- On Capitol Hill
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- 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.
As retirement plan coverage declines nationwide and Congress fails to articulate a solution at the federal level, SCEPA Director Teresa Ghilarducci announced a proposal to offer low-fee, low-risk personal retirement accounts to all workers by providing private-sector employees access to state-level public retirement institutions.
Ghilarducci's plan opens state pension funds to new customers from the private sector. Private-sector workers or employers could voluntarily open an account in a state-level public retirement fund such as the California Public Employees' Retirement System or CalPERS. Workers and/or employers would contribute at least five percent of pay into an account guaranteed to earn at least three percent above inflation. At retirement, workers would have the option to convert their savings into an annuity, a guaranteed stream of income for life. Ghilarducci's plan is detailed in "Meeting California's Retirement Security Challenge," published October, 2011 by the University of California at Berkeley Center for Labor Research and Education.
Calling the proposal "a meaningful retirement security option for California private sector workers," California State Treasurer Bill Lockyer lauded Ghilarducci's plan in a speech at the 21st Annual Northern California Public Retirement Seminar. Lockyer noted that Ghilarducci's plan promises to "make a major dent in the [pension] gap between public and private workers."
"The recession's effect on state budgets has diverted the discussion about pension reform to the promises made to public sector retirees," said Ghilarducci. "While state officials debate how to reform public pensions, all workers deserve access to safe, effective retirement plans. Private-sector workers have been, and will continue to be, battered by the double jeopardy of increasing market risk in their 401(k)s and decreasing employer coverage. Opening a window for private workers in high performing public pension funds provides a practical blueprint to stave off an impending retirement crisis."
The proposal takes advantage of existing state pension infrastructure to invest private-sector funds. States, through their employee pension plans, sponsor not-for-profit financial institutions that consistently receive the highest returns for the least cost. In fact, public pension plans outperformed 401(k) plans or IRA accounts by 20 to 40% over the last 30 years. These funds are able to use their bargaining power to lower fees, and public pension fund traders have a longer-term view, which stabilizes markets and protects individuals from swings in asset prices.
All states could offer a similar structure overseen by an independent board of trustees and administered like TIAA-CREF—the pension plan for university professors—or the Thrift Savings Plan for federal employees. Pension contributions would be pooled and invested professionally with an emphasis on prudent and low-risk, long-term gains. This would effectively shield workers from the high fees and poor investment choices they face when left to fend for themselves in the retail market. Most importantly, these accounts would be portable, allowing a worker to continue investing in the account as they move from job to job. Though these funds would be kept in a separate investment pool from public sector funds, having private sector workers invested in the same system would shore up public support for state public pension funds.
SCEPA Fellow Jeff Madrick works to analyze the current state of the economy and diagnose its public policy implications. In a New York Review of Books piece entitled "America's New Robber Barons," he discusses the super rich of the day - the 1% - and compares today's income disparity with other periods of great inequality. In a piece from the Huffington Post entitled "The 10 Worst Economic Ideas of 2011," Madrick reviews the most troubling economic policy ideas to come out of Washington in the last year and why they are detrimental to the economy and the public.
Sanjay Reddy, Associate Professor and Director of Undergraduate Studies at the New School for Social Research and SCEPA Faculty Fellow, joins INET, The Institute for New Economic Thinking, to discuss his research on world poverty measurement and normative reasoning in economics.
INET's mission is to nurture a global community of next-generation economic leaders, to provoke new economic thinking, and to inspire the economics profession to engage the challenges of the 21st century. Sanjay Reddy's work supports this mission by arguing that normative criteria is essential to answering technical economic problems.
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