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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.
The average unemployment rate is down. But it is up for older workers. Today’s jobs report from the Department of Labor reports an unemployment rate of 3.7% for workers over 55 in January, up from 3.2% last month, an increase of 0.5 percentage points. The overall unemployment rate went down by 0.1 percentage points from 5.0% to 4.9%.
Last month, we reported that unemployed older workers took longer to find a new job than younger workers. Drilling down to the different experiences of men and women, we find that that the long-term unemployment rate - defined as being unemployed more than 27 weeks - increased faster for older women.
In 2007, before the recession, a larger share of jobless men ages 55 to 64 (26%) were long-term unemployed than jobless women of the same age (21%). By 2015, well into the recovery, 37% of unemployed men and 35% of unemployed women were long-term unemployed. The share of unemployed women who are long-term unemployed increased 14 percentage points compared to an increase of 11 percentage points for men. For comparison, in 2015, 22% of unemployed 20- to 24-year-olds were unemployed long term.
Other studies confirm that older women face a harsh labor market. The National Bureau of Economic Research (NBER) found that older, college-educated women face more discrimination finding work than both younger women and older men. The Federal Reserve Bank of St. Louis also found that after the Great Recession, older job seekers, especially women, were hit hardest and longest and longest by both unemployment.
It’s no surprise that long-term unemployment decreases bargaining power by increasing a worker’s willingness to accept a less desirable job. Older women nearing retirement already experienced a lifetime of wage disparity that makes it harder to adequately save for retirement during their working years. For women ages 50-64 without enough retirement income, cutting Social Security by raising the retirement age makes the situation worse. They will be forced to work or look for work longer in a labor market characterized by both age and sex discrimination.
Rather, we need to provide Americans with an adequate, secure income in old age. This will level the labor market playing field, allowing all older Americans to choose between retiring with dignity and taking the time to look for decent jobs that best match their skills. Guaranteed Retirement Accounts (GRAs)are one means of achieving this goal.
NOTES: The share of unemployed workers who are long-term unemployed by sex and age is calculated by dividing the number of women and men that are unemployed for 27 weeks or longer by the number of all unemployed workers. The Bureau of Labor Statistics provide the data for the denominator and numerator. The denominator is the number of unemployed men and women aged 55-64 and the numerator is the numbers of long-term unemployed men and women aged 55-64.
In conversation with INET’s Lynn Paramore, New School Economics Professor Lance Taylor breaks down what’s wrong with the current debate on inequality and what to do about it.
Taylor is critical of the mainstream approach to inequality advanced by economists Joseph Stiglitz and Thomas Piketty. According to Taylor, Piketty’s celebrated book on inequality, “Capital in the Twenty-First Century,” relies heavily on an economic model that was discredited in the 1960s.
Taylor’s issue with the model Piketty uses goes back to the Cambridge Capital Controversies of the 1960s, when economists at MIT and Cambridge were at loggerheads over two fundamental economic questions. One was whether income distributions are formed by purely economic factors, or if social relations play a role. The other was whether it makes sense from a technical perspective to use an economy-wide capital stock in economic modelling. For Taylor, social relations are important and an all encompassing capital stock is problematic.
But much of the economics profession tacitly assumes the opposite positions, including Piketty.
This often leads to a confusion between the causes and the symptoms of inequality. For example, Stiglitz believes that economic rents, such as high costs of real estate, are a driver of income inequality. For Taylor, soaring property values in New York and London are a consequence of economic inequality, whose true causes can be traced to financialization and the erosion of workers’ power.
Taylor has been developing a model of economic growth and distribution that does not rely on what he considers Piketty’s questionable assumptions. He believes it is possible to reverse the trend of growing inequality in the U.S., but doing so will require more than redistribution through the tax code. We’ll need to promote socialized investment and redistribute power back to the working class.
“Capitalism: Competition, Conflict and Crisis” is a new book on modern capitalist economies by Anwar Shaikh, professor and chair of the economics department at The New School for Social Research.
Based on fifteen years of research, Shaikh documents how standard economic assumptions - perfect competition, perfect firms, perfect knowledge and rational expectations - don’t describe or reflect reality.
Instead, he does something new. He develops theory from real behavior and real competition. From this fresh and practical perspective, he redefines conventional economic ideas such as supply and demand, wage and profits, growth, unemployment, inflation, inequality, and the recurrence of economic crises to offer an alternative framework for understanding the economics of capitalism.
5:30pm, Friday, February 12th
The New School
Wolff Conference Room
6 East 16th Street, Room 1103
Books will be available for purchase at the event.
Shaikh is a professor of economics at the New School for Social for Social Research. He is an associate editor of the Cambridge Journal of Economics, and was a senior scholar and member of the Macro Modeling Team at the Levy Economics Institute of Bard College from 2000 to 2005. In 2014, he was awarded the NordSud International Prize for Literature and Science from Italy’s Fondazione Pescarabruzzo. His intellectual biography appears in the most recent edition of Eminent Economists II published by Cambridge University Press (2014), along with similar essays from thirty prominent economists including seven current Nobel Prize Laureates.
The event is co-sponsored by The New School for Social Research and the Schwartz Center for Economic Policy Analysis (SCEPA) and is free and open to the public.