Why the Infrastructure Investment and Jobs Act is good economics

Posted on by Maria Monroe
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Overview

President Joe Biden, in November 2021, signed the Infrastructure Investment and Jobs Act into law, providing $1.2 trillion in new government investments to create millions of jobs, increase U.S. economic competitiveness abroad, and help address the climate crisis. The multiple provisions of the law are now or will soon:

  • Create hundreds of thousands of jobs within the transportation sector, with investments in passenger and freight rail, bridges, roads, airports, ports, and public transit
  • Guarantee safe drinking water by eliminating the nation’s lead-tainted service lines, especially in disadvantaged communities that need refurbishing the most
  • Reduce supply chain bottlenecks to help ease inflation and lower the cost of goods and services
  • Build a national network for electric vehicle charging stations
  • Manufacture solar panels, wind farms, batteries, and electric vehicles to help address climate change
  • Make high-speed internet affordable and accessible

These much-needed investments are not only delivering significant macroeconomic benefits now, and will continue to do so well into the future, but also potentially addressing longstanding economic inequalities. Indeed, the new infrastructure investments and the jobs created by these investments can reduce these inequalities, increase unionization, and address climate change because they rest on sound economic principles.

Issue Brief: Why the Infrastructure Investment and Jobs Act is good economicsDownload

In this issue brief, we demonstrate why the Infrastructure Investment and Jobs Act of 2021 and its focus on equitable growth is good economics. First, we outline the ways in which the law helps to address urgent needs currently facing the United States. Next, we discuss how the law’s focus on equity, unionization, and climate are crucial for a healthy economy with strong, stable, and broadly shared growth. We conclude by discussing the impact the law can have on addressing inequalities in our economy and share recommendations for a path forward.

The Infrastructure Investment and Jobs Act addresses urgent needs

The passage of this law in November 2021 signaled a commitment by the federal government to reinvigorate physical infrastructure in the United States. The bulk of the investments are going toward roads and bridges, power systems, railways, broadband, water systems, and public transit. The deterioration of the nation’s physical infrastructure is well-documented. Following World War II, the United States made public investments to build an interstate highway system, airports, a network of waterworks, and expanded port facilities and other infrastructure that significantly boosted the country’s economic output. Much of this infrastructure is now in critical need of repair.

Take roads, for example. According to the latest research from the American Society of Civil Engineers, almost half of U.S. roads are in poor or mediocre condition due to wear and tear. Research indicates this deterioration costs motorists nearly $130 billion each year in extra vehicle repairs and operating costs.

Water infrastructure is another example of an area badly needing investment. Neglected and old water infrastructure poses a serious public health risk, with some estimates showing that up to 10 million U.S. households and 400,000 schools and child care centers lack safe drinking water. This lack of clean drinking water disproportionately affects Black, Latino, and Indigenous individuals.

In addition to improving older infrastructure, expanding infrastructure such as broadband is imperative. Some estimates indicate that 30 million people in the United States live in areas where broadband infrastructure is inadequate. According to the latest data from the Organisation for Economic Co-operation and Development, the United States has the second-highest broadband costs among the 35 developed OECD countries studied.

Disparities in access to quality broadband infrastructure are pronounced. Research by the U.S. Department of Housing and Urban Development finds a strong association between household income and in-home connectivity—a pattern that persists across both rural and urban communities. The study finds that, overall, two-thirds of U.S. adults ages 18 and older had access to broadband internet in their homes, but just 41 percent of adults with household incomes of less than $20,000 had access, while 90 percent of adults with household incomes higher than $100,000 had access.

Moreover, a report by Dominique Harrison of the Joint Center for Political and Economic Studies finds that in rural counties in the Southern region of the country with populations that are at least 35 percent Black, 38 percent of Black residents in these areas lack home internet access. This is nearly double the rate of White residents in the same counties. The consequences of not having internet access are severe. Students need broadband to access the internet to do homework and apply to colleges. Working families need it to apply for jobs and to more easily access various government services, and seniors are increasingly reliant on broadband accessibility to connect to the growing world of telehealth.

There are macroeconomic benefits to the new investments happening or starting to happen because of the Infrastructure Investment and Jobs Act as well. Investments in infrastructure generally tend to yield a high rate of return, meaning increases in public investments in infrastructure significantly result in increased output and productivity. It is well-documented that infrastructure investments have large multipliers—that is, a proportionally higher increase in Gross Domestic Product for every dollar increase in investment—with infrastructure spending having substantially higher multipliers than other fiscal interventions, such as tax cuts.

In particular, Mark Zandi and Bernard Yaros of Moody’s Analytics write that at the apex of economic growth generated by the new infrastructure investments in 2023, real GDP is forecast to increase 2.9 percent, compared to 2.3 percent if only the American Rescue Plan (which was passed in March 2021) had been passed into law. Zandi and Yaros also project that in the long term, the U.S. economy receives a bump in productivity growth due to the increase in the stock of public infrastructure. Recent projections made by the Congressional Budget Office, which take the Infrastructure Investment and Jobs Act into account, suggest productivity will increase 1.5 percent on average over the next decade.

The Infrastructure Investment and Jobs Act also encompasses the important need to address economic inequity, unionization, and climate in any large job-creation efforts in the United States. Each of these issues cannot be easily separated from one another. In fact, these components frequently intersect, forming a matrix that provides a more comprehensive picture of economic growth and well-being. We next examine why these components matter and how they contribute to building an economy with broadly shared growth.

Economic equity, unionization, and climate

The investments that the Infrastructure Investment and Jobs Act makes to reduce economic inequalities, increase unionization, and address climate change rest on sound economic principles. We outline some of the ways the law addresses these three pillars and examine how these pillars are important for promoting strong, broadly shared economic growth.

One of the ways the law helps to ameliorate inequalities in the U.S. labor market is by mandating that the “overwhelming majority” of the funds will be subject to Davis-Bacon requirements. These requirements ensure that contractors pay workers on construction projects—in which the new funding makes major investments—a prevailing wage, so that local wages, labor markets, and workers won’t be undercut. While there are limitations to this approach, as we discuss below, it is nevertheless one tool to raise the wage floor and, similar to minimum wage increases, can address gender and racial inequalities and wage divides.

These public investments also focus on tackling climate change, such as $7.5 billion in investments to build out a national network of electric vehicle chargers in the United States. These kinds of investments will result in the creation of green manufacturing jobs. As one of the co-authors of this issue brief testified before the Joint Economic Committee, economic research demonstrates the importance of investments in green energy.

For instance, Columbia University economist Joseph Stiglitz, alongside other colleagues, argues that renewable energy and energy efficiency investments typically have high multipliers, delivering even greater returns over time. They also tend to create more jobs, compared to fossil fuel investments, including ones that can’t be taken offshore, such as those in home energy retrofitting. Further, recent research from Ioana Marinescu of University of Pennsylvania and E. Mark Curtis of Wake Forest University suggests there is a pay premium for green jobs, especially for green jobs with a low educational requirement.

Moreover, according to recent research from Heidi Garrett-Peltier, an economist at the University of Massachusetts Amherst, for every $1 million invested in renewable energy or energy efficiency, almost three times as many jobs are created than if the same money were invested in fossil fuels. Investing more money in the fossil fuel industry will not address high and growing unemployment rates. Indeed, the Federal Reserve is not even requiring companies to keep workers as a condition for getting loans in the fossil fuel industry.

Leah Stokes and Matto Mildenberger, both assistant professors of political science at the University of California, Santa Barbara, highlight that many U.S. unions maintain strong ties to carbon-intensive industries, such as auto manufacturing or heavy industry. By contrast, many jobs in the clean energy sector—from clean energy deployment to electric vehicle manufacturing—remain nonunionized.

In part, this pattern reflects the decline in union participation across new U.S. industrial sectors. In order to address labor market disparities—such as gender and racial wage divides—government funding for clean energy projects should prioritize unionized jobs. Indeed, with funds dedicated to infrastructure projects that can help create unionized jobs, the 2021 infrastructure investment law takes a step in the right direction to increasing worker bargaining power.

The benefits of prioritizing unionized jobs for creating broadly shared growth cannot be understated. Unions are shown to have an inverse relationship with income inequality. Moreover, while union members have higher wages than their nonunionized peers—what researchers call the union wage premium—organized labor may create conditions that make all workers better-off. Strong unions are able to set job-quality standards that nonunion businesses have to meet in order to compete for workers, which is known as the spillover effect.

Unions play an important role in addressing racial inequality. Even though the majority of union members were White and male during the height of the U.S. labor movement in the mid-20th century, organized labor strongly supported redistributive public policies that contributed to narrowing racial and gender pay gaps. Research shows, for example, not only that there is a larger union wage premium for Black workers, but also that unions reduce racial animosity among workers.

There are other ways these new investments address racial equity. In addition to investments in both water and broadband infrastructures discussed above, there are investments to clean up Superfund sites, which are contaminated sites caused by hazardous waste being dumped, left out in the open, or otherwise improperly managed. These sites include manufacturing facilities, processing plants, landfills, and mining sites. Investments in cleanup efforts will benefit Black and Hispanic communities, which, compared to predominantly White communities, are located disproportionately within 3 miles of a Superfund site.

Or consider the hundreds of thousands of new jobs that will be created over the course of a decade, alongside the quality—not just the quantity—of those jobs. Research by Kate Bahn of the Washington Center for Equitable Growth and Mark Stelzner of Connecticut College shows that characteristics specific to race and gender, such as the lower levels of wealth in Black and Latino households and increased household responsibilities for women, make workers of color and women more susceptible to exploitation by employers, with Black women and Latina workers facing both race and gender penalties and thus being exploited even further.

These hurdles reduce worker power by restricting workers’ ability to seek other, better-paying, and more interesting jobs, which gives employers more power to reduce wages for these particular groups of workers. Research conducted by one of the co-authors of this issue brief demonstrates that Black women experience a “double gap,” which is the reinforcing confluence of the gender wage gap and the racial wage gap. The double gap helps to explain why Black women workers earn the least in wages, on average, compared to their working counterparts among White men, White women, and Black men. The double gap costs Black women workers approximately $50 billion in involuntarily forfeited earnings—a large and recurring annual loss to the Black community.

For decades, the prevailing wisdom in policymaking circles was that there is a trade-off between equity and economic growth. This conventional belief argues that reducing economic inequality would require such heavy-handed interference in markets that growth would be stifled. Yet there is mounting evidence that suggests otherwise. For the past near-half century, economic inequality has risen in income and wealth, yet the U.S. economy has not experienced stronger or more sustained economic growth. Advancing economic policies that seek to redress these structural inequalities will benefit all U.S. workers and their families and help promote an economy with strong, stable, and broadly shared growth. Failing to address these inequalities leaves our whole economy vulnerable.

Robert Lynch of Washington College finds that closing racial and gender disparities would have resulted in an increase in U.S. GDP of $7.2 trillion in 2019. According to Lynch, GDP could have totaled $28.6 trillion instead of $21.4 trillion that year. Lynch also finds that federal, state, and local tax revenues would have been $1.82 trillion higher in 2019, while the overall U.S. poverty rate would have dropped from 10.5 percent to 6.6 percent, lifting 12.2 million people out of poverty. What’s more, there would have been a $429 billion improvement in the finances of the U.S. Social Security system in 2019.

Remaining questions and recommendations

The Infrastructure Investment and Jobs Act of 2021 is a historic piece of legislation that makes much-needed investments in traditional infrastructure, yet many of these investments in traditional infrastructure will create jobs in industries traditionally dominated by men. Questions remain about how to ensure the jobs created by this law are equitably distributed and do not leave women, including women of color, at the margins of the U.S. economy yet again.

Black women, for example, experience significant occupational segregation, with five occupations accounting for more than half of all the jobs in which Black women work. This is consistent with a large body of economic literature that shows women, including Black women, tend to be crowded primarily in low-wage occupations. These occupations, in fact, are often low wage precisely because of their association with Black women, especially compared to other occupations that may require similar levels of training or skills but are dominated by White male workers.

Indeed, there exists an overrepresentation of Black women in certain industries and occupations—often in care and service sectors— resulting from myriad factors, including the systemic devaluation of certain kinds of work, discrimination, and uneven occupational integration. In general, the overwhelming majority of domestic workers are women. More than half of domestic workers are Black, Latina, or Asian American and Pacific Islander women, with some studies finding that more than 90 percent of domestic workers are women of color.

Significant questions remain about how the jobs created by the Infrastructure Investments and Jobs Act will be equitably distributed and targeted, given significant levels of occupational segregation within the U.S. economy. It will therefore be imperative to improve pathways for people underrepresented in infrastructure jobs to be able to obtain these jobs, such as creating pathways for women to have construction jobs. Another way forward is by making investments in social infrastructure, such as the care economy, which remains key to overcoming the endemic economic divides across race, gender, and income.

Questions also remain regarding how investments are incorporated into transportation infrastructure more equitably. It’s not clear, for example, how these new investments in transportation infrastructure will affect equitable access to transportation and how increases or decreases in transportation equity will affect growth, since the economic consequences of inequitable transportation options are often borne by low-income people, who are disproportionately people of color. To better understand this question, we need better measurement.

With the significant investments in transportation, it will be important to ensure that inequities in transportation are addressed. These inequities include “transportation insecurity,” a term coined by Alix Gould-Werth of the Washington Center for Equitable Growth, Jamie Griffin of the University of Michigan, and Alexandra Murphy of the University of Michigan, which describes the condition of being unable to regularly move from place to place in a safe or timely manner because of a lack of resources necessary for transportation.

A diagnosis of problems surrounding transportation are only as good as the tools to measure it. In this vein, the U.S. Department of Transportation could adopt the Transportation Security Index, which was also created by the aforementioned scholars. The Transportation Security Index, which is modeled after the Food Security Index, is composed of items that ask respondents about symptoms of transportation insecurity, such as taking a long time to plan out everyday trips, feeling stuck at home, or worrying about burdening others with requests for assistance with transportation. As such, it is an important tool that can be used to determine whether people can get to where they need to go in a safe or timely manner and evaluate interventions that are designed to strengthen the U.S. economy by moving people from a state of transportation insecurity to one of security. 

Moreover, while the prioritization of union jobs in the Infrastructure Investment and Jobs Act is an important first step, there are still significant actions worth considering. Current challenges to unionization, such as rulings by the U.S. Supreme Court that have limited the ability of public-sector unions to collect dues, as well as made it more difficult for workers overall to band together and sue their employers for workplace misconduct, calls for new advocacy efforts for legislative remedies to enable more effective unionization.

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Factsheet: The PRO Act addresses income inequality by boosting the organizing power of U.S. workers

By Kate Bahn, Corey Husak,

February 6, 2020

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A plan for equitable climate policy in the United States

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One such example is the Clean Slate Agenda, which was developed by Sharon Block and Benjamin Sachs of Harvard Law School. They created a series of proposals for structural legal changes that would protect workers and give them the ability to countervail employers’ power. Their recommendations include:

  • Sectoral collective bargaining that enables unions to negotiate with industries rather than individual firms, increasing organized labor’s power to lift wages, set industrywide standards, and reach agreements that benefit a greater number of workers
  • Laws that expand and protect workers’ right to engage in collective action, including the creation of funds that allow workers to engage in strikes or walkouts without jeopardizing their financial security
  • An inclusive labor law reform that places the need to address gender, racial, and ethnic inequalities at its center by extending protections to domestic, incarcerated, and undocumented workers, as well as expanding rights and protections for independent contractors

Other proposals include the creation of labor market institutions, such as wage boards, which set minimum pay standards by industry and occupation and lead to wage gains for those at the bottom and middle of the income distribution. Enacting the PRO Act, which would make it easier for workers to organize into unions, would also curtail employers’ ability to misclassify workers as independent contractors, who do not have the right to unionize under federal U.S. law.

These measures would expand workers’ rights and allow unions to balance power in the labor market, ensuring that the economic gains they create are broadly shared.

Conclusion

The Infrastructure Investment and Jobs Act of 2021 is a major piece of legislation that rests on sound economic principles to help the U.S. economy reach its full potential. By placing greater focus on equity, unionization, and climate, the law and its swath of new investments are a step in the right direction. Yet to achieve strong, stable, and broadly shared growth, further investments and policies, such as those outlined above, are needed.

—Michelle Holder is the president and CEO of the Washington center for Equitable Growth. Shaun Harrison is her research assistant.

New U.S. Census Bureau data show significant economic disparities among the LGBTQ+ community

Posted on by Emilie Openchowski
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The evidence across academic and research disciplines overwhelmingly indicates that disaggregated data help build a more detailed narrative about the varying economic experiences of the U.S. population. While great strides have been made to disaggregate federal data by race, ethnicity, gender, income groups, and other categories, one group has long been excluded: the LGBTQ+ community.

Yet new data from the U.S. Census Bureau’s Household Pulse Survey now make it possible to look at a wider range of issues that the LGBTQ+ community faces amid the ongoing COVID-19 pandemic. The Household Pulse Survey began in April 2020 to monitor the impact of the pandemic and ensuing recession on U.S. households in real time, but it wasn’t until July 2021 that the survey began collecting data on sexual orientation and gender identity, or SOGI. These questions allow for further data disaggregation and a clearer understanding of how the LGBTQ+ community is weathering the pandemic.

This is the first time a federal statistical agency has collected data on an inclusive LGBTQ+ community. While the decennial census asks respondents how they are related to the people living in their residence and reports on same-sex households, this doesn’t fully capture the experiences of the entire LGBTQ+ community. Similarly, in 2019, the Federal Reserve Survey of Household Economic Decisionmaking, or SHED, asked questions on sexual orientation and gender identity, but in 2020, supplemental SHED surveys omitted these questions.

This column takes a deeper look at the SOGI data presented in the Household Pulse Surveys over the past year and discusses the economic hardships and resiliency of the LGBTQ+ community in the United States, including discrepancies in job losses, housing stability, and health insurance coverage.

Discrepancies in job losses for LGBTQ+ workers

While the pandemic impacts U.S. workers across all demographic groups, the Household Pulse data indicate that LGBTQ+ workers are disproportionately affected, compared to non-LGBTQ+ individuals. Approximately 28 percent of LGBTQ+ respondents said they experienced some form of job loss since LGBTQ+ data collection began last July. Comparably, 18 percent of non-LGBTQ+ respondents reported job loss in the same time frame.

The data indicate that age plays an intersecting role in work-loss experience. LGBTQ+ respondents between the ages of 25 and 39 and 40 and 54 had the highest rates of job losses, while older, non-LGBTQ+ respondents had the lowest rates. (See Figure 1.)  

Figure 1

Rate of employment losses by LGBTQ+ identity and age range, July 2021-May 2022

These data are further validated by research from the Movement Advancement Project, which shows that LGBTQ+ individuals with additional demographic intersectionalities face greater rates of job loss. Black and Latinx LGBTQ+ households in the United States experienced higher rates of employment or wage loss, at 60 percent and 71 percent, respectively, between July 2020 and August 2020, compared to non-LGBTQ+ households of all races (45 percent).

While the onset of the COVID-19 pandemic played a significant role in increasing unemployment and decreasing incomes among LGBTQ+ workers, these disparities have been building in recent decades in the United States. Research from 2021, for instance, finds that the lesbian wage premium fell from around 10 percent in 2000 to almost zero in 2018. The Center for LGBTQ+ Economic Advancement and Research, or CLEAR, finds that in 2019, 31 percent of Black LGBT households and 24 percent of Latinx LGBT households reported earning less than $25,000 annually, compared to 24 percent of Black non-LGBT households and 15 percent of Latinx non-LGBT households.

Disparities in employment loss between LGBTQ+ and non-LGBTQ+ workers may also be driven by a large share of LGBTQ+ individuals being employed in industries hardest hit by the pandemic. Analysis by the Human Rights Campaign Foundation, for instance, finds that in 2018, the five industries with the greatest share of LGBTQ+ employees were restaurant and food services (15 percent of LGBTQ+ adults), hospitals and healthcare (7.5 percent), K–12 education (7 percent), colleges and universities (7 percent), and retail (4 percent). These five industries have experienced the greatest disruptions in employment since the onset of the pandemic, which comes on top of the already-low wages widely experienced in three of these industries—hospitality, retail, and K–12 education.

Housing affordability among the LGBTQ+ community

Access to affordable and stable housing has historically affected the LGBTQ+ community, especially LGBTQ+ youth. LGBTQ+ youth make up around 40 percent of all homeless youths, and around 80 percent of young homeless LGBTQ+ individuals say that their homelessness is a result of being forced out of their family homes or running away from their families.

While the Household Pulse Survey does not ask about youth homelessness explicitly, it does collect data on housing affordability of adult respondents. Results show that LGBTQ+ adults of all ages were less confident than non-LGBTQ+ adults in their ability to pay their next month’s mortgage or rent payment, with young transgender adults reporting the least confidence of all groups. (See Figures 2 and 3.)

Figure 2

Reported confidence levels of adults in their ability to pay their next month's rent or mortgage payment, by LGBTQ+ identity and age, July 2021-May 2022

Figure 3

Reported confidence levels of adults in their ability to pay their next month's rent or mortgage payment, by gender identity and age, July 2021-May 2022

At the onset of the pandemic, the U.S. Centers for Disease Control and Prevention issued an eviction moratorium, barring landlords from evicting tenants for any reason. In September 2021, however, the Supreme Court struck down the Biden administration’s attempt to extend that moratorium, immediately putting renters across the United States back at risk of eviction.

An analysis of Pulse survey data prior to the Supreme Court’s decision by the Williams Institute, a research organization focused on sexual orientation and gender identity issues, finds that ending this moratorium would disproportionately harm LGBTQ+ individuals. This is because 41 percent of LGBTQ+ people, and 47 percent of LGBTQ+ people of color, rent their residences, compared to 25 percent of non-LGBTQ+ people, according to the analysis.

LGBTQ+ individuals’ access to health insurance

A 2014 study by the Center for American Progress finds that between 2013 and 2014, when the Affordable Care Act was implemented, the uninsured rate of LGBTQ+ Americans with incomes below 400 percent the federal poverty rate fell from 34 percent to 26 percent. The uninsured rate for LGBTQ+ people of all income brackets in the United States remains at 12.7 percent in 2021, compared to 11.4 percent for non-LGBTQ+ people.

Transgender respondents of the Household Pulse Survey report slightly lower rates of public and private insurance, compared to cisgender respondents, indicating that while there has been much progress in improving coverage for LGBTQ+ individuals in recent years, more efforts are needed to improve transgender healthcare coverage. While some of the noise in the survey data can be attributed to the smaller sample size of transgender respondents, it is indicative of the disparities transgender people face in access to quality healthcare. (See Figure 4.)

Figure 4

Reported rate of uninsurance by gender identity, July 2021-May 2022

Many LGBTQ+ workers have lost their employer-sponsored health insurance along with their jobs amid the ongoing COVID-19 pandemic. The U.S. Bureau of Labor Statistics finds that only 42 percent of private-sector employers who laid off workers during the pandemic paid some or all of their workers’ health insurance premiums. Additionally, only 23 percent of workers in the industries with the largest share of LGBTQ+ workers—such as arts, entertainment and recreation, or accommodations and food services—had employer-paid healthcare coverage, compared to 34 percent of the private sector more broadly.

Having little to no health insurance coverage during a worldwide pandemic can have detrimental effects on an individual’s physical and mental health. The Census Bureau’s own analysis of the Household Pulse Survey finds that LGBT respondents reported twice as high rates of experiencing symptoms of anxiety and depression, compared to non-LGBT respondents.

Policy implications and conclusion

In these initial Household Pulse Survey results, there are significant disparities in economic experiences and hardships between LGBTQ+ individuals and non-LGBTQ+ individuals, as well as within the LGBTQ+ community. These data reinforce the importance of federal data collection in accurately tracking the economic well-being of LGBTQ+ populations in the United States.

There is also widespread evidence that shows how disaggregating data by race and gender paints a clearer picture of the economy and holds policymakers accountable for creating broad-based economic growth. Further disaggregating data along LGBTQ+ lines would similarly benefit researchers and policymakers alike.

Legislation such as the LGBTQI+ Data Inclusion Act, which recently passed in the U.S. House of Representatives, would mandate federal agencies to improve data collection and bolster privacy protections for the LGBTQ+ community. This disaggregated data will help create equitable economic growth for the LGBTQ+ community in the United States by clarifying current economic conditions and allowing policymakers to target support programs more effectively.  

Methodology

To collect information about LGBTQ+ respondents, the Census Household Pulse Survey asks three SOGI-related questions:

  1. What sex were you assigned at birth on your original birth certificate? Choice of answers: Male or Female.
  2. Do you currently describe yourself as male, female, or transgender? Choice of answers: Male, Female, Transgender or None of these.
  3. Which of the following best represents how you think of yourself? Choice of answers: Gay or lesbian; Straight, that is not gay or lesbian; Bisexual; Something else; I don’t know.

The U.S. Census Bureau then groups all respondents into three categories: LGBT, Non-LGBT, and Other. Respondents who reported a sex at birth that does not match their current gender identity or those who answered that they are gay/lesbian, bisexual, or transgender were assigned to the LGBT category. Respondents whose birth gender matches their current gender and answered that they are straight were assigned to the Non-LGBT group. And respondents who selected “None of these” on the current gender question and either “Something else,” “I don’t know,” or “Straight” on the sexual orientation question were categorized as Other. Respondents whose sex at birth matches their current gender identity but selected either “Something else” or “I don’t know” on the sexual orientation question were also categorized as Other.

For our analysis, we merged the LGBT and Other groups to make one LGBTQ+ category. We assume that respondents in the Other category identify themselves as queer, pansexual, asexual, or other identities or orientations beyond lesbian, gay, bisexual, or transgender. Merging the two groups thus allows us to create an inclusive LGBTQ+ category that represents all members of the community.

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Expert Focus: The economic impacts of access to abortion and contraception

Posted on by Maria Monroe
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Equitable Growth is committed to building a community of scholars working to understand how inequality affects broadly shared growth and stability. To that end, we have created the monthly series, “Expert Focus.” This series highlights scholars in the Equitable Growth network and beyond who are at the frontier of social science research. We encourage you to learn more about both the researchers featured below and our broader network of experts.

With access to abortion in the United States increasingly restricted or banned, and access to contraception under threat in several states as well, research on the links between reproductive care and equity, economic stability, and overall health and well-being is more important than ever. Though reproductive health is often seen as outside the realm of economic research and policy, the reality is that access to these important healthcare and family planning options has vast economic and financial impacts on the lives of people who may become pregnant and their families.

An array of research already documents the links between bodily autonomy and economic opportunity, as well as the economic impacts of access to abortion and contraception. Studies find, for instance, that access to birth control pills were directly linked to women’s increased labor force participation and reductions in the gender wage divide. Other research demonstrates that access to abortion improves financial outcomes and reduces the likelihood of a woman being in poverty for up to 4 years, as well as facilitates many labor market opportunities for women and boosts educational outcomes.

Furthermore, reproductive justice scholarship and activism has long acknowledged the important links between economic disparities and health inequality, as well as pioneered a framework for considering how reproductive health can be affected by other factors, including race, sexual orientation, immigration or disability status, and environmental conditions.

This month’s installment of Expert Focus highlights scholars whose research establishes extensive evidence on the clear ties between access to reproductive healthcare and economic outcomes, as well as scholars who have made significant contributions to our understanding of how reproductive health inequities intersect with racial and gender inequality. After the U.S.  Supreme Court’s decision on June 24 to overturn Roe v. Wade, and thus overturn the nationwide right to access an abortion, the implications for the physical and mental health of individuals who may become pregnant are now front and center across the United States, as are the widespread economic and financial ramifications for those people and their families.

The work the scholars featured in this Expert Focus and other scholars—including those featured in past installments of Expert Focus, such as Martha Bailey at University of California, Los Angeles and Adriana Kugler at Georgetown University—are doing to document those impacts should guide federal and state policymakers as they face the post-Roe era in the United States.

Jennifer Barber

Indiana University Bloomington

Jennifer Barber is a professor of sociology at Indiana University Bloomington and a senior scientist at the university’s Kinsey Institute. Much of her recent work explores contraception use, pregnancy desires, and intimate partner violence, as well as the racial divides in access to birth control and attitudes about pregnancy. Barber also previously directed the Relationship Dynamics and Social Life project, which surveyed 18- and 19-year-old women each week over 2.5 years to track changes in their social lives, such as intimate relationships, sexual behavior, and contraception use.

One element of this project examines racial disparities. Black women, for instance, are 2.4 times more likely than White women to have an unplanned pregnancy, in part due to racial disparities in the U.S. poverty rate and access to contraception—and the underlying mechanisms driving those disparities. Barber is a collaborator with fellow Equitable Growth grantee Martha Bailey on the M-CARES project, which is exploring how subsidizing reproductive care affects women’s decisions around contraceptive use.

Quote from Jennifer S Barber

Zakiya Luna

Washington University in St. Louis

Zakiya T. Luna is a Dean’s Distinguished Professorial Scholar in the Department of Sociology at Washington University in St. Louis. Her research focuses specifically on social movements and social change, health and inequality, and human rights and reproduction, with an emphasis on the effects of the intersecting inequalities within and across these areas, including gender and racial disparities. Luna is the author of Reproductive Rights as Human Rights: Women of Color and the Fight for Reproductive Justice, a look at how women of color—and SisterSong in particular, which is the largest national multiethnic reproductive justice advocacy organization—were central to making the reproductive justice movement what it is today and linking the cause of reproductive rights to issues of fair wages, safe housing, job security, and other economic rights. She has written extensively on reproductive justice, and is co-creator and former co-editor of the University of California Press book series Reproductive Justice: A New Vision for the Twenty-First Century, a collection of publications that explores the current reproductive justice landscape and serves as a resource for students and advocates.

Quote from Zakiya Luna

Caitlin Knowles Myers

Middlebury College

Caitlin Knowles Myers is the John G. McCullough professor of economics at Middlebury College. Myers’ research examines issues related to gender, race, and the economy, and especially the effects of reproductive policies on people’s professional lives and economic outcomes. Her current work focuses primarily on access to abortion care and the effects of abortion restrictions or burdensome processes, such as traveling to receive care or mandatory waiting periods, on the incidence of abortions.

She also writes extensively in the popular press, academic journals, and for research organizations on the growing body of research reinforcing the economic impacts of access to abortion care for women, what restricting that care would do to women, the U.S. labor force, and the overall economy in the United States, and what a post-Roe era could mean in terms of U.S. abortion access and incidence. Myers was the lead economist on an amicus brief sent to the Supreme Court in the Dobbs v. Jackson Women’s Health Organization case, detailing the economic imperative of not overturning Roe and signed by more than 150 leading economists.

Quote from Caitlin Knowles Myers

Mayra Pineda-Torres

Georgia Institute of Technology (incoming)

Mayra Pineda-Torres is an incoming assistant professor of economics at the Georgia Institute of Technology. Her research interests are centered on the intersection of health economics, labor economics, and gender economics, with a particular focus on topics related to women and teen well-being and the economic and health impacts of access to reproductive healthcare. Her works in progress include papers on access to abortion care and its effects on inter-partner violence and educational attainment. She also co-authored an article that looks into the effects of abortion mandatory waiting periods on abortion timing and abortion rates in Tennessee.

In addition, she has a working paper with Kelly Jones at American University on the impacts of exposure to TRAP laws during adolescence on teen birth rates and educational attainment. This paper finds that young Black women are particularly affected by TRAP laws. In states with such restrictions, teen births increase by 3 percent compared to states without these laws. The paper also finds that adolescent exposure to TRAP laws has downstream impacts on education for Black women, who are 2 to 6 percent less likely to start and complete college.

Quote from Mayra Pineda-Torres

Loretta Ross

Smith College

Loretta J. Ross is an associate professor of the study of women and gender at Smith College. Her research interests lie in women’s human rights, reproductive justice, and White supremacy. Ross’ expertise lies in her background as a reproductive justice pioneer and her own personal experience with abortion and unintended pregnancy. She has co-authored three books on reproductive justice—a framework that she co-created with 11 other Black women working within and beyond the pro-choice movement in the 1990s that combines reproductive rights and social justice into one theory of change and centers the voices and experiences of women of color and other marginalized people.

In 1997, she co-founded SisterSong, a Southern-based, women of color-led national reproductive justice collective, to work together to improve institutional policies and systems that affect not just the reproductive health of marginalized communities but also their economic security and well-being. Ross is a sought-after thought leader who speaks often (including before congressional committees) about the impact of restricting access to abortion care on women, and especially women of color.

Quote from Loretta Ross

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Factsheet: What the research says about the economic impacts of reproductive care

Posted on by Emilie Openchowski

Before the U.S. Supreme Court ruling on June 24 in Dobbs v. Jackson Women’s Health Organization, more than five decades of liberating access to contraception and abortion care had demonstrable effects for women’s economic outcomes in the wake of the previously precedent-setting Supreme Court decisions in Griswold v. Connecticut and Roe v. Wade. These economic outcomes are now under threat.

Women today make up almost half of the overall U.S. labor force, compared to just one-third in 1950, and are the backbone of maintaining family incomes. These outcomes were influenced at least in part by the ability of people to have more autonomy over planning if and when to start a family. Access to reproductive care and control over family planning provided rightful bodily autonomy to people to control their lives and decisions, and enabled more women to participate in the labor force and pursue higher education—and thus earn higher wages and match into jobs that are more fulfilling for them.

Factsheet: What the research says about the economic impacts of reproductive careDownload

Even before the Dobbs ruling, the right to access abortion and contraceptives more broadly—legalized in the early 1970s—faced restrictions in various states and picked up following the 2010 midterm elections that ushered conservatives into power in state legislatures across the country. These restrictions were already limiting women’s economic opportunities based on where they live. After the June 24 Dobbs decision, women’s economic opportunities will only worsen in these states and perhaps be further exacerbated by other attacks on rights and freedoms in the future.

A wide body of research demonstrates that access to reproductive care is fundamental in ensuring economic well-being for women and their families. This research also finds that access to reproductive healthcare is particularly critical for women of color, who face additional economic barriers imposed by structural racism, such as longstanding and widespread occupational segregation.

This factsheet details the existing literature on the economic impacts of access to reproductive care and what restrictions to abortion care or contraception will mean for the U.S. economy and labor force. But these economic consequences laid bare by research are only partial, as bodily autonomy and family planning underlie economic security and well-being in myriad ways throughout the life cycle.

The reproductive care policy landscape until Dobbs

The Supreme Court decisions in Griswold and Roe expanded access to contraception and abortion care, respectively, but the U.S. Congress never passed a law protecting these rights. Now that the U.S. Supreme Court has overturned Roe, state legislatures will be able to decide whether and how people who may become pregnant can access this important reproductive care. Here are some of the consequences:

  •  One in 4 U.S. women—59 percent of whom are already parents and the majority of whom are in their mid- to late 20s—are projected to have an abortion by age 45. That access to abortion is considered a human right by the United Nations’ Office of the High Commissioner on Human Rights. Now, it is not accessible across much of the United States.
  • Since the Roe v. Wade decision, states across the country have strategically limited women’s access to abortion care through restrictions on the conditions under which women can receive abortion care, including gestational limits that ban abortion after a specific amount of time after conception, mandatory counseling and waiting periods, requirements for invasive ultrasounds, and targeted restrictions of abortion providers, also known as TRAP laws, that are specifically designed to foster the closure of health clinics that provide abortion care, among other restrictions.
  • Research from the Guttmacher Institute—a nonprofit reproductive health organization—suggests that as many as 26 states are certain or likely to ban abortion in the wake of the Supreme Court’s Dobbs decision overturning Roe. Of those 26 states, 13 have trigger laws, or abortion bans that will automatically take effect once Roe no longer stands.
  • A recent analysis from Michael Ollove at The Pew Charitable Trusts indicates that several states are also taking aim at access to contraception, such as emergency contraception pills (known as the morning-after pill or Plan B) and intrauterine devices, or IUDs. Many of these state legislatures are also taking steps to limit funding for family planning at reproductive health centers, which could restrict access to contraception, particularly for low-income women, many of whom live in contraception deserts.

Federal legalization of abortion following Roe increased women’s economic opportunities and advancement

Several studies have looked at how the legalization of abortion following the Roe v. Wade decision in 1973 changed economic conditions facing women in the United States. Because abortion was legal in some states and not others prior to Roe, economists have been able to leverage this “natural experiment” of comparing women who had access prior to 1973 and those who did not to understand how expanding bodily autonomy through access to abortion care had subsequent economic impacts on their well-being. Specifically:

  • A study by Caitlin Knowles Myers at Middlebury College and the Institute for the Study of Labor details the effects for young women of both abortion and contraception access, both of which were expanded in the early 1970s. She finds that it had a significant impact on the ability of people to control their family planning decisions, which allowed them to have higher career aspirations and goals, as well as plan better for their futures.
  • A study by the late economist Marshall H. Medoff of California State University, Long Beach finds that though White women have the greatest absolute levels of abortion across the country, disproportionately more Black and Hispanic women seek abortion services.

Other research examines the disproportionate economic effects that abortion expansion has on women of color. Specifically:

  • A study by Ali Abboud at The Ohio State University finds that access to abortion before age 21—prime years for investing in human capital, such as higher education and other skills building—delays the age at which women give birth to their first child by at least 6 months, on average. Abboud examines the effects on labor market participation of that delay, finding that wages significantly increase for women as a result of the ability to control when they start a family—and, in particular, Black women see a 10 percent increase in earnings.
  • A study from Joshua Angrist at Hebrew University and William Evans at the University of Maryland, College Park finds that reforms to abortion restrictions that expanded access to care led to increased rates of education and schooling among Black women, as well as fewer teen pregnancies and nonmarital births.

Subsequent restrictions of access to abortion care limited women’s economic well-being and reduced access to opportunities

Several studies document the economic consequences for women of being denied an abortion due to gestational limits by comparing women who are forced to carry a pregnancy to term and otherwise-similar women who are able to access abortion care. Specifically:

  • Sarah Miller at the University of Michigan and her co-authors find that women’s economic trajectories are similar prior to becoming pregnant, but those women who are not able to get an abortion experience a large increase in financial distress for several years following the denial. The co-authors also find that being denied an abortion increases the likelihood of negative public records, such as bankruptcy and eviction, by up to 81 percent, compared to women from similar financial backgrounds who are able to get an abortion.
  • The Turnaway Study similarly finds that being denied an abortion leads to a higher chance of being in poverty up to 4 years later and a lower likelihood of having positive personal life goals in the coming year.
  • A study by Diana Greene Foster at the University of California, San Francisco and others finds that women denied abortion care are less likely to be employed full time 6 months after the denial and more likely to access income support programs.

Policy conditions that make it more difficult to access abortion care also shape women’s economic outcomes in those states, which helps us understand the potential impact of bans on abortion. For instance, various studies looking into the effects of TRAP laws find many negative outcomes for women, particularly women of color. Specifically:

  • Research by one of this factsheet’s authors, Kate Bahn, with Adriana Kugler, Melissa Holly Mahoney, and Annie McGrew shows that these regulations actually trap women into bad jobs. We find that women in states with TRAP laws are 7.6 percent less likely to go into higher paid occupations than women in states without TRAP laws, controlling for factors such as education, age, industry, and other factors that economists typically think impact occupational mobility.
  • Other research by Kelly Jones of American University and Mayra Pineda-Torres, incoming at the Georgia Institute of Technology, looks at how TRAP laws affect women’s education and future income, finding that young Black women are especially impacted by these abortion restrictions, while White women are relatively unaffected. The co-authors find that Black women who are exposed to TRAP laws between the ages of 15 to 23 have lower college completion rates by between 5 percent and 11 percent and lower future family incomes by between 3 percent and 6 percent, compared to similar women who are not exposed to TRAP laws. This is because reduced access to abortion care increased early births among Black women.
  • The passage of the Texas TRAP law, HB2, in 2013, which imposed onerous restrictions on abortion clinics, and the subsequent repeal of components of this law in the U.S. Supreme Court case Whole Woman’s Health v. Hellerstedt in 2016, drastically changed the landscape of health clinics that offer abortion care in Texas. Closure of clinics across the state increased the distance many women had to travel in order to access abortion care. In one study by Jason Lindo at Texas A&M University, Caitlin Knowles Myers at Middlebury College, and Andrea Schlosser and Scott Cunningham at Baylor University found that going from 0 to 50 miles distance to a clinic to 50 to 100 miles to a clinic reduced the abortion rate by 16 percent.
  • Overall, the effects of abortion restrictions will be felt most strongly by low- and middle-income women and women of color in particular. As the Economic Policy Institute’s Asha Banerjee writes, “Many of the states with preexisting abortion bans held at bay by Roe are also states that have created an economic policy architecture of low wages, barely functional or funded public services, at-will employment, and no paid leave or parental support.”

But it’s not only abortion restrictions that have huge long-term impacts on women’s engaging in the economy. Being forced to carry an unwanted or unplanned pregnancy to term also imposes direct and immediate financial costs on those who become pregnant and their families. Specifically:

  • The Economic Policy Institute’s Banerjee notes that women often face professional penalties, including pay cuts—and even get fired—for becoming pregnant.

Increased accessibility of abortion care improves women’s outcomes

While many studies look at the effects of restrictions to abortion, there is also a body of research that explores expanded access to abortion care through reducing direct costs to individuals. While federal funds cannot be used to reduce costs and increase access to abortion care, due to the Hyde Amendment passed in 1976, direct costs to patients are variable based on decreasing cost through expansion of services—more supply of providers leads to a reduction in prices—as well as state-level dedicated funding to increase access to abortion care. Specifically:

  • A study by Elizabeth Ananat at Duke University and her co-authors looks at the effects of a decrease in the cost of abortion on various outcomes in young adulthood. Looking at changing costs from the 1960s through 1970s, as states legalized abortion and then federally after the Supreme Court legalized abortion in 1973, the co-authors find that lower costs for the procedure increased the likelihood of college completion, reduced the rate of access to social insurance and income support programs, and lowered the odds of being a single parent.
  • Bahn’s research with her co-authors finds that Medicaid funding for abortion care, available in 16 states from dedicated state-provided funding sources, improves women’s economic outcomes. Women who live in states with Medicaid funding for abortion are more likely to change occupations year-over-year, which is linked to higher earnings and better job matches, compared to women who live in states that do not have public insurance funding for abortion care.
  • Research mentioned above by CSU Long Beach’s Medoff finds that Medicaid funding for abortion was particularly critical to Latinas, whose demand for abortion care is more sensitive to access to insurance coverage for abortion care through Medicaid. These women workers already face significant intersectional wage gaps, further exacerbating economic inequality.

Contraception gives women more security over their economic futures

Contraception is also an important part of family planning and reproductive care, and expanded access to birth control was a huge factor in boosting women’s economic security. Specifically:

  • The seminal study in 2002 by Claudia Goldin and Lawrence Katz at Harvard University on the birth control pill finds that it had a direct positive effect on women’s long-term career investments, evident in women’s increasing ability to access graduate and professional degree programs, such as law and medical school. The two authors also find that it had an indirect effect: “all individuals could delay marriage and not pay as large a penalty,” which, the authors explain, leads to better matches for women who pursue their careers.
  • Another important study in 2006 by Martha Bailey, then at the University of Michigan and now at the University of California, Los Angeles, examines women’s labor force participation as a result of “contraceptive freedom.” She finds that access to the pill increased the number of women in the paid labor force, as well as the number of hours those women worked, because it reduced the likelihood of first births occurring before women turned 22. Bailey writes that her findings suggest that access to birth control before age 21 accounts for 3 percentage points of the 19 percentage point increase in labor force participation rates, and 370 hours of the 450-hour increase in annual work hours among women from 1970 to 1990.
  • Further research from Bailey and her co-authors Brad Hershbein at the University of Michigan and Amalia Miller at the University of Virginia finds that this increase in labor force participation rates gave women the chance to invest in new career paths and reduced the gender wage gap.

Conclusion

Economics research on the initial federal legalization of abortion, subsequent changes to accessibility of abortion care, and the broad dissemination of contraception demonstrates the link between reproductive care and economic opportunity for workers. People who can get pregnant face both direct costs, when services become more expensive to secure and unintended pregnancy leads to financial burdens, as well as indirect costs, when it becomes more difficult and uncertain to invest in one’s education and careers in the future.

These costs intersect with other forms of economic marginalization. Research shows that access to reproductive healthcare is particularly critical to women of color. Bodily autonomy is a fundamental human right and the foundation of any individual being able to fully engage in the economy. The U.S. Supreme Court’s June 24 ruling in Dobbs directly threatens all of these economic gains made by women in the United States over the past five decades.

Posted in Uncategorized

This year’s Juneteenth is a celebration of emancipation and a reminder that pervasive wealth inequality persists for most African Americans

Posted on by Maria Monroe
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Following nationwide protests across the United States in 2020 against police brutality, the push for federal recognition of Juneteenth gained momentum, with the U.S. Congress enacting legislation in the summer of 202l declaring June 19th a national holiday. The first anniversary of the federal holiday, celebrated on June 20 this year, is a moment for all Americans to honor the emancipation of enslaved African Americans following the end of the Civil War more than 150 years ago.

But Juneteenth also is an opportunity to take stock of congressional and state government efforts to account for the consequences of pervasive institutional racism before and after 1865 and evident still today. After all, the results of the brutal exploitation of enslaved African Americans to the systematic oppression in the Jim Crow South to today’s institutionalized racism are still evident in the disparate access to and outcomes in income, wealth, education, healthcare, jobs, housing, and criminal justice for so many Black workers and their families.

There is one initiative in Congress to establish a commission to study the effects of slavery and discriminatory policies on African Americans and recommend appropriate remedies, including reparations. Some cities and states are also working to address the need for reparations through piecemeal programs and initiatives. California’s Task Force to Study and Develop Reparation Proposals for African Americans, for example, recently released its nearly 500-page report that says its findings have nationwide implications for the way the United States addresses reparations. And there are several more ways in which reparations could be handled by policymakers at the state and local levels.

Before examining those two reparations proposals, however, it’s first imperative to detail briefly why pervasive wealth inequality—the most telling consequence of the history, legacy, and enduring presence of systemic racism—persists for most African Americans. The reason: Over the course of U.S. history, the accumulation of wealth by the vast majority of generations of Africans Americans was categorically illegal (pre-1865) and then systemically and violently inhibited (post-1865) by Jim Crow laws, the exclusion of agricultural workers and domestic helpers from New Deal reforms, and sweeping housing-market redlining, among many other forms of institutional racism.

All of these barriers to opportunity to earn and save severely inhibited the accumulation of wealth in Black communities across generations. Indeed, government policy has created or maintained hurdles for African Americans who attempt to build, maintain, and pass on wealth. The share of wealth of African Americans is considerably lower than their percentage of the nation’s population, with Black Americans accounting for about 12 percent of the nation’s population but possessing only about 2.6 percent of the nation’s wealth.

This translates into a condition in which the average Black U.S. household has a net worth that is $800,000 lower than the average White household’s net worth. This wealth divide matters because it’s such a critical index of the cumulative effects across generations of racial injustice in the United States.

There are many people in the United States who consider the Civil Rights era of the 1960s as resolving the blatant racial discrimination in U.S. politics and society. Yet the post-Civil Rights period is marked to this day by housing discrimination, mass incarceration, and economic inequalities resulting from the intergenerational effects of White supremacy. What’s worse, calls for teaching this history and its legacy so that more Americans of all races and ethnicities understand the situation today are often met by political assaults from White Americans, particularly in the South, under the guise of combatting “critical race theory.”

This is another reason why reparations need to be on the table for discussion among economists and policymakers alike—documenting why reparations are called for is an important step in educating the broader U.S. public about the need for, as well as the benefits to, not just African Americans but the broader U.S. economy, too. Reparations, broadly understood, would be a program of “acknowledgment, redress, and closure.” It is not enough to merely recognize that Black Americans have suffered historical harm. There also must be steps taken to eliminate the effects of this harm.

Reparations would require the federal government to compensate for the effects of structural racism. The U.S. House of Representatives has a bill, H.R. 40, under consideration, with 196 co-sponsors and only 218 votes needed to pass. H.R. 40 would establish a 15-member commission to study the effects of slavery and discriminatory policies on African Americans and recommend appropriate remedies, including reparations. 

More immediately, there is the already-completed study by California’s Task Force to Study and Develop Reparation Proposals for African Americans. This recently released, nearly 500-page report has nationwide implications for the way the nation addresses the consequences of systemic racism, including a proposal for reparations. Indeed, highlights from the report are a must-read on this first anniversary of Juneteenth as a federal holiday.

post

How combating voter suppression can help close the economic divides between Black and White Americans and spur U.S. economic growth

By David S. Mitchell, Austin Clemens, Shanteal Lake,

February 3, 2021

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Stratification economics: What it is and how it advances our understanding of inequality

By Kate Bahn, Carmen Sanchez Cumming,

February 28, 2022

report

Are today’s inequalities limiting tomorrow’s opportunities?

By Elisabeth Jacobs, Liz Hipple,

October 3, 2018

The California task force hopes to complete its second stage of research on how to create a reparations program sometime in 2023. And perhaps by the end of the current 117th Congress, the U.S. House of Representatives will have passed legislation enabling a federal study and set of recommendations—though chances of full congressional enactment are unlikely.

Indeed, politics and the many legislative and administrative layers that come along with enacting and interpreting legislation more broadly continue to stand in the way of a reparations program at the state and federal level because expanding voter suppression laws are making it more and more difficult to build the political power to address race-based economic inequality.

That’s why the Juneteenth holiday—the historic and symbolic representation of African American’s liberation from institutionalized and legislative slavery and oppression—is so important to the nation’s future. While the historical legacy of Juneteenth shows the value of never giving up hope in uncertain times, the day should also remind the nation that even decades later, we still have work to do.

Posted in Uncategorized

LERA 2022 participants focus on boosting worker power and uplifting marginalized voices in the U.S. workplace

Posted on by Maria Monroe
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The Labor and Employment Relations Association recently held its 74th annual conference, gathering hundreds of presenters and attendees virtually from across industries, and including participants from labor, management, government, advocacy, and academia. From June 2–5, there were more than 80 sessions covering various aspects of the U.S. labor market, its dynamics and challenges, and how workers are navigating these unusual circumstances amid the ongoing coronavirus pandemic.

Given recent unionization drives in the United States, from Amazon.com Inc. warehouses to Capitol Hill staffers, the theme of this year’s event was especially prescient. Centered on worker power and voice in the workplace, LERA chose “Elevating Voice and New Voices in the Workplace and Beyond” as the event’s focus. The agenda highlighted the critical role of employee voice in the workplace and the ongoing need to empower and support that voice for workers, particularly those who have been historically marginalized.

Members of our network, as well as Equitable Growth staff, were featured in at least a dozen different plenaries, panels, and paper sessions. Below, we highlight some of the key moments, as well as panels and papers that caught our interest over the course of the 4-day event.

Former Equitable Growth President and CEO Heather Boushey, now at the White House Council of Economic Advisers, spoke in a plenary session with Equitable Growth grantee Ioana Elena Marinescu. The session, moderated by AFL-CIO chief economist Bill Spriggs, a professor at Howard University, focused on how antitrust law can be used to address wage suppression and inequality.

Boushey detailed the Biden administration’s work to boost competition across the U.S. economy using a whole-of-government approach—a proposal that was recommended in an Equitable Growth antitrust report co-authored by several competition policy experts. She also brought up President Biden’s commitment to strengthening worker power and the importance of unions for workers to be able to collectively bargain and thus provide a counterweight to highly concentrated power of employers.

Marinescu discussed her work on the impact of employer concentration on wages, noting that the assumption in economics that workers are paid roughly what they are worth is not always correct. In fact, she said, “when workers have fewer employers [who] they can turn to for jobs, you see lower wages in that market”—a trend derived from monopsony power, or high concentration of employers in a labor market.

Another panel session focused on worker resistance and labor shortages across the United States, including how unions and worker resistance play a role, featured grantee Ruth Milkman of the City University of New York Graduate Center. Panelists discussed the challenges facing the modern U.S. labor movement, such as scaling it to its former levels of membership, the impact of the 2018 West Virginia teacher strikes and the Red for Ed movement, and why worker shortages are good for labor.

Milkman specifically noted how the so-called Great Resignation in the wake of the COVID-19 recession is a “misnomer” because what’s actually happening is workers are “taking advantage of the labor shortage to look around and get jobs that they prefer to the ones they might have had in the past.” She cautioned analysts to keep an eye on whether this period of heightened worker power will result in long-lasting changes.

Equitable Growth’s Sam Abbott, our family economic security policy analyst, chaired a session on the care economy and its policy implications. Several Equitable Growth grantees presented their research. The University of Maryland’s Corey Shdaimah detailed her co-authored research with Elizabeth Palley at the School of Social Work at Adelphi University on early childhood care providers. The University of Chicago’s Julia Henley summarized her research on the pandemic and home-based child care providers. And Syracuse University’s Emily Wiemers presented her research on the long-term impacts of COVID-19 on care outcomes for high-need older adults.

Several Equitable Growth grantees also participated in a panel on the challenges of collective bargaining in the United States. Duke University’s Matthew S. Johnson discussed his co-authored research on trade competition and the decline in unionizations. Anna Stansbury from the Massachusetts Institute of Technology detailed her research on whether firms have incentives to comply with labor standards laws. In addition, attendees heard about co-authored research by Columbia University’s Suresh Naidu on why unionization rates in the United States have declined. Grantee Ihsaan Bassierof theUniversity of Massachusetts Amherst served as one of two discussants for the session.

Grantee Nathan Wilmers from MIT chaired a session on using data to study work and the labor market. His research was presented by co-author Carly Knight of New York University, who explained their study on why firms adopt new managerial ideologies and strategies using historical data from 1935–2005.

In a “LERA Best Papers” session, grantee Peter Fugiel of the University of Illinois at Urbana-Champaign presented his research on schedule unpredictability, looking at the prevalence of this scheduling practice across the U.S. labor market. His findings suggest that scheduling unpredictability is common in many sectors beyond those that are typically targeted by Fair Workweek laws, such as in retail and fast food chains.

Several other sessions caught our eye, speaking directly to our research and policy priorities:

  • “LERA Plenary: Financialization, Corporate Governance, and Labor.” This plenary session highlighted a major theme of the event—the growing effects of financialization on workers and the U.S. economy and the importance of worker voice in mitigating these harms. Panelists, including Lenore Palladino of University of Massachusetts Amherst, discussed themes such as worker voice and greater workplace democracy as countervailing forces to financialization, including pressure from shareholders to increase profits instead of investing in workers or workplace safety, and the history and impacts of stock buybacks. The panelists also touched upon the racial justice elements of financialization, including how corporate equity is predominately held by wealthy White households, thus driving racial wealth divides.
  • “Pay Equity Laws: Intended, Unintended, and Unpursued Consequences for Tackling Gender Wage Gaps.” This panel session looked at a slate of pay equity laws, including banning salary history questions, prohibiting pay secrecy policies, and mandating companies to report pay data to overcome gender wage divides. One study by Laura Adler at Harvard University found that salary history bans resulted in companies asking about salary expectations, and that women were more penalized than men for stating higher expectations. Another panelist’s study found that Black and White women are more likely to work in places that ban salary sharing, compared to Latina women.
  • “Preparing Hospitality Workers and Workplaces for the Future of Automation.” This panel session looked at the rise of algorithmic management applications in the hospitality industry, including hotel housekeeping. Panelists presented initial findings from a multi-year study that will develop mechanisms for worker input into the design and deployment of these technologies, reducing disruptions to workflow, boosting worker autonomy, and opening pathways for addressing any workplace issues.
  • “Job Quality in the Restaurant Industry: An Examination of Human Resource Practices and Outcomes in Fast Food Chains.” This symposium session explored how franchising affects wages and other job-quality factors in the restaurant industry, and specifically looked at management practices. One study co-authored by Rosemary Batt of the Cornell University IRL School looked at the effects of unpredictable scheduling practices on turnover amid the COVID-19 pandemic, finding that unstable schedules exacerbated the rates of turnover in fast food restaurants.

The 2022 Labor and Employment Relations conference was an important opportunity for Equitable Growth to expand our network of interdisciplinary scholars and to learn about cutting-edge research on the relationship between worker power, the labor market, and inequality during critical period of resurgence for the U.S. labor movement. We look forward to future collaboration and participation with LERA and the many participants and speakers we heard from over the weekend.

Posted in Uncategorized

May jobs report: Young workers are entering a uniquely evolving U.S. labor market

Posted on by Maria Monroe
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The recovery in the U.S. labor market continued in May, with 390,000 jobs added and the unemployment rate holding steady at nearly its pre-pandemic level at 3.6 percent, according to the Bureau of Labor Statistics Employment Situation Summary released today. After 12 consecutive months of adding more than 400,000 jobs per month, that level decreased slightly last month, but continues to be above the pace of job growth pre-pandemic. And while earnings growth has averaged 5.2 percent over the past year, the annualized 3-month moving average for March to May was 4.5 percent compared to 4.8 percent for the prior three months.

In short, the jobs recovery amid the economic impact of the pandemic has been remarkable, but gains have been uneven and it is unclear whether continued fast-paced gains will continue.

A slowing pace of recovery could also mean that the persistent disparities experienced by workers who face historical barriers to opportunity will likely be more difficult to overcome without the tailwind of a tight labor market. The non-seasonally adjusted unemployment rate for Black workers, at 3.0 percent, is nearly twice that of White workers, at 6.0 percent. American Indian and Alaska Native workers are facing an unemployment rate of 4.5 percent while Latino workers, who were among the hardest hit in the pandemic, are facing an unemployment rate of 4.0 percent. (The Bureau of Labor Statistics began publishing monthly data on American Indian and Alaska Native workers in February 2022, but does not report that data on a seasonally adjusted basis.)

The unemployment rate for Asian American workers is lower than the rate for White workers, at 2.2 percent. But our analysis of the April jobs report noted that Asian American workers experience significantly elevated levels of long-term unemployment compared to other workers.

Each of these realities demonstrate how market forces alone are not sufficient to resolve long-standing labor market inequalities. (See Figure 1.)

​​Figure 1

U.S. unemployment rate by race (not seasonally adjusted), 2019-2022. Coronavirus recession is shaded.

The jobs market today for young workers presents its own unique challenges and opportunities. With end of the school year, and with high school and college graduations now in train, many young workers are entering the job market at an unprecedented time.

The unemployment rate of workers ages 16 to 19 was 10.4 percent in May, up from 9.6 percent one year prior, but remarkably low compared to the historical average. The most recent Job Openings and Labor Turnover Survey from April released earlier this week found that there are 11.4 million job openings, a slight decrease from one month prior but above historical averages. As young workers may be finishing their school years, these conditions could have long-lasting impacts on their economic security.

Recession scarring for younger workers

A body of economics research finds that entering the U.S. labor market during a recession has impacts on young workers that can last long after the recession has abated. The long-run effects of an economic shock is known in economics as “hysteresis,” which describes negative effects that persist past the event causing the shock. Research by Kevin Rinz of the U.S. Census Bureau found that during the Great Recession of 2007­–2009, younger workers recovered their levels of employment more quickly than other generations, but they faced both large and persistent earnings losses for up to 10 years following the initial shock.

Workers cannot choose when they were born, but the precise timing of their initial entry into the labor market has long-term impacts. Jesse Rothstein of University of California, Berkeley, finds that college graduates who entered the labor market during the end of the Great Recession in 2009 through the initial tepid recovery into 2011 had lower employment and earnings by 2017 compared to college graduates who entered the labor market immediately prior to the recession or post-2012.

What’s more, hysteresis is an enduring historical problem for young workers. Hannes Schwandt of Northwestern University and Till von Wachter of the University of California, Los Angeles, find that these “unlucky-cohorts” effects were common across business cycles in the modern U.S. labor market from 1976 to 2015, and particularly scarring for workers who face other disadvantages, such as non-white workers and those without a high school degree.

One of the critical factors in shaping these scars of recessions is where re-employment occurs. Rinz finds that younger workers are more likely to work for lower-paying employers following initial local unemployment shocks. (See Figure 2.)

Figure 2

A comparison of the likelihood of working for a high-paying employer as impacted by exposure to local unemployment shocks by generation, 2007–2017

Examined in a different way, Christopher Huckfeldt of Cornell University finds that increased hiring selectivity in recessions leads a situation in which it may be the optimal choice for a worker to switch into a lower-paying occupation when there are few other better alternatives. Workers who switch into lower paying occupations during a recession face earnings losses for a decade after the economic shock compared to workers who are also displaced in their jobs but stay in their occupation, the latter of whom recover their earnings within four years of an economic shock.

Then there’s the unique occupational impact of the coronavirus pandemic. It led to a sharp decline in in-person services followed by high labor demand now, and may shape the impact of this unique recession on the outcomes of younger workers.

Differences between the coronavirus recession, the Great Recession, and their aftermaths

​​As research relating to the Great Recession shows, the U.S. labor market for young people entering it as they begin their career can have long-term effects on their wages and career trajectory. Yet the labor market shocks and the pattern of recovery during the coronavirus recession and the subsequent economic recovery have diverged from those of the Great Recession in key ways that have implications for policy responses.

Employment losses in early and mid-2020 were both severe and unequal, disproportionately harming lower-income households and workers of color, especially those in hard-hit industries. The coronavirus pandemic’s early employment losses were also much greater than those of the Great Recession due to the sudden nature of emergency public health measures, and the fact that in-person services, particularly in leisure and hospitality, were most affected, as opposed to primarily the banking or housing sectors in the initial shock of the Great Recession.

Furthermore, the rate of recovery after the most recent recession has been much more rapid than after other recent recessions. Employment is nearing pre-pandemic levels just over two years after the initial shock compared to eight years after the Great Recession. (See Figure 3.)

​​Figure 3

Percent loss in employment since the start of the recession

The pandemic’s shocks to the economy and related public health measures also appear to have had mixed impacts on young people’s educational outcomes and their decisions about seeking higher education, both of which affect tightness in the labor market. Basically, young people decide how the mix of immediate employment and education opportunities alongside calculations about how the long-term prospects of investing in higher education would shape their human capital accumulation as well as their debt loads.

Indeed, students finishing high school in 2020 may have been more likely to graduate, according to a new analysis by The Brookings Institution, as “high school graduation rates actually increased for students with disabilities, English-language learners, and Black students.” But the Brookings analysis also explains that college entry and enrollment appears to have declined, as pandemic upheaval intersects with years of rising college costs.

The acute employment losses during the coronavirus recession were most severe in many industries that disproportionately employ young people, an analysis from the Economic Policy Institute found, with the unemployment rate for young workers ages 16 to 24 rising to 24.4 percent in spring 2020, more than twice the rate of workers 25 and older. An analysis from the Pew Research Center shows that young people who graduated college in 2020 were also less likely to enter the labor force that year, with labor force participation for recent college graduates ages 20 to 29 falling from 86 percent in 2019 to 79 percent in 2020. Data from the jobs website Indeed also suggest students and early-career workers would have been less likely to have in-person internships in 2020.

While these employment shocks for younger workers were severe, they have also been relatively short as the U.S. economy recovers. This is most striking when looking at labor market activity for the very youngest workers. The Drexel University Center for Labor Markets and Policy predicts that summer employment for 16- to 19-year olds will reach levels not seen since 2007, the summer before the start of the Great Recession. The high demand for workers right now also is strengthening wages for workers in industries that do not typically require college degrees, highlighting how workers’ bargaining power and other factors contribute the wage distribution beyond the “college wage premium.”

Policy responses to support younger workers in the U.S. labor market

The likely long-term effects of the coronavirus pandemic on young workers’ outcomes remain unclear. The sudden and deep shocks of 2020 may have greater long-term effects for young workers entering the job market or making decisions about higher education that year, but the faster recovery may offset those harms to some extent. This suggests the need for policy interventions that both address the immediate harms for the most vulnerable young workers and strengthen our systems to be prepared for future shocks.

The experience of the first two years of the pandemic demonstrate how income supports and a stronger social infrastructure provide stability for weathering economic upheavals that reduce long-term negative consequences. Yet there are still gaps in the current system. For instance, as the Economic Policy Institute notes, expanded Unemployment Insurance benefits were not available to young people who were unable to enter the workforce. Policymakers should reform Unemployment Insurance and invest in building the administrative infrastructure for promising related programs, such as Short-Time Compensation, to protect vulnerable workers from sudden economic upheavals and mitigate the effects on their careers and on their households’ economic security.

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A college degree is not the solution to U.S. wage inequality

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Furthermore, developing a proposed job seekers allowance separate from the Unemployment Insurance system would help those who would remain ineligible for UI benefits as they initially enter the labor force following graduation.

As young workers drive unionization efforts across the country, policymakers also should strengthen workers’ bargaining power and worker protections, which research shows are especially crucial for improving earnings and reducing inequality for young workers without college degrees. At the same time, policymakers should make college more affordable and accessible for those who pursue higher education.

Canceling student loan debt also would provide much-needed relief to students and young workers as they navigate a changing labor market, and make them and their households more resilient down the road. Rebalancing economic power toward workers and young people would provide a foundation for future broadly shared growth.

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Equitable Growth’s Jobs Day Graphs: May 2022 Report Edition

Posted on by Raksha Kopparam

On June 3, the U.S. Bureau of Labor Statistics released new data on the U.S. labor market during the month of May. Below are five graphs compiled by Equitable Growth staff highlighting important trends in the data.

Total U.S. nonfarm employment rose by 390,000 in May, and the employment rate for prime-age workers increased slightly to 80.0 percent.

Share of 25- to 54-year-olds who are employed, 2007–2022. Recessions are shaded.

The unemployment rate remained at 3.6 percent again in May, still elevated for Black workers (6.2 percent) and Latino workers (4.3 percent) compared to White workers (3.2 percent) and Asian American workers (2.4 percent).

U.S. unemployment rate by race, 2019–2022. Recessions are shaded.

Unemployment rates are now 5.2 percent for workers with less than a high school degree and 3.8 percent for high school graduates. The unemployment rate is 3.4 percent for workers with some college, and 2.0 percent for college graduates.

Unemployment rate by U.S. educational attainment, 2019–2022. Recessions are shaded.

Employment in many major industries is now back to or surpassing pre-pandemic levels, including construction, retail, and educational services. Employment in leisure and hospitality, however, has yet to recover.

The employment rate increased slightly in May to 65.6 percent for men and 54.9 percent for women, remaining below pre-pandemic levels for both groups.

Share of the U.S. population that is employed, by gender, 2007–2022. Recessions are shaded.
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JOLTS Day Graphs: April 2022 Edition

Posted on by Raksha Kopparam

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. Today, the BLS released the latest data for April 2022. This report doesn’t get as much attention as the monthly Employment Situation Report, but it contains useful information about the state of the U.S. labor market. Below are a few key graphs using data from the report.

The quits rate remained steady at 2.9 percent as 4.4 million workers quit their jobs in April.

Quits as a percent of total U.S. employment, 2001–2022. Recessions are shaded.

As job openings declined to 11.4 million and hires remained at 6.6 million, the vacancy yield increased to 0.58 in April from a series low of 0.56 in March.

U.S. total nonfarm hires per total nonfarm job openings, 2001–2022. Recessions are shaded.

There were 0.52 unemployed workers for every job opening in April, rising from 0.50 the previous month.

U.S. unemployed workers per total nonfarm job opening, 2001–2022. Recessions are shaded.

The total number of quits remained steady in April, rising in some industries, such as financial activities, and beginning to fall in others, such as manufacturing and construction.

Quits by selected major U.S. industry, indexed to job openings in February 2020. Coronavirus recession shaded.
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