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.
- Published on Friday, February 11, 2011
As of late, policymakers and the media squarely blame public workers' pensions for the fiscal crises affecting some states and municipalities. With this in mind, New York City's Mayor Bloomberg proposed a reduction of public pension benefits to teachers, firefighters and policemen, cutting benefits to future and current retirees. Teachers would also forgo a guaranteed rate of return on tax-deferred annuities, instead of the current guarantee of seven percent.
Without a doubt, some states need to get their houses in order. In February, 2010, The Pew Center on the States released a landmark study identifying those facing daunting fiscal gaps due to underfunded state pensions. However, the cause of the red ink wasn't the pension's generosity or even budget shifting to cover urgent expenses in times of need. Rather, lawmakers decided to kick the can down the road during times of economic expansion and forgo contributions to the fund because of windfall gains on their investments. This largess became public when these same investments shrank and the bill came due.
Unfortunately, those responsible now sit silent as public anger, driven by "pension envy" and the relatively lousy state of private retirement plans, targets public workers instead of lawmakers' irresponsibility. This is largely why hardworking Americans, teachers, policemen and firefighters, are seeing their pensions under attack around the country.
But we need to be careful in our assessments. Not all states are the same. Illinois has a problem, and lawmakers are reaping the consequences of years of lax oversight and irresponsibility. However, New York entered the current recession with a fully funded pension system. Indeed, the Pew Center's report names New York as one of only four states that could claim a fully-funded fund in 2008.
Since then, New York's pension investments have taken a hit - along with all other investments - due to the recession. Yet, as stated by the Center for Budget and Policy Priorities' report on the matter, "it is not appropriate to add ... longer term costs (i.e. related to bond issues, pension obligations and retiree health insurance) to projected operating deficits" (related to the day-to-day costs of municipal management and investment). For this reason, some of the numbers fueling the hype around public pensions are misleading.
Also, state budget holes do not mean pensions are adding to the debt. A recent Moody's report explained it best: "New York and California have high debt levels. But since they have well-funded pensions, they are not among the top states in terms of total liabilities as a share of the economy. That honor goes to Mississippi, Connecticut, West Virginia and Massachusetts, in addition to Hawaii."
We need to be careful with the many rushed road maps to reform – such as Mayor Bloomberg's - that are topping state and local agendas at the beginning of the budget season. Cutting benefits to workers while failing to address larger systemic fiscal and political failings is a short-sighted disservice to all of New York's stakeholders.
- Published on Monday, January 24, 2011
On December 13, 2010, Nancy Folbre, economist and contributor to the New York Times "Economix" Blog, presented a lecture on Women's Work and the Limits of Capitalism: A Feminist Analysis of the Current Crisis.
Folbre is a professor of economics at the University of Massachusetts Amherst, winner of a MacArthur"genius" grant, and associate editor of the journal Feminist Economics. Her work focuses on the interface between feminist theory and political economy, with a particular interest in caring labor and other forms of non-market work. For a review of the event, please read Rob Horning's write-up of the event for PopMatters, The Carefree Society.
Women now represent almost half of all workers on non-agricultural payrolls, concentrated in paid care industries such as health, education, and social services. Even full-time women wage earners devote significant amounts of time to unpaid care work in their households and communities.
Women's specialization in both paid and unpaid care stabilizes and subsidizes the market economy even as it reproduces gender inequality. Recent efforts to measure and assign a value to care work suggest that economists have fundamentally misinterpreted trends in both the level and the distribution of economic well-being, overstating economic growth and understating trends toward increased inequality.
A feminist analysis of care work has important implications for understanding both conservative attacks on the "nanny state" and the global unemployment crisis. The growing need for public provision of care services outside the home, combined with the difficulty of outsourcing these services to low-wage countries, means that "women's jobs" are growing in relative importance within the U.S. economy.
Women and men have much to gain from public investments that could increase both the quantity and the quality of these jobs.
- Published on Wednesday, January 19, 2011
The federal government is not considering plans to confiscate anyone's 401(k) account, despite public assertions to the contrary. This myth originated in a story published in the Carolina Journal Online, a publication of the (self-described) conservative John Locke Foundation in North Carolina. In a 2008 article titled "Dems Target Private Retirement Accounts," the author reported – incorrectly - that leaders in Congress were discussing the confiscation of 401(k) accounts. Later reports recycled this misinformation, leading to a pyramid effect where one undocumented, unsubstantiated claim is used as the source for subsequent claims.
This myth has been dispelled by reputable, non-partisan sources. For example:
1. FactCheck.org is a non-partisan media advocacy project based in the University of Pennsylvania. Referring to the Carolina Journal article, their comprehensive report stated simply, "The report is wrong. There's been no such discussion."
2. The Ric Edelman Show is a nationally-syndicated radio show hosted by the independent financial advisor. Concerned about his listeners panic after hearing these dangerous rumors, his used his November 6, 2010 show to address the rampant misinformation about pension reform proposals and 401(k)s. He also stated clearly, two years after the initial report, that there is no proposal to seize current 401(k) or IRA assets.
The real conversation on Capitol Hill is about the effectiveness of the tax credit for 401(k)s and similar accounts. Currently, taxpayer-funded tax credits for 401(k) and Individual Retirement Accounts (IRA) disproportionally help those who are already wealthy. As a matter of fact, 3% of taxpayers with incomes over $200,000 receive 20% of all the tax credits.
This is not a veiled critique of those who earn more. Indeed, many Americans work hard to gain a higher standard of living. But we need to remember that 401(k) programs we designed to make individual workers save more, and that so far this has not been the case. So in this Age of Austerity, why should we continue giving money to a program that has not accomplished its objective?