic tea leaves foretell a decrease in the standard of living for retired New Yorkers. "
The study was authored by Dr. Ghilarducci, a national expert on public pensions and retirement issues, along with economist Joelle Saad-Lessler, Ph.D, and research assistant Lauren Schmitz. The New York City Comptroller's Office Budget and Policy Bureau provided key data and analysis.
The main study data were drawn from the 2001 and 2010 Current Population Survey (CPS), the 2008 Survey of Income and Program Participation (SIPP), and the 2009 New York State Personal Income Tax Files.
Download the "Retirement Readiness" Report and Fact Sheet.
The report is the fifth in a series produced by Comptroller Liu's Retirement Security NYC initiative:
- • Municipal Employee Compensation in New York City
- • The $8 Billion Question: An Analysis of NYC Pension Costs Over the Past Decade
- • Sustainable or Not? NYC Pension Cost Projections through 2060
- • A Better Bang for the Buck: Costs and Benefits of Defined Benefit and Defined Contribution Plans
NSSR Economics Professors Duncan Foley and Lance Taylor were awarded a four-year grant to investigate the effects of economic growth on sustainability, distribution and stability. The project is funded by the Institute for New Economic Thinking (INET), a non-profit think tank founded by George Soros to support the development of a new generation of economic scholars working to shift economic thought to new paths and away from the theories that helped create the recent global financial crisis. The project will be administered through the Schwartz Center for Economic Policy Analysis (SCEPA), the policy research arm of the New School for Social Research's economics department.
INET Executive Director Rob Johnson characterized their new grants as "challeng(ing) conventional economic thinking in important ways. They emphasize inductive reasoning to escape the straightjacket of deductive reasoning founded on implausible assumptions....We are also supporting creative research in sustainable economics for the first time."
According to Professors Foley and Taylor, who have spent the last 40 years questioning key presuppositions of textbook models of growth, mainstream economics has not adequately dealt with the long-term consequences of economic growth, including the effects on climate change, the shift toward a service-centered economy, and the potential for financial and fiscal instability.
(Read more to find out how the project aims to correct this gap.)
In a weak economy with decreased tax revenues, governments look to save money to ensure they can fulfill promises made to citizens and employees. In this environment, some have proposed replacing traditional defined benefit (DB) pensions with 401(k)-type defined contribution (DC) retirement savings.
A new report from New York City Comptroller John C. Liu's office, "A Better Bang for NYC's Buck: An Efficiency Comparison of Defined Benefit and Defined Contribution Retirement Savings Plans," finds that DB plans possess built-in savings, making them highly efficient retirement income vehicles delivering benefits at a lower cost to employer and employee.
The savings derive from three principle sources:
First, DB plans manage longevity risk more economically than DC plans. By pooling the longevity risks of large numbers of individuals, DB plans allow plan sponsors to make contributions based on average life expectancy of their members. The funds accumulated enables a DB plan to provide their members with a guaranteed retirement income for life, regardless of how long they live.
Second, because DB plans - unlike the individuals in them - do not age, they take advantage of the enhanced investment returns that come from a balanced portfolio throughout an individual's lifetime.
Third, DB plans are professionally managed, achieving greater investment returns than DC plans managed by individual employees. A retirement system that achieves higher investment returns can deliver a given level of benefit at a lower cost.