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PPI Launches Center for Funding America’s Future

Posted on February 12, 2018 by The Progressive Policy Institute

WASHINGTON – The Progressive Policy Institute today announced the launch of a new Center for Funding America’s Future that will promote a fiscally responsible public investment agenda.

This launch comes at a pivotal moment in the federal budget debate. In under two months, Donald Trump and the Republican-controlled Congress have enacted policies that grow federal budget deficits by several trillion dollars throughout the next decade. The administration’s latest budget proposal, meanwhile, offers few ideas to tackle the soaring deficit aside from gutting critical investments in our nation’s intellectual, human, and physical capital.

The PPI Center for Funding America’s Future will offer sensible center-left alternatives to this reckless agenda that foster robust and inclusive economic growth. The Center’s work will include publishing research reports, providing timely commentary on policy debates, and organizing a series of public engagement events around the country.

“The United States now faces trillion-dollar deficits every year as far as the eye can see, which threaten to undermine public support and funding for important investments in the long-term health of our economy,” said Will Marshall, President of the Progressive Policy Institute. “The events of the past week make clear that the work of PPI’s new Center on Funding America’s Future is needed now more than ever.”

The Center will be led by Ben Ritz, who will provide PPI with expert analysis of government spending and tax policies. Ritz previously staffed the Bipartisan Policy Center’s Commission on Retirement Security and Personal Savings, where he helped develop the commission’s comprehensive proposals to reform Social Security and retirement-related tax expenditures, and served as Legislative Outreach Director for the budget-focused Concord Coalition. Ritz has also provided communications and research assistance to several victorious Democratic political campaigns in the Trump era.

“Democrats have a unique opportunity to present themselves as the responsible stewards of government,” said Ritz. “But in order to do so, they need to stand firm against Republican profligacy and offer a credible alternative. I am excited to help PPI’s Center on Funding America’s Future make the case for a fiscally responsible public investment agenda to policymakers and their constituents alike.”

Don’t Help GOP Budget Busters

Posted on February 8, 2018September 18, 2024 by The Progressive Policy Institute

The Republican Party, led by self-proclaimed “King of Debt” Donald Trump, is embracing fiscal profligacy on an epic scale. First, the Trump Republicans broke their promise of “revenue-neutral tax reform” and instead rammed through a bill that will grow deficits by at least $1.5 trillion last December. Now they’ve struck a deal with Senate Democrats that, combined with the tax bill, would add more than $3 trillion to the deficit over the next decade. It’s a one-two gut punch to fiscal responsibility.

It’s regrettable that Senate Democrats have made themselves complicit in the Republican raid on the U.S. Treasury. Yes, this deal would avoid a federal shutdown, which is a good thing. But the pricetag is simply too steep. We support funding disaster relief, health care programs and other critical public investments, and we support adequate defense spending as well. But we’re against unnecessary borrowing to pay for it, which represents an abdication of Congress’s core Constitutional responsibility: paying for government without passing the bill to the next generation.

From the Brownback debacle in Kansas to the tax bill and this latest budget deal, Republicans are proving to be the most reckless and incompetent managers of public finances. All their fiscal posturing and brinksmanship during the Obama years stands exposed as rank hypocrisy. But Democrats can’t effectively make that case to voters if they join in a bipartisan conspiracy against fiscal discipline in Washington.

It would be one thing if this budget deal merely repealed the sequester, which was never meant to take effect and has hamstrung important investments in both defense and domestic initiatives. The Senate budget deal, however, would raise spending above the original levels agreed to by both parties in the Budget Control Act of 2011. It would also cut taxes for corporations by an additional $17 billion and repeal important cost-control measures imposed by the Affordable Care Act – all without paying for them.

If policymakers are going to abandon the BCA, they need to replace it with another plan for controlling America’s massive public debt. The Senate deal places America on the fast track to trillion-dollar deficits as far as the eye can see. That’s the opposite of the fiscal policy our country needs today. When the economy is expanding, we should be unwinding the debt, not using the threat of a government shutdown to make it worse. Otherwise, young Americans will face higher tax and debt payment burdens, and the federal government will have little “fiscal reserve” to tap the next time the economy goes into recession.

The Amazon Jobs Effect: Kenosha County, Wisconsin

Posted on February 1, 2018September 18, 2024 by The Progressive Policy Institute

Amazon is the fastest US company–and perhaps the fastest company anywhere–to 300,000 workers. Its rapid expansion is creating tech-enabled work in virtually every corner of the country, with our estimates showing that fulfillment center jobs pay 31% more, on average, than brick-and-mortar retail jobs in the same area.

Now, there are all sorts of interesting questions about what happens next. Some people have worried that the fulfillment center jobs will fade away as the operations get increasingly roboticized. By contrast, our view is that fulfillment centers will become critical hubs for the new “Internet of Goods“: By lowering the cost of shipping and creating a pool of tech-enabled workers, areas with ecommerce fulfillment centers will have a head start in attracting the next wave of manufacturing startups.

The answers to these questions, of course, bear on the important debates about the value of tax and other public incentives for Amazon fulfillment centers and the company’s HQ2. I haven’t gotten involved in these discussions directly, because they really are about the shape of the future economy. If you think that robots are going to eat all of our jobs, then tax incentives never make sense. If you think that we are just at the beginning of the transformation of physical industries and the creation of a new wave of tech-enabled jobs in physical industries such as distribution, manufacturing, and agriculture, then offering tax incentives to get a piece of the future is far-sighted thinking.

However, in the midst of all of these very interesting discussions, I really must address a new study from the Economic Policy Institute which purports to show no employment gains from the opening of an Amazon fulfillment center. More precisely, “[t]wo years after an Amazon fulfillment center opens in a county, overall private-sector employment in the county has not increased.”

Really? This result does not pass the smell test. You can raise all sorts of long-term questions. But in the short-term, if you build a giant new fulfillment center, first you get construction jobs in the years before the center opens. Then you get the workers themselves. There’s no plausible mechanism by which those jobs can crowd out other jobs in the samecounty in the short-term.

And I’m not sure about their sample of counties. I look on their list of ‘Amazon’ counties (Appendix Table 3), and it doesn’t include Kenosha, Wisconsin, where the construction of an Amazon fulfillment center in 2013 and 2014, and its opening in June 2015, added thousands of jobs into the local economy.

The chart below plots private sector jobs in Kenosha County against private sector jobs in all of Wisconsin.

You can see that right around the time that Amazon arrives in Kenosha, county employment turns up, driven in large part by the increase in warehouse jobs.

Indeed, Kenosha County is effectively becoming a tech-enabled distribution-manufacturing hub. After Amazon opened its doors, the county attracted companies like Haribo, the German candy giant (and originator of gummy bears), which is building its first North American factory in Kenosha.

PPI Statements Prior to the State of the Union Address: “Trump’s Infrastructure Promises Are Lies”

Posted on January 30, 2018 by The Progressive Policy Institute

WASHINGTON— The Progressive Policy Institute (PPI) today released the following statements prior to President Trump’s State of the Union address, which is expected to focus on a $1.5 trillion infrastructure plan:

“The GOP’s insistence on passing tax cuts first will make it harder to tackle the infrastructure challenge,” said PPI President Will Marshall. “For example, House Republicans have proposed to kill the exemption for ‘private activity bonds’ that help leverage private investment in repairing and upgrading infrastructure. And if Republicans use revenues from repatriating overseas profits to offset the cost of their rate cuts, that money won’t be available to finance the big infrastructure push we need.

“GOP leaders have broken their promise to make tax reform ‘revenue neutral’ and now propose to add $1.5 trillion in new borrowing to the national debt. Where are the fiscal hawks of the House Freedom Caucus, who were so fierce in their attacks on Obama’s alleged fiscal profligacy? Back in their nests, cooing contentedly as their party sticks future generations with the bill for lower tax rates today.”

“The Republican tax bill gave away trillions to the richest one percent, squandering all the money needed for investments that would actually grow the economy to the benefit of all Americans; namely, rebuilding our antiquated infrastructure to be competitive in the digital economy,” said Paul Bledsoe, PPI Strategic Adviser. “Trump’s infrastructure promises are lies—because he’s given away all the money needed to pay for them. Democrats should propose rescinding the Republican tax giveaway to the rich and put forward middle class tax cuts and a robust US infrastructure plan to benefit everyone.”

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Langhorne for The 74, “As a Teacher, I Was Complicit in Grade Inflation. Our Low Expectations Hurt Students We Were Supposed to Help”

Posted on January 25, 2018 by The Progressive Policy Institute

In November, NPR uncovered a graduation scandal at Ballou High Schoolin Washington, D.C., where half the graduates missed more than 90 days of school. Administrators pressured teachers to pass failing students, including those whom teachers had barely seen.

Policy wonks have had a field day with the report, adding graduation scandals to their lists of top 2018 education stories to watch and questioning the value of a high school diploma.

The one group of people who were not surprised by the scandal: teachers.

George W. Bush once claimed that as president, he would challenge the “soft bigotry of low expectations” in our nation’s classrooms by raising the K-12 education standards for of all America’s children. But in the past two decades, the soft bigotry of low expectations hasn’t been challenged; it’s been masked by grade and graduation inflation. And these low expectations are not isolated in our nation’s most impoverished schools.

Four years ago, when I began my teacher training, a tenured teacher gave me some advice: “Just give them a D; it’ll be so much extra work for you to fail anyone.” At the time, I thought it was strange wisdom, but soon I learned that it’s part of the “common sense” of survival in the world of teachers.

I worked in Fairfax County Public Schools, a more affluent, higher-performing district near Washington, where pressure to inflate grades and ensure students pass was ingrained. These district-encouraged, sometimes administrator-enforced grading policies still make me cringe.

Continue reading at The 74.

The App Economy in Thailand

Posted on January 25, 2018 by The Progressive Policy Institute

When Apple introduced the iPhone in 2007, that initiated a profound and transformative new economic innovation. While central bankers and national leaders struggled with a deep financial crisis and stagnation, the fervent demand for iPhones, and the wave of smartphones that followed, was a rare force for growth.

Today, there are 5 billion mobile broadband subscriptions, an unprecedented rate of adoption for a new technology. Use of mobile data is rising at 65 percent per year, a stunning number that shows its revolutionary impact. More than just hardware, the smartphone also inaugurated a new era for software developers around the world. Apple’s opening up of the App Store in 2008, followed by Android Market (now Google Play) and other app stores, created a way for iOS and Android developers to write mobile applications that could run on smartphones anywhere.

Shelby County Public Schools Superintendent Hobson is “willing to voluntarily relinquish control over some struggling schools to be operated by private charter groups,” or so we hope.

Posted on January 24, 2018September 18, 2024 by The Progressive Policy Institute

Fighting for the neediest and pushing back against special interests are often unexpected actions in the realm of political battles.

However, Dorsey Hopson, Superintendent of the Shelby County Schools (SCS) in Memphis, Tennessee, might exceed our expectations.

Last week, Hopson announced that he is “willing to voluntarily relinquish control over some struggling schools to be operated by private charter groups.”

For years, SCS has been working hard to turn around struggling schools through its Innovation Zone. The iZone, however, is a costly model, and few of its schools have successfully achieved key benchmarks.

In defense of his decision, Hopson said: “We spend so much money, whether it’s philanthropic dollars, state dollars, our dollars, on trying to improve these Priority Schools over the last five or six years, and we’ve gotten some gains but certainly nowhere near the transformative results that we would like to have had …So I think we’ve got to take another shot at it and do it differently.”

Hopson is showing strength of character by acknowledging the success of the charter school model at a time when the anti-charter propaganda machine is in full swing. Because he recognizes the district’s need for “transformative results,” Hopson is willing to throw out the old, unsuccessful model of education that has failed urban students for decades in favor of embracing public charters, which have created profound changes in cities like New Orleans, Washington D.C., Denver, and Indianapolis.

Strong superintendents cannot, and should not, sit idly and continue to support schools that are not helping children achieve, especially when public charters schools can help thousands of our nation’s most disadvantaged kids.

After all, the Tennessee Charter School Center reminds us that a charter sector benefit students because:

Public charter schools are held accountable. Test scores and performance results are published and are part of the school district findings.
Public charter schools provide healthy learning environments for all students, including students with special needs, English Language Learners and the gifted.
Public charter schools are not allowed to turn away any child, for any reason.
Public charter school teachers want to be in their school; it was their interest that brought them to the school.

If none of these key points brings you to the table with Superintendent Hopson, then looking at the data from the 2017 Shelby County Schools Charter Schools Annual Report might. The existing charter schools have already paved the way for more innovation, progress, and success.

The report notes that student enrollment in Shelby County charter schools has increased annually by an average of 1,500 students per year. More parents are choosing the charter option than ever before.

The charter sector also has lower suspension rates for secondary schools, and public charters in Shelby County have a lower withdrawal rate than district-managed schools. More students receive more days of instruction.

Finally, charter schools participate in a program that offers transparency and encourages oversight. The Operations Score Card (OSC) assesses the charter schools’ performance regarding non-academic expectations, like school budgets, operation, legal compliance and other issues. The OSC stated that Shelby County Charter schools “are consistently managing operations well and to respond appropriately in the interest of protecting SCS and its students when charters are at risk for non-compliance.”

In Reinventing America’s Schools, David Osborne underscores the findings and points out, “As in most charter cities, Memphis’s charters outperform traditional public schools.”

The data supports the promise of having public charters take over operation of SCS’s failing schools. It’s no wonder that Hopson supported the idea too.

Of course, not everyone was pleased at Hopson’s announcement. United Education Association of Shelby County President Tikeila Rucker was dismayed that Hopson would consider partnering with charter organizations: ““UEA along with parents, teachers and community leaders stands behind the district turning schools around, not giving schools away.”

Unfortunately, in the face of such commotion, Hopson has begun to placate those who want to keep the status quo. In an email to principals, he clarified his remarks, writing: “All that said, I want to be very clear that my preference would always be to keep schools under the governance of (Shelby County Schools).”

Please, Superintendent Hopson, continue to stay strong and do what’s right. Put politics aside and put kids first.

The App Economy in Vietnam, 2017

Posted on January 23, 2018 by The Progressive Policy Institute

More than just hardware, the smartphone also inaugurated a new era for software developers around the world. Apple’s opening up of the App Store in 2008, followed by Android Market (now Google Play) and other app stores, created a way for iOS and Android developers to write mobile applications that could run on smartphones anywhere.

Regulation and the Productivity Revolution in Japan’s Handset Market

Posted on January 19, 2018 by The Progressive Policy Institute

The Progressive Policy Institute has long been focused on the interaction between regulation and innovation across the United States, Europe, and Asia.We are particularly concerned with the broad class of pricing of innovative products and services.

From this perspective, we note that the Japanese government, acting through the Ministry of Internal Affairs and Communications (MIC) and the Japan Fair Trade Commission (JFTC), has required or encouraged mobile providers to reduce or eliminate their subsidies for consumer purchases of smartphone handsets. The government’s explicit goal is to persuade the providers to use the money saved from reduced subsidies to lower rates for long-term consumers.

Osborne and Langhorne for The 74, “Is Chicago Really America’s Fastest-Improving Urban School District? Why Claims Made by the NYT & Others Are Misleading”

Posted on January 8, 2018 by The Progressive Policy Institute

A recent New York Times article suggested that Chicago had the nation’s fastest-improving large urban school district. In it, reporters Emily Badger and Kevin Quealy summarized data from a new study by Sean Reardon of the Stanford University Center for Education Policy Analysis.

For many, that was surprising news, since the district has received heat for inflated graduation rates and three years of flat scores on PARCC (Partnership for Assessment of Readiness for College and Careers) tests, which reveal that only 1 in 4 CPS elementary students reads at grade level.

A look at more comprehensive data makes it clear that while Chicago did improve from 2009 to 2014, New Orleans and Washington, D.C., have improved faster. A key reason for rapid improvement in all three cities appears to have been aggressive replacement of failing schools with stronger schools, most of them charters. Unlike in New Orleans and D.C., however, Chicago’s leaders virtually halted charter growth five years ago — which could explain the stalled growth since 2014.

Continue reading here.

Press Release: PPI Report Highlights How Policy Can Drive New, Digitally Enabled Manufacturing Growth & Economic Revitalization

Posted on January 4, 2018 by The Progressive Policy Institute

Report uses Upstate New York as case study for potential economic boon from ‘Internet of Goods’

WASHINGTON —The Progressive Policy Institute (PPI) today released a new report by Chief Economic Strategist Michael Mandel highlighting how the next wave of digitally-driven manufacturing – an essential part of what he calls the “Internet of Goods” – has the potential to revitalize local economies across the country under the right public policies. The report uses the conditions in Upstate New York – particularly the region from Buffalo to Rochester to Syracuse – as a real-world test bed to determine best practices for attracting and retaining Internet of Goods industries.

“Because new Internet of Goods industries incorporate real-time data and advanced analytics into their business practices, high-speed high-capacity mobile broadband is essential. … What’s needed are policies that encourage broadband companies to bring high-speed broadband networks to these areas of the country that are ideally suited for digitally-driven manufacturing companies, while not taking actions that delay or depress the build-out of these networks by making it cost prohibitive to build them.”

“With its world-class universities, access to interstate highways and shipping routes, educated workforce, and ample building space vacated by former manufacturing plants and other industries, [Upstate New York] possesses many essential qualities to forge a robust Internet of Goods economy,” Mandel writes.

Mandel argues the next generation of wireless broadband networks, usually called 5G networks, are essential infrastructure for the Internet of Goods. They provide enough bandwidth to power driverless trucks, guide drones without interruption, and support digital manufacturing. These networks will be built on millions of small cells throughout the country — in buildings or outdoors on utility poles, light poles, traffic lights, or exterior walls of buildings — and can transmit a lot of data over a short range. Thus, a robust broadband network needs to have many cells.

However, in terms of attractiveness for small cell build-out, Mandel writes, Upstate New York starts out with a handicap relative to comparable regions due to lower GDP density. On top of that, local government policies are hindering the deployment of small cells or 5G networks by imposing or considering new and prohibitive costs on the installation of the equipment needed to bring high-speed mobile broadband to the region.

“As a result, broadband companies will find alternative sites for building out their networks, jeopardizing not only the future of new industries that have located Upstate, but also closing the door to future industries and revenues they would generate,” Mandel concludes.

“Upstate New York should complement its universities, workforce, transportation and affordable land advantages by encouraging the essential high-speed, high-capacity broadband network to power future industries and create jobs.”

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The Internet of Goods and a Revitalized Economy: Upstate New York as a Template

Posted on January 4, 2018 by The Progressive Policy Institute

A revival in local manufacturing could provide a new source of jobs for areas of the country that have suffered disproportionate job losses in recent years. The key to this revitalization is integrating digital technology into every stage of the research, development, distribution and delivery of the goods produced. We call this integration the Internet of Goods and believe it is poised to revitalize physical industries such as manufacturing, agriculture and transportation.

Based on new business models, as well as new technology, digitally-driven manufacturing can provide an essential jumping-off point for growth. As we recently wrote in a policy report:

We believe that, through additive manufacturing and other new technologies, combined with the new faster local distribution networks, there is the possibility of creating new business models for manufacturing. In particular, there is the potential for the revival of small-scale manufacturing operations, relatively close to customers, making small-batch and custom goods.

Digitally-driven manufacturers won’t locate in dense urban areas where land prices are high and logistics for transporting the manufactured goods are complex, time consuming and expensive. Instead, they will gravitate to areas of the country that have sufficient, available land; have a strong base of workers comfortable with technology; and have access to a high-capacity broadband network infrastructure.

PPI Tech Job Index 2017: States

Posted on January 3, 2018September 18, 2024 by The Progressive Policy Institute

Tech and tech-enabled jobs are becoming increasingly important to many state economies–not just the tech hubs like California and Texas. Particularly important is the role of ecommerce, which is driving the creation of hundreds of thousands of tech-enabled electronic shopping and fulfillment center jobs around the country (for example, see here). Going forward, we expect tech-enabled manufacturing to help revive job growth in areas that were hit hit hard by the decline in factory jobs (for example, see here).

For this study, we define the PPI Tech Job Index for a state or local area as the increase in tech and tech-enabled jobs from 2010 to 2016, as a percentage of the total number of private sector jobs in that state or local area in 2010. Thus, the PPI Tech Job Index serves as a measure of the importance of tech growth to the economy of that state.

The industries that we include, and their NAICS codes, are listed below in Table 1. These include computer and electronics manufacturing, electronic shopping, software publishing, internet publishing and search, computer systems and programming, management and technical consulting, and the increase in warehousing jobs since 2007. As we have shown in earlier work, this last category picks up the growth of employment in ecommerce fulfillment centers, which do not yet have their own industry.

Table 1:	Tech and tech-enabled industries
334	Computer and electronics manufacturing
4541	Electronic shopping
5112	Software publishing
51913	Internet publishing and search
5415	Computer systems design and programming
5416	Management and technical consulting
493	Warehousing (change since 2007, reflects ecommerce fulfillment)

Table 2 below shows the top states, ranked by the PPI Tech Job Index. We can see Washington at the top, propelled by Amazon’s growth. And California, not surprisingly, is in the top 5. But the top 10 also includes states such as Utah, Tennessee, and Georgia, with North Carolina, Missouri, and Indiana not far behind. Utah’s high ranking is due to growth in computer systems design and programming, and electronic shopping jobs, while Tennessee showed strong gains in ecommerce, computer systems design and programming, and management and technical consulting. Missouri’s ranking came from gains in computer systems design and programming, while Indiana benefited from growth in ecommerce and computer systems design and programming. Massachusetts’ ranking is dragged down a bit because of the continuing decline of tech hardware jobs.

The conclusion: The economic impact of tech and tech-enabled jobs reaches across the entire country. We will shortly be publishing a more detailed study where we look at the PPI Tech Job Index for individual counties.

Table 2	PPI Tech Job Index: Top States
		PPI Tech Job Index*	Tech jobs created, 2010-2016 (thousands)
1	Washington	3.4%	77.2
2	Utah	2.8%	26.2
3	California	2.1%	256.9
4	Tennessee	2.0%	42.2
5	South Carolina	1.9%	26.5
6	Texas	1.8%	146.7
7	Delaware	1.7%	5.7
8	Colorado	1.6%	29.0
9	Georgia	1.6%	49.0
10	North Carolina	1.6%	48.9
11	Missouri	1.5%	31.9
12	Massachusetts	1.5%	40.7
13	Indiana	1.5%	34.2
14	Oregon	1.4%	18.8
15	Minnesota	1.3%	28.3
16	Illinois	1.3%	58.9
17	Florida	1.2%	74.3
18	New York	1.2%	84.7
19	New Jersey	1.2%	38.3
20	Kentucky	1.2%	16.8
21	Virginia	1.2%	33.3
22	Pennsylvania	1.1%	53.5
23	Maryland	1.1%	21.1
24	Oklahoma	1.0%	11.8
25	Nevada	1.0%	9.7

*Change in tech and tech-related jobs from 2010 to 2016, as a percentage of total private sector jobs in 2010.

Data: BLS QCEW, PPI

Ecommerce Job Growth, 2016-17

	Change in jobs, 2016-17
	(thousands)
Brick-and mortar retail	13
Ecommerce	133
Electronic shopping	29
Couriers and messengers	38
Warehousing	66

Data: BLS

PPI Launches Center for Funding America’s Future

Ecommerce Job Growth, 2016-17