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The Trade Deficit: The Biggest Obstacle to Full Employment

April 7, 2014 Comments off

The Trade Deficit: The Biggest Obstacle to Full Employment
Source: Center for Economic and Policy Research

Dean Baker argues that taking aim at the persistent trade deficit, through which the United States exports labor demand, would help a great deal in moving the job market toward full employment. Moreover, he argues that trade is a “policy variable,” amenable to interventions that push back against competitors who place a fat thumb on the exchange-rate scale to keep their imports cheap and our exports expensive.

Baker notes various ideas that could counter currency management. First, the US could pass legislation that gave the government the right to treat currency management as a violation of international trading rules, leading to offsetting tariffs. Second, we could also tax foreign holdings of United States Treasuries, making the usual tactic of currency managers more expensive. Third, we could institute reciprocity into the process of currency management: If a country wants to buy our Treasuries, we must be able to buy theirs.

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Does It Pay to Volunteer? The Relationship Between Volunteer Work and Paid Work

August 14, 2013 Comments off

Does It Pay to Volunteer? The Relationship Between Volunteer Work and Paid Work (PDF)
Source: Center for Economic and Policy Research

It is widely believed that volunteering will improve workers’ job prospects. The logic is that volunteering offers opportunities to expand work-related experience, develop new skills, and build a network of professional contacts. For young people with little history of paid employment it can also signal that a person would be a reliable and motivated employee. In spite of these widespread views about volunteering, surprisingly little research has been done on the effect of volunteering on employment and pay in the United States. This study is intended to help fill this gap.

This analysis examines volunteering as a pathway to employment during a period of high unemployment, when it is reasonable to expect the beneficial effects of volunteering to be especially pronounced. Unemployment rose from 4.6 percent in 2007 to a peak of more than 10 percent in the beginning of 2010.1 There was an even larger rise in long-term unemployment. In the years just before the recession, workers who were unemployed for more than 26 weeks comprised less than 1.0 percent of the labor market.2 However, the share of long-term unemployed increased to 4.2 percent of the labor force in 2010 and continued to be more than 3.0 percent of the labor market through 2012. In this context, the skills and contacts obtained through volunteering could be especially valuable.

Interestingly, rates of volunteering changed little in the recession. The overall rate edged up slightly, but did not rise back to its 2003-2005 level (see Figure 1). Likewise, the volunteer rates for young people (ages 16-24) and for the unemployed remained below the 2005 level throughout the recession and the following slow recovery. While this may be explained in part by a compositional effect (the unemployed in the downturn were a different group of people from those who had previously been unemployed), there clearly was no rush to volunteer in response to the downturn.

No-Vacation Nation Revisited

May 24, 2013 Comments off

No-Vacation Nation Revisited

Source: Center for Economic and Policy Research

This report reviews the most recently available data from a range of national and international sources on statutory requirements for paid vacations and paid holidays in 21 rich countries (16 European countries, Australia, Canada, Japan, New Zealand, and the United States). In addition to our finding that the United States is the only country in the group that does not require employers to provide paid vacation time, we also note that several foreign countries offer additional time off for younger and older workers, shift workers, and those engaged in community service including jury duty. Five countries even mandate that employers pay vacationing workers a small premium above their standard pay in order to help with vacation-related expenses. Most other rich countries have also established legal rights to paid holidays over and above paid vacation days. We distinguish throughout the report between paid vacation ― or paid annual leave, terms we use interchangeably ― and paid holidays, which are organized around particular fixed dates in the calendar. Our analysis does not cover paid leave for other reasons such as sick leave, parental leave, or leave to care for sick relatives.

Where Have All the Good Jobs Gone?

August 21, 2012 Comments off

Where Have All the Good Jobs Gone? (PDF)
Source: Center for Economic and Policy Research

The U.S. workforce is substantially older and better educated than it was at the end of the 1970s. The typical worker in 2010 was seven years older than in 1979. In 2010, over one-third of US workers had a four-year college degree or more, up from just one-fifth in 1979.

Given that older and better educated workers generally receive higher pay and better benefits, we would have expected the share of “good jobs” in the economy to have increased in line with improvements in the quality of workforce. Instead, the share of “good jobs” in the U.S. economy has actually fallen.

Given that older and better educated workers generally receive higher pay and better benefits, we would have expected the share of “good jobs” in the economy to have increased in line with improvements in the quality of workforce. Instead, the share of “good jobs” in the U.S. economy has actually fallen.

Our estimates, which control for increases in age and education of the population, suggest that relative to 1979 the economy has lost about one-third (28 to 38 percent) of its capacity to generate good jobs.

Work Sharing Could Save States $1.7 Billion Per Year

May 14, 2012 Comments off

Work Sharing Could Save States $1.7 Billion Per Year
Source: Center for Economic and Policy Research

Though the unemployment rate ticked down slightly in April, the latest data show that millions of Americans continue to be laid off from their jobs. Work-sharing programs could help curb some of these job losses and shave billions of dollars off state budgets across the country. A new CEPR issue brief examines the work-sharing provisions of new federal legislation and the potential savings.

Work-sharing programs, also known as short-term compensation, can be beneficial to both employers and employees. Rather than laying off workers, employers can shorten workers’ hours. The workers, in turn, receive pro-rated unemployment insurance (UI) benefits for the hours not worked and remain employed. Employers are able to retain trained employees, and, when demand picks up, avoid the costs of hiring and training new workers by simply increasing the hours of existing staff.

Provisions of the recently passed Middle Class Relief and Job Creation Act offer federal support for work-sharing programs, giving states more incentive to promote work sharing. Prior to passage of the law, states had to pay the regular UI benefits provided to workers in work-sharing programs. Under the new law, the federal government provides 100 percent of work-sharing UI benefits for up to three years in states that already have work-sharing programs and 50 percent for up to two years in states that enter an agreement with the federal government to provide work sharing.

Though take-up of work sharing is low at the moment, potential savings of $1.7 billion dollars per year nationwide may make the programs more attractive. Participation has varied from state to state, with Rhode Island seeing over 20 percent of UI claims from work-sharing when the program was at its peak in 2009. If other states saw similar levels of participation, the savings would be substantial. Among states that already have work-sharing programs in place, California could realize savings of $319,377,200. New York could save $158,581,600 and Pennsylvania could save $136,180,800. Among states that do not currently have work-sharing programs, New Jersey could save $57,359,700; Illinois could save 53,976,600 and Ohio could save 35,620,300.

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Unemployment Rate Does Not Tell the Full Story: Long-term Hardship a Tremendous Burden on Millions of Workers and the Economy

March 8, 2012 Comments off

Unemployment Rate Does Not Tell the Full Story: Long-term Hardship a Tremendous Burden on Millions of Workers and the Economy
Source: Center for Economic and Policy Research

Overall unemployment has ticked down slightly from the peaks of the recession, but long-term unemployment remains historically high, threatening the long-term economic security of workers and the country as a whole. A new report from the Center for Economic and Policy Research sheds light on the demographics of the millions of workers struggling with unemployment and under-employment.

“Long-term Hardship in the Labor Market” breaks out workers considered long-term unemployed by the official BLS standard according to race and gender, education, and age. The authors also expand the conventional concept of long-term unemployment and capture further dimensions of long-term hardship including discouraged workers, workers marginally attached to the workforce, and workers who are part-time for economic reasons.

The report shows that under the standard measure of long-term unemployment, half of all unemployed black men have been jobless for more six months or longer, followed closely by roughly 49 percent of unemployed Asian men, black women and Asian women. However, the alternative measure shows that black men are much more likely than other workers to experience long-term hardship. About 9 percent of all black men in the labor force, compared with 7 percent of black women, 5 percent of Latino women and 4 percent of Latino men had been unemployed for six months or longer in 2011.

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Health-insurance Coverage for Low-wage Workers, 1979-2010 and Beyond

February 29, 2012 Comments off
Source:  Center for Economic and Policy Research
This paper uses data from the Current Population Surveys for 1980 through 2011 to review trends in health-insurance coverage rates for low-wage workers (defined as workers in the bottom fifth of the wage distribution in each survey year). In 2010, over 38 percent of low-wage workers lacked health insurance from any source, up from 16 percent in 1979. The biggest reason for the decline in coverage is the erosion of employer-provided health insurance, either through a worker’s own employer or as a dependent on another family member’s employer-provided policy. Over the last three decades, the role of public insurance in providing coverage for low-wage workers has increased, though not nearly enough to offset the declines in private insurance. In 2010, about 10 percent of low-wage workers had coverage through Medicaid, double the share in 1979. While a great deal of uncertainty still surrounds the Affordable Care Act (ACA) and its likely impact on employers and workers, reasonable estimates based on consensus projections suggest that the ACA will have a substantial positive effect on health-insurance coverage rates for low-wage workers. Even so, the ACA will likely leave an important share of low-wage workers, especially low-wage Latino, African American, and Asian workers, as well as many immigrant workers, without coverage. At the same time, if the ACA is blocked – in the courts or in Congress – there is every indication that coverage rates for low-wage workers will continue their long, steady decline.
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