Tuesday, March 29, 2016

[NJFAC] Fight Poverty Through Full Employment: Dean Baker

How to Fight Poverty Through Full Employment 

Dean Baker, 3/17/2106

One of the most effective ways to combat poverty among current and future generations is to maintain a full employment economy. The point should be straightforward: when the labor market is strong, or "tight," it offers increased employment opportunities for those at the bottom. Disadvantaged workers are not only more likely to find employment in a tight labor market, they are also in a better position to secure higher wages as employers are forced to compete for labor. This can allow millions of workers the opportunity to raise themselves and their families out of poverty.

We got a chance to see this story in practice in the boom of the late 1990s, when the unemployment rate fell to its lowest levels in almost three decades, settling at a year-round average of four percent in 2000, the peak year of the boom. In this period, wages rose rapidly at all points along the income distribution, with workers at the bottom of the ladder actually achieving the largest gains.

The same principle would apply today, with the gains of a tight labor market going disproportionately to the most disadvantaged. The unemployment rate for African-Americans is typically two to two-and-a-half times that of whites. This means if we can lower the unemployment rate for whites by one percentage point, it is likely that the unemployment rate for African-Americans will fall by two percentage points. For African-American teens, the ratio hovers near six to one, meaning that a one percentage point drop in the white unemployment rate is likely to be associated with a six percentage point drop in the unemployment rate for African-American teens.
....
The most obvious way to generate demand is with more government spending, ideally through public investment. This approach has the great advantage of creating more jobs today and making ourselves richer in the future. For example, spending to promote clean energy—whether in the form of research or subsidies for the use of solar and wind power—will lessen the damage that we do to the environment, leaving less harm for future generations to deal with. Spending on physical infrastructure and mass transit will speed transportation times and reduce gas use. Money for education will give us a better trained and more productive work force.
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Finally, we can move towards full employment by reducing the supply of labor, specifically by lowering the average number of hours that people work. It used to be the case that workers took a portion of the benefits of productivity growth in the form of more leisure. While that has not been true in the United States to any great extent over the last four decades, workers in other wealthy countries have continued to see reductions in the length of the average work year and/or workweek.

Indeed, across Europe, four to six weeks of paid vacation annually is standard. Workers have paid sick days as well. By reducing the number of hours per worker, there is increased demand for more workers. This story explains how Germany managed to lower its unemployment rate in between 2008 and 2009 even though it experienced a more severe recession than did the United States. By promoting policies that spread work among more workers, the government can hope to create a tighter labor market, which will also give workers the bargaining power they need to obtain higher wages.

Although full employment is not the complete solution to poverty, reaching it would go a long way. It should also be an area of bipartisan agreement. After all, conservatives are supposed to like the idea of people working hard to lift themselves up. But they can only work hard if jobs are available, and they can only lift themselves up if their wages are just.

http://talkpoverty.org/2016/03/17/how-to-fight-poverty-through-full-employment/
--   June Zaccone  National Jobs for All Coalition  http://www.njfac.org

Wednesday, March 23, 2016

[NJFAC] Another year, another increase in inequality



This report,, which you can download all of by clicking, shows how wage inequality is growing.




From: Economic Policy Institute [newsletter=epi.org@mail141.atl121.mcsv.net] on behalf of Economic Policy Institute [newsletter@epi.org]

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EconomicPolicyInstitute March 13, 2016

Wage inequality got worse in 2015

A new EPI report finds that while real (inflation-adjusted) wages increased across the board in 2015 due to a sharp dip in inflation, the gap between top earners and everyone else continued to grow. "Real wage growth in 2015 is welcome news, since it means workers' standards of living increased. However, this comes with two large caveats," said Elise Gould, the report's author. "First, wage inequality showed no sign of slowing down last year. And, relying on falling inflation is an unwanted and unsustainable strategy for increasing living standards."
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Wednesday, March 9, 2016

[NJFAC] Is Bernomics Impossible?



Is Bernomics Impossible?                                                                                                                March 9, 2016


            You may be aware of the broohaha about Bernie Sanders' economic projections. (This debate is not about political possibilities; it's about whether the numbers make sense.) Bernie wants progressive taxation, Medicare for all, and a lot of federal spending. He wants rapid economic growth. Economist Gerald Friedman ran the numbers and said they made sense. James K. Galbraith agreed. But Paul Krugman and other mainstream economists, including three who directed Obama's Council of Economic Advisors (Alan Krueger, Austan Goolsbee, and Christina Romer) have attacked the Sanders' program as unrealistic and even dangerous. For example, they argue that we cannot grow the labor force as fast as Bernie wants to.

            But what is the situation Americans confront today? We've had growth in jobs and incomes since the recession, but mostly anemic rates of economic growth and few gains for income equality. It is common knowledge that people in the lower 50% are still doing worse than before the recession. Poverty rates are high and there's a lot of hidden unemployment out there. Six million part-time workers want full-time jobs and cannot find them. Another twelve million people have no jobs but want one.

            So millions of Americans have been left behind, and not just in the last few years. Wage stagnation is a forty-year problem. So why not propose really big spending with a left-liberal twist? Obama's stimulus program kept the world economy from falling into a Great Depression; but it was too small. In 1933-37, government spending helped to create 8 million jobs; but it did not end the Great Depression. But 1940-1945 was another story: giant spending increases and massive deficits wiped out unemployment. In our time, why not plan something adequate to the task? Start with a plan for five years of 5% economic growth and make it growth that adds good jobs.

            Are the centrist economists who went after Bernie just too moderate, too "responsible?" I recall that Mr. Krueger used economic research to conclude that a $12 minimum wage was OK, but $15 would harm the economy. Something like that. In effect, he was saying that we could not lift people a little more, even to a sub-poverty annual income of $30,000.

             Do Krugman, Krueger, and friends want to cure poverty and raise incomes for the lower 50%? Is so, what is their method? More free enterprise? It's rarely worked in the last forty years. How about interest rates even lower than they are now and more risky loans to homeowners? That brought the Great Recession. A little more government spending?  Not good enough.

            Why not a program that can actually do the job--something that can push poverty rates down for good and put wages permanently on the road to recovery? Bernie has a plan to do it. No one else does.

                                                            **************

            There's plenty to read on the kerfuffle around Bernomics. You can easily find James K. Galbraith's brief defense, and here is a short piece by Kevin Drum: On Second Thought, Maybe Bernie Sanders' Growth Claims Aren't As Crazy As I Thought. The Sanders "Economic Plan" Controversy , by Dave Johnson and Chris Sturr, reviews the controversy and has more links than most of us will need.


Submitted by Frank Stricker. He has completed American Unemployment: A New History, Explanations, Remedies


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Tuesday, March 1, 2016

[NJFAC] State legislators speak out for higher-paying jobs

Two recent articles highlight the leadership of state legislators in speaking out for good jobs at living wages.





1)      Legislator Feels the Grind of a Low-Wage Job , Sen Marilyn Moore, Hartford Courant, February 21, 2016.  

Connecticut State Senator Marilyn Moore from Bridgeport, CT took a job as a seasonal retail store employee, to see what working conditions were like for low-wage retail workers.     "…We all hear the stories, but I decided if I am going to propose legislation, I need to talk with authority and knowledge."   She found the work exhausting and frustrating, and was never offered sufficient hours, or regular shifts so she could apply for a second job.   Read Sen. Moore's op-ed



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2)      South Carolina's leading low-wage job creator? Uncle Sam,  The State, February 29, 2016

In a in a letter to the editor , South Carolina State Rep. Wendell G. Gilliard points out that the "the U.S. government is the leading low-wage job creator in South Carolina, responsible for more than 30,000 poverty jobs that pay under $12 an hour, the federal poverty guideline for a family of four. That's more poverty jobs than than Wal-Mart and McDonald's combined." 

The federal government contributes to low-wage private sector jobs through its contracts, loans and subsidies to low-wage private sector employers, Rep. Gilliard says.

Rep. Gilliard's letter cites a report from Good Jobs Nation, South Carolina's Largest Low Wage Job Creator: The Federal Contribution to Low-Wage Unemployment in the Palmetto State, building on a methodology developed by Demos in their  2013 report, Underwriting Bad Jobs.   Good Jobs Nation is supported by national faith, labor and advocacy organizations including Change to Win, Interfaith Worker Justice, the Ecumenical Poverty Initiative, Progressive Congress, and the Campaign for America's Future.

A previous survey by the National Employment Law Project found that 91 percent of port truck drivers in Charleston who transport military cargo have trouble paying their bills even though they work 60 or more hours a week. Disturbingly, nearly all of the low-wage workers in the survey are African-Americans.


Posted by:

Chuck Bell, Vice-Chair
National Jobs for All Coalition
www.NJFAC.org


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