Every Month a CPEG member will be posting a brief issue analysis for discussion and comments. This month’s discussion piece was authored by CPEG’s newest member, Luis Diaz-Perez. A little more about Luis can be found in the “About Us” section of our site.
A college education was once synonymous with self-advancement and independence. Now, a college degree might be more appropriately associated with debt and dependence. Individual lives, not to mention national growth and development are being buried beneath $1 trillion of student loan debt. This calamity, already greater than American credit card or car loan debt, is scheduled to become even more pitiless after July 1. That’s when interest on federal student loans doubles to 6.8%. But this piling on doesn’t have to be. Thanks to Sen. Elizabeth Warren’s first stand-alone bill, S897 – the Bank on Students Loan Fairness Act, a remedy is at hand that doesn’t just attack the metastasis, it also offers a prescription for broader economic wellness.
The labor market remained sluggish in May. Unemployment rose from 7.5% to 7.6%, while nonfarm payroll increased 175,000. Much of the job growth was concentrated in retail, food services and drinking places and temporary help. Manufacturing fell slightly.
The growth in employment is at about the same rate as has characterized the economy over the last year. This rate is simply not enough to make headway against the huge damage done by the financial panic and recession that started in late 2007. The key measure of labor market health, the employment to population ratio remains stuck at 58.6%. That ratio has been at this level since 2010. On the eve of the recession the employment to population ratio was over 63%. In the 2001 recession this measure never fell below 62%. The economy remains in deep trouble. We are treading water. Growth is barely covering population increases. The human cost of the recession continues. The simple logic of the numbers is that we have made no progress.
This is a crosspost from the “Dollars & Sense Real World Economics” Blog, authored by CPEG’s Ron Baiman.
It’s been interesting following the recent press on corporate tax avoidance, and in Chicago, the ignominious public school closings. I thought it would be useful to take a minute to draw out the linkages.
The biggest revelation from Apple’s tax avoidance strategy has been it’s scheme to set up “corporate persons” who don’t reside anywhere.1 Apple set up an Irish subsidiary incorporated in Ireland (and therefore not liable for U.S. corporate taxes) but managed from California (and therefore not subject under Irish law to Irish taxation) that has rights to the income from all of the companies trademarks and patents in Asia, Africa, and Europe. Presto! This special corporate person is not legally liable for any taxes – a step up from the usual multinational “transfer pricing” and “off-shore” tax haven strategies where the poor “corporate person” still has to at least have a place of residence!
Every Month a CPEG member will be posting a brief issue analysis for discussion and comments. This month, CPEG member Sharon Post has chosen to discuss the impact of health care employment on job creation and income inequality.
In 2009 CPEG released a paper calling for a massive public jobs program aimed at both relieving immediate suffering and redressing long-standing structural problems in the U.S. economy. We raised two often overlooked problems: (1) the inability of the private sector to create sufficient jobs at adequate wages and (2) the existing labor market’s reproduction of inequalities that have left the lower 40% income strata desperate and miserable. In light of those points, this discussion paper attempts to add to that earlier analysis some questions about employment in the health care sector. Given the importance of health care sector employment, especially in low-income communities where the hospital is the largest employer, this paper looks specifically at hospital employment and asks:
- What does it mean for job creation and income inequality that so many hospital jobs are low-wage jobs?
- What will changes in the health care delivery system, stimulated by the ACA and other reforms, mean specifically for the low-wage hospital workforce?
- Can a jobs program such as the one CPEG has proposed take on both the need for good jobs and the need for better health access in low-income communities?
On April 24th two groups of young people met up on Chicago’s Magnificent Mile, and it wasn’t for the shopping. One group was striking retail and fast food workers who had walked off the job to protest low wages and demand a $15 minimum wage for downtown workers. The other group was students protesting Mayor Rahm Emmanuel’s school closings. Many of the striking workers were only a few years older than the students. Inequitable education policies like those of the Chicago Public Schools fall most heavily on low-income communities. The experience of dictates from above disrupting neighborhoods—closing schools, firing school staff, reducing education to performance on high stakes testing–with no voice from those affected doesn’t produce schools encourage low-income students to assert themselves and demand a better life for themselves and their families. Last Wednesday the youth of Chicago taught us what we should already know, the economy is not working for most people in the U.S.