The Class of 2016 is Worse Off Than the Class of 2000

May 16, 2016 Nick Cassella

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The New York Times editorial board penned a powerful column on the economic prospects for the Class of 2016. In short, the outlook is unpleasant. Here’s some data they provide to back up this conclusion: “ Nearly 45 percent of college graduates ages 22 to 27 were in jobs that did not require a college degree, compared with 38 percent in 2000.” “The recent unemployment rate for college graduates ages 21 to 24 was 5.5 percent, compared with 4.3 percent in 2000.” College graduates’ underemployment rate — which includes the unemployed, those who have briefly left the work force and those stuck in part-time jobs — was recently 12.3 percent, compared with 7.1 percent in 2000.” A “soft” US “labor market has depressed wages” for these young graduates. Today, the average hourly pay for university graduates is $18.53 which is “barely higher than it was in 2000, adjusted for inflation.” These stagnant wages are depressing enough on their own. But wait, there’s more! College tuition and fees at private universities have increased by 51 percent from 2000-2015 , while public universities have seen their tuition increase by 85 percent . As a result, “ the average student loan balance has increased by more than 78 percent since 2006 .” An average graduate from the Class of 2015 “ will have to pay back a little more than $35,000 .” With such bleak economic opportunities ahead of them, it is easy to understand why young Americans are not wildly advocating for bland, Democratic establishment policy choices like the Reducing Educational Debt (RED) Act. The RED Act “ would provide two years of tuition-free community college, low-cost student loan refinancing, and Pell Grants indexed to inflation .” Unfortunately, with the GOP controlling Congress, the bills are not going to be passed anytime soon. So for now, the RED Act is used as a Democratic talking point – a mere thirty second blip during stump speeches which acts to assure young, indebted Americans that Democrats are the only party really looking out for them. But advocating for refinancing student loans (down to 3.86 percent!) is nowhere near ambitious enough. How is that honestly going to alleviate our nation’s lackluster economic situation? The establishment’s policy
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Daily Clips: May 16th, 2016

May 16, 2016 Nick Cassella

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Daily Clips

Traditional economists are getting defensive: Traditional economists are starting to get uncomfortable with all this criticism directed towards their profession. Their blind allegiance to neat formulas over actual real world application is very bizarre, to say the least. A recent article by Michael Strain, who works for the conservative think tank American Enterprise Institute, pleads with economics doubters to stop doubting and to just drink the kool-aid: An economics 101 textbook is a treasure. The information therein captures the leaps forward in intellectual history, in our understanding of society — indeed, in our understanding of daily life. Disagreements slow Pentagon’s plan to allow transgender service members: There are roughly 12,800 transgender service members in our military today. That’s a lot. While the Pentagon’s progress on the issue has been lackluster, the consensus seems to be that their policies will change and the military will have full gender inclusion soon enough. Knock on wood. SCOTUS punts on latest Obamacare birth control damage: The birth control mandate has been sent back to lower courts. Confronting the parasite economy: Nick Hanauer’s latest piece defines what he calls the “parasite economy” — an economy “where companies large and small cling to low-wage business models out of ignorance or habit or simple greed.” Why is that a problem? Hanauer explains: According to data compiled by the Brookings Institution, 73 million Americans —nearly one-quarter of our population—live in households eligible for the Earned Income Tax Credit (EITC), a benefit exclusively available to the working poor. I want to underscore this point. Nearly a quarter of our fellow citizens are poor—not because they don’t have jobs, but because they or their family members do—mostly working for giant profitable corporations. These are people who labor long hours preparing our food, stocking our shelves, cleaning our offices, caring for our children, and performing the many other tasks and services that define our modern way of life. Tweet of the day: The free market is a hell of a thing. https://t.co/yCYTjV9zZC pic.twitter.com/6WaVF3AFKV — Matt Pearce
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Daily Clips: May 13th, 2016

May 13, 2016 Nick Cassella

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Americans don’t actually miss manufacturing they miss unions: Our politicians today lionize manufacturing jobs as if they represent the apex of work. That fixation is misplaced, however. What they’re really celebrating is actually the basic workplace benefits which came from this type of work via unions. Yet we never hear politicians say that. Why? Well, because then they’d actually have to put forward policies which broadened labor standards to those outside of unions. The upside of lowering urban inequality: US to schools – give transgender students bathroom rights: Wow. When I saw this news last night, I couldn’t believe it. While the Obama administration’s guidance is not legally binding, it sets a precedent and a tone which is incredibly inclusive. For all of your political failings, here is a moment we can celebrate and feel proud of. Tweet of the day: U.S. immigration plans deportation raids targeting women and children https://t.co/AgFLI7zE87 pic.twitter.com/ipVZ6tZWxx — HuffPost Politics (@HuffPostPol) May 13, 2016

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Daily Clips: May 12th, 2016

May 12, 2016 Nick Cassella

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Congress is failing to fight Zika virus: Deja vu all over again. “Republicans played politics two years ago with the Ebola epidemic, and now they’re stalling on the president’s funding request to fight Zika.” We are so dysfunctional. It pains me. US jobless claims hit more than one-year high: Here’s a sober reminder that the American economy is not nearly as wonderful as (some) Democrats make it sound. Despite the jump last week, claims have remained below 300,000, a threshold associated with healthy job market conditions, for 62 consecutive weeks, the longest stretch since 1973. The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, increased 10,250 to 268,250 last week, the highest level in almost three months. The middle class is shrinking everywhere in the US: The decline of the American middle class is ‘a pervasive local phenomenon,’ according to Pew, which analyzed census and American Community Survey data in 229 metros across the country, encompassing about three-quarters of the U.S. population. In 203 of those metros, the share of adults in middle-income households fell from 2000 to 2014. Tweet of the day: "Don't let mosquitos bite you" – almost as bad as, "Try not to get pregnant" #zika #publichealth pic.twitter.com/tgirlYgiUr — Steph Herold (@StephHerold) May 12, 2016

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How We Won the Fight for $15 in Seattle, and What’s Next

May 11, 2016 Paul Constant

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Minimum Wage

Last night, David Rolf debuted his brand-new book, The Fight for Fifteen: The Right Wage for a Working America , to a packed room at Town Hall. A taped video introduction by Mayor Ed Murray set the tone for the evening as he declared that with the $15 minimum wage, “we turned the impossible into the inevitable.” Rolf’s own talk, and the comments from the panel of citizens who helped bring a $15 minimum wage to Seattle and SeaTac, proved that all it takes for the impossible to become real is a lot of hard work. Rolf began his introductory remarks by asking the audience to picture a presidential candidate in 1976 giving a speech that accurately predicted the future. Everything in the speech would seem impossible back then: the fall of the Berlin Wall, the addition of China, Brazil, South Korea, Russia and South Africa to the international community, whole new industries built around technology that couldn’t even be imagined forty years ago. But then imagine that immediately after the candidate predicted that America would become the wealthiest nation on earth, he also predicted that 95 percent of the wealth created would go to the top one percent, and that government would be more interested in detaxing and deregulating big business, breaking unions, and establishing “a new economic apartheid for brown and black Americans.” That candidate would be shamed out of politics forever, Rolf said, and their party would lose the White House for generations. But those predictions are exactly what happened, he explained, because over the last forty years “we believed the wrong theories” and “we followed the wrong leaders.” Rolf said he “grew up believing we [in America] were number one.” But now we only have the “27th largest middle class in the world;” by that metric, Germany is now number one. A big reason why everything is going
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Daily Clips: May 11th, 2016

May 11, 2016 Nick Cassella

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Should the middle class fear the world’s poor? A nuanced article that looks at recent research on globalization and its affect on the middle class of Western nations. Very worthy of your time. Trump surges in new national poll: The worst way to wake up. Thomas Friedman on the foreign policy goals of the next POTUS: The column is littered with some dubious fear-mongering (“These suicidal jihadist-nihilists are not trying to win; they just want to make us lose.”), but for the most part Friedman’s take on world affairs is accurate. He also takes a few shots at Obama’s foreign policy “victory lap” – which is unexpected. Hillary Clinton wants to let people buy in to Medicare: What does that exactly mean? People who don’t get health insurance through their job and earn too much to qualify for Medicaid could buy insurance from the government rather than from a private company. In the public option scenario, the government insurer would have a new name and would be open to people of all ages. In the Medicare buy-in scenario the government insurer would be called “Medicare” and access to it would be limited by age. Clinton spoke specifically of “people 55 or 50 and up,” which is broader than the 55 and up that was considered by the Senate back in 2009. Bernie’s response is, well, very Bernie-esque – and by that I mean valid: Secretary Clinton’s proposal to let the American people buy into Medicare is a step in the right direction, but just like her support for a $12 minimum wage, it is not good enough.

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Daily Clips: May 10th, 2016

May 10, 2016 Nick Cassella

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This is the opinion section for the Washington Post. The media is out of control. There are infinite amount of important stories which need to be run, which need to be understood, which need to be unveiled, but these clowns continue to be hypnotized by He Who Must Not Be Named. The cost of low wages to our economy: A fascinating new report examines poverty and public assistance in the manufacturing workers. Best-paid U.S. hedge fund managers take home $13 billion : “Hedge funds lost money for their investors last year but the industry’s top-paid managers had a banner year, with five men earning more than $1 billion each in 2015, an industry survey released on Tuesday showed.” Amazing graph that may only interest me: Velocity of money “is the number of times one unit of money is spent to buy goods and services per unit of time.”

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Daily Clips: May 9th, 2016

May 9, 2016 Nick Cassella

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Donald Trump or Pauly Ryan? Who’s #1? Maureen Dowd imagines how Trump and Ryan’s meeting on Capitol Hill, where she creates witty dialogue and unveils sound political observations. Here’s my favorite passage: ‘I never use the same adjective twice,’ Trump replies coolly. ‘As you know, I do have killer instincts. That’s how I knocked out 16 losers. So let’s try a few names for kicks. Pious Paul? Pompous Paul? Phony Paul? Back-Stabbing, Blindsiding Paul who hung me out to dry to protect his own presidential ambitions for 2020?’ Ryan blanches, protesting: ‘No, no, I just want us to come together with a positive vision.’ The South’s Confederate-monument problem isn’t going away : It turns out that the South started building a ton of monuments to defenders of the “lost cause” in the years following the Civil War. The sheer amount around today means that many towns and cities will be confronted with some controversial decisions. Dark-skinned economist profiled for making notes in “strange code” while on airplane : We are a xenophobic and racially charged nation now, even without He Who Must Not Be Named at the helm. Seattle schools have biggest white-black achievement gap in state : Depressing, but not at all surprising.

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Daily Clips: May 6th, 2016

May 6, 2016 Nick Cassella

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Raise wages, kill jobs? Seven decades of historical data find no correlation between minimum wage increases and employment levels: Wow. The National Employment Law Project released a groundbreaking study yesterday which examined “the historical data relating to the 22 increases in the federal minimum wage between 1938 and 2009 to determine whether or not these claims —that if you raise wages, you will lose jobs—can be substantiated.” The short answer: no. They found “no correlation between federal minimum-wage increases and lower employment levels, even in the industries that are most impacted by higher minimum wages.” US adds 160,000 jobs: The unemployment rate stayed put at 5%. It’s not the best report, though, as the data “provided an unexpectedly downcast signal about the nation’s labor market: A surge of Americans dropped out of the workforce and hiring in several key industries, including construction and manufacturing, all but stalled.” Hillary Clinton doesn’t need to choose between a reassuring campaign and progressive policies: Clinton doesn’t have a realistic chance of securing large Democratic majorities. The House districts are sufficiently tilted that even securing a narrow one would be a very steep uphill fight, and any Democratic majority would depend heavily on relatively moderate members holding Republican-leaning districts. But it’s still the case that even a small Democratic majority reliant on moderate legislators would pass more progressive legislation — hiking the minimum wage, raising taxes, expanding Medicaid funding, etc. — than a Republican one. Tweet of May: The best taco bowls are made by immigrants who resent a rich prick calling them rapists. Love inauthentic Mexican! pic.twitter.com/9tEORJxoZp — Full Frontal (@FullFrontalSamB) May 5, 2016

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A Groundbreaking New Report Upends Conventional Wisdom About the Minimum Wage

May 5, 2016 Paul Constant

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Minimum Wage

You’ve heard opponents argue again and again that raising the minimum wage will kill jobs. ( And you’ve seen us refute their claims at every turn.) If you increase labor costs for businesses, they claim, employers will have to either raise costs or lay off employees. They discuss minimum-wage increases in such simple language that it’s hard to argue with them: wages go up, employment goes down. A child could understand that, right? Unfortunately, simplicity doesn’t always equal truth. For most of the history of humanity, we believed through our uninformed observations that the sun circled the earth, and that misconception colored our understanding of the way the universe works. These charges that raising the minimum wage will kill jobs are just as untrue as the belief that the earth is the center of the universe. Luckily, we now have proof that raising the minimum wage doesn’t kill jobs, in the form of a new report from the National Employment Law Project . Titled “Raise Wages, Kill Jobs? Seven Decades of Historical Data Find No Correlation Between Minimum Wage Increases and Employment Levels,” authors Paul K. Sonn and Yannet M. Lathrop, using data collected with help from T. William Lester, PhD., lay out every federal minimum-wage increase in America since 1938, making “simple before-and-after comparisons of change 12 months after each minimum-wage increase.” This seems basic enough, and it’s fairly remarkable that nobody has ever thought to do it before. So what did they find using these methods? Out of 22 changes in the federal minimum wage since 1938, “in the substantial majority of instances (68 percent) overall employment increased after a federal minimum-wage increase.” This means that one year after the national minimum wage went up, employment was up 15 out of 22 times. Of the decreases remaining, the vast majority occurred just after or during recessions, when employment always decreases, no matter
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