The House of Representatives is set to vote next week on President Biden’s bipartisan infrastructure bill. At stake is not just a stronger U.S. economy, but whether we still have a functioning democracy.
In normal times, this bill wouldn’t be controversial. Almost no one disputes the need for a major infusion of public investment in modernizing America’s transportation, water and other common goods that undergird U.S. economic innovation and competitiveness. That’s why the bill breezed through an otherwise polarized Senate on a 60-30 vote in August.
In the House, however, progressives are threatening to torpedo the bill unless they get a simultaneous vote on a “reconciliation” bill that would spend trillions more on social and climate programs. Critics have assailed this tactic as political hostage-taking, but it’s more like a murder-suicide pact, since progressives want a big infrastructure bill too.
But they’re apparently willing to sacrifice the infrastructure upgrade to gain political leverage over the growing ranks of moderate Democrats who, although they support many elements of the massive reconciliation bill, are balking at its $3.5 trillion price tag.
Talk Policy with PPI is a podcast series of discussions with leading policy experts and policymakers on relevant topics in the news. For this latest episode of Talk Policy, PPI’s Director of Social Policy Veronica Goodman sat down with Dr. Chandra Childers, Study Director at the Institute for Women’s Policy Research. Their discussion focuses on the concept of apprenticeships, it’s benefits for workers, and the historical context on the racial and gender makeup of these job training programs.
The full podcast is available hereand below as a transcript. Be sure to check out “Here to Stay: Black, Latina, and Afro-Latina Women in Construction Trades Apprenticeships and Employment,” a paper focusing on how the COVID crisis has put a spotlight on skilled construction trades, and the opportunities it has presented for Black, Latina, and Afro Latina women here. Other episodes of Talk Policy can be found here.
Radically Pragmatic, a PPI Podcast
TALK POLICY: Apprenticeships with Dr. Chandra Childers
Progressive Policy Institute (0:10)
You’re listening to Radically Pragmatic, a podcast from the Progressive Policy Institute. We talk with lawmakers, policy experts and thought leaders about the issues driving the news nationally and internationally. The Progressive Policy Institute is a catalyst for policy innovation and political reform with offices in Washington, D.C. and Brussels. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. We encourage analytical conversations, not your typical partisan talking points.
Veronica Goodman (0:43)
Hi there, and welcome to Radically Pragmatic, a PPI podcast. My name is Veronica Goodman, and I’m PPI’s Director of Social Policy. For this segment of Talk Policy, I sat down and spoke with Dr. Chandra Childers, Study Director at the Institute for Women’s Policy Research. She’s an expert on social stratification and social and economic inequality by race and sex. Chandra examines issues related to women and girls of color and job quality. Be sure to subscribe wherever you listen and enjoy the episode. Hi, Chandra thank you so much for joining me today to talk about equity and inclusiveness and apprenticeships and job training programs. I’m really looking forward to this discussion.
Dr. Chandra Childers (1:24)
Thank you! Thank you for having me. I’m looking forward to it as well.
Veronica Goodman (1:28)
My pleasure. So, just to start to give listeners a little bit of background, what is an apprenticeship when we’re talking about it?
Dr. Chandra Childers (1:37)
Okay, so I would like to focus specifically on registered apprenticeships because they provide a structured experience for trainees or workers. They are focused on mastering, or ensuring that the worker or the trainee, however we want to refer to them…that they actually master a specific set of skills that the employer is actually needing in his workforce. And they are, these apprenticeships, they’re paid from day one, so you’re being paid to learn the skills that you need. These are…they get regular pay raises as they master the work as they move forward. They receive mentoring, so, these are an excellent opportunity to prepare workers for moving into jobs that are hard to fill. It allows them to earn a living wage so that they’re not going into student debt trying to get a college degree. Yet, they put out some really high quality workers. And I think that apprenticeships are really valuable for those reasons. Also, because they tend to earn…workers who go through apprenticeships tend to earn more. So, according to apprenticeships.gov, over 90% of graduates of apprenticeships have earnings…have average earnings of $70,000 annually, which is, you know, that’s a pretty good living to make. That’s after they’ve graduated. But during their program, they’re paid from the very beginning. And they cover a wide range of industries. So, while most apprenticeships are, for example, in the skilled construction trades, we do find that we have them in everywhere from hospitality, transportation, manufacturing, health care and business. So, there are a range of areas, although the vast majority are in skilled construction trades.
Veronica Goodman (3:33)
That’s really helpful. Thank you. And I think you sort of highlighted that they’re usually in the trades, but they actually exist in a lot of industries. Could you please share a little bit about some of the historical context on the racial and gender makeup of apprenticeships and these programs just to frame the conversation and, you know, maybe what percentages are female and from communities of color? And I know from reading your papers that that’s changing in certain programs and regions, too, which is good.
Dr. Chandra Childers (4:03)
Sure! So, we know that women make up almost half of the workforce. Women are, you know, like 47% of all workers. Yet, it has only been in the last few years that women have actually made up more than 10% of all apprenticeships. So, when we look between 2014 and 2020, I believe the number of women in apprenticeships, again, only reaching now to about 14%…but that’s a 200% increase over just 2014. So, we are seeing a lot of growth. We also see that Black and Latina women in particular are also really underrepresented. But, again, we are also beginning to see improvements in those numbers. So, for Hispanic women…the number of Hispanic women between 2016 and 2019 increased by, again, almost 100%. Their numbers almost doubled. And for Black women, the increase was about almost 50%. So, we are seeing growth. We are beginning to see some changes, yet, these groups are still really underrepresented in the trades. And I think it’s really important to think about the inclusion of members of these groups because it has a number of impacts. One, by excluding…whether it’s women, whether it’s, you know, Black, Hispanic workers, men or women…one of the things that you’re continuing to do is you’re denying these large segments of the population access to earning a living wage or being able to provide for their families. But, you’re also depriving employers, or [they’re] depriving themselves of access to really large pools of talent. So, they’re actually losing out. And one of the things we know is that a lot of the…in the skilled construction trades in particular…a lot of these workers are older. We did a study looking in New Orleans in particular, and there we found that over a quarter of construction workers were 50 or older. These are people who are going to retire, and they’re already struggling to find an adequate number of workers. So, you know, that history of bias and exclusion for women and for workers of color…that is beginning to change, but we do need to see that change at a much faster rate.
Veronica Goodman (6:30)
That’s interesting. I mean, those are huge increases percentage-wise, but still, it’s disappointing to see how low the participation is. So, I guess building off of that, how do you think we can best address these inequities, you know, to sort of strengthen access for these workers?
Dr. Chandra Childers (6:51)
To be able to be more inclusive and to ensure that we get more workers into these apprenticeships, there’s a number of things that can be done. You know, some of them are as simple as going ahead and enforcing, you know, EEO regulations around making sure that things aren’t biased and that people get equal access. But I think that there are other factors, too. For example, we could start apprenticeships in high school. You know, we have lost a lot of the like shop classes and so forth in high school, but by beginning to have schools begin to work with businesses, you can begin to go ahead and get those apprenticeship processes started. But, I think another important piece of that is helping employers to understand how they benefit from taking on apprenticeships. I think apprenticeships can be seen as costly for employers. I think some employers worry about training workers and then having them leave to go work for some other company. But, I think that one of the things we know is that for a good apprenticeship that is preparing workers…it’s preparing them with exactly the skills that that employer needs…and those apprenticeships can definitely pay for themselves throughout the time of the apprenticeship.
So, I think that’s one way to begin to increase the access for some of these communities. But, I mean, I think we could also make other investments, and I’ll probably talk about this a little later, but we know that there are a lot of…well not a lot…but there are some women-only pre-apprenticeship programs that are beginning to bring women into and preparing them to go into apprenticeships. Those are an other areas where we can really invest that could increase access to apprenticeships.
Veronica Goodman (8:51)
That’s great! And I guess, as a follow up question, since you alluded to it, are there any programs out there that you think are getting particularly good results, or that you’re interested in researching further?
Dr. Chandra Childers (9:03)
There’s a few programs…and, of course, I can’t…there’s a couple that I will highlight here. I think one that is really doing…that’s having a really great amount of success…is Morehouse, which is located in Mississippi. They’re not only providing that training for women to prepare them, but they’re also providing women with one of the most important supports that they’ll need, and that’s childcare. And so, we’re seeing, not a lot, but a few of these apprenticeship and pre-apprenticeship programs…they are either providing access to child care for women, or they’re matching women up with resources…because that’s a major barrier for women who are moms, especially with small children, whether it’s in the apprenticeship itself or once they finished working in the trades. The hours, and I’m focused on construction trades – that’s where a lot of the apprenticeships are, where a majority of them are, and that’s also the work that we’ve been doing – but, because of the hours that they work, because of the demands…I mean, going through an apprenticeship, that is a full time job…it’s combining classroom training with on the job training – but you are doing a lot of intensive work. And so, those programs that provide access to childcare and other supports, including transportation – because, again, you’re on job sites that are not necessarily close to your home…they may be constantly moving. So, I think those are important. But, in some of the research that we did with women, some of the programs that women were really the most excited about…they couldn’t talk enough about these programs that introduced them…like they had no idea about their trade. So like Chicago women in the trades, non-traditional employment for women in New York…you’ve got these types of women pre-apprenticeship programs, that are really providing women with information, with training, preparing them for moving into those apprenticeships. And so, those I think are a really great opportunity to, again, increase the representation of women and women of color in particular.
Veronica Goodman (11:28)
I’m glad that you mentioned this information barrier and how these groups are working to address those because I’ve seen a lot of surveys and polling around how a lot of workers are interested in these opportunities, but don’t know exactly how to access them or tap into them in their communities, so that seems like a really key piece. And so President Biden in the White House included proposals in the American Jobs Plan to increase gender and racial equity in workforce development programs. What do you think some of the top priorities should be in achieving that? And how can we make sure that there’s accountability measures in place to make sure we’re getting the outcomes that we’re shooting for?
Dr. Chandra Childers(12:10)
Accountability, that right there…is, I think, enforcing, again, you know, EEO. Having companies set goals and annually reset those goals, not only for hiring and bringing women – Black, Latina women – on, not only hiring, but also, retention. So, once that, you know, really focusing on, have reporting around that, holding them accountable on those numbers…And that retention piece is a really big piece, because when you can retain the women that you’ve hired, then that points to having addressed a lot of the other issues that come up as barriers that women face, especially in the in the trades, when they’re working…you know, sexual harassment, issues like that, that make it difficult for women, when they…especially, because, quite often, they are the only, or one of two women who may be on a job site. So, there are already a lot of issues that they’re dealing with. So, I think that is a really, really important piece of that. It is, you know, setting those goals. It is, you know, have that reporting in place and making sure that there are realistic, you know, we know that we’re not going to have 50/50 women…and that’s not the goal…but to make sure that women are included, that there is no bias, that they are not facing discrimination, that they are not being excluded from those positions.
Veronica Goodman (13:49)
I think that’s exactly right. I think looking through some of your publications, one of the things I especially appreciated was that there were research interviews done with women who were actually in these positions and on these work sites. And it seems like from the ones that were in roles that were surrounded with other women, there was sort of a support structure, sort of a virtuous cycle as there were more women included, then it became a better work environment for everybody. So, I think that this can only build on its success as we got more women and workers of color included.
Dr. Chandra Childers (14:24)
I really, on that point, I don’t think that that can be over-emphasized. That was, you know, again, the sense of isolation…and we, you know, we highlight a number of consequences of that. And being the only woman on a job site, you know, it means that quite often, they don’t have equipment that’s designed for them, that safety equipment may not fit. They may not have a bathroom on site if they’re the only woman. So, there were those issues. But also just that sense of isolation in the interviews. The way they talked about when they went to the first Women Build Nations Conference, where they saw other women and they heard other people who had had their same experience, and they would form groups, too. So, even if they couldn’t have it on their job site, just so that they could only other women who, you know, work in that field to really understand that experience…so I think that cannot be over-emphasized.
Veronica Goodman (15:27)
I agree. And I don’t know if you can hear it on the audio, but there’s a house being built in the neighbor’s yard and the construction noises are just for ambiance. It’s actually funny because there are two women on that crew. And I’ve noticed them and so it’s just all coming full circle here in my office. But I think one of the points that you made earlier…I wanted to dig into that a little bit more…about how women in trades and apprenticeships tend to earn more than in many fields that are that are dominated by female labor. So, if you could please take a moment to discuss like some of the wage differences and what might account for those?
Dr. Chandra Childers (16:10)
So that’s another…again, over all apprenticeships, as I said, they report that over 90% of them are working after they complete their apprentice and they’re earning an average of $70,000 a year. However, the vast majority of those apprenticeships are in the skilled trades. And so that’s kind of the comparison I usually make is, you know, you can take, for example, and I will give you two examples. One, you can think of jobs that don’t require anything beyond the high school education. So, here, I think about a waitress, you know, you make…waiters, waitresses, compared with construction laborers. Now, neither of these jobs require any advanced training, yet, what we see is that the average earnings for waiters and waitresses is $11.42 per hour. And we compare that with construction laborers who earn $18.22 per hour. So, we’re looking at, a serious, you know, what is that, a pretty large wage increase just for being in what is a male-dominated field. And then if we look at, for example, positions that require greater levels of skill. So, for example, here, we can compare librarians with plumbers. So for the librarian position…and I looked at librarians and media collection specialists…that’s a position that requires a master’s degree. Well, if we look at plumbers, pipe fitters, and steamfitters….love these these job titles…if you look at those occupations, they also require about a five year apprenticeship. So, we’re talking about similar levels of training that’s required. However, for the library and media specialists, you’re paying large amounts of money to get the master’s degree to go into that field. And they have earnings of $29.24 per hour whereas plumbers, pipe fitters, and steamfitters are paid $27 per hour. Now, that’s, you know, it’s about $2 less an hour, however, for the plumber and pipe fitter, they are being paid in their apprenticeship from day one on the job and they’re not going into student loan debt, and they have the potential for earnings to increase over the course of their career. So, those are two examples where we can say that apprenticeships…they really do provide…and this is one of the reasons we really are pushing to increase access for women and women, you know, Black and Latina women in particular, is because these are occupations where you’re not going into so much student debt. Yet, the pay is really good. You have really great benefits. And it’s something that you don’t find in a lot of, you know, a lot of the jobs where women are concentrated. You know, I picked out librarians and media collection that requires a master’s degree, but for a lot of female dominated occupations, you know, they’re not requiring that much education, but the pay is terrible, and they don’t have a lot of benefits.
Veronica Goodman (19:43)
I know that child care and early education workers have really been in the news, and I mean, some of those positions actually do require a higher level of education and it doesn’t really quite match up with them where the wages are after getting those degrees or credentials.
Dr. Chandra Childers (19:59)
I think like elementary school teachers and even middle school teachers, they’re paid, you know…the hourly wage is lower than what a plumber makes, yet they are required to have at least a bachelor’s degree. So, you do see that with…you know, there’s a number of occupations you can pull out. And that was something else also that we saw in our interviews, is that several of the women we spoke with, they had bachelor’s degrees that they thought they needed in order to be successful, but then they learned about the trades, and they prefer the trades over their professional jobs, so they left what they were doing to move into the trades, and had better pay and benefits.
Veronica Goodman (20:40)
That’s great. I’d be interested to hear about what sort of next for you and your research and some of these areas.
Dr. Chandra Childers (20:48)
Yes, so, we’ve done the reports looking at women coming out of apprenticeship programs. We’ve done some work in New Orleans, in particular, looking at opportunities to, you know, ways that we can help increase women’s access to the trades. And so that’s some ongoing work…we’re still there, you know…we put out the report, but we’re still there building on that, trying to make connections and build up opportunities with training institutions, with employers, to be able to do some of that work. And the next step in this, again, that will continue, but we also will start looking into manufacturing and, you know, looking to increase women’s access and representation in manufacturing occupations. So, you know, there are a number of book paying jobs, again, in New Orleans jobs at the port, transportation, where, women are really underrepresented, but they’re jobs that pay well. And so we really just want to keep building on trying to increase opportunities for women to move into these well-paying jobs. And also, you know, a big part of that is it will reduce the occupational sex segregation, and that is the largest contributor to the gender wage gap. Closing that gender wage gap, getting women into some of these occupations, can really help to reduce poverty rates for not just women, but children, raise GDP, so it’s got good benefits all around. So, those are kind of some of the next steps that we’re looking at here.
Veronica Goodman (22:34)
That’s wonderful. Well, thank you so much for taking the time to speak with me today and talk more about your research. I’m looking forward to seeing how it evolves. And we’ll be sure to link to some of your publications at the end of this for readers that want to take a closer look, but thank you so much.
Dr. Chandra Childers (22:51)
Thank you for having me. I really appreciate it.
Veronica Goodman (22:54)
My pleasure.
Progressive Policy Institute (22:57)
Thanks for listening. Want to learn more about the progressive Policy Institute? Follow us on Twitter, at @PPI and on Facebook at Progressive Policy Institute, or go to our website at progressivepolicy.org. Be sure to subscribe wherever you listen and check back for new episodes. We’ll talk with you soon.
On the latest segment of Talk Policy, Director of Social Policy Veronica Goodman sits down with Dr. Chandra Childers, Study Director at the Institute for Women’s Policy Research. Their discussion focuses on the concept of apprenticeships, it’s benefits for workers, and the historical context on the racial and gender makeup of these job training programs.
Also, check out “Here to Stay: Black, Latina, and Afro-Latina Women in Construction Trades Apprenticeships and Employment,” a paper focusing on how the COVID crisis has put a spotlight on skilled construction trades, and the opportunities it has presented for Black, Latina, and Afro Latina women here.
Learn more about the Progressive Policy Institute here.
While there are promising signs for the overall trajectory of the economic recovery, the latest data from the Bureau of Labor Statistics points to some slowing and the overall picture shows the recovery remains uneven for many workers. Amidst ongoing negotiations in Congress concerning their reconciliation package and news about worker concerns and labor shortages, the Progressive Policy Institute (PPI) has released a new report detailing evidence-based approaches to achieving a more equitable recovery. These policy changes and priorities will ensure all Americans in — and out of — the workforce are empowered to succeed.
“As we recover from the pandemic, Congress, policymakers, and business leaders must prioritize policies that ensure an inclusive economic recovery,” said Veronica Goodman, Director of Social Policy at PPI. “To prevent further economic scarring and to better help those currently out of work quickly pivot to new opportunities, we will need to wield every tool to ensure that the recovery brings all workers along.”
The paper proposes a comprehensive slate of policies for addressing historic and worsening inequities in the workforce, including:
Better preparing and supporting students in their transition to work by expanding access to career and technical education, apprenticeships, and training programs.
Equipping adult learners and workers with tools like wraparound services, flexibility in curriculums, building social capital, and training in digital skills, to complete degree and training programs and find jobs in the post-pandemic recovery.
Providing greater transparency about the credit transfer process for all students, including those with nonlinear paths to degree completion.
Prioritizing skills-based hiring and addressing degree discrimination, changing hiring technologies that leave qualified workers out, and aligning workforce development programs with in-demand jobs and opportunities.
Increasing apprenticeship and job training programs across industries, including in early education and child care, that lead to jobs with good wages and benefits for more workers.
Building on the proven success of Great Recession-era subsidized employment programs, so that disadvantaged workers can transition more quickly and seamlessly to the labor force.
Increasing the minimum wage, implementing a Living Wage Credit, and making the pandemic EITC expansion permanent.
Support working parents by investing in supports like child care, universal pre-kindergarten, paid family leave and increasing wages for early education teachers — helping many women and workers of color, while helping parents stay in the labor force.
Strengthening worker protections and rights to ensure a competitive labor market, including modernizing Unemployment Insurance (UI) to be an “automatic stabilizer” that kicks in when certain economic conditions are met.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.
The Biden administration’s efforts to control the spread of the virus and bolster the economy are working. In fact, job growth has been historically high since President Biden took office, as the economy has recovered 4.5 million jobs. Economists expect that as the delta variant surge wanes, vaccination rates increase, and schools and daycares can reliably stay open, labor markets will further tighten.
However, as the August 2021 jobs report from the U.S. Bureau of Labor Statistics shows, our nascent labor market recovery is still vulnerable to setbacks from surges of the virus. The roaring pace of new jobs early in the summer is not a guarantee that all workers will find employment after historic job losses.
What’s more, new research shows that time and a booming labor market do not a guarantee a fully inclusive recovery. For a multitude of reasons, the non-college educated, workers of color, women, and less experienced workers suffered disproportionate job losses early in the pandemic, and they have historically been last in line for job gains. Policymakers will need to wield every tool to ensure that as the recovery progresses, that we work toward an inclusive and equitable labor market that brings all workers along.
The reconciliation package working its way through Congress with elements of the American Families and Jobs Plans would certainly help working families and individuals affected by the pandemic. In addition, our pandemic strategy should also include new investments in training workers with sought after skills in the marketplace and new steps to empower workers after decades of wage stagnation and growing economic inequality. We cannot be satisfied with a partial recovery that leaves whole communities behind. This paper offers policymakers at all levels of government evidence-based approaches for creating a more inclusive labor market after the pandemic.
Recommendations:
Our education system needs to better prepare traditional and non-traditional students to transition to work and provide better supports. Policymakers should expand access to career and technical education, early college high schools, and flexible models tailored to students and workers that face unique challenges and barriers.
Adult learners and workers need more wraparound services, flexible curriculums, social capital and networking, and training in digital skills to complete degree and training programs and find jobs in the post-pandemic recovery.
Many students will not have a linear path to degree completion. States should require more colleges and universities to be transparent about what coursework will transfer, and then ensure that students get these credits transferred between institutions.
Business leaders and policymakers can work together to ensure our workforce development programs are aligned with in-demand jobs and opportunities in their communities and give employers more skin in the game. Additionally, current systems for hiring and recruitment are leaving out a wide swath of workers due to degree discrimination. Companies should reform their hiring process to switch to skills-based hiring that will help them find the talent to fill openings.
Some industries, such as health care and education, are having difficulty finding workers. Our workforce programs should increase apprenticeship and job training programs, such as in early education and child care, to build a pipeline of high-quality jobs with good wages. A focus on equity and inclusiveness will help women and workers of color succeed in these industries.
Policymakers should build on the proven success of subsidized employment programs used during the Great Recession to help disadvantaged workers transition more quickly and seamlessly to the labor force.
Wages for millions of workers are far too low. Congress should work to increase the minimum wage, implement a Living Wage Credit, and make the pandemic expansion of the EITC permanent going forward.
The child care industry has been in crisis during the pandemic and is facing a severe labor shortage. Yet this critical support is necessary for working families and parents. We should support working parents by investing in child care and increasing wages for early education teachers to attract and retain workers. This will not only help many women and workers of color, but will help parents stay in the labor force. Other programs like paid family leave and universal pre-kindergarten will also boost labor market participation and family economic security.
Lastly, beyond wages, policymakers should strengthen protections and rights for workers to ensure a competitive labor market after the pandemic. To support workers during future economic downturns, Congress should modernize Unemployment Insurance (UI) to be an “automatic stabilizer” that kicks in when certain economic conditions are met that signal a recession.
THE CURRENT LABOR MARKET RECOVERY
The latest data from the U.S. Bureau of Labor Statistics for this past August shows a labor market recovery slowing under the strain of the coronavirus delta variant wave. As case rates increase across the states, and especially in counties with lower vaccination rates, businesses and individuals have had to grapple with mask mandates, canceled events, delayed returns to in-office work, school and daycare quarantines, and other disruptions that have cumulatively led to decreased economic activity.
While the unemployment rate is down significantly from 14.8% in April 2020, the labor market recovery remains uneven, and the experience of past recessions shows that some workers will need extra support to land good jobs. The unemployment rate for Black workers ticked up to 8.8% in August 2021 compared to 4.5% for white workers. The percentage of long-term unemployed workers (LTU) — those out of work for 27 weeks or more and actively looking — is very high at 37.4%. That figure is trending downward as the labor market tightens, but data from previous recessions suggests that workers with a high school degree or less will struggle to find jobs. And women, hampered by child care and school closures and quarantines, made up only 28,000 new jobs or 11.9% in August 2021, compared with gains of 207,000 for men.
There are also signs of a realignment in our workforce. Employee preferences on how and where to work are changing, while companies are shifting their hiring, technologies, and supply chains to reflect the new pandemic economy. As recent analysis from The Washington Post points out, there is a “massive reallocation” of labor that is leading to a surge in job openings, quit rates, retirements, and redistribution of employment opportunities. Certain sectors, such as education and health care, are having a hard time filling job openings. Opportunities might also shift regionally due to the rise of telework and these differences will have profound policy implications for workers of different races, ethnicities, and backgrounds.
Employers report that workers seem to be pickier about the types of jobs they are willing to accept. One reason may be that they are sitting on increased personal savings, which reflect both government payments during the pandemic and reduced opportunities for consumption in a locked down economy. Some labor analysts have suggested that unreliable access to child care and health concerns may still be holding back some workers. In addition, nearly five million workers seem to have dropped out of the labor market during the pandemic recession. The good news for workers is that wages have been on the rise in certain industries desperate to fill openings and that trend is expected to continue.
However, for a percentage of unemployed workers, their career trajectories might be hampered in the same way as some did during the Great Recession and they will not reap the benefits of a tight labor market. Additionally, analysts predict that not all jobs will come back and that some industries might be permanently changed by the pandemic. The difficulties for those who struggled to find jobs after the last recession serve as a lesson for how to help unemployed workers recover faster during this downturn. As the economy improves during the pandemic, policymakers have several options for building an inclusive recovery. To prevent further economic scarring and to help job seekers quickly pivot to new employment, we need to draw upon the active labor market strategies and workforce development policies that have worked in the past and other promising ideas.
The shape of inflation over the past year isn’t what you might expect. The table below pulls out the change in price for selected goods and services from July 2020 to July 2021, based on BEA personal consumption expenditure (PCE) data (we explain below why we use BEA rather than BLS data).
The overall price level for personal consumption expenditures rose by 4.2% over the past year. (that’s the bold line in the middle of the table). Well-reported contributors to inflation include car rentals (+74%) and purchases of used vehicles (+37%), both spectacularly large pandemic-related increases that no one expects to continue. Other price increases are clearly related to the disruptions of supply chains: Furniture (9%), televisions (10%), and major appliances (12%).
But then there are some price increases that are not so obviously related to the pandemic, and maybe sticky. The price of financial services is up 5%, driven in part by pension funds (12%) and financial service charges, fees, and commissions (+9%). The latter category includes portfolio management and investment advice services, where prices have risen 17% over the past year. That’s disturbing given the importance of the financial system.
Meanwhile some goods and services showed much slower than average price increases. For example, the price of beer only rose by 2.1% from July 2020 to July 2021, about half the overall inflation rate, and lower than the 2.6% increase in the price of food purchased for off-premises consumption.
The price of rental tenant-occupied nonfarm housing rose only 1.9%. That’s the lowest rental inflation rate in decades, with the exception of 2008-09 financial crisis and its aftermath.
Finally, there is the price of telecom and broadband services, which only rose 0.5% over the past year. To calculate this figure, we built a price index that combined wireless and wired telephone, cable and satellite television, internet access, and video and audio streaming, taking into account shifts in spending patterns as consumers adapt to new technological choices.
Change in personal consumption expenditure prices (July 2020-July 2021)
Spectator sports
-4.6%
Prescription drugs
-2.5%
Personal care products
-0.5%
Insurance
-0.2%
Recreational books
0.1%
Household cleaning products
0.3%
Telecom and broadband*
0.5%
Legal services
0.6%
Education services
0.8%
Rental of tenant-occupied nonfarm housing
1.9%
Beer
2.1%
Nursing homes
2.3%
Imputed rental of owner-occupied nonfarm housing
2.4%
Pets and related products
2.4%
Newspapers and periodicals
2.5%
Educational books
2.6%
Food purchased for off-premises consumption
2.6%
Hospitals
2.9%
Physician services
3.4%
Accounting and other business services
3.7%
Veterinary and other services for pets
4.1%
Personal consumption expenditures
4.2%
Hairdressing salons and personal grooming establishments
4.8%
Financial services
5.0%
Social assistance
5.0%
Meats and poultry
5.4%
Repair of household appliances
6.1%
Fresh milk
6.2%
Museums and libraries
6.2%
Meals at limited service eating places
6.6%
Electricity and gas
7.0%
Nonpostal delivery services
7.7%
Furniture
8.8%
Financial service charges, fees, and commissions
9.2%
Televisions
9.9%
Pension funds
12.2%
Major household appliances
12.3%
Moving, storage, and freight services
13.3%
Portfolio management and investment advice services
16.6%
Air transportation
19.7%
Net purchases of used motor vehicles
36.5%
Motor vehicle rental
73.5%
*Includes wireless and wired telephone; cable and satellite television; internet access; video and audio streaming
Data: BEA
Note: The BLS publishes the Consumer Price Index (CPI) for various goods and services, while the BEA publishes a set of price indices connected with Personal Consumption Expenditure (PCE) data. Both are useful, but the Federal Reserve tends to give somewhat more weight to the PCE inflation rate because it accounts better for changes in spending patterns. Similarly, using the PCE gives us an opportunity to construct a price index for the telecom and broadband sector that has a chance of capturing some of the rapid changes in the sector.
The Mosaic Economic Project, an initiative of the Progressive Policy Institute, welcomed a new cohort of policy experts for its third ‘Women Changing Policy’ workshop, hosted September 13 – 15, 2021. The cohort included a diverse slate of credentialed experts across sectors in economics and technology, including leaders at the Association of American Railroads and Prosperity Now, as well as professors in Marketing, Economics, and Public Policy at Occidental College and the University of Southern California.
The project’s goal is to locate, elevate, and advocate for the inclusion and engagement of experts with diverse experiences and an interest in meaningful policy conversations, with a focus on Congress and the media.
The group of industry and academic leaders heard from experts in the fields of media, strategic communications, and government, including staff of senior congressional leadership and Politico.
This Mosaic Economic Project Cohort included:
Christina Biedny, Ph.D. Student and Research Assistant at Oklahoma State University
Dr. Luisa Blanco, Professor of Public Policy and Economics at Pepperdine University
Dr. Carycruz Bueno, Assistant Professor in the Department of Economics at Wesleyan University
Rayshoun Chambers, CEO of The Blockchain Chamber of Commerce
Luisa Fernandez-Willey, Assistant Vice President in the Policy and Economics Department at the Association of American Railroads
Myrto Karaflos, Senior Policy Associate at Prosperity Now
Dr. Mary Lopez, Professor in the Department of Economics at Occidental College
Dr. Kalinda Ukanwa, Assistant Professor of Marketing at the Marshall School of Business, University of Southern California
For more information on how to contact the members of the Mosaic Economic Project, please reach out to Jasmine Stoughton at jstoughton@ppionline.org.
Today is National Hunger Day — a day to remember that there are millions of low-income households across America that will not have enough to eat and may be forced to skip meals. Here are five facts on hunger and poverty to show the scale of the problem.
In 2020, over 38 million Americans were food insecure, including more than 12 million children. Households with single parents or children under the age of six have a higher prevalence of food insecurity.
Children were the most likely group to face hunger but even young adults, such as college students, are also vulnerable to food insecurity.
Black and Hispanic families have higher rates of food insecurity, as compared to other households.
Rural communities fare worse on hunger than urban ones, especially in households with young children.
Despite high unemployment and a public health crisis, the USDA reported that the overall rate of 10.5% of food insecure households in 2019 was unchanged in 2020. The historic federal aid provided to struggling families during the pandemic worked at curbing what many expected to be an unprecedented modern-day hunger crisis.
This National Hunger Day, let’s work to ensure a country where we eradicate hunger once and for all. The pandemic has shown that when you provide more food assistance and direct aid for families, hunger goes down. Policymakers have the tools at their disposal to reduce or eliminate hunger in our country.
As Democrats shape the reconciliation package, Congressional leaders must work to earn voter trust on jobs, debt and support for private enterprise
The Progressive Policy Institute (PPI) recently commissioned a national survey by Expedition Strategies of public attitudes in battleground 44 House districts and eight states likely to have competitive Senate races next year. This second report focuses on how these pivotal voters compare the two parties on jobs and the economy, tax and fiscal policy, and innovation, entrepreneurship and competition.
“Our findings provide crucial context for today’s debate – both between the parties and between the pragmatic and left wings of the Democratic Party – over the size, cost and financing of President Biden’s ambitious Build Back Better plans,” said PPI President Will Marshall.
“The good news is that battleground voters trust Biden and the Democrats more to improve the economy and deliver tax fairness,” he added. “But there are warning signs here on job creation, deficits and paying for public investment that Democrats should heed as they shape their big reconciliation package.”
The full memo on this exclusive polling can be found here. Here are some of the key takeaways:
Battleground voters trust President Biden (53%- 47%) and Congressional Democrats (52%-48%) more than Republicans to “improve the economy.”
They overwhelmingly believe that Republicans stand more for the wealthy (74%) and favor special interests (63%), while Democrats are seen as representing the poor (72%).
Although they want Biden to succeed, voters divide evenly on which party “knows how to create good jobs” and lean toward the GOP as the party that “knows how to strengthen the economy (52-48).
Republicans appear to have a structural advantage on helping companies be more innovative, working to create private sector jobs, strengthening the economy, and helping U.S. firms win the competition with China for economic and technological leadership.
Two-thirds of battleground voters say they are concerned that Democrats are too anti-business. This includes 73% of Independents and even 42% of Democrats.
Possibly as a result, voters are more likely to credit the GOP as the party striving to create private sector jobs (54-46).
Voters lean strongly toward the Democratic position on tax fairness, saying their top goal for tax policy is “making sure the wealthy and companies pay more in taxes.”
Voters also side with Democrats in supporting additional IRS funding to crack down on tax cheats and evaders.
Battleground voters favor more public investment to improve the economy over cutting taxes and regulations by a solid margin, 58-42. Republican supply side nostrums aren’t getting traction.
On the economy, voters say jobs, growth and rewarding work are more important goals than addressing inequality and fairness. Only 10% said “promoting fairness” should be the most important goal.
Battleground district and state voters rank deficits and debt as their second highest economic concern. By 88-12, they say the national debt is a “serious problem.” Independents, undecideds, and Hispanic voters strongly express this view.
By 80-20, voters say they are worried about the mounting debt burden on the young and working families. They also express strong concerns about inflation (74-26).
Voters are slightly more inclined to blame Democrats than Republicans for running up public debt (32-28). Similarly, they trust Republicans more than Democrats (32-28) to get the debt under control, but a plurality (40%) say they trust neither party.
These voters favor (53-47) taxing gains from capital and labor at the same level. However, they oppose capital gains hikes when they are presented as a way to finance public investment in infrastructure and child tax credits (54% opposed).
Last week, PPI released the first report on the poll, which focused on voter attitudes towards President Biden’s infrastructure plan and the social investment package Democrats hope to pass using the reconciliation process.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.
Recently, the Progressive Policy Institute hosted an event with U.S. Senator John Hickenlooper (D-CO) and a panel of energy experts, focused on expanding power line capacity to enable renewable energy deployment. PPI’s Strategic Climate Advisor Paul Bledsoe moderated the conversation and raised questions about how the US can improve its electric infrastructure to reach President Biden’s clean energy goals. As a member of the Senate Committee on Energy and Natural Resources, Senator Hickenlooper spoke of his own efforts to improve transmission siting opportunities and clean energy initiatives.
Learn more about the Progressive Policy Institute here.
Today, the Progressive Policy Institute (PPI) announced the hire of three new fellows, focused on communications and political affairs. The fall 2021 fellows include:
Ryan Radulovacki, Communications Fellow
Ryan Radulovacki is the Communications Fellow for PPI. Before joining PPI, Ryan worked in press offices in the U.S. Senate and at the local level on various city council campaigns in New York City. He is a graduate of New York University and based in Washington, D.C.
Maggie Landers, Digital Fellow
Maggie is the Digital Fellow for PPI. She graduated from Marquette University in May of 2021 with a B.A. in Political Science and Philosophy and a minor in Interdisciplinary Culture, Health and Illness. As an aspiring policy analyst, Maggie eventually hopes to attain a master’s degree in public policy. Despite currently living in Chicago, she is a proud Massachusetts native and Boston Red Sox fan.
Phil McLaughlin, Center for New Liberalism Fellow
Phil McLaughlin is PPI’s Center for New Liberalism Fellow, housed within the New Democrat Coalition on Capitol Hill. He is a policy analyst and researcher, with particular interest in public safety, criminal justice, public budgeting, and bond markets. He previously worked for the Massachusetts State Auditor General, and as a research analyst for the Massachusetts House of Representatives.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.
As Congress prepares to boost public spending on domestic research and development (R&D), policymakers must simultaneously address mounting concerns regarding our scientific institutions, argues a new report from the Progressive Policy Institute (PPI)’s Innovation Frontier Project. The report, authored by M. Anthony Mills and titled “Fix Science, Don’t Just Fund It,” highlights inequities in the distribution of federal R&D funding, stifling bureaucratization across disciplines, and the “replication crisis” of integrity in the scientific enterprise.
“Thanks to revitalized support and interest from Congress, science agencies may soon benefit from a transformative increase in federal funding, signifying a critical first step in supporting American science and innovation. But, as M. Anthony Mills identifies in this must-read report, further action must be taken to address the interrelated issues plaguing the scientific enterprise if we’re going to advance innovation for generations to come,” said Jack Karsten, Managing Director of the Innovation Frontier Project at PPI.
Mills argues that most current proposals for supporting R&D involve substantial increases in federal spending — without institutional guardrails to address issues like highly concentrated distribution, a constraining bureaucratic apparatus, and the prevalence of scientific findings that cannot be independently confirmed.
Mills’ report suggests several proposals for helping policymakers better understand the problems concerning American R&D, including:
The OMB should establish the Research Policy Board (RPB), as it was instructed to do in the 2016 Cures Act. The board is by statute set to expire at the end of this month.
In addition to reauthorizing the RPB, Congress should consider expanding its scope and purview to include a multi-stakeholder assessment of best practices for R&D funding generally.
Congress should direct science agencies to establish a “second look” program for federal science grants to experiment with alternative funding mechanisms.
Congress should direct federal agencies to set aside a fixed percentage of new R&D funding for institutions of higher education for a block grant program.
Congress should direct the NIH to grow and expand the scope of its Director’s Pioneer Award, Specifically, the program should be expanded to include researchers from basic scientific fields in the natural sciences.
These new or expanded funding programs should be pursued in tandem, using a portfolio approach in order to gather evidence of effectiveness. To accomplish this, Congress should establish appropriate feedback mechanisms in coordination with relevant scientific agencies.
Read the report and the expanded policy recommendations here:
Based in Washington, D.C., and housed in the Progressive Policy Institute, the Innovation Frontier Project explores the role of public policy in science, technology and innovation. The project is managed by Jack Karsten. Learn more by visiting innovationfrontier.org.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.
By Dr. Michael Mandel, Chief Economic Strategist; and Dr. Robert Popovian, Senior Fellow at PPI
As Congress is considering the shape of the $3.5 trillion reconciliation bill, one of the biggest flash points is drug pricing reform. Drug price reform is very popular, but when you look closely at the data, as we did in our February 2021 report, the evidence for out-of-control drug price increases becomes much less compelling. Spending on drugs, net of rebates and discounts, is basically flat as a share of GDP over the past decade. At the same time, the pharma industry has boosted spending on R&D much faster than the federal government. In 2020, the U.S. pharma industry spent $106 billion on R&D, almost triple the $37 billion in health R&D coming from the federal government (Figure 1).
Equally important, pharma manufacturers’ revenue, net of discounts and rebates, increased by only 11%, or $36 billion, between 2016 and 2020, according to a report from the IQVIA Institute. Taking the industry as a whole, all of that revenue gain went into increased R&D spending.
That’s not to say that some people aren’t hurting. In 2018, only 1 percent of Americans paid more than $2,000 in out-of- pocket drug expenses, not including Part D premiums, according to our analysis. That’s a small percentage, but a significant number of people in the aggregate.
Moreover, data analyzed by PPI and others suggest that the major issue irritating most American families is the insane number of copays that people have to pay as they get older. On average, the typical American between the ages of 50 and 60 fill almost thirty prescriptions per year, while the typical American over 65 and over fill almost 50 prescriptions per year. Most drugs are covered by insurance, but even when each copay is small, these numbers add up quickly and are a growing drag on household budgets. In an October 2019 report, we call this the prescription escalator, since the number of prescriptions — and copays — rises sharply with age.
The problem is that the centerpiece of the drug pricing reform proposal–broad Medicare drug price negotiation–will almost definitely hurt R&D and new drug development without actually addressing most of the co-pays that Americans pay. A recent CBO study estimates that drug price reform (similar to what has been proposed) would lead to 59 fewer new drugs over the next three decades. Moreover, key lines of drug development may never even be funded, leading to missed opportunities for saving lives and reducing medical costs in the future. That’s unfortunate, coming after a year when the industry outperformed the rest of the world by developing “gold standard” vaccines in record time.
Given the current levels of R&D spending, excessively squeezing the revenues received by pharma companies will inevitably translate into fewer new drugs. That implies Democratic Representatives Scott Peters (D-Calif.), Kathleen Rice (D-N.Y.) and Kurt Schrader (D-Ore.), who voted against the drug pricing proposal in the House Energy and Commerce Committee markup process, have solid grounds for worrying that such legislation will undercut investment in innovative drugs.
The drug pricing proposal being considered does contain some good features, including reforming Medicare Part D to cap catastrophic spending. But from a political perspective, it should also deal with the prescription escalator problem that is a key driver of the negative feelings towards drug prices. That means capping out-of-pocket drug expenses, not just for Medicare Part D but for all medical insurance. We examined this in our February 2021 report, “Memo to President Biden: A Reality-Based Approach to Drug Pricing.” In that paper, we support a cap on out-of-pocket costs for drugs, including copays, similar to legislation proposed in 2018. We also support a shift to point-of sales rebates, which should benefit consumers and align their incentives with actual net prices. Getting more transparency into the system is essential.
Finally, we need a better payment scheme for new drugs, especially potential cures for major diseases that are socially beneficial and cost-saving over the long run, but expensive to develop. The most straightforward solution is a shift to outcome-based pricing, which will get new drugs to market faster while having the pharma companies absorb more of the risk.
Today, the Progressive Policy Institute hosted an event with U.S. Senator John Hickenlooper (D-CO) and a panel of energy experts, focused on expanding power line capacity to enable renewable energy deployment.
“Senator Hickenlooper has forged a compelling record as a leader on clean energy and the fight against climate change, from his service as Governor of Colorado to the U.S. Senate. PPI was grateful to have facilitated this engaging roundtable with the senator and our panel of distinguished experts, centering the goals of maintaining the integrity of the electrical grid, expanding capacity while lowering consumer costs, and aggressively confronting climate change with innovative, forward-thinking solutions. Prioritizing these efforts will deliver benefits from public health, to climate, to cost reduction — while protecting our environment and driving job creation,” said Paul Bledsoe, PPI Strategic Advisor and moderator for the event.
Watch the event livestream here:
Senator Hickenlooper serves on the Senate Committee on Energy and Natural Resources.
“There are lots of benefits from this. It’s going to provide revenue and jobs in rural communities — in other words, this is going to really tie together the country,” said Senator Hickenlooper during the event. “…By investing in transmission and the grid, we’re going to get a level of resiliency that, based on what we’ve seen this year, is sorely lacking in the existing system.”
This event’s panelists included Donnie Colston, Director of Utilities for IBEW; Bob Kump, President of Avangrid; Sue Tierney, energy analyst and author of the National Academy Sciences Report; Macky McCleary, energy consultant and former Rhode Island Utility regulator; and Bill Parsons, Chief Operating Officer for the American Council on Renewable Energy.
The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.
Today’s U.S. Census Bureau Supplemental Poverty Measure release for 2020 underscores that despite COVID-19 and high unemployment, government support kept millions from falling into poverty over the past year. The poverty rate that takes into account government aid fell to 9.1% from the SPM rate of 11.8% in 2019. According to the authors, this is the lowest rate since estimates were initially published for 2009.
The stimulus checks moved an estimated 11.7 million individuals out of poverty and Unemployment Insurance prevented 5.1 million from falling into poverty. Notably, poverty decreased across all ages, races and ethnicities, and educational attainment levels.
On this week’s Radically Pragmatic Podcast, Dr. Michael Mandel, Chief Economic Strategist at the Progressive Policy Institute (PPI), sits down with Representative Bill Foster (IL-11), to discuss artificial intelligence (AI) and the future of work.
Dr. Mandel and Representative Foster discuss the diffusion of technological innovations for individual consumers and small businesses, the role of government in privacy, and the work Congress is doing to advance pro-growth policies that will help spur innovation. In particular, they underscored the urgent need to help small businesses adopt AI and meet the numerous challenges they face.
Learn more about the Progressive Policy Institute here.
