Weekend reading: Evidence for a stronger economic future edition
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.