- 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.
by Rick McGahey, SCEPA Faculty Fellow
The report on September's labor market had some better news for the economy, and President Obama. But while it may help the President politically, it is still very weak. Payroll employment is rising by an average of 146,000 per month this year, compared to a slightly higher monthly average of 153,000 in 2011.
One sad by-product of the improved numbers is a burst of idiotic attacks on the Bureau of Labor Statistics' (BLS) integrity, as some Republicans rush to add misunderstanding of basic statistics to their disbelief in evolution, climate change, and the President's birth certificate. I worked with the monthly employment report in Congress and in the Department of Labor, and like many others I can testify to the integrity and absolute non-partisan nature of the data analysis and release process.
But first, the numbers: the unemployment rate, drawn from surveys of households, fell to 7.9 percent, the first time it has been below 8 percent since January of 2009. And the drop in the rate wasn't due primarily to people leaving the labor force, but to actual reports of new jobs.
Payroll employment, based on a survey of employers, rose by 114,000. And August's anemic job number of 96,000 was revised upward by 48 percent, with BLS now reporting that August's job number was a more robust 142,000. (July's job numbers were also revised upwards, by 22,000.) But the number of people who reported being employed part-time for economic reasons actually rose, and the long-term unemployed stayed at about 40 percent of all workers.
146,000 jobs per month will keep the economy ahead of population growth, but it simply is not enough to restore the economy's health. According to the Atlanta Federal Reserve's jobs calculator, it would take about 66 months at that job growth rate to get us to 6 percent unemployment. That's five and a half years. If jobs continue to grow only at the August rate, then when President Obama leaves office, unemployment will still be around 6.5 percent.
But the actual numbers have been rapidly overtaken by partisan attacks on the integrity of BLS itself. Jack Welch, the retired CEO of General Electric, tweeted "Unbelievable jobs numbers..these Chicago guys will do anything..can't debate so change numbers."
Rush Limbaugh, that paragon of fair-minded analysis, said that "There's no evidence of any job creation. You'd sense it. You would know it. You would feel it." (Next up on Limbaugh—the world is flat, not round, and you can tell by just going outside and looking at it.)
These attacks on BLS, and the survey and reporting process, are conspiracy theories, as well as divisive, partisan nonsense. In the 1990s, I was the Executive Director of the Joint Economic Committee of Congress, which gets the unemployment report just before its public release. I later served as Assistant Secretary of Policy at the Department of Labor, where we had to be ready to respond to the BLS report, but didn't see it until it was just about to be released. BLS is one of the most professional and non-partisan agencies in government, and it simply isn't possible to manipulate their numbers.
So why do the numbers fluctuate so much? BLS polls 144,000 employers every month, but they don't all get their data in on time; as more information comes in, BLS revises the data to reflect a fuller sample.
And the US economy has about 133 million jobs, so a sample revision of 20,000 jobs or so isn't very much. In fact, jobs can vary by up to 100,000 for the monthly establishment survey at a 90 percent level of confidence. That is why experts know not to put too much stock in any month-to-month change reported by BLS, but instead look to three-month rolling averages and the trends of the data, not the specific estimates in any one month.
This uproar over the revisions in the numbers may actually help Obama, by diverting attention from the continuing weakness in the economy and the labor market. But although it is good to see the numbers improved from the awful August report, this is not a strong employment report, and there shouldn't be too much celebrating about it.
CA Governor Signs Landmark Legislation, Expands Access to Retirement Saving Plans to More than Six Million Californians
SCEPA applauds California Governor Jerry Brown for signing the California Secure Choice Retirement Savings Trust, SB 1234, into law. The Act will expand access to retirement savings plans to the 6.3 million private sector workers who currently have do not have access to a retirement plan through their employer. The law creates the first retirement savings plan for private-sector employees administered by the state.
Statements of support for the law from State Senator Kevin de Leon, who co-sponsored the bill, and the National Conference on Public Employee Retirement Systems (NCPERS) are available online. Articles from the New York Times, which recently came out in support of the law, the Sacramento Bee, and 89.3 KPCC Southern California Public Radio also cover this landmark legislation.
The California Secure Choice Retirement Savings Program will provide a low-fee, low-risk savings vehicle that would be a win-win for employers and employees in the state. Employers will not have to worry about fiduciary or administrative duties; they will have to do nothing more than send a small percentage of an employee’s paycheck via payroll deduction into the new program, unless the employees opt out. Employees will have an efficient way of saving for retirement through the workplace. The new savings program would achieve economies of scale that would be passed on to employees in the form of lower fees without adding to the state’s pension obligations. The state must conduct a feasibility study before implementing its plan.
“When half of the workforce has no retirement plan, it is more important than ever that we come up with innovative solutions – and the states are at the forefront of this fight,” said Teresa Ghilarducci, director of SCEPA. “We hope they will be an incubator for a comprehensive national solution.” Ghilarducci is the author of Guaranteed Retirement Accounts, a policy proposal that served as a model for the California legislation.
On September 14th, the Pension Rights Center, SCEPA, and Dēmos, a New York-based advocacy nonprofit, hosted a forum with state officials to discuss proposals to expand pension coverage for private sector workers at the state level. Titled “Retirement Security for All: A Forum for State Action,” the event included officials from California, Connecticut, New York, North Carolina, Pennsylvania, and Rhode Island. With an emphasis on collaborative reform efforts, the forum was an acknowledgement of the increasingly urgent need to address a lack of retirement security.
Earlier this year, Massachusetts became the first state in the nation to pass a state-administered retirement plan for the private sector. Its plan covers employees at nonprofit organizations, while California’s plan would cover any eligible private-sector worker. Other states and New York City are considering similar arrangements.
SCEPA Faculty Fellow & INET Launch Blog to Provide Critical Analysis of Influential Microeconomic Text
SCEPA Faculty Fellow Sanjay Reddy has joined with INET, a non-profit think tank supporting diversity in economic thought, to launch a new blog to provide alternative perspectives to mainstream microeconomic theory. Titled Reading Mas-Colell, the blog will present commentary and interpretation on the textbook “Microeconomic Theory” by Andreu Mas-Colell, Michael Whinson, and Jerry Green (also known as the MWG). The text is widely used in Ph.D. programs in economics around the world.
Presenting microeconomic theory as a social enquiry, the blog will follow Professor Reddy’s Advanced Microeconomics course taught at the New School for Social Research. Professor Reddy and teaching assistant Raphaële Chappe will post weekly commentary and videos of Professor Reddy’s lectures. A welcome message from Reddy and Chappe is available as well as an initial discussion of topics such as the implications of human agency, the social construction of economic concepts, the political role of economic theory, and the role of mathematics.