New study in the Proceedings of the National Academy of Sciences shows schedule stability supports U.S. workers and the broader economy

Posted on by Maria Monroe
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As COVID-19 vaccination rates rise in the United States many businesses, especially in hard-hit industries such as retail and food service, are seeking to fill positions to keep pace with public demand. Securing or returning to a job is a huge relief to workers who faced or narrowly avoided unemployment over the past 18 months, but it also is important to ask what kinds of jobs these service-sector workers are returning to.

Long before the coronavirus pandemic hit, U.S. policymakers were discussing the quality of work schedules for service-sector workers. As discussions about reemployment heat up, many advocates and policymakers are revisiting conversations about job quality. That’s why the time is right to reexamine policy interventions that are designed to ensure scheduling practices in the service sector work well for employers, employees, and the broader U.S. economy alike.

Evidence published last week in the Proceedings of the National Academy of Sciences on the effects of a stable scheduling law enacted in Seattle provides a useful jumping-off point. Using an innovative approach to data collection, rigorous statistical methods, and building upon previous research conducted in Seattle, the article provides important insights into the effects of stable schedules on workers. Prior to implementation of the ordinance in 2017, the majority of hourly workers in Seattle experienced instability or unpredictability—defined by the researchers as receiving less than 2 weeks’ notice of upcoming work schedules, not receiving compensation for last-minute changes to their schedules, and working an on-call shift or a so-called clopening shift, in which workers have less than 10 hours to rest between shifts or back-to-back closing and opening shifts.

The study’s co-authors—Kristen Harknett of the University of California, San Francisco, Daniel Schneider of Harvard University, and Véronique Irwin of UC Berkeley—collected 1,942 surveys from hourly workers at large retail businesses in Seattle, along with 15,747 surveys from workers in similar cities without scheduling laws as a comparison group. They find that the ordinance decreased the prevalence of workers reporting on-call shifts and clopening shifts by 7 percentage points and 6 percentage points, respectively, increased the share of workers who know their schedule at least 2 weeks in advance by 11 percentage points, and decreased the share of workers experiencing last-minute shift changes without pay by 13 percentage points. (See Figure 1.)

Figure 1

Proportion of service-sector workers at large employers reporting negative scheduling practices before and after passage of SSO, 2017-2019

But that’s not all. The ordinance also had an impact on these employees outside of the workplace. Workers reported an improvement in their material well-being: The ordinance was associated with a 10 percentage point fall in rates of material hardship. It also was associated with an 11 percentage point increase in reports of good sleep quality and a 7 percentage point increase in levels of overall happiness. (See Figure 2.)

Figure 2

Proportion of service-sector workers at large employers indicating well-being before and after passage of SSO, 2017-2019

In sum, the ordinance not only improved working conditions in terms of schedule stability but also enhanced Seattle workers’ lives and well-being outside of work and bettered their financial stability.

The study’s co-authors make a point of noting that their findings do not indicate that hourly workers in Seattle no longer have unstable schedules. In fact, they note that many workers still report a fair amount of unpredictability and instability. For instance, 40 percent of workers covered by the ordinance reported less than 2 weeks’ notice of their schedules 2 years after the law took effect. This suggests that the ordinance’s accompanying training and awareness campaign may have fallen short of its goal to educate the city’s workforce about these changes. The continued high rates of unpredictable schedules also serve as an important reminder that labor standards enforcement is a key—and perhaps missing or flawed—piece of carrying out these schedule stability ordinances.

The study is a fascinating addition to the literature on work schedules, which has generally been focused on two main areas. One strand of the existing research examines the associations between scheduling practices and outcomes such as happiness, levels of distress, sleep quality, and financial security. (See Figure 3.)  

Figure 3

Probability of experiencing hunger hardship by type of schedule among U.S. food and retail workers.

This area of research also looks into the effects of schedule stability on child care arrangements, finding that better schedules are associated with better outcomes in these domains. (See Figure 4.)

Figure 4

Number of days per year in which young children of U.S. food and retail workers receive child care from a sibling younger than 10 years of age or lack child care

This body of research also finds that unpredictable and unstable schedules are not distributed equally across the population. Food, retail, and other low-wage service-sector employees—who are disproportionately likely to be workers of color and women workers—frequently face precarious scheduling practices because they are widespread in these industries. These low-wage workers also have been hit the hardest by the coronavirus recession and the continuing COVID-19 pandemic.

Another strand of schedule stability research evaluates interventions at the company level, finding that when companies, such as Gap Inc., implement changes designed to improve schedule quality, workers report improvements such as higher productivity and better sleep quality, and firms report improvements such as decreased turnover, longer job tenure, and increased profits. Reductions in turnover save companies money—replacing an employee can cost an employer an average of 40 percent of that employee’s salary. These outcomes are good for the broader U.S. economy.

Inspired in part by these twin strands of research, nine cities and states have passed “fair workweek laws” that attempt to improve the quality of work schedules in the service sector. Yet, to date, little research has drawn causal conclusions about the impact of these laws. That’s what makes the newly published study so exciting.

working paper

Uncertain Time: Precarious Schedules and Job Turnover in the U.S. Service Sector

By Joshua Choper, Daniel Schneider, Kristen Harknett,

October 16, 2019

working paper

Hard Times: Routine Schedule Unpredictability and Material Hardship among Service Sector Workers

By Daniel Schneider, Kristen Harknett,

October 16, 2019

working paper

Consequences of Routine Work Schedule Instability for Worker Health and Wellbeing

By Daniel Schneider, Kristen Harknett,

September 26, 2018

It’s important to bear in mind that the three researchers’ surveys with workers took place prior to the onset of the coronavirus pandemic in the United States. This is especially important considering the outsize impact of this public health crisis and the ensuing recession on low-wage and service-sector employees. A separate research team led by Susan Lambert at the University of Chicago’s School of Social Service Administration and Anna Haley at Rutgers University’s School of Social Work plan to release a study later this year that focuses on employer implementation of the Seattle law. The forthcoming study will incorporate the coronavirus pandemic’s impact on staffing and scheduling choices during these times of unprecedented stress and business uncertainty.

Even as the availability of COVID-19 vaccines allows many service-sector workers to feel safer going to work, it’s clear that the precarious working conditions that so many of them face are not conducive to quality living standards and, indeed, exacerbate inequality in the United States. Many service-sector workers are, in fact, not returning to their jobs even as the economy and society reopen, with some preferring to look for jobs with better working conditions and benefits or higher pay.

This body of research suggests that policymakers should heed the evidence on the myriad benefits of predictable schedules and enact scheduling stability laws. This new study published in the Proceedings of the National Academy of Sciences adds to the existing research that shows how improvements to workers’ schedules reduce turnover, boost worker productivity, and grow company profits, and demonstrates the clear personal and professional benefits for individual workers. Together, this body of work implies that benefits of stable schedules for workers and their families ripple out to the broader U.S. economy, facilitating the current economic recovery and improving life for all U.S. workers and their families.

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Weekend reading: Another disappointing Jobs Day edition

Posted on by Maria Monroe

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 U.S. Bureau of Labor Statistics released data on employment and the U.S. labor force in September today, revealing only 194,000 jobs were added to the struggling job market recovery. Carmen Sanchez Cumming and Kathryn Zickuhr detail the implications of the still uneven employment recovery for women of color, focusing in particular on U.S. care workers. This sector provides health, education, and social services to workers, families, and communities—services that took it on the chin anew with the surge the delta variant of the coronavirus. Then there are the longstanding challenges for workers in the care sector of the U.S. economy, including low pay and lack of paid leave, that pre-date the pandemic. The co-authors explain that because women in general and women of color in particular are overrepresented in care occupations, care work is undervalued and thus is both a driver and a reflection of racial and gender economic inequality and now a drag on a broadly shared economic recovery.

Ahead of this week’s EconCon 2021 session on redefining economic measurement, Austin Clemens put together a list of resources for those interested in advancing new methods of tracking how the economy is working for all Americans. The list covers Equitable Growth’s work on GDP 2.0—our project on the value of disaggregating Gross Domestic Product data by income—as well as why policymakers should work to disaggregate data along race and ethnicity lines to better understand the role and impact of systemic racism in the United States.

Check out Brad DeLong’s latest Worthy Reads column for his takes on must-read content from Equitable Growth and around the web.

Links from around the web

As eviction moratoriums lapse in states across the United States, millions of families face losing their homes. This crisis is worse for Black families, writes USA Today’s Jessica Guynn in a feature appearing on yahoo!finance, thanks in part to historical systemic racism that has prevented many of these families from becoming homeowners and building wealth. As rents rise and available housing options become scarce, fears of eviction are rising, with Black households more likely to be behind on rent payments and facing higher unemployment rates, and thus more likely to be displaced. Guynn details the implications for exacerbating existing inequality and racial disparities in the United States as well as the difficulties many families have had in accessing federal rental assistance programs during the pandemic.

The U.S. employment situation and economic recovery is also disproportionately more difficult for Black workers, with rates of joblessness still much higher for Black workers than their peers. This is not a new phenomenon and hardly surprising to many economists, reports NBC News’ Bracey Harris, but it has gotten worse amid the pandemic. The persistence of these disparities has led to questions about whether racial bias and discrimination as well as occupational segregation are playing a role. Many Black workers are in occupations and industries in which working from home is not an option and in which minimum wages and unpredictability are common. Harris tells the story of two Black women in Mississippi who lost their jobs during the pandemic and how they have experienced the labor market recovery.

Friday figure

Percent change in employment by selected education and health services industries, February 2020-September 2021

Figure is from “Problems in the U.S. care sectors risk holding back the economic recovery amid another month of disappointing job gains,” by Carmen Sanchez Cumming and Kathryn Zickuhr.

Problems in the U.S. care sectors risk holding back the economic recovery amid another month of disappointing job gains

Posted on by Maria Monroe
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According to the latest Employment Situation Summary by the U.S. Bureau of Labor Statistics, the economy added 194,000 jobs in September—well below expectations and substantially less than the average 806,000 job gained over the previous three months. As the delta variant of the coronavirus sent ripples through the labor market, the prime-age employment-to-population ratio, or the share of 25- to 54-year-olds who have a job, remained flat at 78 percent between mid-August and mid-September. While the overall unemployment rate fell from 5.2 percent to 4.8 percent, some of the reduction in joblessness was the consequence of workers leaving the labor force.

Today’s Jobs report continues to show that the recovery in employment remains uneven. Across the lines of race, ethnicity, and gender, employment is most depressed for women of color. In September 524,000 fewer Black women were employed than in February 2020, a decline of 5.2 percent. Latina women—who did not see any net increases in employment last month and face the second-deepest job losses—are experiencing a drop of 4.7  percent. (See Figure 1).

Figure 1

Percent change in U.S. employment for workers 20-years-old and over relative to February 2020, by race, gender, and ethnicity

The still chilling effect of the delta variant was evident in overall job growth. The education and health care industry, for example, shed 7,000 jobs and the “other services” industry that includes sectors such as personal care services shed 16,000 jobs. Even though in September the leisure and hospitality sector added 74,000 jobs—more than any other industry—these gains still fell short of the massive number of jobs added during the summer.

Another factor holding back stronger employment gains is the slow recovery in some parts of the paid care economy. This sector provides health, education, and social services to workers, families, and communities.

Indeed, last month nursing care facilities, residential mental health facilities, and community care centers for the elderly all saw their workforce shrink. These data reflect reports that care providers such as child care centers and nursing homes are struggling to hire and retain workers after millions of workers in the health care and social assistance industry were laid off between March and April of last year during the depths of the coronavirus recession. While some care sectors such as home health services have recovered at roughly the same pace as the overall U.S. labor market, others are lagging behind. As of September employment at nursing care facilities and community care centers for the elderly remained 15 percent and 11 percent below February 2020 levels. (See Figure 2).

Figure 2

Percent change in employment by selected education and health services industries, February 2020-September 2021

One likely reason for the slow recovery in these care sectors is that the coronavirus pandemic made already challenging and often bad-quality jobs even more difficult. Compensated caregivers in general—among them home health aides, child care workers, and nursing home staff—tend to be poorly paid and are likely to experience precarious working conditions. In 2020, for example, the median wage for childcare workers was just $12.24 per hour and for home health and personal care aides just $13.02 per hour.

In addition, these workers often do not have access to employer-provided benefits and are often subject to particularly invasive forms of worker surveillance. And as the pandemic hit early last year, many of the workers who were not laid off were highly exposed to the coronavirus at work and often received little support from their employers in terms of provision of basic protective equipment such as masks. According to one analysis, nursing home workers held one of the deadliest jobs last year as they provided care in understaffed and underfunded facilities while also lacking access to paid sick leave and earning insufficient wages.

Because women in general and women of color in particular are overrepresented in care occupations, that care work is undervalued and thus is both a driver and a reflection of racial and gender economic inequality.

Bad-quality jobs in the care economy hurt workers, those who are in need of care, and the entire economy

There are broad implications of so many bad-quality care positions. Poor working conditions and low pay translate into high turnover rates among care workers—turnover that is expensive for employers and bad for clients and patients. Nursing home staff turnover was already extremely high before the pandemic, with an average annual turnover rate of 128 percent, and high turnover has been found to be associated with citations for poor infection controls.

This incomplete recovery in care-providing sectors also is a drag on employment growth and long-term economic growth. According to the U.S. Census’ Household Pulse Survey, more than 11 million adults are not working because they are caring for someone sick with coronavirus symptoms, caring for an elderly person, or caring for children who are not in school or daycare.

Then there’s the recent survey by the Urban Institute. It finds that in late 2020, about 20 percent of adults living with children under the age of 6 had to work fewer hours because of greater care responsibilities. More broadly, research finds that when parents in general and mothers in particular do not have access to affordable and high-quality child care, they are also less likely to be in the workforce.

Partly because of the country’s aging population and the labor-intensive nature of most of this kind of work, the U.S. Bureau of Labor Statistics projects that between 2020 and 2030, demand for home health and personal care workers will grow 33 percent—27 percentage points more than the average growth rate for all occupations. Also due to greater demand, five of the 10 fastest growing jobs are in care occupations. This means that the quality of jobs in the paid care economy will affect a growing number of U.S. workers in the years to come, making it increasingly important to act now to ensure that these are well-paying, good-quality jobs.

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Equitable Growth’s Jobs Day Graphs: September 2021 Report Edition

By Kathryn Zickuhr, Carmen Sanchez Cumming,

October 8, 2021

Equitable Recovery

Factsheet: What does the research say about care infrastructure?

By Equitable Growth,

April 15, 2021

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Factsheet: U.S. occupational segregation by race, ethnicity, and gender

By Kate Bahn, Carmen Sanchez Cumming,

July 1, 2020

Investments in the U.S. care infrastructure are essential for a complete recovery and broadly-shared growth

The most direct route to start to counter the undervaluing of paid care workers is to raise pay through policies such as raising the federal minimum wage. Research by Krista Ruffini at the University of California, Berkeley, finds that because direct-care staff at nursing homes are some of the worst-paid workers in the United States, higher minimum wage floors lead to better labor market outcomes for those who do the job, reduce employee turnover, and improve patient care. Other measures that promote job quality, such as access to predictable schedules and safe working conditions, also are essential.

Because the U.S. labor market continues to be short 5 million jobs compared to the abrupt end of the previous economic expansion in February 2020, investments in U.S. care infrastructure will be essential for reaching a complete and resilient recovery.

Insufficient investment in accessible and high-quality child care and home- and community-based services have long held back progress toward a more dynamic and equitable economy—one in which paid caregivers are fairly compensated and those who currently cannot do paid work because they have caregiving responsibilities are able to enter the workforce if they choose to.

Equitable Growth’s Jobs Day Graphs: September 2021 Report Edition

Posted on by Carmen Sanchezcumming

On October 8th, the U.S. Bureau of Labor Statistics released new data on the U.S. labor market during the month of August. Below are five graphs compiled by Equitable Growth staff highlighting important trends in the data.

The employment rate for prime-age workers remained steady in September at 78.0 percent, still well below pre-pandemic levels.

Share of 25- to 54-year-olds who are employed, 2007-2021. Recessions are shaded.

The unemployment rate declined to 4.8 percent, with Black workers (7.9 percent) and Latinx workers (6.3 percent) still experiencing markedly higher unemployment rates compared with White workers (4.2 percent) and Asian workers (4.2 percent).

U.S. unemployment rate by race, 2019-2021. Recessions are shaded.

Total employment increased by only 194,000 in September. Employment in educational services declined, and employment in leisure and hospitality, after recent strong gains, increased more slowly.

Employment by major U.S. industry, indexed to industry employment in February 2020 at the beginning of the coronavirus recession (shaded).

The employment rate for women was steady at 53.4 percent in September, and the rate for men increased from 63.1 in August to 64.4 in September.

Share of the U.S. population that is employed, by gender, 2007-2021. Recessions are shaded.

In September, the share of workers unemployed due to permanent job losses was 38.5, and another 14.7 percent of workers are unemployed as a result of job losses due to temporary layoff. About 10.3 percent are leaving jobs, 30.0 percent re-entering the labor force, and 6.4 percent are new entrants.

Percent of all unemployed workers in the United States by reason for unemployment, 2019-2020

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Measuring economic outcomes for all U.S. workers and their families will hold policymakers accountable to creating broad-based growth

Posted on by Maria Monroe
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U.S. Gross Domestic Product is one of the most-cited economic statistics and is regularly regarded as shorthand for measuring the economic outcomes of the entire nation. Although it once represented cutting-edge economic analysis, U.S. GDP is completely inadequate for understanding our modern economy or the well-being of U.S. workers and their families. It cannot tell economists or policymakers anything about the informal work sector, inequality in the economy, sustainability, and myriad other issues that are essential for policymaking in the 21st century.

The problems with the GDP measure are emblematic of the work by the Washington Center for Equitable Growth to improve economic measurements. We know from research that changes in GDP have a huge impact on the tenor of economic narratives in the United States. But we also know that GDP is increasingly disconnected from the experience of most U.S. workers and their families, most of whom generally see increases in their own incomes that are well below headline GDP figures.

Measuring economic outcomes for all U.S. workers and their families will hold policymakers accountable to creating broad-based growthDownload

Fortunately, U.S. policymakers increasingly want to know not simply whether the economy is growing and by how much, but also where and for whom the economy is growing. They want to know what geographic regions are being left behind, whether persistent systemic race and gender divides are narrowing, how the economy is performing for old and young alike, and much more. Data disaggregation is the next frontier to guide responsive policymaking.

Our federal statistical agencies are world leaders and are poised to help answer these questions, but we must identify priorities and fund the necessary data infrastructure. By addressing racial and ethnic equity in the collection and reporting of data, by reporting on economic inequality, and by modernizing data infrastructure to make these goals possible, federal statisticians can give policymakers the tools they need to craft policy for equitable growth and give the public the tools they need to hold their elected representatives accountable to creating an economy that works for all of us.

Equitable Growth resources

GDP 2.0

“GDP 2.0: Measuring who prospers when the U.S. economy grows”

U.S. GDP growth is no longer sufficient as a marker of economic progress. A first step is to report on growth along the income distribution, so that policymakers can see how the economy is performing for working- and middle-class families. This brief shows that growth has increasingly been tilted toward very high-income Americans, leading directly to decreased economic mobility for those in the middle and at the bottom.

“Disaggregating growth”

This comprehensive report outlines a plan for replacing U.S. GDP with measures of growth that will better represent most U.S. workers and their families.

“Gross Domestic Product sets the tone of the U.S. economic debate while leaving working- and middle-class families behind”

This Equitable Growth working paper looks at decades of media economic coverage and finds that the tone of economic news does not correspond to the fortunes of the bottom 99 percent of income earners. This is directly attributable to the outsize importance of GDP growth as a metric for economic success, even though it no longer accurately represents progress for those outside the very top of the income distribution.

Racial gaps and equity in measurement

“Structural racism and the coronavirus recession highlight why more and better U.S. data need to be widely disaggregated by race and ethnicity”

In this Equitable Growth issue brief, Austin Clemens and Michael Garvey look at two major surveys—the Current Population Survey and the Survey of Consumer Finances—to show that these surveys cannot give accurate estimates of subpopulations of marginalized groups. This prevents researchers from, for example, being able to accurately estimate homeownership rates among generational cohorts of African Americans. Oversampling these populations could make these surveys more useful for policymakers who want to understand racial divides in employment, income, and wealth.

“Congress needs distribution analyses to make informed, equitable policy choices, and the CBO FAIR Scoring Act would deliver it”

Analyses of congressional legislation prepared by the nonpartisan Congressional Budget Office do not give policymakers enough information to assess the effects of legislation on different populations. The CBO Fiscal Analysis by Income and Race, or FAIR Scoring Act would require distributional analyses, including by race, that would help policymakers better craft legislation to address income and racial inequality and thus spur strong, stable, and broad-based growth.

“Executive action to improve U.S. economic measurements”

This “Executive Action Agenda” factsheet highlights the two ways the federal statistical agencies can contribute to advancing economic research into racial economic disparities, which ultimately can help ensure more equitable economic treatment.

“Racial equity in U.S. data collection improves the accuracy of research, policy evaluation, and subsequent policymaking”

This column from associate professor Randall Akee at the University of California, Los Angeles highlights some of the many benefits of having more diverse representation in the economics profession and suggests some ways our data infrastructure could be improved to provide more data on marginalized communities.

“Diversity in economics and data disaggregation can improve our understanding of the U.S. economy”

Marie Mora, provost at the University of Missouri-St. Louis, has been a leader in academic economics in trying to increase diversity and doing research that provides insight into economic outcomes for racial groups that go beyond lumping all Hispanic and Latinx Americans together. She writes here about why these are important projects to pursue.

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GDP 2.0: Measuring who prospers when the U.S. economy grows

By Austin Clemens,

July 11, 2023

Coronavirus Recession

Structural racism and the coronavirus recession highlight why more and better U.S. data need to be widely disaggregated by race and ethnicity

By Austin Clemens, Michael Garvey,

September 24, 2020

Executive action to spur equitable growth

Executive actions to improve U.S. economic measurements

By Equitable Growth,

March 3, 2021

Top experts

GDP 2.0

Austin Clemens, Director of Economic Measurement Policy at the Washington Center for Equitable Growth

David Johnson, Director of the Panel Study of Income Dynamics at the University of Michigan and Member of the Research Advisory Board at the Washington Center for Equitable Growth

Gabriel Zucman, Associate Professor of economics at the University of California, Berkeley

Emmanuel Saez, Professor of economics and Director of the Center for Equitable Growth at the University of California, Berkeley, and former member of Equitable Growth’s Steering Committee

Racial disaggregation

Michael Garvey, Macroeconomic Policy Analyst at the Washington Center for Equitable Growth

Randall Akee, Associate Professor at the University of California, Los Angeles

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Brad DeLong: Worthy reads on equitable growth, September 28-October 4, 2021

Posted on by Maria Monroe

Worthy reads from Equitable Growth:

1. A good society will need an extremely robust income support program. But the problem has always been that enough voters in the United States would rather see 10 people who would be appropriate users not get social insurance than to see 1 person among the “undeserving” actually receive benefits. Curiously, however, this set of judgments is never—or rarely—applied to systems that reward the undeserving rich. Their comeuppance is limited to entertainment fantasies. Read Liz Hipple and Alix Gould-Werth, “Weak income support infrastructure harms U.S. Workers and their families & constrains economic growth,” in which they write: “Economists Jesse Rothstein … and Sandra Black … argue it is inefficient to have families self-insure against unpredictable risks they cannot reasonably calculate. … Black and Rothstein explain, ‘The federal government can provide social insurance protections at a much lower overall cost, and … enable families to stretch their market earnings further.’ … Most people will need income support at some point in their lives. … In any given month, nearly 1 in 5 people benefit from SNAP, Supplemental Security Income, TANF, public or subsidized housing, the Women, Infants, and Children, or WIC, program, or the Child Care and Development Fund.”

2. I wonder if the government can be flexible enough to handle this problem, and I certainly doubt the ability of our current legal system to handle it. So I would rather focus on mechanisms to give more workers more bargaining power, and more channels and intermediary institutions through which they can bargain and to bargain on their behalf. Read Kathryn Zickuhr, “Workplace surveillance is becoming the new normal for U.S. workers,” in which she writes: Invasive and exploitative workplace surveillance in the United States is now growing largely unchecked due to weak worker power and a lack of legal protections or regulatory restrictions. … Workplace surveillance … enables illegal discrimination, hampers worker organizing … [and] is part of a cycle of fractured work arrangements through which firms de-skill work and misclassify employees. … The dangers posed by workplace surveillance fall most heavily on the most vulnerable.”

3. From two years ago. Read Austin Clemens, “Eight graphs that tell the story of U.S. economic inequality,” in which he writes: “Rising economic inequality over the past 40 years has redrawn the U.S. wealth and income landscape, shifting many of the gains of prosperity into the hands of a smaller and smaller group of people and marginalizing members of vulnerable communities. This transformation is in turn reducing income mobility and opening gulfs in educational achievement and health outcomes between different levels of income. The eight graphs in the three sections below visually illustrate these findings. … The first graphic tracks the share of all earned income accrued by the top 1 percent of earners, along with the next 9 percent, the upper 40 percent (from the 50th percentile to the 90th) and the bottom 50 percent. The share of income controlled by the top 10 percent bottomed out in the 1970s but has reached new highs—the top 10 percent of all income earners now control around 38 percent of national income.”

Worthy reads not from Equitable Growth:

1. I confess that the correlation between political polarization and COVID denialism at the state level makes me significantly more depressed than I believe Bradley L. Hardy and Trevon D. Logan are. Read their “The Way Back: Assessing Economic Recovery Among Black Americans During COVID–19,” in which they write: “Varying state and local public health and economic policy choices could present clear challenges to the speed and persistence of a broader national economic recovery. … Recent federal policies will mandate that employers require employees to either be vaccinated or submit to weekly testing. Economic policy evidence and theory show that businesses value and benefit from a consistent application of regulatory policies. Federal policy is converging with a private sector that is increasingly adopting a more consistent, aggressive stance on mask-wearing and vaccination policy for employees as a mechanism to avoid another large-scale shutdown of economic activity. Black Americans have experienced an especially large, harmful public health and economic shock from COVID–19. The consequences from historically high job loss and COVID–19 mortality and morbidity, along with K–12 learning loss, will likely transmit a substantial intra- and intergenerational consequence onto Black families and their communities. These communities will benefit from sustained public health, economic policy, and educational interventions to moderate the effects of COVID–19.”

2. Heather Boushey is doing a good job from her perch in the Executive Office Building. Read her “I’m One of Biden’s Advisers. Here’s How I Think About His Economic Agenda,” in which she writes: “In the early 1980s … my father was “pink slipped” from his machinist job building 747s at Boeing, an event that upended our family finances. … We were lucky; the recession was relatively short, and between my mom’s paycheck and my dad’s benefits, we got by until the orders for planes resumed. … I recall being shocked by how much power Boeing had over our lives. When my dad was laid off, the economic security my parents had long worked for disappeared overnight. … It got me thinking about … how can … things like unions and democratic governments that respond to crises … [and] cushion individual families against the whims of the marketplace? … Biden has set out to mend broken supply chains as aggressively as he tackled other challenges with the American Rescue Plan. But getting back to where we were is not enough. We need to emerge stronger and more resilient. And that’s why we need a more robust government. … Congress has a choice to make. Does it want to grow our economy by investing in the middle class and the public sector, and fundamentally recalibrating the relationship between government and the people it represents, or continue giving billions in tax handouts to the wealthiest Americans and multinational corporations? It’s time to build back better.”

3. Remember, the collapse of Lehman Brothers in 2008 should not have been a Lehman moment for the U.S. economy. There is no good reason that Evergrande today should be for China. Whether what I now tend to think of as the safe-asset-shortage problem is about to come to China big time, and trigger an example of the middle-income trap—that is a very interesting idea that I think I need to spend significant amounts of time trying to assess. Read Paul Krugman, “Wonking Out: This Might Be China’s ‘Babaru’ Moment,” in which he writes: “Suppose that the conventional wisdom is right and that Evergrande isn’t another Lehman moment. That still won’t mean that things are OK. For it seems quite possible, at least to me, that China is having a “babaru” moment … the Japanese bubble economy—or as the Japanese themselves called it, the “babaru economy”—of the late 1980s, when prices of many assets, above all commercial real estate, went completely crazy. At one point it was widely claimed that the land under the Imperial Palace was worth more than the whole state of California. Then everything crashed. … The bursting of the Japanese bubble didn’t lead to a financial meltdown. But it was followed by a prolonged period of economic weakness. At first many observers attributed that weakness to a hangover from previous financial excess: Japanese corporations had too much debt, they argued, or Japanese banks had too many nonperforming loans. But the weakness went on and on, and indeed in some ways continues to this day. … Japan has been able to maintain more or less full employment only through constant economic stimulus: ultralow interest rates and persistent budget deficits that have pushed the national debt above 200 percent of GDP. True, that debt hasn’t posed any problems so far, and the Japanese arguably deserve praise for managing a difficult economic situation with relatively little mass suffering. … Here’s the thing: While China is vastly different from Japan in many ways, China’s macroeconomic situation bears a striking resemblance to that of Japan around the time the Japanese bubble burst.”

Posted in Uncategorized

Racial equity in U.S. data collection improves the accuracy of research, policy evaluation, and subsequent policymaking

Posted on by Maria Monroe
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The U.S. economy and society are rife with racial and ethnic inequalities, from wealth and income divides to disparities in health and well-being, education, and employment outcomes. These racial and ethnic inequalities are a result of centuries of systemic racism and discrimination, which prevents people of color from moving to better-paying work, accumulating wealth, and otherwise developing and fully deploying their human capital in the U.S. economy and labor market.

These disparities have only gotten wider during the coronavirus recession in 2020 and amid the continuing coronavirus pandemic. Economists and social science researchers have long debated and studied these trends, yet data collection and reporting have long faced obstacles in best reflecting the diversity of the U.S. economy. These challenges not only limit the scope of data-driven research but also obscure its findings and, in turn, impede efficient and effective policymaking aimed at promoting strong, stable, and broadly shared economic growth.

This was the general theme of an Equitable Growth and Groundwork Collaborative virtual event this past summer, “Data Infrastructure for the 21st Century: A Focus on Racial Equity,” in which I spoke on a panel of fellow academic experts on the importance of racial equity in federal data collection. My co-panelists and I—all scholars of color who study underrepresented populations and subpopulations in the United States—discussed actionable proposals to increase the quality and utility of data gathering and analysis.

One such technique is oversampling, a method in which particular groups are surveyed at higher rates than they actually appear in the population. Oversampling can facilitate data disaggregation for these underrepresented groups in the United States and enhance the accuracy and generalizability of research findings.

Aggregate data points and statistics, such as Gross Domestic Product or the unemployment rate, are inadequate representations of the current U.S. economic situation because they lump all populations together and calculate an average. In reality, various groups and subgroups of the U.S. population fare differently in the economy and across society, rendering averages inaccurate portrayals of most people’s lived experiences.

To properly measure how all U.S. workers and their families are faring in the labor market, or how policies are impacting their lives, disaggregating data is therefore essential.

As I mentioned in my opening remarks at the recent data infrastructure event, I do a lot of research on small groups in the U.S. population, such as American Indians, Alaska Natives, Native Hawaiians, and Pacific Islanders. This work is facilitated with the use of administrative data that contain the entire populations of AIAN or NHPI groups and thus make it possible to conduct statistical analysis and data disaggregation.

But it’s not only studies of these smaller demographic groups that benefit from better data disaggregation. Larger demographic groups such as Hispanic Americans and Asian Americans that tend to be clumped together in surveys have an array of subgroups that face diverse challenges and experience the U.S. workforce and economy differently.

When researchers use broad categories to analyze outcomes for these groups, we essentially just get the average effect and lose a lot of nuance that is incredibly valuable for our research and findings, as well as policy implications. (See the video for more details.)

There’s another side of this question of missing the nuance in research findings that comes from a lack of diversity among researchers doing the research, framing the questions, and surveying the population. It’s no secret that economics as a profession and a field in general has a diversity problem. Women, people of color, and especially women of color, face incredibly high barriers to entry and success, starting at the undergraduate and graduate level. For instance, in the United States, between 2015 and 2019, no economics doctorates were awarded to Native American women out of the 1,200 doctorates awarded in that time period.

This diversity problem extends beyond who studies economics or teaches it to the next generation. One of the many pitfalls of not having diversity among researchers is that certain areas of research, outcomes, and evaluation tend to be forgotten—many of which could inform future research and policy decisions.

One example I discussed at the virtual event this past summer is the universal basic income program that many American Indian tribes have provided for the past 25 years. This means there are extensive data that can shed light on the effects of a universal basic income on labor force participation or poverty rates, among other areas—yet no one is really talking about them or paying attention to them, despite the knowledge that policymakers could gain from learning about these communities’ long-run experience and the effect on their communities.

This is just one example. But there are probably many others that academics and policymakers alike don’t realize they are missing because of a lack of diversity among economists. These areas of unexplored research opportunities are often only known to the communities in which they are being put into practice, which means that without researchers from those communities, they will probably remain unknown.

This profound lack of diversity in economics not only limits the scope of academic research and policy evaluation but also curbs the effectiveness and creativity of policymaking itself, as well as the ability of federal, state, and local governments to set up effective economic and social programs that create better economic opportunities and build better communities.

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The value of racial and gender diversity at the Federal Reserve

By Equitable Growth,

September 16, 2021

Boosting Wages

Sovereignty and improved economic outcomes for American Indians: Building on the gains made since 1990

By Randall Akee,

January 14, 2021

Coronavirus Recession

Structural racism and the coronavirus recession highlight why more and better U.S. data need to be widely disaggregated by race and ethnicity

By Austin Clemens, Michael Garvey,

September 24, 2020

Policymakers today have a unique opportunity to pass life-changing and essential legislation that will enable millions of Americans to achieve better economic and social outcomes in unprecedented fashion. But in order to fully comprehend the impact of these programs, we need disaggregated data to shed light on how various U.S. communities are affected by them, and we need economists from all backgrounds to analyze and evaluate those data. Not only will future research benefit from it, but so will the communities studied by academics and served by policymakers.

—Randy Akee is an associate professor in the Department of Public Policy and American Indian Studies at the University of California, Los Angeles.

Brad DeLong: Worthy reads on equitable growth, September 21-27, 2021

Posted on by Maria Monroe

Worthy reads from Equitable Growth:

1. Back in the real old days, large family sizes meant that the economies of scale in child care were captured for the most part within the family, and certainly within the extended family. In our time of nuclear families and low fertility a great deal of this essential work and life is done at a much greater societal resource load per child than a better organized society would do. Read Sam Abbott, “The child care economy,” in which he writes: “Insufficient child care options can prevent parents who wish to work from doing so, with mothers often bearing the brunt of this challenge. … High-quality early care and education provides critical socialization and learning opportunities when the brain is developing rapidly. … Adequate funding is necessary for human capital development. … Supporting child care workers is crucial for promoting quality care and human capital development. … Investing in the nation’s children is one of the safest bets policymakers can make. Research on early care and education programs finds that $1 in spending generates $8.60 in economic activity.”

Worthy reads not from Equitable Growth:

1. There is a very large fiscal contraction coming down the tracks, targeted at the non-rich in the United States. It is not at all clear that macroeconomic forecasters optimistic about production and employment are taking full and proper account of it. Read Asha Banerjee and Ben Zipperer, “All pain and no gain: Unemployment benefit cuts will lower annual incomes by $144.3 billion and consumer spending by $79.2 billion,” in which they write: “Congress and the Biden-Harris White House have let expanded unemployment benefits expire in the middle of the ongoing COVID–19 pandemic, even while employment is still well below pre-pandemic levels. As a result, annual incomes across the United States will fall by $144.3 billion and annualized consumer spending will drop by $79.2 billion, according to the best available evidence on the effects of recent unemployment benefit cuts. … About half of states prematurely terminated these programs between June and late July 2021, and then, by letting the federal law expire in September, Congress and the White House cut off pandemic UI entirely. In total, more than 10 million workers lost all of their unemployment benefits because of either the state-level program terminations or the September program expiration.”

2. Behind the belief that Black people just happen to make bad choices is blame: either of the culture, or (more often) of the genes—although that is mostly whispered in polite society. Until we can convince the overwhelming majority of Americans that people are, at bottom, the same, and that groups where “bad choices” are more common arise from structural causes, equitable growth will be a nearly impossible task. Read Alberto Alesina, Matteo F. Ferroni, and Stefanie Stantcheva, “Perceptions of Racial Gaps, Their Causes, and Ways to Reduce Them,” in which they write: “Using new large-scale survey and experimental data, we investigate how respondents perceive racial inequities between Black and white Americans, what they believe causes them, and what interventions, if any, they think should be implemented to reduce them. We intentionally over- sample Black respondents, cover many cities in the United States, and survey both adults and very young people aged 13 to 17. In the experimental parts, we consider the causal impact of information on racial inequities (such as the evolution of the Black-white earnings gap or the differences in mobility for Black and white children) and explanations for these inequities (i.e., the deep-seated roots and long-lasting consequences of systemic racism) on respondents’ views. Although there is heterogeneity in how respondents perceive the magnitude of current racial gaps in economic conditions and opportunities, the biggest discrepancies are in how they explain them.” 

Posted in Uncategorized

Diversity in economics and data disaggregation can improve our understanding of the U.S. economy

Posted on by Maria Monroe
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Economics as a field is beleaguered by a diversity problem. This is not a new phenomenon, but diversity-related issues are now more widely discussed within many organizations and professional disciplines, including among economists, in light of how COVID-19 and the unraveling of the U.S. economy exposed sustained racial and social inequities alongside ongoing systemic discrimination and violence against Black Americans and other Americans of color.

The lack of representation in economics results in pervasive barriers and blind spots along the economics pipeline and pathways, from who becomes an economist and how economics is taught to how data are collected and the ways in which researchers and policymakers analyze and use those data. As a Latina economist who has long worked to diversify the profession—particularly with respect to race, ethnicity, and gender—I know all too well the obstacles that my peers face in the field, as well as the benefits of the diversity in lived experiences, viewpoints, and backgrounds that we bring to the table.

These challenges and their effects on the economics profession were largely what pushed my colleagues and me, back in 2002, to found the American Society of Hispanic Economists, a professional association of economists concerned by the underrepresentation of Hispanic voices in economics. We seek to promote research on economic and policy issues affecting Hispanic communities and the United States as a whole, and to encourage more Hispanic Americans to enter the economics profession.

I recently spoke about my experience founding ASHE and my desire to promote more diversity in economics at an Equitable Growth virtual event co-hosted by the Groundwork Collaborative earlier this year. I explained the importance of diversity of perspectives in academia to shape what we study and how we go about it. I also highlighted ASHE’s work—along with the American Economic Association’s mentoring program, which is funded by the National Science Foundation, for traditionally underrepresented minorities—in mentoring early-career economists and graduate students.

These young scholars tend to be more at-risk of leaving the economics profession—or even not entering it at all or completing their degrees—due to harassment, discrimination, feelings of isolation, or unfair treatment arising from lack of diversity. (See video for details.)

The event centered on the importance of racial equity in federal data collection and how disaggregating data can illuminate certain racial and ethnic inequalities that permeate our economy and society. Better understanding the lived experiences of various demographic groups expands our understanding of how the economy is working for all Americans in a way that is often obscured by more traditional macroeconomic aggregate numbers, such as Gross Domestic Product. And disaggregated data can guide policymakers as they work to address racial disparities and the systemic racism from which they stem.

The push to disaggregate data along race and ethnicity lines is one I have long worked on and am passionate about, particularly as it relates to specific subgroups of the Hispanic American community. The experiences of Mexican Americans or Puerto Ricans differ from those of Cuban Americans or Dominicans, for instance, but those distinctions are obscured by aggregate statistics that lump all Hispanics together.

There also are differences within subgroups. Mexican Americans, for example, include immigrants from Mexico but also U.S. natives whose families have lived in areas that predate the United States. And Puerto Ricans growing up in Puerto Rico are U.S. citizens by birthright, but their lived experiences are not necessarily the same as those growing up on the U.S. mainland.

As I mentioned at the Equitable Growth-Groundwork Collaborative event, “When we think about the Hispanic or Latino population, it’s actually quite heterogeneous. And sometimes … we just hear about the ‘Hispanic population’ or what’s happening with Hispanic employment or unemployment, without understanding that there are key differences within the Hispanic population.” (See video for details.)

So, what can academics and policymakers do about it?

For one, oversampling would improve the ability to analyze subgroups of the U.S. population. Oversampling is a survey tool that targets specific groups at a higher rate than they appear in the overall population to address the frequent underrepresentation of these groups in surveys. Larger samples would help researchers uncover different economic and social experiences of these communities and facilitate disaggregation among subgroups that are not well-represented by the aggregate data.

For instance, I often use the U.S. Census Bureau’s American Community Survey in my research because it is a large dataset that allows for some disaggregation of Hispanic groups. But even the ACS is limited in its ability to break down certain smaller subpopulations, and this is where expanding sample sizes could be useful.

In addition to oversampling, it is essential to complement survey and administrative data with on-the-ground data so that policymakers can develop and implement more effective policies to address specific needs of target groups. When I served on the board of directors of the Federal Reserve Bank of Dallas’ San Antonio branch, I quickly understood the value of having researchers and other stakeholders in the community learn firsthand about local conditions and gather so-called economic intelligence from the areas we, as board members, represented.

Coronavirus Recession

Structural racism and the coronavirus recession highlight why more and better U.S. data need to be widely disaggregated by race and ethnicity

By Austin Clemens, Michael Garvey,

September 24, 2020

Expert Focus

Expert Focus: Intersections between racial equity and disaggregation of data

By Aixa Alemán-Díaz, Christian Edlagan, Maria Monroe,

June 14, 2021

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The intersectional wage gaps faced by Latina women in the United States

By Kate Bahn, Will McGrew,

November 1, 2018

Indeed, the conversations we had in our respective communities shaped our understanding of the lived experiences of local residents and allowed us to examine, almost in real time, the potential effects of policies under consideration by the Fed. By sharing our insights with the Fed, we were able to help it formulate and implement more effective monetary policy.

In other words, collecting more and better data allows for more and better data disaggregation and analysis, which, in turn, allows for better policy decisions and outcomes. Knowing how to collect these data begins with empowering economists from diverse backgrounds to shape how we study different groups of people while providing unique perspectives from our lived experiences, making sure all voices are heard and respected.

As I and my fellow panelists reiterated, while disaggregating the data we collect and having “boots on the ground” requires effort and resources, not taking these steps is doing a disservice to ourselves, our research, the communities we study, and to local and national economic prosperity.

—Marie T. Mora is associate vice chancellor for strategic initiatives and professor at the University of Missouri-St. Louis.

Weekend reading: Evidence for a stronger economic future edition

Posted on by Maria Monroe

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 its biennial policy conference, virtually gathering policymakers, academics, and advocacy partners for sessions discussing pressing economic challenges. The event, “Equitable Growth 2021: Evidence for a Stronger Economic Future,” included opening remarks from Equitable Growth’s new President and CEO Michelle Holder, in which she outlined her research background and how it fits with the organization’s mission. She also detailed Equitable Growth’s long history of facilitating evidence-backed policymaking by connecting academia and the policymaking community, before explaining why the current moment in Washington offers opportunities to make real structural change in the U.S. economy and society. Participants and attendees of the conference also heard from:

  • U.S. Secretary of Labor Marty Walsh, who discussed the importance of an equitable recovery from the coronavirus pandemic.
  • U.S. Rep. Hakeem Jeffries (D-NY), who spoke to Equitable Growth’s Director of Labor Market Policy and interim chief economics Kate Bahn about building a just and competitive economy for all.
  • New York Attorney General Letitia James, who detailed the importance of curbing Big Tech’s market power.
  • Michigan State University economist and Equitable Growth Steering Committee member Lisa Cook, who chatted with Equitable Growth’s Holder about the role of academic research in evidence-based policymaking.
  • University of California, San Diego assistant finance professor Carlos Fernando Avenancio-León, whose conversation with Marketplace’s Kimberly Adams touched on topics that he recently discussed with Equitable Growth’s Director of Government and External Relations David Mitchell in our In Conversation series. Adams and Avenancio-León dove into Avenancio-León’s research on how the Voting Rights Act of 1965 impacted the economic well-being of Black Americans and the link between political polarization and rising economic inequality, the structural racism embedded in local property taxation systems and property appraisals, and policy solutions to address these issues.

A new Equitable Growth issue brief presents a cost-benefit analysis of the proposed nationwide public preschool program included in the American Families Plan. Robert Lynch calculates the 10-year costs and benefits of such a program, and then extends the analysis to a 35-year period to fully grasp the long-term implications. He finds that a high-quality, publicly funded preschool education program will generate growing annual benefits that surpass the annual costs of the program within 8 years. These benefits, he writes, come in the form of government budget benefits, increased wages and earnings of workers (and thus higher tax revenues), and improved outcomes for children and their parents in terms of better health, lower crime rates, and fewer instances of child abuse and neglect. This investment will not only have long-term benefits but also an immediate stimulus effect on the U.S. economy, with estimated growth in Gross Domestic Product of $28.6 billion and more than 210,000 new jobs in just the first 2 years. Though this program would have significant upfront costs, Lynch explains, the benefits more than make up for the costs.

Equitable Growth is excited to welcome two new Dissertation Scholars for the 2021–22 academic year. Lauren Russell of Harvard University and Sheridan Fuller of Northwestern University. Russell and Fuller receive a stipend and professional support from Equitable Growth and our network throughout the year as they work on their research and learn about the policymaking process. Find out more about their current areas of study and goals for the year by reading our blog post announcing their participation.

Links from around the web

Employment in the child care industry is still down even as demand for child care rises. The Washington Post’s Heather Long explains that child care workers are leaving their jobs for better-paying, safer positions in different industries. This leaves many child care centers without sufficient staff numbers, meaning many children and families are being turned away from the only care options nearby. Long cautions that this trend is a “red flag” for the economy, as working parents, mostly women, are unable to return to work until the child care crisis is resolved. Long reports that more than one-third of child care providers are considering leaving their jobs or closing their businesses in the next year, with potentially disastrous consequences for the broader economy. This is part of the reason why President Joe Biden has asked Congress to increase public investments in the care economy.

There’s something wrong with the hiring system in the U.S. labor market, write Recode’s Rani Molla and Emily Stewart. Headlines tout job openings across industries with employers desperate to fill them, and yet unemployed workers are not getting hired. In fact, U.S. Bureau of Labor Statistics data reveal 8.4 million unemployed workers and 10.9 million job openings. There are many potential explanations for this mismatch, the authors write. Many workers are only finding jobs that pay too little or offer unpredictable schedules, or just simply aren’t a match for their background. Others are still worried about the thread of COVID-19 or have other health and well-being concerns. Yet another factor is that the set of desirable skills employers are looking for is rapidly changing as technology and software reshapes industries and positions within them. But, Molla and Stewart explain, hiring software and algorithms are also playing a role: They weed out candidates based on arbitrary factors or keywords and ignore candidates’ potential to be a good fit such that “the endless quest to make hiring efficient has rendered in inefficient.”

Antitrust laws are primarily used to combat monopoly power in the United States, but perhaps it’s time to start using them to address monopsony power as well. In a New York Times guest essay, Eric Posner makes the case for raising wages for workers by using antitrust laws to boost wages and lower inequality. Posner details how monopsony relates to monopoly, especially with regard to the impacts on consumers and workers, before diving into research on monopsonistic labor markets and how to use antitrust law against these employers. He explains the connection between labor market concentration and anticompetitive behavior among firms, as well as the results for employment rates and earnings. And he credits academic research with the increase in antitrust violation cases brought against employers in the past year, with hopefully more to come as the Biden administration seeks to use antitrust to help workers.

Friday video

The video is from “Equitable Growth president and CEO addresses conference attendees in first public appearance,” by Michelle Holder.