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Embrace of IT in Physical Industries Has U.S. on the Cusp of a Productivity Boom

Posted on March 28, 2017 by The Progressive Policy Institute

WASHINGTON—The Technology CEO Council (TCC) today released a new economic analysis, co-researched and written by PPI Chief Economic Strategist Michael Mandel that shows a coming U.S. productivity boom enabled by the diffusion of information technology (IT) into the physical industries, including manufacturing, agriculture, healthcare, transportation, and energy. Far from a jobless future, Mandel’s co-analysis predicts that increased use of information technology will make the physical economy more productive and American workers more valuable.

“Job and productivity growth has stalled in many industrialized countries, including the U.S.,” says Mandel. “While some economists will put the blame squarely on IT for disrupting industries and destroying jobs, the surprising fact is that 70 percent of companies in the U.S. economy are not taking full advantage of the power of information technology. And that’s the problem.”

By comparison, digital industries have fully embraced information technology, building new products and platforms—the PC, the Web, the smartphone, cloud computing, electronic financial markets—all of which empowered further explosions of entrepreneurial activity and along with it, jobs.

According to the report, this IT-enabled transformation could add $2.7 trillion to U.S. annual economic output by 2031 (in 2016 dollars), and grow federal revenues by a cumulative $3.9 trillion over the next 15 years.

In particular, The Coming Productivity Boom details a manufacturing sector in the midst of major transformation—not just by robotics and 3D printing, but by the emergence of smart manufacturing, a fundamental rethinking of the production and design process that will substantially boost productivity and demand. In turn, smart manufacturing will lead to the creation of a new set of manufacturing-related jobs and allow American factories to compete more effectively against low-wage overseas competition.

Catalyzing this growth requires better tax policy, the free flow of goods, services and data around the world, investments in communications networks and in education and training, as well as an embrace of innovation among regulators.

The complete report is available for download at www.techceocouncil.org/productivityboom.

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Albany Times Union: Protect Consumers From Cash Advance Companies, Too

Posted on March 24, 2017 by The Progressive Policy Institute

New York Attorney General Eric Schneiderman last month filed a complaint against a lawsuit cash advance firm for allegedly engaging in predatory lending practices. RD Legal Funding stands accused of shamefully taking advantage of 9/11 first responders and brain-injured NFL players by offering high interest advances on expected payouts from legal settlements.

Schneiderman’s filing should be wake-up call to lawmakers in Albany. To ensure more New Yorkers do not fall victim, New York desperately needs to pass legislation to apply existing consumer protection laws to these cash advance companies.

The fact is, “crash cash” lawsuit lenders have operated in the shadows, outside the purview of New York’s consumer lending laws, for too long. These lenders skirt consumer protections by calling their products “investments” rather than “loans,” and this allows them to charge annual interest rates that would make a loan shark blush. The lawsuit cash advance industry should play by the same rules as every other company that lends money.

You may have seen the late-night ads promising “quick cash” for your lawsuit. These ads are careful never to say the word “loan,” so the lenders may continue their farce and sidestep New York law. These fast-cash offers take advantage of the most vulnerable consumers — people who have already been injured.

Take the case of Joseph Gill, a Brooklyn resident who borrowed $4,000 for medical bills while his lawsuit arising from alleged police brutality was in court. By the time the case settled five years later, Joseph owed $116,000 on his loan.

Or the situation highlighted in the complaint by the attorney general: a first responder on the ground on 9/11 was advanced $18,000 while she waited for her settlement. After six months, she owed $33,000 — an outrageous 83 percent increase in less than a year.

New York lawmakers cannot let this practice continue. New York is the financial capital of the world, and the unchecked practice of lawsuit lending is a stain on the state’s position as a steward of the world’s finances. It is an industry that thrives on the victims who are most in need of assistance. States across the country have subjected these predatory loans to existing lending laws, and New York should do the same.

Last year, the state Senate unanimously passed a bill subjecting lawsuit loans to existing consumer lending protections, and existing caps on interest rates. In a stunning illustration of rarely seen bipartisanship, senators on both sides of the aisle came together to close the lawsuit lending loophole. Unfortunately, the Assembly failed to pass the bill, and so another year has gone by and New Yorkers continue to be victimized by this practice.

The Assembly should follow Schneiderman’s lead, regulate lawsuit loans, and ensure that injured New Yorkers are not victimized again.

See full article.

Thurbert Baker and Tom Stebbins serve on the advisory board of the Progressive Policy Institute’s Center for Civil Justice. Baker is a former Georgia attorney general. Stebbins is the executive director of the Lawsuit Reform Alliance of New York.

Marshall for The Daily Beast: Donald Trump and the Republicans Shotgun Marriage Is Off to a Rocky Start

Posted on March 23, 2017 by The Progressive Policy Institute

Many Congressional Republicans regard Donald Trump as an interloper, so it’s not surprising that their political marriage of convenience is already showing signs of strain. They’re bickering over health care now, but the deeper source of discord is the basic incompatibility of conservatism and populism.

During the campaign, Trump echoed Republicans in caricaturing Obamacare as a “disaster” that demands immediate repeal. Yet he also distanced himself from GOP dogma by assuring working class voters that he wouldn’t take away their health coverage and let them “die in the streets.”

Continue reading at The Daily Beast.

Legal Newsline: Justice Reform Groups Continue Push for Venue, Jurisdiction Bills in Missouri Legislature

Posted on March 22, 2017 by The Progressive Policy Institute

Phil Goldberg, director of the Progressive Policy Institute’s Center for Civil Justice and Don Gifford, a member of PPI’s Center for Civil Justice Advisory Board, were quoted in the Legal NewsLine about a recent Missouri Supreme Court ruling:

“The ruling offers some clarity on jurisdiction rules in Missouri—as in, courts don’t have jurisdiction over out-of-state claims—but it doesn’t completely settle the issue that’s been so controversial in the state, Phil Goldberg, director of the Progressive Policy Institute’s Center for Civil Justice, told the St. Louis Record.

If someone has been wrongfully injured and they want to bring a lawsuit, they should be able to do so—but only in the place that makes sense for that lawsuit,” Goldberg said.

Part of the problem is fraudulent joinders. Joinder refers to the occasion when multiple parties join a lawsuit as co-plaintiffs or co-defendants. In Missouri, frustrations arise when parties are allowed to join a case without meeting jurisdiction requirements. A lawsuit may originate with a plaintiff who meets proper jurisdiction requirements, but then out-of-state plaintiffs attach their claims in a joinder. Proposed rule changes address that issue.

“We think joinder was never meant to get around venue and jurisdiction laws,” Goldberg said. “Venue laws and jurisdiction laws should be clear that if you’re not from Missouri and you don’t have venue or jurisdiction in Missouri, you don’t get to bring your lawsuit in Missouri.”

Read the rest of the article at the Legal NewsLine.

Rotherham for U.S. News & World Report: No Imagination for Education

Posted on March 21, 2017 by The Progressive Policy Institute

The presidential budget request is always a mash up of policy, politics, signaling and negotiation. Yet even with the caveat that any budget request is best taken seriously but not literally, President Trump’s first budget stands out as an exceptional missed opportunity in education and across a range of federal agencies. Ignore the theatrics about Trump’s new battle with Big Bird, he won’t win that one. And remember that some of the programs the president is putting on the chopping block are ones that President Obama sought to cut, too. Instead, what’s most tragic about this budget is how profoundly unimaginative it is at a time the country needs big ideas.

When it comes to the education budget, and the federal budget more generally, a strong case can certainly be made that cutting and reinvesting might help spur modernization and reform. Many education programs are an ossified grab bag of special interest priorities rather than real drivers of better outcomes for kids or genuine innovation. But some of these programs do provide essential support for students and contrary to popular wisdom it is quite possible to make things worse than they are now. So reform requires careful and thoughtful policymaking not blunt force trauma. Trump’s budget, by contrast, bludgeons rather than fixes. Worse, it doesn’t look forward, or even sideways, it looks down.

Trump’s EPA Cuts: An Invitation to Litigation

Posted on March 20, 2017 by The Progressive Policy Institute

The bullseye of President Trump’s budget cuts is now clear. Unless Congress asserts itself, the budget of the EPA will be slashed thirty-one percent, more than any other agency. The budgets of the National Oceanographic and Atmospheric Administration and climate change programs within NASA will be similarly decimated.

These cuts should not come as a shock. During the campaign, President Trump reportedly said he’s like to abolish the EPA or “leave a little bit.” And he has famously asserted that “the concept of global warming was created by and for the Chinese in order to make U.S. manufacturing noncompetitive.”

As carbon emissions rise, so will the “social costs of carbon”

Posted on March 16, 2017 by The Progressive Policy Institute

President Trump’s “open mind” on climate change seems to be closing. He’s preparing an executive order to kill Obama administration rules aimed at curbing U.S. greenhouse gas emissions. It is almost as though Trump is determined to increase the amount of carbon and other greenhouse gases America pumps into the atmosphere.

As carbon emissions rise, so will the “social costs of carbon.” That’s a fairly new metric energy economists have developed to account for the many ways climate change can harm our economy as well as public health and safety. Harvard’s Joe Aldy, a PPI contributor, helped to develop the measure while serving in the Obama White House. In this piece on The Conversation, he explains how the social cost of carbon came to be and how it’s been used to keep the costs and benefits of regulation in balance.

Ecommerce Has Added Almost 100K Jobs Over the Past Year

Posted on March 10, 2017September 18, 2024 by The Progressive Policy Institute

In our new paper, we develop a methodology for tracking ecommerce jobs and pay. Applying that methodology to today’s jobs report, we find that the ecommerce sector has added 97,000 jobs over the past year. This figure includes fulfillment centers. Surprisingly, general retail–which includes the retailers competing most directly with ecommerce–has added 27,000 jobs over the same stretch.

The ecommerce jobs pay much better than general retail. For example, production and nonsupervisory workers in the ecommerce sector, including fulfillment centers, earned an average of $17.41 per hour in 2016, compared to $13.83 in general retail—a 26 percent premium.

Based on official data, it looks like the ecommerce sector is adding new, better-paying jobs without actually reducing existing jobs in retail. Moreover, as our paper shows, these jobs are widely distributed around the country, including states such as Kentucky and Indiana.

Background: In our new paper, “The Creation of a New Middle Class?: A Historical and Analytic Perspective on Job and Wage Growth in the Digital Sector, Part I,” we explore the possibility that the job and wage growth generated by the digital boom is creating a new middle class, with gains across the entire country. Our historical benchmark is the first half of the 20th century, when superstar industries companies such as Ford, General Motors, General Electric, and DuPont accomplished what had seemed impossible at the time: create hundreds of thousands of jobs while paying good wages and offering consumers lower prices than their rivals. We provide evidence that

For the purpose of this analysis, we define the ecommerce sector to include what the government calls the “electronic shopping and mail order house” industry (NAICS 4541) and “general warehousing” (NAICS 49311). Based on careful examination of the data, this second industry apparently contains the bulk of fulfillment centers and similar establishments.

We define the general retail sector to include those retailers that compete most directly with ecommerce, including electronic and appliance stores (NAICS 443); clothing, shoes, and jewelry stores (NAICS 448); sporting goods, hobby, musical instrument, and book stores (NAICS 451); and general merchandise stores, including department stores and supercenters (NAICS 452).

Because of the way that the BLS collects data, it is possible that the general retail sector includes some workers involved in ecommerce. That would mean we are underestimating ecommerce jobs and overestimating brick-and-mortar general retail jobs by the same amount.

For the results reported in this blog post, we use 12-month averages.

Comparing Today’s Tech/Telecom Employment with Yesterday’s Industrial Employment

Posted on March 9, 2017September 18, 2024 by The Progressive Policy Institute

We’re grateful to have our new report mentioned in Neil Irwin’s piece today in the New York Times about tech employment. The report, An Analysis of Job and Wage Growth in the Tech/Telecom Sector, to be presented at the TPRC conference later this week, directly compares employment at today’s leading tech/telecom firms with employment at the industrial leaders of the past. Here’s what we found:

• Today’s 10 most valuable tech/telecom companies employ roughly 1.5 million people, up 63 percent over the past 10 years.

• In 1979, at the peak of US manufacturing employment, the 10 most valuable industrial companies employed 2.2 million workers, 48 percent more than employment at 2017 tech/telecom leaders.

• The average employment of the vintage-2017 tech/telecom leaders is 149,000, compared to a 222,000 average for the vintage-1979 industrial leaders. However, the industrial average is heavily influenced by General Motors, which is an outlier. If we omit General Motors, the employment average of the other industrial companies is 152,000, very close to today’s tech/telecom average.

• For example, Apple (mentioned in Irwin’s story) reported 116,000 fulltime equivalent employees as of its last annual report. Kodak in 1979 had 126,300 employees worldwide, and 80,800 in the United States. That makes them roughly the same size in terms of employment.

• Kodak employed 24,500 workers in 1929. So Kodak needed 50 years to add roughly 100,000 workers. Apple employed 17,787 workers in 2006, so Apple needed 10 years to add roughly 100,000 workers.

• The revenue of the top 10 tech/telecom companies in 2016 was 5.5 percent of U.S. GDP, compared to 5.7 percent of GDP for the top 10 industrial companies in 1979.

• Real wages for production and nonsupervisory workers in tech/telecom, digital nontech, and health have been steadily rising since 1990. By comparison, real wages for production and nonsupervisory workers in the physical nonhealth sector have been flat since 1990.

• Workers in mid-skill occupations such as office and administrative support; sales; and installation, maintenance, and repair get paid significantly more in the tech/telecom sector.

Read the paper.

Is Economic Growth Becoming Less Concentrated ?

Posted on March 8, 2017September 18, 2024 by The Progressive Policy Institute

It’s been well-documented that economic dynamism for many years has been concentrated geographically–in a few tech hubs like SF and NY, in the largest urban areas where young people flock, in coastal states. This geographical concentration appears to have been a major force underlying the 2016 election, where areas left behind by economic prosperity were willing to vote for Donald Trump.

However, the latest release from the BLS shows that nonfarm payroll employment increased over the year in 342 out of 388 metropolitan areas over the last year, suggesting economic gains are spreading across the country. Moreover, Amazon and other ecommerce leaders seem to be creating hundreds of thousands of jobs in outlying areas with cheaper real estate and good access to roads.

So we did a deep dive into the numbers. Using QCEW from 2007 to 2016, we compared the economic performance of big metro areas (employment over a million) with the rest of the country. Our measures were growth of private sector jobs and establishments. A new establishment reflects either a new business opening up, or an existing business expanding.

From 2007 to 2015, the big metro areas far outperformed the rest of the country. Indeed, the rest of the country experienced shrinkage in both jobs and establishments. Economic growth was very concentrated.

But 2016 was different. In 2016, the rest of the country actually created establishments faster than the big metro areas, reflecting growth of new businesses and expansions of existing businesses. This is great news. The big metro areas still did somewhat better when it came to job growth, but the gap has narrowed enormously.

We get the similar results when we look at large and small counties (with 400K employment as the dividing line), or major tech hubs versus the rest of the country.

These results suggest that the economic pendulum may be starting to swing back, away from the biggest cities towards more evenly balanced growth, with some very interesting policy and political implications. More to come.

Yarrow for Washington Monthly: Why French Presidential Candidate Emmanuel Macron Could Save Western Democracy

Posted on March 3, 2017September 18, 2024 by The Progressive Policy Institute

He’s the last best hope to stop the ethno-nationalist Marine Le Pen from capturing the presidency.

Why are this spring’s French presidential elections so important to the United States and the world?

Typically, few Americans pay attention to elections beyond our borders, although Britain’s “Brexit” vote last summer was potentially a harbinger of Donald Trump’s election in November. Likewise, for most Americans who think about France, it is as a romantic tourist destination, an occasionally annoying ally, and a country whose language we studied in high school. And, for those very few who think more about French politics and policy, the picture is of a succession of lackluster, often corrupt leaders since before World War II, rigid regulatory policies that have hurt the French economy for more than 30 years, and some social policies—like the French health-care and child-care systems—that could be a model for the United States.

This year is very different. For Americans, and Brits and others—deeply disturbed by rising xenophobia and racism, the go-it-alone nationalism that sees other countries as enemies and free trade as harmful, and the rise of “alternative facts” and disdain for a free press—the French election could be a dramatic turning-point. For those who support President Trump and Brexit leader Nigel Farage, a victory by Marine Le Pen, the far-right National Front leader in France, would be the third, and decisive, domino to fall in the overturning of the post-World War II order of liberal democracy.

Lewis for The Daily Beast, “Great Party, Brutal Hangover-Why Democrats Should Reject Their Donor Class”

Posted on February 23, 2017 by The Progressive Policy Institute

As the parties have given up on their core functions, wealthy donors with ideological agendas have filled the void they’ve left.

Democrats suffered losses up and down the ballot on Nov. 8, bolstering Republican dominance of both national and state governments. A presidential campaign launched with high hopes wound up adding to the party’s demoralizing string of defeats in 2010, 2012, and 2014. Outside of a candidate named Barack Obama, Democrats have not had much success on election days since 2008.

The party needs to change, but how? Media attention has focused on the race between competing factions to take over the Democratic National Committee. The press will obsessively cover the “dramatic” picking of a party chair in Atlanta this weekend, where 447 voters will choose the new superhero to return the party to power.

It’s the wrong battle, though, because the DNC cannot be the instrument for the party’s revival. Thanks to the Bipartisan Campaign Reform Act of 2001, the national parties have lost power to the growing role of outside money. Formal party structures have become empty vessels overshadowed by external ideological networks of wealthy individuals and organizations on the right and left.

Continue reading at The Daily Beast.

Osborne & Miller-Freutel for U.S. News, “Filling the Adult Education Vacuum”

Posted on February 22, 2017September 18, 2024 by The Progressive Policy Institute

Charters offer students over the age of 18 an alternative path to graduating high school

When people think about education, they usually focus on kindergarten through 12th grade, or perhaps higher education. But there are more than 30 million adults without high school diplomas, and the publicly funded adult education system can serve only two million of them every year.

In states and cities that allow it, charter schools are perfectly positioned to fill this void. Charters are public schools, but they have the freedom to create out-of-the box models for adults who want to improve their lives. Goodwill Industries, the national nonprofit agency best known for selling used goods, has a subsidiary that operates charters for adult dropouts – The Excel Centers – in a handful of states.

It all began in Indianapolis. Scott Bess, former president and chief operating officer of Goodwill Education Initiatives, says Goodwill was operating career centers – state-funded offices where people collected their unemployment checks and got information about jobs, training and education opportunities and six-week classes on job hunting and life skills. Half of those they served lacked high school diplomas, and they often returned multiple times because they couldn’t hold onto jobs. So Bess and his colleagues decided to do something more long-lasting, a charter high school.

Continue reading at U.S. News & World Report.

Brazil’s App Economy

Posted on February 22, 2017 by The Progressive Policy Institute

Apple’s introduction of the iPhone in 2007 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, use of mobile data is rising at 50% per year globally, a stunning number that shows the revolutionary impact of the smartphone.1

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.

em português: PPI_BrazilAppEconomy_PT