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

The Trump administration is considering a unilateral change to how the government measures poverty. If adopted, the change would reduce by millions the number of people eligible for Medicaid, parts of Medicare, SNAP, and other benefits over the next 10 years.

One of the questions this raises is whether a progressive president could make the same change in the opposite direction. In other words, could a President Warren or Sanders make millions of more people eligible for Medicaid and other benefits without Congressional approval by increasing the poverty line?

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The Affordable Care Act (ACA) led to increases in health insurance coverage and reductions in racial and ethnic disparities in coverage. With Fathers’ Day this weekend, it’s a good time to take a closer look at trends in coverage for fathers. In this post, we focus on fathers who report living with one or more of their minor children in the American Community Survey.


Overview

Following the passage of the ACA, uninsurance declined substantially among dads of all classes, races, and ethnicities. Yet large class, racial, and ethnic gaps in coverage remain. Some of the decline in dads’ uninsurance is due to the strong economy and the ACA’s private coverage-related provisions, but most of the credit goes to Medicaid and other public health insurance coverage. Despite this progress, far too many dads in our diverse working class remain uninsured, and the Trump administration is doing everything it can to undermine the health insurance system in ways that will reduce coverage and increase disparities. Ultimately, we need a universal Medicare plan that builds on the success of the ACA by providing comprehensive coverage to everyone, while creating a more efficient and simpler system.

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Since last fall, the Revolving Door Project has been working to ensure that House Democrats use their newfound majority to perform long overdue oversight that targets the intersection between outsized corporate influence and Trump-era corruption. We have argued that across the breadth of every issue area imaginable, such oversight not only represents good policy but also good politics. In a moment of deep skepticism about the integrity of elites and institutions across the globe, fighting against corruption could not be more timely.   

Despite our pleas, few Democrats have embraced this manner of populist oversight. This timidity is disheartening in all cases, but in certain areas, like Betsy Devos’ Education Department, it appears particularly egregious.

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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

Growing cities that work for all: A capability-based approach to regional economic competitiveness

This report aims to provide a framework and inform policymakers on how the evolving economy is reshaping communities’ distinct opportunities and strengths by proposing a plan for regions to grow quality jobs through capability-based industrial development strategies. This involves firms and cities working together to see what inputs firms need to be productive and for cities to invest in those inputs in order to be more attractive and resilient.

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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 through multiple channels to shed light on these overlooked agencies and the threats that they face. 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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This was originally posted on the Economic Policy Institute's Working Economics Blog.

If the current economic expansion which began in June 2009 makes it to this July, it will set a record for the longest period of U.S. economic growth—beating the 1991 to 2001 boom. Economic expansions don’t die of old age, however, so what might bring this one to an end?

With memories of 2008-2009 still fresh, some observers have focused on corporate debt as the likely culprit. It’s true that corporate debt has risen rapidly during the expansion, both in absolute terms and in relation to corporate profits. But low interest rates mean that debt service—interest payments on this debt relative to after-tax profit—is about 25 percent, where it usually is during periods of expansion and not a cause for worry. Bank regulators are concerned about the rapid growth of leveraged loans and weaker lender protections. But they appear to be correct in their assessment that leveraged lending, despite a 20 percent growth since last year to almost $1.2 trillion, “isn’t a current threat to the financial system.”

Still, recession or no recession, there will be pain.

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Asian American and Pacific Islanders (AAPIs) are one of the fastest growing demographic groups in the US workforce. About 9.5 million AAPIs[1] ages 16 or older worked in the United States in 2017 — a dramatic increase from just over one-half of one percent of all US workers in 1960 to 6.1 percent today.[2] AAPI workers also almost doubled from 2000, during a period when the Asian population in the US grew 87 percent, from 11.9 million in 2000 to 22.2 million in 2017.[3]

As more AAPIs enter the labor force, it is becoming ever more important to understand the unique challenges facing these workers and not be misled by the model minority stereotypes that have consistently downplayed the socioeconomic disparities rampant in these communities.

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This week Senator Bernie Sanders and Representative Barbara Lee are introducing bills in the Senate and House for a financial transaction tax (FTT). Their proposed tax is similar to, albeit somewhat higher than, the FTT proposed by Senator Brian Schatz earlier this year. The Sanders-Lee proposal would impose a 0.5 percent tax on stock transactions, with lower rates on transfers of other financial assets. Senator Schatz’s bill would impose a 0.1 percent tax on trades of all financial assets.

At this point, it is not worth highlighting the differences between the bills. Both would raise far more than half a trillion dollars over the next decade, almost entirely at the expense of the financial industry and hedge fund-types. In the case of the Schatz tax, the Congressional Budget Office estimated revenue of almost $80 billion a year, a bit less than 2.0 percent of the budget. The Sanders-Lee tax would likely raise in the neighborhood of $120–$150 billion a year, in the neighborhood of 3.0 percent of the federal budget.

While the financial industry will make great efforts to convince people that this money is coming out of the middle-class’ 401(k)s and workers’ pensions, that’s not likely to be true. This can be seen with some simple arithmetic.

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The financial industry has been the driving force behind some of the most damaging economic trends of our time. In spite of this fact, since the spasm of reform reflected in the Dodd Frank Act, financiers have faced very little scrutiny from lawmakers. Instead of regulating the industry, many governing officials from both parties have chosen to collect campaign checks in exchange for helpful votes.

Maxine Waters has rejected this complacency in favor of aggressive oversight. The committee’s failure to oversee the industry for so long, however, has left a significant backlog of issues to examine, in addition to the plethora of new and novel issues emerging under this administration. In an effort to help advocates and members of the public understand the scope of the task that the House Financial Services Committee (HFSC) faces, the Revolving Door Project has compiled a list of problems that deserve the committee’s scrutiny.

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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.

To approve this merger under these circumstances would undermine public confidence in both the FDIC and the Federal Reserve. For this reason, the Revolving Door Project and the Demand Progress Education Fund appealed directly to Federal Reserve Governor Lael Brainard, who has previously served as an ally of pro-worker groups, to oppose the merger until such time as the concerns we raise in our comment are resolved.

Please find the full letter here.

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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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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.

Add a comment

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 at 10:00 AM on March 29, 2019

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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