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Article Artículo

Economic Growth

Inequality

Workers

An $18.42 Minimum Wage?

Last year, President Obama called for increasing the federal minimum wage to $10.10 an hour by the end of 2015. He argued that after 2015, increases in the minimum wage should be tied to inflation, with the minimum wage rising in line with the consumer price index.

The purchasing power of the minimum wage peaked in the late 1960s at $9.54 an hour in 2014 dollars. That is over two dollars above the current level of $7.25 an hour. While raising the minimum wage to $9.54 would provide a large improvement in living standards for millions of workers who are currently paid at or near the minimum wage, it is worth asking a slightly different question: what if the minimum wage had kept in step with productivity growth over the last 44 years? In other words, rather than just keeping purchasing power constant at the 1968 level, suppose that our lowest paid workers shared evenly in the economic growth over the intervening years.

This should not seem like a far-fetched idea. In the years from 1947 to 1969, the minimum wage actually did keep pace with productivity growth. (This is probably also true for the decade from when the federal minimum wage was first established in 1938 to 1947, but we don’t have good data on productivity for this period.)

Dean Baker and Nicolas Buffie / July 23, 2015

Article Artículo

Haiti

Latin America and the Caribbean

World

Deportations from the Dominican Republic: The IOM Changes its Tune

On July 14, 2015, the International Organization for Migration (IOM) released a statement regarding the situation on the Haiti-Dominican Republic border. The IOM interviewed some 1,133 individuals who had crossed the border between June 16 and July 3, finding that “408 persons (or 36.0 per cent) said that they had been deported by different entities, including the military, police, immigration officials and civilians.”  These findings directly contradicted statements from the Dominican Republic and U.S. officials that no deportations had occurred.

However, within two days the press release was pulled from the IOM website and on July 21, IOM issued a new press release making no mention of deportations.

U.S. Special Coordinator for Haiti Thomas Adams, testifying before the Senate Foreign Relations Committee on July 15, 2015, stated, “They -- they [the Dominican Republic] have assured us that there will be no mass deportations and none have begun yet.” He added: “There were reports of others that when they investigated, they found out that they weren't -- they weren't really deportees.” A day later the IOM press release had been pulled from the website.

When contacted by HRRW last week, Ilaria Lanzoni, a press officer with the IOM, e-mailed that “They [IOM Headquarters] are currently revising the note.” When the release was re-posted, however, all mentions of deportations were removed. The original release contained a quote from Gregoire Goodstein, IOM’s Chief of Mission in Haiti, stating: “A proper monitoring system is essential to overcome the current uncertainty about the conditions and number of deportations …” However in the updated release, Goodstein’s quote has been changed to “… the current uncertainty about returns.” The rest of the changes can be seen in the screen grabs, below.

IOM PR Deportations Change
Edited Paragraphs of IOM press release with changes highlighted (original on right). Click to enlarge.

Jake Johnston / July 22, 2015

Article Artículo

Haiti

Latin America and the Caribbean

World

On Campaign Trail, Martelly Pledges to Restore Disbanded Military Force

After launching the electoral campaign of his political party, Parti Haïtien Tèt Kale (PHTK), in Cap-Haitien last week, Martelly has renewed his 2011 campaign pledge to restore the Armed Forces of Haiti (FAd’H), reports Le Nouvelliste. In a rally held in the Palmes region in the Southeast department over the weekend, Martelly stated that his previous pledge was not false. He added that since his mandate began, “I have been around the world to meet with representatives of major countries on the issue.”

In February 2014, Martelly formally requested technical advice on the creation of a military from the Washington D.C.-based Inter-American Defense Board (IADB), a body of the Organization of American States.  Former President Jean-Bertrand Aristide disbanded the military in 1995 as the force was involved in numerous human rights violations and coup d’etats. Nevertheless, on June 25, 2015, the IADB met with Haitian authorities in Port-au-Prince to officially present a “white paper” outlining the formation of a new defense force. The process has been led by Haitian Minister of Defense Renauld Lener, himself a former major in the FAd’H.

The Director General of the IADB, Vice Admiral Bento Costa Lima Leite de Albuquerque Junior, in announcing the finalization of the “white paper” told the audience:

The principle innovation of the Haitian White Paper, with respect to others, is that it covers the global interests of security, without limiting exclusively to questions of defense. It defines the strategic guidelines of security and national defense that give answers to “all the risks and threats that could make the life of the nation vulnerable” and the interweaving with the economic development and social sustainability of the country. The field of national security includes defense policies, but doesn’t limit itself to it. Other policies, like the exterior policies and the economic policies, also contribute directly to national security.

Therefore, we understand that the Haitian White Paper of also [sic] defines a concrete space of international cooperation in the future, to the extent that the document ordered, systematized and establishes axes and sets areas of priorities for the country.

When Martelly first came to office pledging to restore the Haitian military, the plan was met with fierce resistance, both within and outside of Haiti, with key donor governments including the U.S. opposed to the idea. Reed Brody of Human Rights Watch told the Associated Press in 2011: “The Haitian army has basically been an army that's been used against the Haitian people … It was there as an instrument of repression, so it's hard to see what Haiti gains by bringing back the army.”

Jake Johnston / July 21, 2015

Article Artículo

Economic Growth

Workers

CBO’s Estimates of Output Gap, Natural Rate of Unemployment Show Discrepancy

Last quarter the civilian unemployment rate fell to 5.41 percent, the lowest rate since the second quarter of 2008. This represented a drop of 0.16 percentage points from the first quarter, when unemployment was 5.57 percent.

According to the Congressional Budget Office (CBO), this also meant that the economy nearly achieved full employment. The CBO estimates that the natural rate of unemployment, an estimate of the unemployment rate that excludes cyclical effects, was 5.38 percent in the second quarter. (The CBO publishes a short-term as well as a long-term rate; both were 5.38 percent in the second quarter. The two rates are expected to be the same going forward.)

The CBO’s estimates of the natural rate of unemployment are inconsistent with its estimates of the output gap. The output gap measures the difference between GDP and what GDP could be if there were no cyclical weakness in the economy. There should therefore be no output gap when the economy has hit its natural rate of unemployment.

CEPR and Nicolas Buffie / July 21, 2015

Article Artículo

United States

Workers

The Tipped Minimum Wage Hasn’t Risen Since 1991

In April 1991, the federal minimum wage was raised from $3.80 to $4.25 per hour. The federal tipped minimum wage, which had traditionally been set to half the normal minimum wage, was raised to $2.13. The tipped minimum wage sets a wage floor for all workers who receive tips as part of their compensation; most of these workers are in the food service industry, which employs 60 percent of the nation’s tipped workers.

CEPR and Nicolas Buffie / July 17, 2015