The newsletter highlights CEPR's latest research, publications, events and much more.
CEPR on the Minimum Wage
President Obama's call for an increase in the minimum wage during his State of the Union address drew much attention from the media, providing CEPR with an opportunity to inform the debate. CEPR released a new paper that finds that moderate increases in the minimum wage – such as the one proposed by President Obama – have little impact on employment, due to adjustments by employers and workers. The paper, "Why Does the Minimum Wage Have No Discernible Effect on Employment?" by CEPR Senior Economist John Schmitt,reviews evidence on eleven possible adjustments to minimum-wage increases that may help to explain why the measured employment effects are so consistently small. The strongest evidence suggests the most important adjustments are: reductions in labor turnover; improvements in organizational efficiency; reductions in wages of higher earners ("wage compression"); and small price increases.
"This is one of the most studied topics in economics, and the evidence is clear: modest minimum wage increases don't have much impact on employment," said John.
Brad Plumer wrote a long summary of the report for Ezra Klein's Wonkblog, and it was mentioned on several other blogs from the National Journal to Jared Bernstein's blog (Jared called the report a "must read" in a subsequent post). Paul Krugman cited the paper in a post where he supported the proposed increase, and he linked to John’s paper in the online version of his New York Timescolumn. Rachel Maddow highlighted the report on her MSNBC show, and it was also mentioned in this piece on CBS News' Moneywatch. Newspapers across the country ran articles on the report, including the Orlando Sentinel and the Minnesota Daily.
John gave several radio interviews about the paper, including this one for WNUR's This is Helland this one for KBAI's The Joe Show. The paper also served as the basis for John's testimony on February 25th before a Select Committee of the Minnesota state legislature and his remarks at a separate public event on the minimum wage sponsored by JOBS NOW Coalition at the University of Minnesota. John also penned this post for the CEPR Blog responding to an ad in Politico by the conservative Employment Policies Institute claiming that the minimum wage harms low-wage workers, as well as this post on his Dissent article with Colin Gordon on benchmarking the minimum wage
CEPR Co-director Dean Baker weighed in with this piece for the Huffington Post, and he was mentioned in this highly-viewed piece on Yahoo!Finance. Dean also wrote this post for the CEPR Blog, where he and co-author CEPR Domestic Intern Will Kimball showed what the minimum wage would be if it had kept up with productivity growth over the past 44 years. CEPR Senior Research Associate Shawn Fremstad wrote thesetwo CEPR blog posts on the issue.
CEPR on Ecuador
Ahead of the February 17th presidential elections in Ecuador, CEPR released a paper that examined Ecuador’s financial and regulatory reforms during the past five years. “Ecuador’s New Deal: Reforming and Regulating the Financial Sector,” written by CEPR Co-director Mark Weisbrot, Research Associate Jake Johnston, and Research Assistant Stephan Lefebvre, found that the financial reforms carried out by the Rafael Correa administration are in large part responsible for the economic success Ecuador has experienced over the past several years.
Mark wrote this op-ed on the paper for the Guardian (which was mentioned in this piece that appeared on Fairness and Accuracy in Reporting’s blog), and he was quoted in this AFP article. Director of International Programs Deborah James presented the paper’s findings on Al Jazeera’s Inside Story Americas, and Senior Associate for International Policy Alex Main summarized the paper for CEPR’s Americas Blog.
CEPR’s paper received additional press after Ecuador President Rafael Correa easily won re-election. Mark was on The Real News and Sojourner Truth Radio (KPFK) while Deborah James appeared on KPFK radio’s Strategy Sessions. Director of International Communications Dan Beeton wrote this post for the Americas Blog critiquing media coverage of Ecuador leading up to the election, and he and Jake wrote an additional post correcting numerous errors in both the Washington Post’s and the Miami Herald’s editorials on the election results. Dan elaborated on his post in this interview with FAIR’s Counterspin.
CEPR on Work Hours and Climate Change
CEPR’s paper “Reduced Work Hours as a Means of Slowing Climate Change,” by Economist David Rosnick finds that significant reductions in carbon emissions are possible through reducing work hours, and could help to reduce climate change. The study finds that 8 - 22 percent of every degree of warming through 2100 would be cut by an annual 0.5 percent reduction in work hours.
“As productivity increases, especially in high-income countries, there is a social choice between taking some of these gains in the form of reduced hours, or entirely as increased production,” said David. “For many years, European countries have been reducing work hours – including by taking more holidays, vacation, and leave – while the United States has gone the route of increased production. The calculation is simple: fewer work hours means less carbon emissions, which means less global warming.”
The paper received a great deal of media attention, with Fox Business and Fox News shows each interviewing Mark the week it was released, as well as CBC television, which conducted a less confrontational, more informative interview. David Rosnick did several interviews with radio stations such as KGO Newstalk AM 810 in San Francisco. The paper was also written up in articles in dozens of media outlets such as CBC News, CBS’ Moneywatch, Fox News, U.S News and World Report, the International Business Times, The Vancouver Sun, Global Post, Grist, The Guardian (U.K.), Mother Jones, The Daily Mail (U.K.) and Forbes. Many more blogs also summarized and commented on the paper.
David wrote a CEPR blogpost on the paper, partly in response to the distorted and often careless coverage the paper received. The right wing media generally ignored the productivity dividend, which is crucial to understanding the paper’s findings.
CEPR on the FMLA
February 5, 2013 was the 20th anniversary of the Family and Medical Leave Act (FMLA), passed with bipartisan support in Congress and signed into law by President Bill Clinton. The law guarantees up to 12 weeks of unpaid job-protected leave for eligible workers in case of their own serious health problem, to care for a seriously ill family member, or to bond with a new child. CEPR Senior Economist Eileen Appelbaum wrote this op-ed for U.S. News and World Report to mark the occasion.
Eileen worked with the Small Business Majority on developing and interpreting data from their survey of small businesses on experiences with FMLA and attitudes toward paid leave for their release of survey results on Mon Feb 4. Eileen was also an invited participant in the February 8th White House Roundtable on the new 2010 Department of Labor (DOL) FMLA survey results.
Eileen penned a four part series on the FMLA for the CEPR blog. The first, “What Do the DOL Surveys Tell Us About How the FMLA Can Be Strengthened?,” revealed that two decades after passage of the FMLA, about a third of all workers (34 percent) still have not heard about the Act and employers at nearly a quarter of work sites subject to the FMLA do not know that the FMLA applies to them. In the second, Eileen examines what the DOL surveys tell us about the possibilities for expanding coverage of the FMLA to work sites with fewer than 50 employees, many of which already allow employees to take leave for FMLA qualified reasons. The third part examines the need for paid family and medical leave. FMLA leaves are unpaid, creating undue hardship for many families when leave is necessary. The final post examines employers’ experiences with the FMLA and finds it was a ‘non-event’ for the overwhelming majority.
CEPR on the SOTU
CEPR made watching the State of the Union address more fun with the first-ever CEPR SOTU Economics Bingo game. Whenever the President mentioned an issue related to the economy, players could click on each topic and then scroll down to learn more about the issue from CEPR. CEPR Director of Domestic Policy Nicole Woo detailed the rules of the game in this post for the CEPR Blog.
CEPR on the Sequester
Dean discussed sequestration with Paul Krugman on MSNBC’s Up With Chris Hayes. Here is the clip in four parts: one, two, three and four. Dean also discussed the sequester on Background Briefing with Ian Masters, while Nicole’s Sinclair Broadcasting interview aired on over 40 TV stations across the country. Nicole was also on Let’s Talk About It (Nicole joins the program at 13:15)
CEPR on Haiti
CEPR responded tothe U.N.’s refusal to take responsibility for bringing cholera to Haiti last week with this press release in which Mark condemned it as “a failure of the U.N. system.” Despite overwhelming scientific evidence pointing to U.N. troops as the cause of Haiti’s cholera epidemic, the U.N. claimed immunity in response to a lawsuit by over 6,000 cholera victims, also stating that the complaint was related to “policy.” CEPR was cited in articles from Inter Press Service and RT. Posts on CEPR’s Haiti Relief and Reconstruction Watch blog examined both the U.N.’s immunity claim and the cholera eradication plan which the Haitian government finally released this week, and which involves U.N. agencies.
CEPR’s Alex Main, Dan Beeton and Jake Johnston also have commented on recent developments in the case against former dictator Jean-Claude Duvalier for human rights crimes. Recent blog posts commented on the case and ways in which the U.S. government has hindered rather than helped efforts to bring Duvalier to justice. A related op-ed was published by Truthout and Common Dreams, and in Spanish by la Agencia Latinoamericana de Información and other outlets.
CEPR on the FTT
This past week was a big one for proponents of the financial transaction tax, or FTT. Om Thursday February 28th Sens. Tom Harkin (D-IA) and Sheldon Whitehouse (D-RI) and Rep. Peter DeFazio (D-OR) introduced legislation that would subject financial trades to a 0.03 percent tax. CEPR released this statement by Dean, who said “The modest tax would discourage an enormous amount of short-term trading while having almost no impact on the ability of markets to finance productive investment. The cost of the tax would be born almost entirely by the financial industry, since for most investors the money saved as a result of lower trading volume will offset the higher cost of trades. CEPR has long called for a small tax on financial transactions.
Earlier in the week, European leaders were in Washington, calling on the U.S. to re-think its opposition to the FTT. Nicole was quoted in this article on the EU’s recent announcement that 11 member states were preparing to impose the law beginning next year. The article also quotes Algirdas Semeta, the European Commissioner for Taxation and Customs Union, who was in Washington for talks with U.S. supporters of the FTT.
CEPR on Medicare Drug Benefits
In this issue brief titled “Reducing Waste with an Efficient Medicare Prescription Drug Benefit,” Dean shows that by having Medicare negotiate drug prices comparable to those in other advanced nations, the federal government could save from $230 billion to $541 billion over the next 10 years. Additionally, state governments could save from $31 billion to $72 billion, and consumers could save from $48 billion to $112 billion over the same period.
CEPR’s paper was released to coincide with the launch of a grassroots effort to educate the public and lawmakers about the substantial benefits that drug-price negotiations could offer. Seattle-based Alliance for a Just Society gathered support from nearly 300 organizations nationwide to urge Congress and the President to enable Medicare to negotiate prescription prices with drug makers and suppliers. Health Care for America Now (HCAN) is coordinating legislative and field activity in states across the country to achieve the goal.
News from the CEPR Blogosphere:
Dean wrote several posts on Social Security, including this one on how the upward redistribution of income has affected Social Security solvency, and this one on the Chained CPI. Shawn wrote this post on the Kristof-Greenstein debate and this one on Temporary Assistance programs. John penned this post on gender, debt and dropping out.
The Americas Blog: Analysis Beyond the Echo Chamber
Alex wrote several posts for CEPR’s Americas Blog, including these two on killings in Honduras. CEPR International Intern Arthur Phillips wrote this post on scandals surrounding New Jersey Democratic Senator Robert Menendez and this one on the Honduran government’s plan to build model cities. In this post, Dan critiques Ricardo Hausmann’s misleading Guardian op-ed on Venezuela. Mark’s post on Venezuela’s currency devaluation received a lot of attention in the U.S. and in Latin America, where it was cited by various media outlets.
In Other CEPR News…
--Mark wrote this McClatchy column on the new health insurance exchanges that appeared in over 40 newspapers, including Sacramento Bee (CA), Anchorage Daily News (AK),Raleigh News and Observer (NC) and the Kansas City Star (KS).
--Dean was the featured “Newsmaker” at a press conference held at the National Press Club on February 28th. Dean’s presentation was titled “The Path to Sustainable Economic Growth: Why the Dollar’s Value Should Decline.”
--CNBC billed this clip as “Bond Market Battle: Santelli Vs Baker”. Guess who won?
--Dean answered “Does the Government Need to Do More?” when New York Times’ Room for Debate asked for questions for Jack Lew’s confirmation hearings. And he answered “NO” to U.S. News and World Report’s question: “Is the New Bowles-Simpson Plan a Good Deficit Reduction Proposal?” Dean’s post was number one, earning the most “up votes” at 532 (compared to Former Senator Alan Simpson’s 226, as of today).
-- Mark debated the sustainability of economic policies in Argentina and Venezuela opposite Professor Arturo Porzecanski on Al Jazeera’s Inside Story Americas.
--Alex Main was on the Real News talking about CELAC – the hemispheric regional grouping that includes all the countries of the Americas except the U.S. and Canada.
--CEPR’s latest graphic economics shows single-family housing starts from 2000 – 2013.