The Minimum Wage: Time to Start Working on the Next Increase
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This is a cross-post from Jared Bernstein’s blog, On the Economy. Bernstein is a senior fellow at the Center on Budget and Policy Priorities (CBPP) and, from 2009 to 2011, was the chief economist and economic adviser to Vice President Joe Biden.
I’ve always thought the national minimum wage is a lot more important than most people tend to think. By definition, it sets a floor on the low end of the job market, though to their credit, many states now set their minimums above the federal level of $7.25 (Washington State clocks in at a cool $9.04). So it’s a floor, not a ceiling.
Lots of low-wage workers and their families depend on it, and its long slide, as shown in the accompanying chart, especially over the Reagan years, contributed to wage losses and working poverty for many who toil to this day in low-end services.
Of course, when someone raises the idea of a raise, you hear a huge outcry from some in the business lobby. Their generic argument is that the increase will lead to job losses among those low-wage workers affected by the higher wage level. Such workers, they say, will now be “priced out of the labor market.”
Yet, you hear the opposite from groups that represent low-wage workers’ interests, groups like the National Employment Law Project, or NELP (proud disclosure: I’m on their board). Read the rest of this entry »
New Taxes Won’t Turn Millionaires into Fleeing Tax Refugees
Any time the idea that the very wealthiest among us ought to pony up their fair share is raised, Republican lawmakers issue dire warnings. ”If—heaven forbid—millionaires are asked to pay a little more in taxes, they will flee like flocks of migratory birds looking for a warmer welcome elsewhere. Their vast wealth forever lost.”
New Jersey Gov. Chris Christie (R) used that shaky rationale when he vetoed a small increase on taxes for millionaires in each of the past two years. In March, he told the state legislature:
Ladies and gentlemen, if you tax them, they will leave.
But a new study shows Christie and others are wrong.
“Tax Flight Is a Myth” from the Center on Budget and Policy Priorities (CBPP) finds:
Compelling evidence shows that this claim is false. The effects of tax increases on migration are, at most, small—so small that states that raise income taxes on the most affluent households can be assured of a substantial net gain in revenue.
Republican 2012 Budget Kills Jobs, Vanishes Government
The closer we examine the House Republican budget plan for 2012 put together by Rep. Paul Ryan (R-Wis.), the worse it looks. Two new analyses show not only would Ryan’s plan to cut Medicaid cost 2 million mostly private-sector jobs, but—and this is scary—if the nation followed Ryan’s budget road map, the federal government would nearly vanish by 2050.
The Ryan budget plan, says Center on Budget and Policy Priorities (CBPP) President Robert Greenstein,
specifies a long-term spending path that means that, by 2050, most of the federal government aside from Social Security, health care, and defense would literally cease to exist, according to figures in a Congressional Budget Office (CBO) report.
He writes that the CBO report says that Ryan’s plan would shrink federal spending to its lowest level since 1951. It gets a little wonky from here, but bear with us.
Except for spending on Medicare, Medicaid (both due for big cuts), Social Security and debt interest, the Republican budget says all other federal spending such as education, infrastructure, law enforcement, job creation, workplace safety, and everything else including defense spending would be just 3.5 percent of the Gross Domestic Product (GDP).
Setting the Record Straight: Public Employees Make Less Than Private Sector
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The nonpartisan Center on Budget and Policy Priorities (CBPP) is setting the record straight and exposing the falsehoods behind the extremist rhetoric about public employees from Wisconsin Gov. Scott Walker and his ilk.
In a new report, CBPP looks at the facts about public employees and here’s what the data show: Public employees are paid 4 percent to 11 percent less than private-sector workers with similar education, job tenure and other characteristics. This wage disadvantage is greatest for higher-wage public workers.
Public employees also earn less than their private-sector counterparts when you count both their wages and benefits such as pensions and health insurance. Benefits are more generous and secure for public employees than for most private-sector workers. But even after factoring in the value of these benefits, it does not eliminate the gap between public employees and their counterparts in the private sector.
Check out the full CBPP report here.
Happy 75th, Social Security, Watch Out for Deficit Scam
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Seventy-five years ago this August, President Franklin Roosevelt signed Social Security into law. Today, the nation’s most successful safety net, a program that has provided retirement security and kept hundreds of millions of seniors out of poverty, is under attack.
Politicians like House Minority Leader John Boehner (R-Ohio) want to raise the retirement age to 70, and leading members of the federal budget deficit commission are trial-ballooning benefit cuts.
This morning, Kelly Ross, AFL-CIO deputy policy director, told the U.S. House Ways and Means Social Security subcommittee that the nation’s working families will fight any attempt to weaken Social Security.
Misinformation and exaggerated fears about the federal budget deficit are being deployed as the latest weapons in a decades-old Wall Street campaign to undermine Social Security, which is not a principal contributor to deficits in the short or the long term.
Union Leaders Join in White House Meeting on Health Care, Social Security
After eight years with a virtual “Do Not Enter” sign at the White House front door, President Obama has opened 1600 Pennsylvania Ave. to leaders, policymakers and advocates of a wide range of views.
Yesterday, union and business leaders, conservative and progressive economists, and think tankers and Democratic and Republican lawmakers came together for a “Fiscal Responsibility Summit.”
At the opening session, Obama unveiled his outline to cut the $1.3 trillion federal deficit he inherited from the Bush administration in half by the end of his term by letting the Bush tax cuts for the wealthy expire, reining in tax breaks for companies that ship jobs overseas and drawing down troops in Iraq, among other items.
Grim State Budgets Could Mean $100 Billion Shortfall
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The nation’s crashing economy and deepening recession is slamming states. A new report by the Center on Budget and Policy Priorities (CBPP) reveals that 43 states are, or will soon be, facing serious budget shortfalls, forcing them to cut vital services, lay off workers, deplete reserves or raise taxes. With this fiscal year only half over:
The outlook for state budgets remains grim. Over half the states had already cut spending, used reserves, or raised revenues in order to adopt a balanced budget for the current fiscal year—which started July 1 in most states. Now, their budgets have fallen out of balance again….And these problems are expected to continue into next year.
The CBPP study, State Budget Troubles Worsen, shows that economic indicators predict that the current recession will be far more severe that the 2001 recession where unemployment topped out at 6.3 percent. Today, it already has hit 6.7 percent and
many economists expect it to rise much further, which will reduce state income taxes and increase demand for Medicaid and other services.
