Blog postings by CEPR staff and updates on the latest briefings and activities at the Center for Economic and Policy Research.

Dear America,

A working mother recently wrote to the New York Times asking what really makes for a “family friendly” company. Her workplace experiences were the opposite of the company’s stated commitment to the notion and she wanted to know if her expectations were too high. The reply that followed was not so much a definition of a family friendly workplace, but advice: “Even if you are short on funds, it is worth it for you to go into (potentially further) debt at this time to pay for as much day-to-day help as you can get.” In other words, if you’re looking for a better work-life balance, you’re on your own in 2019 America.

A survey on work-family stress due to lack of childcare support conducted among working mothers from the US and other industrialized countries found “it was American moms uniquely who blamed themselves for their own stress and thought it was their own job to resolve it.”

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In honor of Mother’s Day, CEPR is publishing a curated selection of original research reports from academic institutions and nonprofits on the current state of child care and early education in the US. The compilation is part of our ongoing effort to promote informed debate on the most important economic and social issues that affect people's lives as well as encouraging inclusive conversations on improving the lives of families across the country.


Brookings Institution

What is the market price of daycare and preschool?

This report uses nationally representative data from the 2016 Early Childhood Program Participation Survey in order to calculate hourly and annualized prices for parents who purchase at least eight hours a week of center-based care for a child under the age of five without a disability or without outside financial help in paying child care fees. Ultimately, the author is looking to find the market price of center-based daycare and preschool for young children by analyzing the age of the child, region of country, parental education, parental income, and hours of attendance.

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On Thursday, May 2nd, the Revolving Door Project, in conjunction with the Demand Progress Education Fund and Color for Change, submitted a comment to the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve System Board of Governors regarding the proposed merger between Branch Banking and Trust Company (BB&T) and SunTrust Bank. This comment raised numerous concerns related to the implications of this merger, the largest since the financial crisis, and the integrity of the process by which it will be approved. We believe that these concerns warrant an elevated level of scrutiny for this merger.

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This year’s Social Security and Medicare trustees’ report saw very few changes from last year’s report and showed that the Social Security retirement program’s (OASI) financial situation had improved modestly by some measures. While the report predicts that the Social Security retirement program will be able to pay 77 percent of benefits starting in 2034 (down from 79 percent that was reported in 2018), the trustees’ own rationale shows that the future of the program is secure with minor adjustments. Let’s walk through the logic.

In the report, the trustees forecast that the trust fund will have a shortfall of 2.78 percent of payroll under their intermediate assumptions over 75 years (Table VI.G3). This is to say that to erase the shortfall throughout this period, payroll taxes will need to be increased by 2.78 percent. This calculation is an improvement when compared with the projected shortfall of 2.84 percent of payroll that was reported in the 2018 report.

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 This version reflects corrections made on July 2, 2019. The original post mistakenly stated that four independent agency boards lacked quorums when, in reality, six did.

As we have previously highlighted, the federal government’s forty independent federal agencies receive too little attention relative to their importance to our collective safety and prosperity. The Revolving Door Project has worked to shed light on these overlooked agencies and the threats that they face through multiple channels. We hope public education will generate pressure to safeguard the independence of these agencies and ensure that they are staffed with advocates for the public interest rather than corporate insiders.

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Earlier this year, Representative Alexandria Ocasio-Cortez made waves when she used her appearance on 60 Minutes to call for a 70 percent marginal tax rate on incomes over $10 million. The mainstream media establishment was further blown away when polls in the following days showed that this radical proposal was wildly popular. To anyone who had been paying attention, this was hardly a shocking revelation; Americans have long supported raising taxes on the wealthiest Americans. Nonetheless, the renewed focus on proposals to tax the rich opens the door for a long overdue conversation about biases in our tax system and how to change them.

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CEPR regularly publishes a curated collection of original research from academic institutions and nonprofits on the state of the US labor market. The compilation is part of our ongoing effort to promote informed debate on the most important economic and social issues that affect people's lives.


The Brookings Institution

Meet the millions of young adults who are out of work

An estimated 17 percent of young people aged 18 to 24 years old find themselves out of work in midsize to large cities in the US—about 2.3 million young people and potential workers. The authors use cluster analysis to partition out-of-work young adults into five groups which are arranged by educational attainment, school enrollment, English language proficiency, family status, and other characteristics. The report offers recommendations for state, local, civic, and institutional leaders to help all young people make the transition into the labor force successfully.

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It’s widely understood that private equity firms make money for themselves and their investors by loading the companies they buy with debt, selling off assets, and gaming the tax system. But, there is another, less well-known way that private equity enriches itself when it takes over a traditional company.

While relations between management and labor in traditionally managed companies are generally built on low-trust and an acknowledged divergence of interests, managers have needed to build minimum levels of trust and reciprocity to ensure the ongoing commitment of those who actually produce the company’s products to the survival and success of the business. Managers have used earnings generated by company operations to pursue strategies aimed at inducing a diverse group of stakeholders to contribute to the enterprise.

Private equity owners have no such commitment to the long-term success of the companies they acquire. Their commitment is to making returns for themselves and their investors that exceed normal market returns by 15 to 20 percent. Managerial strategies to enhance performance and assure the company’s future are viewed as reducing profits. They see defaulting on these implicit contracts that govern relationships between management and other stakeholders as a quick way to increase the returns to the company’s owners.

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The FAMILY Act was reintroduced in the 116th Congress by Kirsten Gillibrand in the Senate and Rosa DeLauro in the House. It would provide workers with income when they need to take time off for their own health including recovery from childbirth, to care for a seriously ill family member or spouse, or to bond with a new baby or an adopted or foster child. One of the arguments against paid family and medical leave that opponents frequently use to try to discredit this popular social insurance program is that workers can’t afford it. The payroll deduction, technically a tax, is actually an insurance premium that finances these paid leaves.

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CEPR regularly publishes a curated collection of original research from academic institutions and nonprofits on the state of the US labor market. The compilation is part of our ongoing effort to promote informed debate on the most important economic and social issues that affect people's lives.


The Brookings Institution

Advancing Opportunity in California’s Inland Empire

California’s Inland Empire has seen exceptional growth over the years due in large part to its affordability and close proximity to the Pacific Ocean. However, a series of busts and booms within trade and technology coupled with the Great Recession threatened to diminish the growth of the region and left many of the workers behind. This report finds ways to advance jobs opportunities in the area. The authors found the Inland Empire must increase competitiveness and diversity in “opportunity industries”— industries that contain good and promising jobs.

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This version reflects corrections made on July 2, 2019. The original post mistakenly stated that four independent agency boards lacked quorums when, in reality, five did.

The federal government’s 40 independent agencies play an important role establishing and enforcing the regulatory frameworks that govern sectors as diverse as financial securities, chemicals, nuclear weapons, and postal services. Yet, despite these essential contributions to public safety, financial security, and the public good in general, these agencies are perpetually forgotten.  

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In the coming days, advocates and lawmakers will fight to ensure that the findings of Mueller’s team are made public so that the American people may assess for themselves the results of the Special Counsel’s two-year investigation. Even as this important work unfolds, however, we must also acknowledge the limitations of the Special Counsel’s investigation. That’s why we renew our call from early January for Representative Richard Neal (D-MA) to perform his constitutional obligations and request Trump’s tax returns without any delay.

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With just under $6 trillion in assets under management (as of year-end 2018) BlackRock is the largest money manager in the world. Virtually unheard of only a decade ago, it has now grown into one of the most powerful forces in financial markets and politics alike.

Central to this ascendance was its risk management software, Aladdin. Aladdin — an acronym for Asset Liability and Debt and Derivative Investment Network — has become the “industry’s dominant platform for keeping track of portfolios.” It counts among its clients approximately 200 financial firms who use the software to manage approximately $18 trillion in assets.

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Protecting the health of workers is a crucial factor in maintaining a productive workforce. However, this objective remains inaccessible for many Americans due to the lack of universal access to paid sick leave. Over 40 million American workers still do not have access to paid sick leave and face the dilemma of either taking an unpaid day off or working while sick, thus risking their economic security, reducing workforce productivity, and threatening the health of co-workers and customers.

This problem disproportionately impacts the lives of part-time and low-wage workers. In 2018, only 40 percent of part-time workers had access to paid sick days. In comparison, 85 percent of full-time workers had access to sick pay. There’s an even larger disparity between low-income and high-income workers regarding sick pay. Shockingly, only 31 percent of the lowest income earners had access to sick pay, compared to 93 percent of the highest-paid workers.

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Yesterday a coalition of good government and progressive groups sent a letter to Speaker Pelosi urging her to “to take every available step to ensure that the House Ways and Means Committee fulfills its Constitutional obligation to provide stringent oversight.”

You wouldn’t think such a letter would be necessary. Given the broad public outcry at different rules for the rich and everyone else, you would think a Democratic Party seeking to reclaim the mantle of populism would naturally pursue opportunities to discover the “who, what, when, where, why, and how” of tax evasion.

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The Honorable Speaker Nancy Pelosi
1236 Longworth H.O.B.
Washington, DC 20515

Dear Speaker Pelosi,

We are writing you as organizations who believe that fairness and equity in both the writing and implementation of tax law is of critical importance. Our commitment to fairness is why we urge you to take every available step to ensure that the House Ways and Means Committee fulfills its Constitutional obligation to provide stringent oversight. 

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In 1990, nearly three-quarters (74.0 percent) of prime-age women, ages 25 to 54, in the US participated in the labor force. Only the Nordic countries — Sweden, Norway, Denmark, and Finland — had substantially higher shares of women in the labor force, while women’s labor force participation in Canada was modestly higher at 75.5 percent. The US ranked sixth out of 22 Organisation for Economic Co-operation and Development (OECD) countries.

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Today marks Equal Pay Day for Asian American and Pacific Islanders (AAPIs). In 2017, median earnings for Asian women in the United States — that is, those who identify themselves as “Asian alone” in the US Census Bureau’s American Community Survey and worked full-time, year-round — were $50,559 per year, compared to median annual earnings of $57,638 made by a white, non-Hispanic men (a difference of about $7,000 per year).  Asian women also earned 77 percent of what Asian men earned per year, which is smaller than what all women were paid as a percentage of all men (80 percent).

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Don't let the headline ("House Democrats prepare case to request Trump tax returns") fool you: Richard Neal's announcement of a plan to issue a request letter for Trump's tax returns comes distressingly late — and projects to be vastly too modest in scope.

Revolving Door Project, which has helped lead the way in spotlighting Neal's shirking the need for serious Congressional oversight, notes the following problems with the request as reported by NBC News.

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As federal policymakers shrink away from their campaign promises to request President Trump’s tax returns, state lawmakers are stepping up to take their place. On January 24, the New Jersey Senate passed a bill that would bar presidential and vice-presidential candidates from appearing on the ballot unless they released five years of federal tax returns. Meanwhile, there is growing momentum in New York for the TRUTH ACT, a bill which would require state tax authorities to release tax returns for any officials elected statewide, from State Comptroller and Attorney General up the ranks through to the President of the United States. That bill now has 78 cosponsors in the NY State Assembly (a majority) and 28 in the State Senate (four shy of a majority).

If passed, New York state tax authorities will be required to release Trump’s tax records within 30 days. Those records would not just include income earned in New York state but worldwide income as well.

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Social networks and the development of platform technologies have drastically transformed the way people live, work, and spend their money. The use of information and communication technologies has become an important aspect of jobs in occupations ranging from medical assistants to fast food operators, lawyers, steel workers, and others employed in traditional employment relations. The growth and popularity of online and app-based platforms like Uber, GrubHub, and TaskRabbit have raised the profile of the gig economy* and created the impression that employer-less work and gig jobs are a pervasive aspect of modern employment. A lack of consistent, rigorous data on twenty-first-century employment relations allowed speculation about the role of independent contractors, and especially gig workers, to dominate conversations about the future of work.

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