Category: Equitablog

This is a post we publish each Friday with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth published this week and the second is relevant and interesting articles we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context.

Equitable Growth round-up

Big Agriculture has a big concentration problem, write Hiba Hafiz and Nathan Miller in this month’s installment of Competitive Edge. U.S. agricultural markets are one of the most highly concentrated industries in the country, with a small group of large corporations wielding incredible buy-side power, or monopsony power, leaving workers along the supply chain with low pay, tough working conditions, and limited ability to fight back. Hafiz and Miller run through the depths of the concentration in the Big Ag poultry, pork, and meat industries, and the anticompetitive and anti-labor effects that arise for workers from small farmers and hatchers to meat processing plant employees. The co-authors explain why policies and actions are needed to combat this monopsony power and suggest that President Joe Biden and his U.S. Department of Agriculture secretary nominee, former Iowa Gov. Tom Vilsack, do more to protect small farms and ensure good jobs.

On February 23, Equitable Growth is hosting a virtual event, “A future for all workers: Technology and worker power,” which will discuss the impact of technology in the workplace and its role in the future of work. The event will feature a keynote address by Mary Kay Henry, the international president of the Service Employees International Union, and two panels covering how workers can and do successfully use technology to amplify their power and voice, and how workers can bargain over how technological advancements may change their jobs. Kate Bahn previews the event in a recent post, which dives into the topic at hand, the speakers and panelists, and the urgency and relevance of discussing technology’s impact on workers. (Visit the event page to learn more and register to join us.)

Equitable Growth released a factsheet this week—the first in a series on executive actions that the new Biden administration could take—detailing how federal agencies should consider using their regulatory power to provide a countercyclical boost to the U.S. macroeconomy and fight the coronavirus recession. The factsheet notes how regulation could increase demand and lower unemployment by encouraging banks to make loans, companies to make investments, and people to spend money, and explains how pro-cyclical policy can delay much-needed boosts in local economies by discouraging spending among low- and middle-income families, which typically have a high propensity to consume. Equitable Growth also urges the Biden administration to create an office within the White House National Economic Council to coordinate effective countercyclical policy across the federal government, an action that can take effect via an update to the executive order that established the NEC.

Our second factsheet on executive actions examines how a new Office of Competition Policy could coordinate antitrust and competition policies across the federal government to combat market power. Growing market power disrupts the operation of free and fair markets, and harms consumers, businesses, and workers. It exacerbates inequality and compounds the harms of structural racism. For these reasons, the second factsheet in our series of executive action calls upon the new administration to establish a White House Office of Competition Policy within the Executive Office of the President, led by the National Economic Council and including membership from at least the Council of Economic Advisers, the Office of Information and Regulatory Affairs, the Office of Management and Budget, and the Domestic Policy Council.

Brad DeLong’s latest Worthy Reads highlights must-read content from Equitable Growth and elsewhere on the internet. This week, he revisits the important recession-fighting proposals Equitable Growth made in its Recession Ready book of essays in partnership with the Brookings Institution’s Hamilton Project, an assessment of the nation’s broken Unemployment Insurance system, and more.

Links from around the web

As people and firms rely more and more on certain internet-based services as a result of the pandemic and limited in-person activities, Big Tech giants have gained more and more market power and earned more and more profit. In fact, writes The Wall Street Journal’s staff, as small businesses and brick-and-mortar stores struggle amid the coronavirus recession, and many fail to stay afloat, internet companies—already some of the largest corporations in history—are experiencing unprecedented growth. These gains are expected to outlast the pandemic and the recession, even if regulators act to try to limit this market concentration. The Journal staff look at how the big five tech companies—Apple Inc., Alphabet Inc. (Google’s parent company), Amazon.com Inc., Facebook Inc., and Microsoft Corp.—have fared over the past year and how each has tapped into emerging markets as a result of new demands from consumers amid the pandemic, expanding their market dominance to potentially irreversible levels.

As corporations grow bigger and richer, millions of Americans are still out of work—and new research indicates many of those jobs probably aren’t coming back even after the public health crisis passes. The Washington Post’s Heather Long reports that the pandemic is likely to change the nature of the economy and the labor force, requiring millions of workers to be retrained, recertified, or even shift careers or industries in order to find work. One reason for these permanent job losses, Long continues, could be the increase in automation that usually arises during recessions as employers look to cut costs and experiment with new technology during periods of high unemployment and layoffs. Amid the pandemic, economists predict that these trends could be further amplified as social distancing and other public health and safety measures are enforced to limit the number of people simultaneously working in a single place.

Many Americans who qualify for social safety net assistance do not receive it, or even apply for it, thanks to a complex, outdated system that prevents many from trying to access badly needed aid. Harin Contractor, Jamil Poonja, and Faiz Shakir at Vox outline the deficiencies of the U.S. social safety net to protect vulnerable Americans who are eligible to receive government-provided relief. These holes in the system have become ever more apparent amid the coronavirus pandemic, the co-authors write, and are ever more important to address as Congress and the Biden administration negotiate future coronavirus stimulus. If relief is to be effective and actually help those in need, the co-authors argue, it will be necessary to ensure greater coordination between government aid programs and implementing agencies, and the simplification of benefits and application processes.

Friday figure

Figure is from Equitable Growth’s “Boosting wages when U.S. labor markets are not competitive” by Ioana Marinescu.

This is a post we publish each Friday with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth published this week and the second is relevant and interesting articles we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context.

Equitable Growth round-up

As Congress continues negotiating the details of a new COVID-19 stimulus bill, David Mitchell and Corey Husak make the case for including automatic triggers rather than arbitrary cut-off dates for relief programs. President Joe Biden’s current proposal includes the latter—random dates at which point emergency benefits such as extended Unemployment Insurance will expire—but this idea is misguided and based on the idea that legislators can somehow predict when the recession will have abated. Mitchell and Husak argue that instead, lawmakers should include automatic stabilizers—triggers that moderate the level of aid programs provide based on specific economic trends and data that indicate the state of the economy. This policy idea was included in the 2019 book of essays published by Equitable Growth and The Brookings Institution’s Hamilton Project, Recession Ready, and has gotten traction recently. Mitchell and Husak detail several options proposed for implementing these on- and off-triggers, explaining how each one is designed and how it would benefit U.S. workers and their families. They urge policymakers in Congress to adopt one of the options in the coming COVID relief bill in order to ensure that those most vulnerable in this economic downturn are supported and able to provide for their families.

Since the Clean Air Act was passed in 1970, many studies show the benefits of reducing air pollution on outcomes from health and well-being to economic productivity for parents and children alike. Studies also reveal the disproportionate exposure to poor air quality among disadvantaged communities, highlighting the linkages between environmental justice and economic inequality. A new Equitable Growth working paper by Jonathan Colmer and John Voorheis looks at the long-term effects of the Clean Air Act and finds that not only did the law affect children of mothers who benefited from cleaner air during pregnancy as a result of the new regulations, but also the grandchildren of these mothers. The co-authors in an accompanying column explain how the mechanism through which the intergenerational effects of air pollution arise, finding little evidence that the improvements in grandchild outcomes are biologically inherited, but rather are likely driven by increased parental resources and investments. Colmer and Voorheis also detail the policy implications of their research, particularly on how future cost-benefit analyses of environmental regulations can take these intergenerational transmissions into account.

Every month, the U.S. Bureau of Labor Statistics releases data on hiring, firing, and other labor market flows from the Job Openings and Labor Turnover Survey, better known as JOLTS. Earlier this week, the BLS released the latest data for December 2020. Kate Bahn and Carmen Sanchez Cumming put together four graphs highlighting the most important trends in the data.

Brad DeLong’s latest Worthy Reads column provides his takes on recent posts from Equitable Growth and around the web, covering some must-read content you may have missed.

Links from around the web

If the Great Recession of 2007–2009 taught policymakers anything, it is that stimulus legislation must be big and bold. Any coronavirus relief package must last as long as the pandemic does, writes Neel Kashkari in aWashington Post op-ed, and should be linked to the recovery of the job market. During the Great Recession, policymakers underestimated the depth of the crisis and were consistently surprised when things got worse, Kashkari explains. Today, rather than underestimating how bad the recession is, lawmakers risk underestimating how long it will last. Kashkari pushes for automatic triggers to tie fiscal support “to recovery of the job market rather than an arbitrary date.” And should the labor market actually rebound faster than what some public health experts are predicting, automatic triggers would shut off the aid gradually as things improve. Kashkari’s comparisons to the Great Recession paint a compelling picture for Congress to include automatic stabilizers in COVID relief legislation—or else, risk a repeat of the sluggish recovery and wage stagnation of the previous economic crisis.

A new project from The New York Times details the many challenges facing working parents amid the coronavirus recession and how they have been left to fend for themselves as the crisis persists. As is well-known, most household responsibilities fall on women and mothers more than other family members. In this series of articles and features, the Times looks in detail at the various ways in which mothers have been left behind, how they have been affected by the pandemic and recession, and the implications for women’s labor force participation in the future. The series also looks at the potential solutions offered by the Biden administration’s recovery plan—supports that some employers are offering to employees with children—alongside other solutions that would help working parents as they struggle to not only keep their jobs amid the recession, but also support their families and navigate the public health crisis.

The budget reconciliation process presents a prime opportunity to abolish the federal debt ceiling, argues Vox’s Dylan Matthews. The debt ceiling is essentially a hard limit on how much debt the U.S. government can take on and is typically adjusted based on tax and spending laws already passed by Congress. If Congress does not raise the debt ceiling, then the U.S. government cannot pay its legally mandated bills, and, in the worst-case scenario, the United States goes into default, triggering a global financial crisis. This arbitrary federal law has led to major and unnecessary political fights in the past, another of which would be devastating now, Matthews writes. Most wealthy countries around the world do not have legal limits on government debt and instead simply pass tax and spending legislation, issuing debt to make up any difference. Matthews lays out various ways that Democratic leadership in Congress and/or President Biden could follow in these footsteps and eliminate the debt ceiling, and focuses on why using the reconciliation process is the least politically fraught and most realistic option.

Friday figure

Figure is from Equitable Growth’s “How to replace COVID relief deadlines with automatic ‘triggers’ that meet the needs of the U.S. economy” by David Mitchell and Corey Husak.

This is a post we publish each Friday with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth published this week and the second is relevant and interesting articles we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context.

Equitable Growth round-up

Economic power and political power are intertwined in the U.S. system, as those with market power tend to also wield outsized political power. This relationship between the U.S. economy and U.S. democracy creates a feedback loop that perpetuates economic inequality, instability, and stagnating growth, write David Mitchell, Austin Clemens, and Shanteal Lake in a new report for Equitable Growth. The report looks at the consequences of recent electoral trends in the United States—including underinvestment in electoral infrastructure, the unbalanced campaign finance system, and heightened voter suppression tactics—on voter turnout and representation in the federal government. They examine the many ways in which economic and racial inequality affects who votes, who faces challenges when trying to vote, and who doesn’t vote at all, with repercussions on the populations, policies, and issues that elected officials represent and fight for while in office. They then make several recommendations for policymakers to address the cycle of unequal political power and economic and racial inequality, and to ensure broadly shared and sustainable growth. In an accompanying column to the report, the authors summarize their research and explain why fighting voter suppression would bridge the economic divide between Black and White Americans while kickstarting the U.S. economy.

The “skills gap” narrative, which says that wages will increase when workers acquire more skills or credentials, is false and harmful, and may further entrench vast racial income divides across the U.S. workforce. In fact, Kate Bahn and Kathryn Zickuhr write, even as educational attainment increased for all racial and ethnic groups in the United States in recent decades, the wage divide has worsened between Black and White workers, particularly at higher levels of education, while student debt among Black college graduates remains higher than that of White students for years following graduation. Bahn and Zickuhr review a recent working paper that looks into the link between education level and actual required job skills in order to show how credentialism fosters inequality and reduces upward income mobility. While the vast majority of new jobs posted and filled in recent years required a bachelor’s degree, the skills actually needed in many jobs—in software and technology, for instance—are learned by experience and training rather than formal education. Loosening education requirements may aid in job matching, the working paper’s authors argue, and Bahn and Zickuhr recommend raising wages and improving job quality across the board to reduce inequality and drive growth.

Every month, the U.S. Bureau of Labor Statistics releases data on the U.S. labor market, and today, it released data for the month of January, in which prime age employment increased only slightly, reflecting a weak economic recovery. Bahn and Carmen Sanchez Cumming put together five graphs highlighting important trends in the data, including in the continued racial disparities in unemployment rates and recovery, as well as a still-declining leisure and hospitality sector. And accompanying Jobs Day column by Bahn and Carmen delves into some of the details evident in the newly released data.

In late 2020, Equitable Growth hosted a virtual event highlighting policy ideas for strengthening antitrust enforcement that were put forth in a report authored by seven academic antitrust and competition policy experts. Raksha Kopparam summarizes the report’s main ideas and policy proposals, while reporting on the event’s debate and discussion among participants.

The deadline for our 2021 Request for Proposals is this Sunday, February 7. Be sure to read through the four main issue areas in which the RFP is organized (human capital and well-being; the labor market; macroeconomics and inequality; and market structure), details about who is eligible, and instructions on how to apply on our website.

Links from around the web

Canceling all federal student debt can be done via executive action and would not only help all borrowers but would also begin to close the racial wealth divide in the United States. In an op-ed for The New York Times, Naomi Zewde and Darrick Hamilton explain how this policy idea would have a profound impact on the discriminatory burden of student loan debt for Black Americans. Zewde and Hamilton describe the long history of policies that discriminate against borrowers of color, especially Black borrowers, that has fostered the enormous Black-White wealth divide in the United States. Less household wealth, they write, means taking on more debt to pay for college, which gets compounded when Black workers earn less than their White counterparts upon graduating and entering the labor force. President Joe Biden can use executive authority to cancel all federal student loan debt—and in the absence of full cancellation, Zewde and Hamilton contend, the push to cancel $50,000 of debt per borrower would be a step in the right direction.

The benefits of raising the federal minimum wage from its current $7.25 per hour to $15 per hour would outweigh the costs of doing so, writes The Atlantic’s Annie Lowrey. Though the longstanding theory is that doing so would harm small businesses, raise prices on goods and services, and lead to rising unemployment, evidence suggests that these predictions are overblown. Recent research debunks the claim that higher wages lead to lower employment, with studies of U.S. cities and states, as well as other countries, that have raised the minimum wage finding no evidence of major job losses. As for the idea that “mom and pop” shops would go out of business, Lowrey explains that there are many tried-and-tested creative options these companies can use to adapt to a higher minimum wage. And, countering the idea that raising the minimum wage would cause inflation, Lowrey shows that the price increases from higher labor costs tend to be marginal. Rather than raising overblown and disproven potential costs of raising the minimum wage, she concludes, we should focus on the myriad proven benefits that would be seen and shared across the U.S. economy.

The coronavirus recession is disproportionately affecting working women. U.S. women have lost more than 30 years of gains in the labor market in the months since the virus began closing schools and child care facilities and causing overall employment to drop. And, while solutions to this crisis are complicated, write Fortune’s Maria Aspan and Emma Hinchliffe, the private sector and policymakers alike must act quickly and broadly to address and reverse the scarring that women workers face. Aspan and Hinchliffe run through the various proposals that would help working women amid the coronavirus crisis, including ideas in President Biden’s coronavirus relief package, wage hikes for caregivers, and increased funding for nutrition and housing assistance. Enforcement of existing policies, such as antidiscrimination and overtime regulations, would also support working women, especially Black women and Latina workers, as would increasing funding for state and local governments, where women and workers of color are overrepresented. Finally, Aspan and Hinchliffe explain, ramping up vaccinations to end the pandemic and jumpstart the recovery is key to solving many of these issues and getting people back to work.

Friday figure

Figure is from Equitable Growth’s “The consequences of political inequality and voter suppression for U.S. economic inequality and growth” by David Mitchell, Austin Clemens, and Shanteal Lake.

This is a post we publish each Friday with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth published this week and the second is relevant and interesting articles we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context.

Equitable Growth round-up

Each month, we highlight a group of scholars doing ground-breaking work in specific areas of the social sciences in a series called Expert Focus as part of our commitment to build a community of scholars working to understand how inequality affects broadly shared economic growth. This month, Christian Edlagan, Michael Garvey, and Maria Monroe look at those scholars working at the intersection of climate change and economic inequality. These experts are attempting to assess the full effects of climate change across communities, income and wealth distributions, firms and workers, and the macroeconomy.

U.S. workers are frequently asked to sign noncompete clause as part of their work contracts, preventing them from taking their knowledge and talent to competing companies. Older theoretical arguments claim that these clauses are actually beneficial for workers and firms, citing the ideas that both parties agree to the noncompetes before signing and that noncompetes facilitate knowledge-sharing between firms and workers as well as firm-sponsored training of workers. David Balan explains in a recent Competitive Edge post that these arguments are weak and stand in tension with recent empirical evidence of the harms of noncompete clauses. Balan summarizes the findings in his accompanying working paper and then critiques each of the pro-noncompete arguments to show how these clauses are detrimental to workers. He demonstrates why they are actually largely a means for companies to extract additional value from their employees or to treat them poorly—and why policy solutions must treat noncompetes as such.

Employer concentration likewise has harmful, wage-suppressing effects on millions of U.S. workers, writes Anna Stansbury, and policymakers must respond accordingly. In a recent working paper by Stansbury and her co-authors, they propose a new method for estimating the causal effect of employer concentration, or monopsony, on wages. They find that monopsony lowers earnings for a significant set of workers, primarily those who have few options to move to other jobs or industries and those in lower-population areas. Their new method of measuring the causal effects of monopsony could have a significant impact on U.S. antitrust laws and labor market policy to combat excessive market power. Stansbury suggests that labor market regulators and antitrust enforcers respond with increased scrutiny on labor markets and use of policies that raise wages for workers directly, such as increasing the minimum wage or empowering unions.

In case you missed it: The deadline for Equitable Growth’s 2021 Request for Proposals is February 7, 2021. Equitable Growth supports research on whether and how inequality affects economic growth, and this year’s RFP has centered research on race and structural racism, as well as climate change.

Head over to Brad DeLong’s latest Worthy Reads, where he provides his takes on must-read content from Equitable Growth and around the web.

Links from around the web

President Joe Biden released details of his sweeping climate change plan, placing environmental justice at its core, report The Washington Post’s Juliet Eilperin, Brady Dennis, and Darryl Fears. President Biden’s unprecedented plan to treat climate change “as the emergency that it is” (according to a White House official) will also tackle the persistent racial and economic disparities in the United States and invest in low-income communities of color—which are disproportionately affected by pollution and climate change. Black, Hispanic, and Native American communities often are targeted for the placement of environmental hazards and eyesores, from power plants and landfills to hazardous waste depositories and trash incinerators, the Post reporters explain. This leads to disproportionate rates of disease and illness in these communities—which, in turn, leaves them more vulnerable to the worst effects of the coronavirus. President Biden’s climate plan aims to improve conditions for people of color so as to address the vast, longstanding inequalities and barriers these communities experience across the United States.

U.S. companies are using the pandemic to squash unionization efforts and reduce the power of collective bargaining, writes The Guardian’s Michael Sainato. Telling the stories of several groups of workers who believe they are shut out of employment by companies trying to break unions, Sainato shows how the coronavirus pandemic exacerbated various firms’ and industries’ use of lockouts, or work stoppages that are “initiated by the employer in a labor dispute where the employer uses replacement workers,” who are typically nonunion. In economic downturns, such as the coronavirus recession, lockouts reduce the power of unions and collective bargaining because of the higher availability of replacement workers due to high unemployment rates. Many of these workers are shut out for merely asking for better protections, hazard pay, and more favorable working conditions as they risk their lives during the pandemic.

During most economic downturns, both workers and investors face hard times. But during the coronavirus recession, only workers really felt pain, writes Robert Gebeloff in The New York Times’ The Upshot blog. This is largely thanks to the stock market, Gebeloff explains, which boomed despite the raging public health crisis and imploding job market—deepening existing inequalities in the U.S. economy. Just 1 in 6 American families report direct ownership of stocks, and the wealthiest 10 percent of Americans hold about 84 percent of all the value of financial accounts with stocks—meaning as the market soars, the wealthy get wealthier while their less well-off counterparts don’t share in the profits. The wealth divide in the United States is even wider than already-gaping U.S. income inequality, and racial disparities are even larger, Gebeloff reports, with Black Americans owning a disproportionately low share of assets and stocks.

Friday figure

Figure is from Equitable Growth’s “Americans want green spending in federal coronavirus recession relief packages” by Parrish Bergquist, Matto Mildenberger, and Leah Stokes.

This is a post we publish each Friday with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth published this week and the second is relevant and interesting articles we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context.

Equitable Growth round-up

For decades, the majority of U.S. workers experienced stagnating wages, sluggish economic growth, and disparities in pay based on race, ethnicity, and gender. These broad structural trends and inequality result today in the misallocation of talent and the undervaluation of certain occupations and industries—which, in turn, restricts economic growth and productivity. This week, Equitable Growth (in partnership with the Institute for Research on Labor and Employment at the University of California, Berkeley) published a series of essays that puts forward new policy ideas to create an economy that works for everyone. The book of essays, titled Boosting Wages for U.S. Workers in the New Economy, features a diverse group of leading economic thinkers who present alternative ideas for policymakers to boost wages and living standards by addressing structural impediments to economic growth and fair pay. The essays are organized in three main sections: worker power, worker well-being, and equitable wages. Kate Bahn and Jesse Rothstein provide an overview of the book, summarizing each of the three sections and the essays within them, and explaining why creating structures to support worker empowerment and reduce wage inequality is essential to broadly shared economic growth.  

After last week’s dismal Jobs Day report, Kate Bahn and Carmen Sanchez Cumming delve deeper into the data and focus specifically on the experience of the U.S. retail sector. This industry is particularly harmed by the ongoing coronavirus recession due to the nature of its in-person services, which have declined significantly amid public health restrictions. But the retail sector had several preexisting dynamics that may have influenced the impact of the pandemic, write Bahn and Sanchez Cumming, including the rise of e-commerce over the past decade. They then look at what these factors mean for U.S. retail workers, who tend to be some of the most vulnerable in the U.S. labor force, and provide ideas for how policymakers can protect these workers both in the short and long term.

The U.S. social safety net is a vital support system for many U.S. workers and their families, and has been particularly important in the coronavirus pandemic and recession. While many studies have shown the benefits of many of the safety net’s programs, from Unemployment Insurance to the Supplemental Nutrition Assistance Program, there is always more to discover about these policies and their impact. Enter the Equitable Growth 2021 Request for Proposals—which, Hilary Hoynes explains, features important questions surrounding human capital and development, and the role of the safety net in ensuring well-being for workers and families. Researchers studying these questions can help guide policymakers as they look for the most effective and timely investments to ensure worker well-being amid the coronavirus recession.

Another area of the 2021 Request for Proposals is the impact of rising inequality on the macroeconomy. Atif Mian explains why the oft-held belief that inequality doesn’t have much of an effect on macroeconomic outcomes is misguided. His recent research on savings behaviors finds that the rich save more than their less well-off counterparts, exacerbating inequality and putting downward pressure on aggregate demand, which can be offset by increased borrowing from nonrich households. This borrowing, however, can become a future drag on spending. Mian looks at the consequences of this so-called indebted demand and its implications, showing why Equitable Growth’s research network provides important lessons for policymakers looking to address extreme inequality.

Links from around the web

Front-line healthcare workers across the United States face an almost constant lack of personal protective equipment, inconsistent safety measures, grueling hours, and heightened personal health risks amid the coronavirus pandemic. Many are expressing feelings that the systems and employers meant to protect them have failed­—and, reports NPR’s Aneri Pattani, many are  expressing a renewed interest in unionization. Studies show that healthcare facilities with unions experience better patient outcomes, fewer workplace hazards, and even lower mortality rates from COVID-19, the disease caused by the coronavirus. Pattani writes that many healthcare workers who previously opposed unionization are changing their minds as a result of the pandemic, which is amplifying many problems these workers face on a daily basis, from short-staffing to insufficient PPE provision.

The December 2020 unemployment report released late last week was bad, acknowledges Neil Irwin in The New York Times’ The Upshot blog. But there is a silver lining, too. Despite the data revealing a backslide in the economic recovery, there is a clear path forward out of the downturn, Irwin argues, thanks to the prospect of mass vaccinations against the virus. Much of the current jobs crisis is contained in industries that are directly affected by pandemic-related restrictions, such as leisure and hospitality, suggesting that these jobs will come back once enough of the public is vaccinated and feels comfortable engaging in in-person leisure activities, such as dining out and traveling. And though most other sectors of the economy are not yet back to their pre-pandemic employment levels, Irwin points out that many are steadily rehiring. These trends, alongside a new U.S. Congress more receptive to passing coronavirus stimulus legislation, indicate that there is reason to be optimistic.

One potential piece of the next coronavirus stimulus legislation was unveiled on January 14 by President-elect Joe Biden—his proposed $1.9 trillion coronavirus relief package. Vox’s Emily Stewart explains the proposal, called the American Rescue Plan, and details how its three buckets of funding—$400 billion for combatting the coronavirus, including vaccination and testing efforts, $1 trillion in direct relief for families, and $400 billion in aid to communities and businesses—aim to both shore up the U.S. economy and deal with the virus. Stewart details the specific items President-elect Biden includes in the proposal, from $1,400 payments to individuals to a $15 minimum wage, and more. While this is a big deal, in terms of the size and scope of the proposal, Stewart reports that some on the left worry it doesn’t go far enough, fearing a repeat of the sluggish recovery after the Great Recession of 2007–2009 and proposing added steps, such as canceling student loan debt.

Friday figure

Figure is from Equitable Growth’s “U.S. retail sector’s recession experiences highlight continuing labor market travails” by Kate Bahn and Carmen Sanchez Cumming.

This is a post we publish each Friday with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth published this week and the second is relevant and interesting articles we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context.

Equitable Growth round-up

While implementing policies that improve the quality of jobs in the United States may have some direct costs, such as raising wages or providing workers with more paid time off, the costs that arise from employee turnover can be huge—an average of 40 percent of an employee’s annual salary, to be exact. Kate Bahn and Carmen Sanchez Cumming look at how increasing job tenure via improved job quality can benefit employers and employees alike by reducing turnover costs and improving worker well-being. Bahn and Sanchez Cumming present the research behind the costs to employers of replacing workers and training new hires, which range from 2 percent to almost 150 percent of the individual employee’s annual salary, depending on the occupation and industry in question. They then describe several policy solutions that can reduce turnover by providing better jobs to begin with, including increasing the minimum wage and creating wage boards, boosting union membership, giving workers a voice in the workplace and in decision-making, and enforcing anti-discrimination protections for workers to reduce workplace hostility.

Paid family and medical leave is repeatedly shown to be an essential support for workers and their families—and amid the coronavirus pandemic and recession it likely will only grow in importance. Equitable Growth this week announced a trio of research grants to scholars exploring the role of this vital policy area during the current public health and economic crises. Sam Abbott and Alix Gould-Werth provide a brief overview of paid leave programs and their impact since the onset of the virus. They then describe the three projects that Equitable Growth is investing in to further study how paid leave programs have worked thus far in the pandemic and will continue to affect workers in the months and year ahead.

From January 3 through January 5, the Allied Social Science Associations, organized by the American Economic Association, held its annual 3-day meeting virtually. The conference featured hundreds of sessions on a wide range of economic and social science topics, and presented valuable research from these areas. Equitable Growth posted a round up for each day of the conference highlighting and summarizing the specific presentations that piqued our interest.

Links from around the web

The first day of 2021 brought with it a series of minimum wage hikes across the country. Twenty states and 32 cities and counties officially raised their pay floor, 27 of which brought their minimum wages to more than $15 per hour. The New York Times’ Gillian Friedman explains how raising the minimum wage grew in popularity across the political spectrum over the past 9 years—putting added pressure on the U.S. Congress to finally raise the federal minimum wage, which has been set at $7.25 per hour since 2009. In fact, Friedman writes, what started in 2012 as a small protest demanding fair pay outside a McDonalds has grown to such a point that even without congressional action, by 2026, 42 percent of Americans will work in a city or state that mandates a minimum wage of at least $15 per hour. In the wake of the coronavirus recession, these state and local wage hikes are providing a more secure standard of living for millions of workers across the country, particularly in low-wage, service-sector jobs. Proponents hope these efforts also will provide a baseline for expanding these pay standards to more workers.

Earlier this week, more than 220 workers at Alphabet Inc.’s Google unit announced that they unionized, potentially signaling the start of worker organizing and activism in Big Tech. Recode’s Shirin Ghaffary provides a brief explainer on what the union can (and can’t) accomplish, and its potential impact on Google, its parent company, and other technology companies that have largely avoided or suppressed unionization efforts thus far. This new activism could be particularly important in the current moment, when policymakers are focused on regulating Big Tech and activists are highlighting workplace culture issues within these companies. Ghaffary then looks at the long road ahead for these workers, especially considering Google employees’ previous attempts to unionize.

Friday figure

Figure is from Equitable Growth’s “Improving U.S. labor standards and the quality of jobs to reduce the costs of employee turnover to U.S. companies” by Kate Bahn and Carmen Sanchez Cumming.

This is a post we publish each Friday with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth published this week and the second is relevant and interesting articles we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context.

Equitable Growth round-up

With coronavirus cases on the rise again, it appears the recession caused by the pandemic isn’t going anywhere. What does this mean for workers and their families? New research studies the effects of job losses on economic and psychological well-being, particularly for vulnerable households. One of the working paper’s authors, Ariel Kalil, explains the nuanced findings of the study, which showed the coronavirus having both negative and positive effects for mothers and their children. Essentially, Kalil writes, it boils down to whether mothers lose their income due to the pandemic. Those who lost their jobs—and with it a significant share of household income—are experiencing more stress and depressive symptoms, while those who are able to continue working or who got laid off but have not lost significant household income (thanks to unemployment benefits, stimulus checks, or a partner working more hours to make up for the lost earnings) are reporting better mental health outcomes and more quality time spent with their children. Improving parent-child interactions affects children’s economic, social, and educational outcomes down the road and thus has long-term implications. The study highlights that employment status may not matter as much as loss of income for parents’ well-being, Kalil concludes, as well as the importance for parents of having quality time to spend with children—important findings that U.S. policymakers should keep in mind as they craft solutions to current challenges.

Each month, Equitable Growth highlights scholars in our network who are working to understand how inequality affects economic growth and stability, in a series called Expert Focus. This month, Christian Edlagan and Maria Monroe look at researchers studying market organization and the effects of firms’ behaviors on growth and distribution. From antitrust law and competition policy to market structure and industry organization, these academics are working to explain the relationship between inequality, market power, and economic growth.

Brad DeLong’s latest Worthy Reads highlights must-read content from Equitable Growth and around the web.

In case you missed it, Equitable Growth launched our 2021 Request for Proposals on November 30. For more information on what topics and types of research we are interested in funding, who can apply, and deadlines and instructions for submitting a proposal, head to the RFP page on our website. 

Links from around the web

It has been months since the U.S. Congress passed a coronavirus relief package, and many of the emergency programs that were included in the previous bill are set to expire this month. Even if policymakers are able to push through another round of relief, at this point, many workers will face a gap in coverage that could have dire consequences. Vox’s Emily Stewart explains that up to 4 million unemployed workers have already had benefits dry up, which means these vulnerable workers are potentially facing eviction, hunger, poverty, or other crises, including mental health issues, in addition to joblessness. Stewart shows why the procrastination of some U.S. policymakers on coronavirus relief has led to this situation and why there will almost certainly be a delay in distribution even if a bill were to pass right now—thanks in part to complicated bureaucracy procedures that put up unnecessary hurdles.

As average U.S. workers and their families struggle to get by and small businesses close their doors, a new analysis in The Washington Post finds that 45 of the 50 largest U.S. companies have turned a profit since March, when the coronavirus pandemic and recession reached the United States. Douglas MacMillan, Peter Whoriskey, and Jonathan O’Connell detail how these big companies have laid off thousands of workers while raking in profits and making shareholders richer during some of the most volatile months in modern history—and despite many of them making promises to protect workers. Even in hard-hit sectors such as restaurants, travel, and hospitality, the authors write, many of the biggest companies were protected from the worst of the virus’ effects as smaller, independent businesses were devastated and shuttered, which has led to troublesome market concentration in many areas and industries. The analysis underscores yet another long-lasting contribution the coronavirus recession will have on ever-growing economic inequality in the United States.

New research shows that tax cuts for wealthy people did not, in fact, promote economic growth for all. Though many trickle-down economists argue that lowering taxes on the highest-income individuals and families has widespread benefits for all, in reality, these cuts are shown to only help those directly affected. Bloomberg’s Craig Stirling looks at a recently published study of the fiscal policies and economic conditions in 18 countries over the past 50 years, revealing that these policies served mostly to make the wealthiest even more wealthy, without boosting economic growth or creating jobs for those further down the economic ladder. As a result, the study’s authors make clear, policymakers needn’t worry about the economic effects of increasing taxes on the rich to cover, for instance, the high costs of the coronavirus pandemic and recession.

Friday figure

Figure is from Equitable Growth’s April 2020 post, “How the coronavirus pandemic is harming family well-being for U.S. low-wage workers” by Alix Gould-Werth and Raksha Kopparam.

This is a post we publish each Friday with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth published this week and the second is relevant and interesting articles we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context.

Equitable Growth round-up

Earlier this week, Equitable Growth hosted our third biennial grantee conference, Equitable Growth 2021: People and Research Advancing Economic Evidence. Held virtually this year for the first time, we gathered scholars and policymakers together over four afternoons to showcase cutting-edge research from our network of grantees, covering economic inequality and its effect on growth and stability. With various types of programming—from fireside chats to keynote addresses to training and mentorship workshops—attendees had the opportunity to learn about up-and-coming research from peers, give and receive advice and feedback on their work, and engage with leaders in the policymaking arena. For more information about the sessions, speakers, and participants, click here.

Every month, the U.S. Bureau of Labor Statistics releases data on hiring, firing, and other labor market flows from the Job Openings and Labor Turnover Survey, better known as JOLTS. Earlier this week, the BLS released the latest data for October 2020. Kate Bahn and Carmen Sanchez Cumming put together four graphics to highlight trends in the data. 

Check out Brad DeLong’s latest Worthy Reads column, where he provides summaries and analysis of must-read content from Equitable Growth and across the internet.

Links from around the web

Proponents of regulating Big Tech have a big reason to celebrate this week: More than 40 states, as well as the Federal Trade Commission, filed bipartisan antitrust lawsuits against Facebook.com Inc., alleging that the social media giant illegally crushed competition by buying up its emerging rivals, namely Instagram and WhatsApp, that could have eventually challenged Facebook’s online dominance. The New York Times’ Cecilia Kang and Mike Isaac report on the lawsuits, which call for breaking up these three platforms into separate entities instead of all falling under Facebook’s broad umbrella. They also argue for new restrictions on Facebook regarding future deals and purchases—some of the most severe penalties that regulators can demand, write Kang and Isaac. While Facebook has responded to the lawsuits saying it will fight back against the allegations, these cases signal a long legal battle ahead with potentially huge implications for social media platforms and Big Tech regulators alike.

As we enter a new phase of the coronavirus pandemic and recession, with many of the emergency relief programs Congress passed earlier this year set to expire later this month, there’s never been a better time for policymakers to consider cancelling student loan debt. Not only does the evidence indicate this would help struggling Americans and their families stay afloat during the worst economic downturn since the Great Depression; it also would address the vast racial wealth divide in the United States. A recent podcast from WAMU radio showcases the debate surrounding student loan forgiveness, featuring Naomi Zewde, who co-wrote (with Darrick Hamilton) a chapter on this topic for our Vision 2020 series of essays. WAMU also put together a series of articles alongside the podcast covering the idea to guide readers and listeners through the ins and outs of the idea.

Friday figure

Figure is from Equitable Growth’s “JOLTS Day Graphs: October 2020 Edition” by Kate Bahn and Carmen Sanchez Cumming.

This is a post we publish each Friday with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth published this week and the second is relevant and interesting articles we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context.

Equitable Growth round-up

This week, Equitable Growth launched our 2021 Request for Proposals. Since our founding, we have focused on deepening our understanding of how inequality affects economic growth and stability by supporting research that investigates these topics from a diverse range of perspectives in economics and the social sciences. Our RFP is organized around four main channels of economic growth: human capital and well-being, the labor market, macroeconomics and inequality, and market structure. And this year, we are particularly interested in research that looks at the consequences of structural racism, as well as climate change, on these four areas. Read more about our RFP and the types of research we aim to fund, as well as details about who is eligible, how to apply, and upcoming deadlines.

As millions of workers continue to be out of work as a result of the coronavirus pandemic and recession, many have relied upon their states’ Unemployment Insurance benefits to get through the worst of the economic downturn. Earlier this year, the U.S. Congress passed a program called Pandemic Emergency Unemployment Compensation, which provides an additional 13 weeks of benefits for those who have used up the standard 26 weeks in their states. But the program is set to expire at the end of this month. Alix Gould-Werth explains the results of a recent study that looks at the benefits of expanding unemployment benefits to workers, firms, and the economy. The study uses data from previous recessions, with implications for the current one: The research finds that when workers have access to Unemployment Insurance that provides the resources to cover their basic living expenses, they are able to take the time to find a job that fits their skillset and meets their needs, both financially and in terms of working conditions, rather than taking the first job they find. This not only benefits workers and their families but also allows firms to fill openings with the best-suited candidates for their jobs, increasing overall productivity—and causing positive ripple effects across the economy. The findings indicate that insufficient levels and durations of UI benefits during downturns may exacerbate inequality in the U.S. labor market, writes Gould-Werth. This is particularly disconcerting in amid the coronavirus recession.

In the United States, an individual’s income is not only determined by level of skills or education, but also by the opportunities they have to deploy those skills in jobs that value them—which often comes down to networking. This balance between what you know and who you know in opening doors for economic prosperity makes it hard to break the cycle of poverty, writes Matthew Staiger, and runs counter to the American ideal of equality of opportunity. Staiger’s recent working paper looks at individuals who work at the same employer as a parent and the effects this has on earnings and opportunities. He finds that around 7 percent of individuals work for a parent’s employer at their first job and 29 percent do so by age 30—a trend which is associated with large earnings benefits, including 31 percent higher initial income at a first job. This exacerbates existing economic and racial inequalities in the labor market, Staiger shows, with non-Black males with high-earning parents benefitting the most.

The child care industry in the United States is facing twin crises: immediate challenges as a result of the coronavirus pandemic and recession that leave child care providers and families alike struggling, and larger structural challenges that were present even before the coronavirus began to wreak havoc on the country earlier this year. Sam Abbott explains how reforms to U.S. child care policy, while a step in the right direction, would benefit from further research to ensure that proposals appropriately target the right issues. Abbott highlights three gaps in child care research: the child care experiences of children of color, low-income children, older children, and their families; the experiences and impact of providing child care through home-based providers, as opposed to center-based care; and improving job quality and support for the child care workforce and the ways in which that increased support would improve care quality. He concludes with several opportunities and suggestions for those interested in conducting further research.

Every month, the U.S. Bureau of Labor Statistics releases data on the labor market. Today, it released data for the month of November, which showed that the jobs recovery is stalling, threatening low-wage workers and workers of color in particular. Kate Bahn and Carmen Sanchez Cumming explain that despite an overall unemployment rate of 6.7 percent, it is 10.3 percent for Black workers and 8.4 percent for Latinx workers. They look at how the pandemic has affected different wages groups and why these effects are problematic for future economic growth. (You can also check out Bahn and Sanchez Cumming’s five graphs highlighting important trends in the data.)

Links from around the web

Instead of tax cuts, let’s talk about higher wages to grow the economy, writes The New York Times’ Editorial Board. The pervasive narrative about economic growth has largely been about tax cuts—on both sides of the political aisle—and has been so pervasive, in part, because other policy ideas have not been seriously discussed as an alternative. But increasing workers’ wages should be the priority of economic policymakers under the new administration, the Board continues. Doing so can boost economic growth, which will be badly needed amid the continuing coronavirus recession, because workers who are paid more can also spend more across the U.S. economy. Higher wages must be paired with other policies, such as strengthening the safety net, addressing structural racism, and protecting the environment, in order to ensure a minimum quality of life, the board concludes. Wage growth alone is not a silver bullet, but it is a useful organizing principle and a valuable counterweight to tax cuts in the debate on how to grow the economy and increase productivity.

The lack of additional pandemic relief from the U.S. Congress is killing people and making the pandemic worse—a scary prospect considering the current surge in coronavirus cases and COVID-19 deaths we are experiencing, writes Vox’s Anna North. She explains the effects that Congress’ inaction is having not only on U.S. families, small businesses, and state and local governments, but also on the virus and its spread. North shows how the expiration of various emergency programs, from expanded Unemployment Insurance to eviction moratoriums, enacted to address pandemic early on has led to heartbreaking decisions for both employers and employees, pitting the U.S. economy against public health and safety. North urges policymakers to pass additional economic relief in order to help Americans contain the virus by staying home and sheltering in place without facing negative consequences at work.

One group of workers toiling around the clock to feed those who are lucky enough to stay home is food delivery workers. While food delivery app usage surged, the workers who are essential to these apps are struggling under worsening working conditions, reports Kimiko de Freytas-Tamura for The New York Times. Looking at New York City in particular, Freytas-Tamura writes that many of those who lost their jobs early on in the pandemic turned to gig work such as delivering food to users of DoorDash, Uber Eats, and GrubHub—all three of which are booming with heightened demand from people working from home. These gig workers already faced precarious conditions—from low wages to lack of benefits such as health insurance—prior to the onset of the coronavirus pandemic, and things have only gotten worse since. And not only are these often overlooked workers more vulnerable to getting the virus due to their inability to work from home and exposure to large swaths of the public; they also are facing rising crime rates in the city, including assault and bike theft. Freytas-Tamura tells the story of several of these workers and the various struggles, fears, and challenges they are facing.

Friday figure

Figure is from Equitable Growth’s “The long-run implications of extending unemployment benefits in the United States for workers, firms, and the economy” by Alix Gould-Werth.

This is a post we publish each Friday with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth published this week and the second is relevant and interesting articles we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context.

Equitable Growth round-up

The next administration and the incoming 117th Congress being sworn in early next year provide important opportunities to address the U.S. antitrust laws and ways in which we can restore competition across the U.S. economy. Market power is now at the point of being untenable in many U.S. industries and areas, disrupting the operation of free and fair markets, harming consumers and workers, and hindering the success of small businesses and innovators. In a new report for Equitable Growth, Michael Kades and six co-authors—Bill Baer, Jonathan B. Baker, Fiona M. Scott Morton, Nancy L. Rose, Carl Shapiro, and Tim Wu—lay out a robust antitrust plan, explaining in detail how Congress and the executive branch can institute a procompetitive agenda. Summarizing the current state of antitrust enforcement and its flaws, the report’s co-authors provide three key areas where the next administration can make fundamental changes to the status quo that will have an important effect on market power in the United States: passing new antitrust legislation and allocating more resources to antitrust enforcement at the Federal Trade Commission and the U.S. Department of Justice’s Antitrust Division; revitalizing enforcement and focusing on strengthening deterrence; and committing to a “whole government” approach to competition policy, which acknowledges that several executive branch agencies—not only the antitrust enforcement agencies—impact competition in the United States. Enacting these policy recommendations will not only address rampant market concentration, but will also work to alleviate the harmful effects of inequality and structural racism in the United States.

One specific area of the U.S. economy that would benefit greatly from added competition is the pharmaceutical industry. Aaron S. Kesselheim uses the example of remdesivir—the antiviral drug that the U.S. Food and Drug Administration recently approved as a hospital treatment for COVID-19, the disease caused by the new coronavirus—to show how current policy surrounding the ownership and costs of prescription drugs leads to market concentration, reduces innovation in drug development, and raises prices for consumers. Kesselheim summarizes the brief history of remdesivir’s development, as well as the intellectual property laws that govern the development of pharmaceuticals in general. He suggests several policies, which he divides into the stages of drug development, approval, and production, that would reduce prices for consumers and ensure a robust, competitive pharmaceutical market. The recommendations he makes would not only ensure that remdesivir and other COVID-19 treatments are made widely available and affordable for all those who need them, but also are applicable to a broad range of drugs.

Brad DeLong’s latest Worthy Reads column covers recent must-read content from Equitable Growth and around the web. This week, DeLong brings our attention to Equitable Growth’s Vision 2020 series of policy ideas for the next administration to combat inequality, including the chapter on strengthening competition policy, among others.

Links from around the web

Racism harms the whole U.S. economy, not just those who are its immediate targets. According to new research, writes Lisa D. Cook in The New York Times, while discrimination unquestionably hurts its intended victims the most, it also has an impact on everyone else—even those who do not see themselves as traditional victims. Across the economy, discrimination reduces the wealth and income of millions of workers, who are paid less and have less access to educational opportunities than their peers and who frequently are given jobs beneath their skill levels. This brings down the wages and wealth of others who are not the target of discriminatory policies, and reduces aggregate economic output. Cook summarizes her own research on the drag effect that hate-related violence has on long-term U.S. economic growth and innovation, as well as other research, explaining the outcomes that could have been if racism and discrimination were not as widespread as they are. She then offers some possible solutions that would address rampant discrimination and racism, and improve the standard of living of those who suffer the most from these societal ills, which would work to improve the lives and livelihoods of all U.S. workers and their families.

Unemployment Insurance claims rose last week for the first time in more than a month, reports Anneken Tappe for CNN, reinforcing that the coronavirus pandemic and recession are far from over. Around 742,000 Americans filed for first-time unemployment benefits on a seasonally adjusted basis, more than three times more compared to the same time period last year, and approximately 320,000 workers applied for Pandemic Unemployment Assistance, a temporary program designed to support those who are not eligible for traditional UI benefits during the coronavirus recession. Workers are exhausting their states’ UI benefits, and when the temporary benefits expire at the end of this year, Tappe writes, experts worry that economic suffering could get a lot worse in the coming weeks and months—especially considering the dangerous increase in coronavirus infections.

One way to curb rising coronavirus case numbers may be closing some of the businesses that contribute to outbreaks, such as bars, restaurants, and gyms—rather than doing what New York City recently did and closing schools. But one reason we haven’t seen this course of action in the United States, as opposed to other similar countries in Europe that are trying to curb new waves of infection, is the lack of help from the federal government, writes Anna North on Vox. What is behind these decisions guiding the government’s coronavirus response? Money, North answers. No stimulus package seems likely to pass through Congress in the near future, which leaves many business owners wary of closing down again, as many did in the spring when the Coronavirus Aid, Relief, and Economic Security, or CARES, Act provided some aid to those in need. Policymakers are wary of the economic effect that shutting down these sectors without financial supports in place would have on the economy—and are very aware that shutting down schools doesn’t have the same immediate economic impact. But forcing working parents to juggle care responsibilities and their jobs will hamper the future economic recovery, North explains, and the government’s prioritization of businesses over schools is causing needless pain across the economy.

Friday figure

Figure is from Equitable Growth’s “Restoring competition in the United States: A vision for antitrust enforcement for the next administration and Congress,” by Bill Baer, Jonathan B. Baker, Michael Kades, Fiona M. Scott Morton, Nancy L. Rose, Carl Shapiro, and Tim Wu.