“Also in this episode...Alan Krueger discusses his new [Hamilton Project] paper with Eric Posner on three reforms for protecting low-income workers from monopsony and collusion.”
Last month, the Hamilton Project at the Brookings Institution convened a panel to discuss solutions to this problem; the event coincided with the release of a new e-book from theHamilton Project that's chock full of proposals to address wage stagnation. ‘Coming out of a very deep recession, there's often a single-minded focus on jobs, jobs, jobs,’ says Jay Shambaugh, an economist and the director of the Hamilton Project. ‘But as theunemployment rate comes down, at a certain point, it's important to think about what thereturn on those jobs is. And if you look at the broader sweep of history, the returns to work for the typical worker have not been growing.’
But perhaps a new target alone wouldn’t be enough. At an event last week hosted by the Hamilton Project, Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, argued that a strong belief in a “nonlinear relationship” between unemployment and inflation among many monetary policymakers is why the Fed has hiked interest rate hikes when the rate of inflation was still below target.
Are there some ways to tip the balance a bit more toward workers? Jay Shambaugh and Ryan Nunn have edited an ebook, Revitalizing Wage Growth: Policies to Get American Workers a Raise, with nine chapters on causes of wage stagnation and policy proposals to address it (published by the Hamilton Project at the Brookings Institution, February 2018, full Table of Contents is appended below). Given that the US unemployment rate has now been 5% or less for more than two years, since September 2016, the question of wage growth is rightfully assuming high importance.
In a speech in Washington on Wednesday, Kashkari suggested he didn’t want the Fed to tap on the brakes until wage growth and inflation move higher. “I think we should allow this [economy] to continue to run,” Kashkari said. “I want to see wage growth continue to build, I want to see inflation move towards our 2% target,[ and] I want to see more evidence that the slack in the labor market is being used up,” he said at the HamiltonProject in Washington.
'I want wage growth to continue to build, I want to see inflation move toward our 2-percent target, I want to see more evidence that the slack in the labor market is being used up: those are going to be the key factors that I pay attention to in making my recommendation,’ Minneapolis Federal Reserve President Neel Kashkari said at an event on the roots of slow wage growth at the Hamilton Project in Washington.
A new report from the Brookings Institution’s Hamilton Project seeks to cut through thenoise. Compiling the most comprehensive recent studies on non-compete agreements, thereport’s author, Matt Marx, has four key policy recommendations for lawmakers who want to promote economic growth.
In a new study for the Brookings Institution’s Hamilton Project, we report survey results in which we find that one in five workers with a high school education or less are subject to a noncompete. A quarter of all workers are covered by a noncompete agreement with their current employer or a past one.
On Tuesday, the Hamilton Project at the Brookings Institution released a series of studiesby some of the nation’s top economic thinkers on policies to revitalize wage growth. Thegood news is that plausible reforms could start tipping the labor market to benefit workers. But bringing the labor market back into balance will require a lot of them.
“’I sometimes wonder whether part of it is, firms got used to not giving raises because we were in a period of a lot of labor market slack for a long time and because the recession was so deep,’ said Jay Shambaugh, a senior fellow at the Brookings Institution and economics professor at George Washington University.”
“It’s time to enact a national universal paid leave program. It should include the principles laid out by the Washington Center for Equitable Growth’s Bridget Ansel and Heather Boushey in a paper published last fall by the Hamilton Project: Offer at least 12 weeks of leave to men and women for childbirth and adoption, care of a relative’s serious medical condition or a personal medical issue; cover all private-sector workers; and pay those workers a replacement wage high enough to make a difference in their lives. Doing so would provide an immense benefit to workers and their families and be very good for the overall economy.”
“Yet the evidence that private prisons are less costly than government-run facilities is thin, according to a 2016 paper by the Hamilton Project, a liberal-leaning think tank. Because private prisons don't release many details about their costs, it can be difficult to compare the two types of facilities, the study noted.”
“Even more children are living in food insecure households today than they were in the years leading up to the Great Depression. In 2014, one in seven households had trouble providing food to all members of their families, according to a 2016 report by the Hamilton Project.”
'Professors Patricia Anderson (Dartmouth) and Kristin Butcher (Wellesley) found that a $30 increase in monthly SNAP benefits would increase participants’ consumption of nutritious foods such as vegetables and healthy proteins, while reducing food insecurity and consumption of fast food,’ writes Lauren Bauer at the Brookings Institution.
“Plus, some economists point out that while month-to-month prices changes missed expectations, the year-to-year downtrend in inflation is more important. After all, inflation is still below the Fed’s 2% target, suggesting the Fed might feel less pressure to raise rates quickly — a point Jay Shambaugh, who served as an adviser to former President Barack Obama, made on Twitter.”
“In a report for the Hamilton Project, Stanford professor Tom Dee found that the percentage of schools reporting vacancies in social studies has always remained much lower than those reporting vacancies in other subjects.”
“A proposal from the Hamilton Project would give the Centers for Medicare and Medicaid Services (CMS) more resources to scrutinize medical technologies and allow the agency to experiment with ‘reference pricing’: Medicare would pay a single price for all treatments, for a given condition, that have similar therapeutic effects, up to a cost-effectiveness threshold. Patients who want to receive less cost-effective treatments could still get them, but they’d have to pay any difference out of pocket. That strikes the right balance.”
Average hourly earnings last year grew at their slowest pace since 2012, once inflation is taken into account, said Jay Shambaugh, director of The Hamilton Project at the Brookings Institution, which focuses on economic growth. That's mainly because inflation picked up over the past two years, eroding the value of any wage increases.
“Real wage growth, after we adjust for inflation, has been slowing down again in 2016 and 2017,” said Jay Shambaugh, director of The Hamilton Project at the Brookings Institution and former member of President Obama’s White House Council of Economic Advisers.
But that’s just one metric. Instead of using weekly earnings, the Brookings Institution’s Hamilton Project analyzed average hourly earnings for employees in the private sector. After adjusting for inflation, the group found that real wage growth was 0.2 percent in 2017, which is roughly in sync with Sanders’s 0.17 percent figure.
That’s because, as Michael Greenstone and Adam Looney of the center-left Hamilton Project put it, “immigrants and U.S.-born workers generally do not compete for the same jobs; instead, many immigrants complement the work of U.S. employees and increase their productivity.
The Hamilton Project, a research group within the Brookings Institution, also proposed comparing a loan’s principal when students begin to pay their loans versus how much they still owe five years later.
A study by the Brooking Institution’s Hamilton Project estimated that, because such requirements discourage people from pursuing some careers, the rules have resulted in 2.85 million fewer jobs nationwide. The study found that around 30 percent of American workers need a license to perform their jobs; in the early 1950s, less than 5 percent did. About 800 occupations—from emergency medical technicians to cosmetologists to interior designers—are licensed by at least one state.
Taylor cited a September report from the Hamilton Project at the Brookings Institution titled “Thirteen Facts about Wage Growth” and suggests that researchers Jay Shambaugh, Ryan Nunn, Patrick Liu and Greg Nantz have “resolved” the “short-term mystery” of sluggish wage growth.