Category: Uncategorized

Younger workers earn $10K less than in 2005

Posted on by The Progressive Policy Institute

Fortune interviewed PPI’s Diana Carew on the fall in real earnings for young college grads, and the effect of the “Great Squeeze” on the younger population

Fall has arrived. Across U.S. college campuses, thousands of students are deciding on majors that will hopefully prep them for the job they’ve dreamed of. But they’re probably also pretty discouraged, having heard that so many graduates from a few years ago are spending their days as baristas earning a measly wage.

Indeed, it’s tougher out there for America’s young people. For the sixth year in a row, real earnings declined for 25 to 34-year-olds with a bachelor’s degree working full-time, according toProgressive Policy Institute’s look at the latest U.S. Census data. In 2011, they earned $10,000 less than they did in 2005, falling from an inflation-adjusted $64,500 to $54,500.

What’s most perplexing isn’t what happened last year or even the year before. Fortune asked the Washington, DC-based think tank how the slide in earnings of young college grads compares to most other full-timers. Economist Diana Carew crunched the numbers and found that in 2009, earnings for young graduates fell below all other workers 18 years old or older, regardless of education, for the first time. Young college-educated workers saw their earnings rise in 2004 amid the height of the U.S. housing market boom, while wages and salaries for all other full-timers continued to stagnate. As the market started showing signs of cooling in 2005, young graduates saw earnings immediately plunge from their $64,500 peak to $56,500 by 2009.

Read the entire article here.

The Graph That Should Accompany Every Article About Millennials and Economics

Posted on by The Progressive Policy Institute

The Atlantic called PPI Economist Diana Carew’s graph on the fall in real average earnings of young college grads “The Graph That Should Accompany Every Article About Millennials and Economics”:

The Atlantic has been on the Millennial beat for a long time, explaining why 20-somethings aren’t buying cars or houses or cable subscriptions, not getting married, not having children, and sometimes not even moving out of their parents’ basements. The answer, again and again, is the economy.

Unemployment for adults between 20 and 24 is 14%, compared to the national average of 8.1%. But even those with jobs are facing something without modern precedent: Steadily falling annual earnings (graph via Progressive Policy Institute).

Read the full article here.

Rising Home Prices May Not Spell Recovery

Posted on by The Progressive Policy Institute

In recent months, a slew of new data from several major indices suggests home prices have found a floor nationally and are now slowly rising. While that may be welcome news to homeowners and a real estate industry battered by years of lost equity and sluggish sales, they might want to keep the champagne on ice for now. This is not to suggest the data is wrong and house prices aren’t going up, it’s just worth taking a closer look at the fundamentals behind the recent price trends and asking if there is a corresponding “housing recovery.”

Here are four reasons to temper optimism with caution:

  1. Investors drive a significant share of home buying. Many former homeowners and new households have chosen the safety of renting over the risks (and potential benefits) associated with homeownership. This increased rental demand, combined with home prices that are only now getting back up to 2004 levels, have driven residential rental rates to all-time highs.

    Naturally, this combination has attracted the attention of investors. These include seniors looking for income opportunities at a time when near-zero interest rates are punishing savers, to large investment funds and international speculators that see an attractive real estate opportunity.

    As of May 2012, investor purchases made up 25.3% of all real estate transactions. That’s simply unsustainable.As prices continue to rise, the opportunity for investors to reap sweet returns begins to fall. In fact, we’re already seeing signs of diminished demand as investor purchases fell to 21.9 percent of all real estate transactions in July, down from 23.5 percent in June and 25.3 percent in May. Continue reading “Rising Home Prices May Not Spell Recovery” →

Young College Grads: Real Earnings Fell in 2011

Posted on by The Progressive Policy Institute

The latest Census figures show real earnings for young college grads fell again in 2011. This makes the sixth straight year of declining real earnings for young college grads, defined as full-time workers aged 25-34 with a bachelor’s only. All told, real average earnings for young grads have fallen by over 15% since 2000, or by about $10,000 in constant 2011 dollars.

This statistic is fundamental to our understanding of the current economy. College graduates have jumped through the hoops that were supposed to give them a better life. They are supposed to have the skills that enable them to compete on the global economy. But something is going wrong. The fastest growing jobs now for young college grads include dental assistants, hairstylists, and bus drivers.

The middle-skill jobs that young college grads generally take (think sales agents, teachers, and financial analysts) continued to shed workers in 2011. And for the few high-skill jobs actively hiring (think engineers, web developers, and computer support specialists) most college graduates still lack the necessary training. That leaves many young grads taking jobs that don’t require a college degree for less pay. I call this “The Great Squeeze” – as college grads take the lower-skill jobs, they squeeze out those with less education and experience from the labor market. Nobody wins.

Given the prospect of falling real wages, coupled with rising college costs and debt, many young people are beginning to question the value of a college degree altogether. That means it’s essential whoever wins the election make the plight of young college grads a priority. Not making the investment in education is not the answer; ensuring there are better jobs upon graduation is.

WTO Filing a Step Toward Enhancing Competitiveness

Posted on by The Progressive Policy Institute

Are U.S. manufacturing jobs gone for good? Many so-called experts have mocked the Obama Administration’s latest trade action against China as being fundamentally useless, the economic equivalent of spitting into the wind. After all, factory job seem like a relic of the past.

Yet by our calculations, the U.S. could regain 4 million jobs in manufacturing at relatively low cost – if we follow the right policies. PPI does not advocate a trade war with China, or a tit-for-tat exchange of trade actions. But taking legitimate disputes to the WTO is the right way to enforce the rules – and in most cases to date with China the U.S. has had success. Such carefully targeted actions, back by accurate data, could make a big difference in boosting the economy.

That’s because we are fighting to recapture competitiveness that may have been disingenuously lost. When countries like China provide non-market financing or other subsidies to industries like automobiles, it gives their companies an advantage that wouldn’t be there absent government support. Such an advantage negatively impacts U.S. companies trying to compete, even if China does not export directly to the U.S. As the NYT explains, “While China exports virtually no fully assembled cars to the United States, it has rapidly expanded exports to developing countries, and those exports compete to some extent with cars exported from or designed in the United States.”

Monday’s WTO filing may be a small first step, but we must start somewhere. We are in a slow-growth economy with an anemic labor market. If we want U.S. companies to keep and increase production (and jobs) here, if we want to close the non-oil trade gap, we must be competitive. And it would help if we gave U.S. companies a level playing field to fight on instead of an uphill battle. Continue reading “WTO Filing a Step Toward Enhancing Competitiveness” →

Election Watch: Obama’s Post-Convention Bounce and Romney Presses on in Shrinking Battleground

Posted on by The Progressive Policy Institute

The week after the conclusion of the two national political conventions has been lively, to say the least. Amid signs of a modest post-convention “bounce” for Obama, augmented by some favorable economic signs, the Romney campaign seems to be undergoing one of its periodic mini-crises, launching risky personal attacks on the president even as intraparty criticism reemerges about his campaign strategy and execution.

The Obama “bounce,” initially measured at around five points (after a one-to-two point bounce for Romney), seems to mainly involve renewed enthusiasm among Democrats and Democratic-leaning independents (as reflected in relatively small “gaps” between Obama’s standing in registered-voter and likely-voter polls, with the latter beginning to be deployed by most of the major polling firms). Aside from taking a small but significant lead in virtually all of the “horse-race” polls (and in polls of most battleground states), the president’s job approval rating in the much-watched Gallup tracking survey has broken the crucial 50% barrier. Moreover, the positive feelings emanating from the Democratic convention seems to have obscured any backlash to a tepid August jobs report. Subsequent positive market reactions to a Eurozone “rescue” plan and just today to the Federal Reserve Board’s announcement of a third—and this time, open-ended—round of “quantitative easing,” help boost a shaky but very real aura of economic optimism that could be critical for the incumbent.
Continue reading “Election Watch: Obama’s Post-Convention Bounce and Romney Presses on in Shrinking Battleground” →

Debacle in Chicago

Posted on by The Progressive Policy Institute

The Chicago teachers’ strike is turning into an all-round debacle – for school children and their families, for President Obama and his party, and quite likely for the teachers themselves. Only Republicans are smiling, as the strike supplies fresh fodder to their campaign to vilify and weaken public sector unions.

By shutting down the city’s public schools over a contract dispute, the Chicago Teachers Union (CTU) has left about 350,000 students in the lurch, not to mention their parents, who’ve had to scramble to find safe places to park them during the day. Even if you think the teachers have valid grievances, it’s hard to justify using Chicago’s public school students as pawns in a political test of will with city leaders.

Now in its fourth day, the strike also threatens to throw a monkey wrench into President Obama’s finely tuned campaign machine.

Chicago, after all, is the President’s home town. Its mayor, the sharp-tongued Rahm Emanuel, is Obama’s former Chief of Staff and a key political ally. The CTU, 25,000 members strong, is furious at Emanuel for pushing accountability measures it claims are unfair to teachers. And teachers’ unions are a potent source of votes and money for Democrats.

The stage is thus set for a family feud among Democrats at the worst possible moment – just as Obama seems to be pulling away from Mitt Romney.

Continue reading at The Hill.

Photo credit: Shutterstock

Don’t Ground the Golden Goose

Posted on by The Progressive Policy Institute

Serendipity is crucial to scientific discovery. Researchers often stumble on breakthroughs when they are working on entirely different problems. That’s why it’s vital for government to cast a wide net in funding scientific research.

Unfortunately, government-funded research will be on the chopping block unless Congress acts to avert a budget “sequester” by the end of the year. The sequester would cut discretionary domestic spending, for science and everything else, by over 8 percent, or nearly $39 billion in 2013 alone.

This is the wrong way to solve America’s debt problem. Washington’s investment in science is critical to preserving our country’s comparative advantage in technological and economic innovation. PPI has stressed the need to boost investment in knowledge production, as well as our physical and human capital.

That’s why PPI is proud to join Rep. Jim Cooper, the Association of American Universities and other pro-innovation organizations in today’s unveiling of the “Golden Goose” award. Continue reading “Don’t Ground the Golden Goose” →

Manufacturing Jobs Boom Is For Real

Posted on by The Progressive Policy Institute

PPI’s Michael Mandel was quoted in CNN Money about the bottoming out of the manufacturing sector:

“What we’re seeing is the bottoming out of manufacturing,” said Michael Mandel, chief economy strategist with the Progressive Policy Institute. “The really sharp jump in wanted ads coincides with the portion of manufacturing that is switching from shrink to growth mode.”

Read the entire article here.

Idealism without Illusion: Henry Jackson at 100

Posted on by The Progressive Policy Institute

PPI’s Will Marshall is quoted in World Affairs on the need to rebalance U.S. foreign policy:

My wager is that Jackson would have cheered on the Democratic Leadership Council’s Will Marshall, who has called for another rebalancing of US foreign policy. The course correction from the George W. Bush years was necessary, he argues, but the chastened realism of his successor is an over-correction that must be addressed in turn. Marshall, the president and founder of the Progressive Policy Institute, argues, in true Jacksonian style, that

the administration’s policy of reassurance and strategic humility … has overlooked … the “values dimension” of American power as well as the ideological wellsprings of conflict in today’s networked world.

While noting that Obama’s closure of the half-century national security confidence gap between the Democrats and Republicans is “no mean feat,” Marshall points out that when it really matters—for example, when Iran’s Green Movement was repressed in 2009 and needed support, or when the ideological roots of violent extremism needs articulating and combating—“the president seems to lose his voice.”

Read the entire article here.

Michelle’s Winning Message

Posted on by The Progressive Policy Institute

Michelle Obama cleaned Mitt Romney’s clock last night. By recounting the sacrifices her family and her husband’s family made to give their children a better life, she put the lie to Republican claims that Democrats stand for entitlements and dependency.

Obama exemplifies the middle class values and aspirations that Republicans love to extol, but unlike them she understands the social context that makes personal success possible — supportive families and communities and public investments that give everyone a shot at opportunity. By emphasizing her own blue collar roots and work ethic, she made it clear she doesn’t need lectures from GOP trust fund babies about the threat moochers, free loaders and “takers” supposedly pose to U.S. prosperity.

Opportunity, responsibility, community – haven’t we heard Obama’s message somewhere before? In any case, it’s the right answer to the GOP’s chilly new brand of selfish, anti-social, and anything-but-compassionate conservatism.

Photo credit: Shutterstock

Renewing America’s Fighting Faith

Posted on by The Progressive Policy Institute

PPI’s Will Marshall writes for Foreign Policy on why Barack Obama’s correction to the excesses of the George W. Bush years was necessary, and why a cold-blooded realism is not enough to safeguard America interests and promote its values.

One of the most striking aspects of the 2012 U.S. presidential campaign has been Barack Obama’s ability to neutralize the Republican Party’s traditional advantage on national security. Voters see Obama as a better commander in chief than Mitt Romney and have more confidence in his ability to handle foreign policy.

How much this will matter in an election dominated by economic anxiety remains to be seen. But closing the national security confidence gap that has dogged Democrats for nearly 50 years is no mean accomplishment — if it lasts.

Republicans, meanwhile, have splintered into rival camps. Centrist internationalists like Dick Lugar are out of favor, leaving realists, neocons, Tea Party nationalists, and neo-isolationists to battle it out for the party’s soul. Romney hasn’t even tried to weave a coherent story about America’s global role from such incongruous strands, confining himself instead to scattershot criticisms of Obama’s polices and hackneyed slogans about “American exceptionalism” and “peace through strength.”

Read the entire article.

Think tank seeks new federal office to counter extremist ideology

Posted on by The Progressive Policy Institute

PPI’s Will Marshall is quoted in Government Executive on why anti-Islamic extremism has no home port in the U.S., speaking on a panel of foreign policy specialists at the Hudson Institute:

Will Marshall, founder and president of the Progressive Policy Institute, speculated on why anti-Islamic extremism “has no home port in the U.S. government.” He said Americans are skeptical that Islamic extremism would catch on inside the United States and are uneasy attacking an ideology that has a religious provenance.

“There’s a consoling myth that it’s just a handful of fanatics, but it has spread to places like Sinai and Mali,” Marshall said. “We also may lack confidence in our own story” and hence fall back on “moral relativism” on such issues as the Palestinian-Israel conflict. He said the office would target moderate Arab populations to help send a message of economic opportunity and “rewrite the rules of war” so that U.S.-based Muslims would no longer conclude that jihad is somehow not as bad as terrorism.

Read the entire article here.

 

Election Watch: Look Back, Look Forward

Posted on by The Progressive Policy Institute

Today we’re going to take a look back at the Republican National Convention, and a look ahead at the Democratic confab.

Republicans entered their convention with multiple challenges: (1) introducing Paul Ryan; (2) reintroducing Mitt Romney; (3) showing some diversity in a party that’s in deep trouble with minority voters; (4) exhibiting excitement and enthusiasm; (5) tightening their negative case against Barack Obama; (6) presenting a plausible positive agenda related to the shortcomings in Obama’s performance they had identified; and (7) avoiding mistakes.

The general judgment (or mine, anyway) is that they did a reasonably good job with (1), (3) and (5); a minimally effective job with (2) and (4); and fell significantly short on (6) and (7). Some of these tasks involved serious tradeoffs: Ryan’s effective speech, and to a considerable extent Romney self-“humanization,” came at the direct expense of a positive presentation of a coherent agenda. You’d never know listening to Ryan that he was the author of a budget resolution that constitutes most of the GOP agenda; to the uninitiated, he came across as a nice, non-controversial young man who is most focused on protecting his mother’s Medicare benefits from Barack Obama. This image will obviously not bear a great deal of scrutiny. Despite a brisk recitation of his alleged 5-point “jobs plan,” Romney did not do much to connect his burnished autobiography to any policy specifics, particularly as related to economic recovery and jobs.  His speech may have been effectively reassuring to voters who have already decisively turned against the incumbent and simply want to be convinced the GOP nominee is not a robotic corporate executive, but didn’t exactly seal the deal otherwise. Continue reading “Election Watch: Look Back, Look Forward” →

The Anti-Reagan: Even A Hologram Of The Gipper Overshadows Mitt Romney

Posted on by The Progressive Policy Institute

Writing for the Daily Beast, Will Marshall argues Ronald Reagan, whatever his failings, was a man of convictions. Mitt Romney, by contrast, is a man of circumstance.

In a small but telling episode, Republican activists reportedly blocked a plan for a surprise speech outside the party’s convention—by a hologram of Ronald Reagan. They feared the projection would overshadow living candidate Mitt Romney’s speech accepting the GOP nomination.

It was the right call. The Tampa Republicans have resigned themselves to Romney, but they positively adore Reagan. The last thing they needed was a giant holographic image reminding them of how very unlike the Gipper their nominee is.

Reagan was the ultimate conviction politician. It helped, of course, that he was a genial ex-actor who knew how to deliver a line. But his political career was anchored in the bedrock of certain political beliefs: individual liberty, free enterprise, anti-statism, and America’s democratic mission. Even many who disagreed with Reagan or thought his views too simplistic admired his sincere and steadfast dedication to these principles.

Read the entire article. 

Romney’s stance on housing: ‘Let it run its course’

Posted on by The Progressive Policy Institute

PPI’s Jason Gold was quoted in foxnews.com about the way Romney wants to fix the ailing housing market:

“Romney’s running as Mr. Fix-it on the economy, but he has nothing to say  about one of the biggest pieces of the puzzle,” said Jason Gold, a senior fellow  at the Progressive Policy Institute, a Washington D.C. think tank  affiliated with the Democratic Party.

Gold, who specializes in housing policy, questioned whether Romney’s  selection of Ryan as a running mate indicates he supports privatizing Fannie Mae and Freddie Mac, as Ryan called for in a budget blueprint last year. Romney  hasn’t said.

Many conservatives argue such a move would finally untangle government — and  taxpayers — from the mortgage business. Gold calls it an impractical step that would almost  certainly end the days of 30-year fixed mortgages. “It would take a sledgehammer to the housing market and throw us right back into recession.”

Read the entire article here.