PHOTO RELEASE: Senator Ben Cardin Joins PPI for Briefing on New Report Encouraging Entrepreneurial Opportunities for Returning Citizens

 

 

This week, Senator Ben Cardin (D-MD) joined the Progressive Policy Institute for a Capitol Hill briefing on the PPI Metro Federalism Caucus’s new report titled, “From Prison to Business: Entrepreneurship as a Reentry Strategy.” Senator Cardin, Chair of the Senate Small Business Committee, was joined by three panelists, Manu Delgado-Medrano, Research Director at Association for Enterprise Opportunity, Kristi C. Whitfield, Director of DC Department of Small & Local Business Development, and Maurice “Chef Reese” Dixon, Business owner who has participated in the DSLBD program. The discussion was moderated by New Democracy’s Matti Miranda.

In tandem with this week’s event, Senator Cardin introduced the Necessary Entrepreneurship Workshops via the SBA to Transform and Assist Re-Entry Training Act (NEW START) Act, which awards grants to provide entrepreneurial training and opportunities for returning citizens — previously incarcerated individuals — through a new reentry program within the U.S. Small Business Department (SBA).

“Entrepreneurship can be a critical lifeline for justice impacted individuals, and it can provide inherent benefits for their families and their communities. These entrepreneurs are less likely to recidivate and more likely to employ other justice impacted individuals, creating a positive multiplier effect,” said Chair Cardin. “I applaud the PPI report and appreciate their support for my NEW START legislation. The NEW START Act will help organizations that are on the ground administering entrepreneurial development programs and training to this community. The time has come to identify additional areas where we can come to a bipartisan consensus on how to produce meaningful change for the more than 70 million Americans with a criminal history,” said Senator Cardin, Chairman of the Small Business and Entrepreneurship Committee.

“Second chances are part of the American dream. Providing returning citizens the tools to turn their lives around through entrepreneurship is both a win for our national economy and our local economies. As our new report outlines, entrepreneurship is key in breaking the cycle of recidivism for returning citizens, and — with supports from federal and local policymakers — can be a method in overcoming major barriers to economic security. PPI applauds Chairman Cardin for his leadership in sponsoring the NEW START Act, and thanks the Senator for joining PPI for this timely Capitol Hill briefing on a critically important legislative priority,” said Will Marshall, President of the Progressive Policy Institute.

“Reform of our justice system must include reintegration support for those who were previously incarcerated as this report makes abundantly clear,” said Congresswoman Marilyn Strickland (WA-10), Co-Chair of PPI’s Metro Federalism Caucus.“We must do more to support critical training programs which allow returning citizens to build valuable skills and achieve economic security.”

“It’s important to understand there are two things that every human being has in common. One of them is that we all make mistakes. The other one is that mistake does not characterize who you are today. I say that because that’s the life of a returning citizen. Everyone that makes a mistake, is not who they are today. … What I’m thankful for is that I did not allow the stigma or the mistake to stop me from achieving,” said Maurice “Chef Reese” Dixon.

The U.S. has the highest incarceration rate in the world, and those who have a history of involvement with the justice system face barriers to economic security and reintegration into their communities. Entrepreneurship can be a way out of this cycle, but local and federal support is vital for success.

The briefing covered key themes and policy recommendations from the report, highlighting the need for significant reform to remove barriers that prevent those exiting the criminal justice system from achieving economic security and reintegration into their communities.

View the livestream from the event here and see photos here:

Read the Full Report Here:

The Progressive Policy Institute, in partnership with the Kauffman Foundation, has launched the Metro Federalism Caucus to advocate for a more direct and empowering relationship between national and local government leaders. The Caucus consists of former local officials who now serve in Congress, as well as accomplished mayors and former mayors from around the country, whose governing experience and insights can help U.S. policymakers reimagine the division of labor among national, state, and local governments. Its mission is to open a direct channel of communication that does not run through state governments, aimed at forging a stronger partnership between Washington and metro leaders. Organized and supported by PPI and Co-Chaired by Representative Marilyn Strickland (WA-10) and former Mayor of Kansas City Sly James, the Caucus will champion a new approach to federalism that channels resources and decision making directly to metro leaders. PPI calls this decentralizing dynamic “Metro Federalism.”

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.

For more than 30 years, Association for Enterprise Opportunity (AEO) and its over 2,700 member and partner organizations have helped millions of underserved entrepreneurs in starting, sustaining, and growing their businesses. Together, AEO is working to change the way that capital and services flow to underserved entrepreneurs so that they can create jobs and opportunities for all.

Follow the Progressive Policy Institute.

 

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Media Contact: Tommy Kaelin; tkaelin@ppionline.org

Marshall for The Hill: Dictators stalk the free world again

Almost exactly a century ago, Benito Mussolini seized power in Italy and Joseph Stalin took control of the Soviet Union. These events marked the origins of fascist and communist totalitarianism, which soon gave rise to Adolf Hitler in Germany and lit the fuse for both World War II and the Cold War.

That era seemed to come to an end in 1989, when the Berlin Wall came down and the Soviet Union started to implode. Popular uprisings toppled tyrants, and liberalizing winds swept the globe.

But the totalitarian idea is making a comeback today thanks to Russia’s Vladimir Putin and China’s Xi Jinping. Like their predecessors, these dictators are dangerous because they have designs on others’ territory, few domestic checks on their power and contempt for the resilience and resolve of free societies.

Read more in The Hill.

Jacoby for American Purpose: Safeguarding Ukraine’s Civil Society

By Tamar Jacoby, Director of the New Ukraine Project

Following a wave of Russian attacks, there was no electricity in Kyiv’s Obolonskyi district administration building—essentially a neighborhood town hall—on the day the local council was formed. I had come to Kyiv to explore how the democratic reforms and nation-building so vibrant in Ukraine before the Russian invasion were faring in wartime; this was my first stop. Some three dozen nonprofit volunteers, legal aid lawyers, municipal officials, and people displaced from their homes in other parts of Ukraine—what experts call internally displaced persons or IDPs—sat in the dark in the ornate Soviet-era meeting hall. The wan winter sunshine filtering in past brocade curtains barely cast enough light to see by, but the activists didn’t seem to notice—they were so excited to be moving forward.

This ad hoc coalition of city officials and civil society advocates had gathered to talk about the needs of the estimated 30,000 IDPs who had settled in Obolon in the year since the Russian invasion. Their vision for the “IDP Council” they were launching: that activists would collect information about the migrants’ needs, and government would use it to tailor more effective services. The nonprofit organization spearheading the project, Charity Foundation Stabilization Support Services, was providing humanitarian aid to displaced people across Ukraine. The group says that it has distributed food and other basic supplies to more than 300,000 internal migrants since last February. But this was different, a step up the food chain—humanitarian help combined with grassroots democracy building. The new council’s motto: “Nothing about IDPs without IDPs.”

Read more In American Purpose

PPI, AEO, and Senator Cardin join forces to promote entrepreneurship for returning citizens

Today, the Progressive Policy Institute’s Metro Federalism Caucus and the Association for Enterprise Opportunity (AEO) released a new report highlighting the supports United States federal and local policymakers can implement to help returning citizens — those who were previously incarcerated — find new opportunities through entrepreneurship.  The release of the report will be highlighted at a Capitol Hill briefing, featuring Senator Ben Cardin, who has been a longtime leader of entrepreneurship opportunities for returning citizens.

The report is titled “From Prison to Business: Entrepreneurship as a Reentry Strategy” and is authored by Ann Nguyen, Sidney Gavel, and Manu Delgado-Medrano of AEO.

“Returning citizens in the U.S. face significant barriers to economic security and reintegration into their communities. However, there are opportunities for U.S. government, civic, and business leaders to help the stream of returning citizens find good jobs, achieve financial stability and, if they have the aptitude and inclination, go into business for themselves,” write the report authors. “Our challenge now is to extend that opportunity to more people and scale up proven initiatives…”

This report highlights two entrepreneurship training programs — Aspire to Entrepreneurship in Washington, D.C., and ASPIRE MO in Missouri — which help returning citizens overcome the natural hurdles new entrepreneurs and small business owners face.

The U.S. has the highest incarceration rate in the world, and those who have a history of involvement with the justice system face barriers to economic security and reintegration into their communities. Entrepreneurship can be a way out of this cycle, but local and federal support is vital for success. The report suggests four ways federal and local policymakers could work together:

  • Boosting public investment in returning citizens
  • Providing pre-release support
  • Strengthening the continuum of care; and
  • Engaging the public

Read and download the paper here:

The Progressive Policy Institute, in partnership with the Kauffman Foundation, has launched the Metro Federalism Caucus to advocate for a more direct and empowering relationship between national and local government leaders. The Caucus consists of former local officials who now serve in Congress, as well as accomplished mayors and former mayors from around the country, whose governing experience and insights can help U.S. policymakers reimagine the division of labor among national, state, and local governments. Its mission is to open a direct channel of communication that does not run through state governments, aimed at forging a stronger partnership between Washington and metro leaders. Organized and supported by PPI and Co-Chaired by Representative Marilyn Strickland (WA-10) and former Mayor of Kansas City Sly James, the Caucus will champion a new approach to federalism that channels resources and decision making directly to metro leaders. PPI calls this decentralizing dynamic “Metro Federalism.”

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. Find an expert at PPI and follow us on twitter.

For more than 30 years, Association for Enterprise Opportunity (AEO) and its over 2,700 member and partner organizations have helped millions of underserved entrepreneurs in starting, sustaining, and growing their businesses. Together, AEO is working to change the way that capital and services flow to underserved entrepreneurs so that they can create jobs and opportunities for all.

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Media Contact: Tommy Kaelin; tkaelin@ppionline.org

From Prison to Business: Entrepreneurship as a Reentry Strategy

This paper is a collaboration between the Progressive Policy Institute (PPI) and the Association for Enterprise Opportunity (AEO)

By Anh Nguyen, AEO; Sidney Gavel, AEO; and Manu Delgado-Medrano, AEO

Executive Summary

The United States has the highest incarceration rate in the world, and as many as a third of Americans have some type of criminal record. Upon reentry, individuals with a justice history, whom we refer to as returning citizens, face significant barriers to economic security and reintegration into their communities. Among the most formidable barriers to reentry are a disadvantaged living environment, low levels of education, mental health challenges, and stigma that excludes them from job opportunities and other resources.

All of these factors contribute to a high recidivism rate among returning citizens and make it harder for them to secure employment. An alternative yet underappreciated opportunity for returning citizens to circumvent these barriers is to work for themselves by launching their own businesses.

Entrepreneurship presents a promising pathway to economic security and reintegration into communities as it requires minimal formal schooling, provides additional income and control over their livelihoods, and has the potential to uplift the often-low-income communities to which these individuals return.

Additionally, a study in 2020 showed that entrepreneurship can reduce the likelihood of recidivism by 5.3%.3

While entrepreneurship has great potential to reduce recidivism and promote economic stability, returning citizens have to overcome several hurdles in their entrepreneurship endeavors, ranging from a lack of access to capital, collateral consequences of having a criminal record, a digital skills gap, and limited access to wraparound support services..

Read the Full Report.

 

PPI’s Trade Fact of the Week: The U.S. manufacturing trade deficit has nearly doubled since 2016

FACT: The U.S. manufacturing trade deficit has nearly doubled since 2016.

THE NUMBERS: U.S. manufacturing trade deficits, nominal dollars –

2022          $1.20 trillion
2020         $0.90 trillion       
2016          $0.65 trillion
2000         $0.32 trillion

 

WHAT THEY MEAN:

How does the Trump-era agenda hold up six years later, when matched against its officials’ trade-balanced centered critiques of their predecessors and goals for their own program?

Each February, the U.S. Trade Representative Office puts out a report entitled “The President’s Trade Agenda,” which sets out Administration goals for the coming year. The 2017 edition cited a U.S. global trade balance statistic as proof that earlier administrations got things wrong:

“In 2000, the U.S. trade deficit in manufactured goods was $317 billion.  Last year [i.e. 2016] it was $648 billion – an increase of 100 percent.”

The next edition, in 2018, used “bilateral” trade balance with Mexico — i.e. country-to-country, subtracting the value of U.S. exports to Mexico from the value of imports from Mexico  — to claim failure for the North American Free Trade Agreement and set a goal for the renegotiated “USMCA”:

“[O]ur goods trade balance with Mexico, until 1994 characterized by reciprocal trade flows, almost immediately soured after NAFTA implementation, with a deficit of over $15 billion in 1995, and over $71 billion by 2017. … USTR has set as its primary objective for these renegotiations – to improve the U.S. trade balance and reduce the trade deficit with the NAFTA countries.”

How does this hold up six years later? Before turning to the bleakly comical answers, an econ. note and a couple of stat. correctives:

(1) Standard Econ 101 equations show that a country’s trade balance always matches the difference between its savings and its investment. Since the mid-1970s, Americans have been investing more than we save; ergo, trade deficits. The orthodox view is that while very high trade deficits can arouse alarm as indicators of unsustainable booms, the appropriate response is fiscal contraction and long-term measures to raise savings rates (and contrariwise, expansion and higher consumer purchasing in surplus countries).  One corollary of this is that trade policy measures like tariffs or FTAs won’t much affect overall balances, and shouldn’t really be judged on a balance basis.  A second is that a program like the Trump administration’s — business tax cuts which will (barring some offsetting rise in family or corporate savings) lower the national savings rate and possibly raise investment, plus higher government spending which will (barring some offsetting collapse of private-sector investment) raise national investment rates will naturally create a higher trade deficit. (Or lower surplus for countries in surplus.) The Trump administration’s evident hypothesis was that this basic equation is in error, and a combination of tariffs and negotiated purchasing commitments, rules of origin, efforts of will, and so forth, would force the plus and minus signs to change.

(2) Statistically, the best way to compare balances across time (and especially over decades) is to look at “trade balance relative to GDP,” rather than “nominal” dollar totals which don’t account for inflation or the scale of trade relative to the economy.  By this measure, the U.S. trade deficit has averaged 2.7% of GDP since 1982, with lows of 0.5% in 1991 and 1992 and highs of 5.7% in 2005 and 2006. The 2016 level was 2.7% of GDP, exactly the 40-year average and a bit below the 3.7% of GDP of 2000 and the 3.0% of GDP in 1987.

(3) Less consequentially, U.S. goods trade with Mexico might be termed “characterized by balanced trade” across the entire 1970-1990 stretch of time, but oscillated with growth trends and energy prices from a surplus (from a U.S. perspective) in the 1970s, to deficits from 1982 through 1990, and then briefly surplus during the Mexican boom/U.S. recession in 1991-1993.

These points duly noted, here are the 2022 figures analogous to those in the 2017 and 2018 President’s Trade Agenda reports:

Overall and manufacturing balances: The largest measurement of trade balance is the (exports of goods + services) – (imports of goods and services). At 2.7% of GDP ($480 billion) in 2016, this reached 3.0% of GDP ($845 billion) in 2021, and 3.8% of GDP ($948 billion) in 2022. The manufacturing deficit was $892 billion in 2020, $1.06 trillion in 2021, and $1.20 trillion in 2022. Thus it nearly doubled the $648 billion nominal-dollar figure cited as evidence of debacle in 2017.

Bilateral balances: The U.S.-Mexico goods trade balance with Mexico, two years into the USMCA, was -$120 billion in 2022, nearly double the 2017 figure used to illustrate the need to renegotiate the NAFTA. The balance with Canada, a $16 billion deficit in 2017, was $80 billion in deficit as of 2022.  USMCA may well have some advantages over the NAFTA — new digital material, labor, and environmental coverage, and so on – but with respect to balance the Trump negotiators look to have over-reached.  Even the China goods deficit, at $383 billion in 2022, was well above the pre-“301” tariff of $347 billion of 2017.

In sum, not quite what the policies’ authors predicted, and a bit of vindication for the economists who (a) thought use of trade balance as a success-meter was a mistake in general, and (b) based on policy and growth trends, predicted an outcome a lot like the one that actually happened.

* As above, this should be adjusted for inflation and so doesn’t quite double the 2016 figure.

 

 

FURTHER READING:

The Trump administration’s 2017 Executive Order on “Omnibus Report on Significant Trade Deficits” asked the U.S. Trade Representative Office and the Commerce Department to write up a report on trade balances with most major U.S. trading partners.  This was never released:

Data:

The Census Bureau’s U.S. monthly trade data

… and imports, exports, and bilateral balances for the U.S. with individual countries, back to the mid-1980s

… and for the big picture, U.S. worldwide annual exports, imports, and balances from 1960-2022 on one convenient page

As noted above, a better way to put trade flows and balances in context is relative to GDP. A quick run-down of imports, exports, and balances in 2016 and 2022, with 2000 and peak-deficit year 2006 added for context.

What Happened?

Why the upward turn since 2016?  Tax policy is the logical suspect.  Three of four big upward ratchets in U.S. trade deficits since the 1970s followed tax-cut bills: one in 1981, another in 2001, and the third in 2017. Bills of this sort typically bring somewhat higher government deficits (“dissavings”), which mean an overall drop in national savings unless offset by higher family or business saving. All else equal, by virtue of the “savings-investment = trade balance” identity, trade deficits rise.

The main balance effects of the Trump-era tariffs are likely (a) shifting some of the overall U.S. deficit from China to Vietnam, Mexico, and some other mid-income countries, and (b) also probably, though less certainly, concentrating the deficit more in manufacturing than had been the case before 2017.  Trump-era tariffs on steel, aluminum, and Chinese goods fall heavily on industrial inputs — metals, auto parts, electrical converters, etc. — and require U.S. manufacturers and farmers to absorb extra costs. The likely result is some marginal loss of competitiveness for exporters trying to sell to foreign buyers and for firms competing against imports at home, pushing a larger share of the overall U.S. deficit into manufacturing, reducing the erstwhile agricultural surplus, and accelerating the shift of energy from deficit to surplus.

The Two Reports

The 2017 President’s Trade Agenda.

… and the 2018 followup (with an extraordinary claim that the 2017 tax bill “has the potential to reduce the U.S. trade deficit by reducing artificial profit shifting”).

 

 

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank Progressive Economy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007).  He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week

Popovian for National Review: Transparency Laws Are the First Step toward Creating a More Sustainable Health-Care System

By Dr. Robert Popovian, Senior Health-Policy Fellow for PPI;
and Catherine Barr Windels

For decades, lobbyists for the pharmacy-benefit-management (PBM) industry have been telling policy-makers, employers, and patients that PBMs (middlemen responsible for the administration of the prescription-drug benefit for various health-plan payers) save everyone money. They argue that opaque negotiation, rebate contracting, and vertical and horizontal integration are intended to help lower biopharmaceutical spending. Unfortunately, the promises of savings are a mirage, with no data-driven analysis to back them up. The PBM industry is thus staunchly opposed to laws that provide transparency into their business practices.

Fortunately, states and federal legislators are finally taking action. They have decided to scrutinize the flow of untold billions of dollars in discounts, fees, concessions, and rebates that are siphoned off from the biopharmaceutical industry by the pharmacy-benefit managers. The estimated total collected by the middlemen is over $200 billion annually, which makes up almost 40 percent of drug spending in the U.S. Unfortunately, because of a lack of transparency, no one, including federal and state governments, has a clue as to how much of that money provided by the pharmaceutical industry is kept by PBMs. At best, there are estimates by various governmental agencies of the amount of savings that is passed back to those who are supposed to benefit from the work of PBMs: the employers, the state and federal governments, and most importantly, the patients. It is important to note that such estimates are primarily based on modeling data, testimony by PBM officials, or incomplete information.

Read the full piece in the National Review.

Ritz for Forbes: Win or Lose, Executive Actions Like Student Debt Cancellation Should Face Judicial Review

By Ben RItz

The Supreme Court will hear oral arguments this week on the constitutionality of President Biden’s attempt to cancel up to $20,000 in student loans per borrower via executive action last year. Many proponents of the move, including the Biden administration itself, have argued that not only is the move itself legal but that it is wrong for the courts to even entertain the pending challenges to its legitimacy. Whether one thinks the plan itself is lawful or not, everyone should be grateful that the courts are so far rejecting this argument and taking a serious look at the merits of the plan itself because failure to do so could have catastrophic long-term implications.

The Biden administration says that it has the authority to grant mass debt cancellation under the HEROES Act: a law passed in 2003 that gives the Secretary of Education authority to adjust the terms of any loan it holds during national emergencies. The law was introduced to make it easier to discharge debt for victims of terrorism and veterans who were injured or killed fighting the War on Terror, but the Biden administration argues that the law’s text gives them broad discretion to provide relief for anyone who lived through the COVID-19 pandemic.

Several lawsuits claimed this broad interpretation was an abuse of the HEROES Act authority that went well beyond Congress’s intent in passing the law. The answer to this legal question has serious implications for our constitutional system, which entrusts Congress with the power of the purse. If allowed to proceed, Biden’s debt cancellation move would cost taxpayers over $400 billion. That would be one of the biggest expenditures of public funds without explicit Congressional appropriation.

Read more in Forbes.

Adrienne Elrod of Dept. of Commerce’s CHIPS Program Office Joins PPI’s Mosaic Project to Discuss Implementation of Historic CHIPS and Science Act

Last week, Director of External and Government Affairs for the CHIPS Program Office Adrienne Elrod and Head of Government Affairs at ASML Maryam Cope joined the Women Changing Policy Luncheon Series, hosted by the Progressive Policy Institute’s (PPI) Mosaic Project and moderated by Jordan Shapiro, Director of the Innovation Frontier Project at PPI.

Ms. Elrod discussed what the long-lasting impact of the historic Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act will mean for communities across the country, and what the Administration is doing to ensure a smooth and effective implementation of the law’s many provisions. Ms. Cope explained what the law will mean for companies like ASML and how it will bring the United States to the forefront of global competition in the semiconductor industry. The CHIPS and Science Act was signed into law by President Biden in August, 2022.

“Number one, first and foremost, we passed this legislation and we’re implementing the CHIPS and Science Act all around national security and economic security…Right now we basically make no leading edge chips in the United States, and we have got to change that trajectory,” said Adrienne Elrod, Director of External and Government Affairs for the CHIPS Program Office.

“I think governments around the world are recognizing that there is a need to have this resiliency, looking at the U.S. CHIPS and Science Act, and [asking], what’s our target? What’s our part of this equation? And how can we contribute our expertise and our comparative expertise to this global system? So I think that it’s really a balance between domestic resiliency and globalization that we have to continue to look at,” said Maryam Cope.

“Mosaic was honored to have set the stage for such an important and timely conversation. It’s not everyday you get to hear from two of the country’s leading women working to advance the future of semiconductor manufacturing and paving the way for countless women in tech,” said Jasmine Stoughton, Director of PPI’s Mosaic Project.

 

Left to right: Jordan Shapiro, Director of the Innovation Frontier Project, Progressive Policy Institute; Maryam Cope, Head of Government Affairs, ASML; Adrienne Elrod, Director of External Affairs for the CHIPS Program Office at the Department of Commerce.

 

The Mosaic Project is an initiative of the Progressive Policy Institute that aims to put more women at the forefront of policymaking. The same handful of well-known men have dominated key policy conversations for decades, resulting in legislative outcomes that fail to reflect the richness of our society. It is the project’s mission to empower expert women with the tools and connections needed to engage with the media and lawmakers on today’s toughest policy challenges.

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.

Follow the Progressive Policy Institute.

Follow the Mosaic Project.

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Media Contact: Tommy Kaelin – tkaelin@ppionline.org

Skill-Based Hiring, If Done Right, is a Win-Win

In the 21st century, education has become America’s most significant marker for class privilege. People with bachelor’s and advanced degrees have mostly prospered, while employment prospects, wages, and advancement opportunities for those with less education have fallen. While there are many reasons for this persisting disparity, a big one is that jobseekers keep hitting “the paper ceiling.”

The paper ceiling is the invisible barrier that comes at every turn for workers without a bachelor’s degree. Early in the 2000s, many employers began adding degree requirements to job descriptions, whether they needed them or not — using the degree as a proxy for job preparedness. As a result, workers without a bachelor’s degree were screened out of opportunities.

Research from Opportunity@Work, which leveraged public datasets, the Occupational Information Network (O*NET) and the Current Population Survey (CPS), found there is an overlooked talent pool of skilled workers in our economy — uncovering more information about workers without degrees, their occupations, and skill sets. This data showed that Americans skilled through alternative routes other than a bachelor’s degree represent 50% of the U.S. workforce. Many of them possess skills that should qualify them for jobs with salaries at least 50% higher than their current job. In other words, our current hiring practices systematically underutilize the skills of millions of U.S. workers, deepening the economic divide between those with and without college degrees.

Luckily, the trend toward degree inflation is starting to reverse. Business, government, and community  leaders are moving towards skills-based hiring practices. In one recent survey, 81% of employers said they are looking at skills rather than degrees as they struggle to fill open positions with U.S. unemployment at a record low.

Policymakers in both parties are also starting to act. In Colorado, Utah, and Maryland, elected leaders have passed laws or signed executive orders that eliminate or substantially reduce degree requirements for public sector hiring, with Maryland already having seen a 41% increase in new hires without degrees. More recently, Pennsylvania followed suit, with Governor Josh Shapiro signing an executive order declaring thousands of state jobs would no longer require a four-year college degree on his first full day in office.

At the federal level, President Biden endorsed the “skills, not degrees” movement in last year’s State of the Union address. The administration’s Office of Personnel Management has released new guidance for agencies to help them implement a skills-based hiring approach to filling jobs. Unfortunately, Congress has yet to pass The Chance to Compete Act, which seeks to improve and update the hiring process for federal employers, focusing on potential candidates ability to succeed in the job rather than where or if they received their college degree.

The federal and state momentum is encouraging, but there are still kinks that need to be worked out.  First, there needs to be a greater commitment from employers across the private and public sector to scale up skills-based hiring. What’s more, organizational leaders who commit to skills-based hiring are not always the ones in charge of executing it. Many HR professionals and hiring managers may not understand how to assess job applicants’ skills in the absence of formal credentials.

This can be especially confusing when job descriptions ask for a bachelor’s degree or an equivalent skill or practical experience — forcing hiring managers to compare people’s qualifications without knowing how to analyze them properly. This is why Opportunity@Work’s Paper Ceiling campaign is so important.  Rather than asking for degree equivalency, it encourages employers to drop degree requirements altogether, making it easier for the jobseeker as well as the employer to navigate the hiring process.

While this would make the process easier, it still will be a challenge to truly assess an applicant’s skills in absence of historically relied upon credentials. It is why job descriptions are also critically important. As employers reduce their reliance on degree-based hiring, they must think more carefully about what capabilities they are truly looking for and describe them more explicitly. This not only helps the applicant better convey their relevant skills, it helps the employer match the skills to the internal need more effectively, while also encouraging skill providers to consider how they can update their curriculum to respond to in-demand opportunities.

As with any new initiative, it will take time to get this right. As employers newer to the space begin to get involved and adopt skills-based hiring, they should consider starting off with a trial, implementing the practice with one or two in-demand positions. This will allow employers to test best practice and understand what works – ensuring their skills-based hiring procedures are having the intended impact.

In addition to shifts in employer practice, the move toward skills-based hiring will require overhauling our nation’s workforce development system. This means a greater emphasis on industry-responsive education, training, and experience, like career and technical education and work-based learning, across K-12 and postsecondary education. Policies that promote competency-based education, offer prior-learning assessments, and expand career pathways will also be increasingly important so individuals can have more stackable, skills-based learning opportunities while also understanding changing labor market demands. Additionally, innovation around learning and employment records, which provide digital infrastructure to hold information about a person’s academic and industry achievements will be important to design and scale so individuals have a more accessible way to demonstrate their accumulation of skills, knowledge and experiences.

Dropping degree requirements and moving toward skills-based hiring practices has the potential to even the playing field for degree and non-degree workers — helping to close equity gaps that persist across employment opportunities and wages, while also creating a more diverse talent pool for employers to pull from.

Employers and policymakers alike should lead by example, by removing degree requirements from job descriptions that don’t need them. The private and public sector must also better work together to promote industry-responsive education and training opportunities that ensure people are learning the skills needed for in-demand careers while also supporting assessments and new tools that ensure individual’s skills are effectively translated, demonstrated, and understood in the job market.

Reforming hiring practices to consider jobseekers’ actual skills and competencies, not just formal credentials, will narrow economic inequality and boost U.S. productivity. Previously overlooked workers will be able to pursue attractive career pathways even without a four-year degree and employers will be better able to fill jobs that need filling. It is a win-win.

Jacoby for New York Post: How Ukrainians are learning to live with the war sirens

By Tamar Jacoby, Director of the New Ukraine Project

 

President Biden’s visit to Kyiv this past week was met with jubilation across Ukraine. Ukrainian friends messaged me with glowing thanks. A bartender who knows I’m American offered me a drink on the house. The president’s trip underscored what Biden has often said – that America will stand by Ukraine “as long as it takes.”

Nothing made this point more viscerally for Ukrainians than the way Biden and Ukrainian President Volodymyr Zelensky ignored the air-raid siren screaming in the background as they walked across the square in front of golden-domed St. Michael’s Cathedral on Monday. For Ukrainians, air raid sirens are a weekly if not daily scourge, and everyone knows what it’s like to decide, should I heed this one or not?

Read more In New York Post.

Mosaic Moment: Tis the Season… to Talk About Taxes!

It’s that time of year again… It’s tax season, and on this episode of the Mosaic Moment PPI’s Senior Policy Analyst, Nick Buffie, sits down with Mosaic alum and Associate Director of Policy at Prosperity Now, Joanna Ain to talk all things taxes. They talk about the importance of the Volunteer Income Tax Assistance program (VITA), why funding the IRS is an equity imperative, and the current state of the Child Tax Credit and the Earned Income Tax Credit.
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Learn more about the Progressive Policy Institute here.

Butler for Newsweek: Democrats Depend on Black Voters But Do Nothing for Us. Here’s How to Fix That

By Markose Butler, Director of Community Outreach and Training

It’s no secret that Democrats have long controlled major coastal cities of the United States. Politicians running as Republicans have not won city-wide election in any of the 10 largest cities since Michael Bloomberg’s first election as New York City mayor, and in many cities, it’s literally been decades. Yet despite the remarkable loyalty showed to Democrats by Black voters, they have completely abandoned these voters on the most important issues to their daily lives.

The truth is, the Black community hasn’t benefited from improvements in urban economies or quality of life, and we remain disproportionately represented as the victims of crime. It’s long past time for Democrats to take concrete actions that actually move the needle and provide for the needs of Black Americans.

In recent decades, the nation’s urban centers have emerged as engines for job creation. From 2004 to 2015, job growth was concentrated in the 94 largest cities in the U.S. and especially in just four cities: New York, Chicago, San Francisco, and Seattle. While this does show that cities run by Democrats can produce economic growth, this concentration has also contributed to large scale migration to a handful of large cities that has resulted in a massive housing crisis in large metros nationwide.

Read more in Newsweek

Administration Proposes Welcome Reforms to SSI’s ISM Rule

It didn’t generate many headlines, but last week, the Biden administration released a common-sense proposal to simplify one of our country’s most convoluted, overregulated safety net programs. Specifically, the administration proposed removing food purchases from the In-Kind Support and Maintenance (ISM) calculations in the Supplemental Security Income (SSI) program. This change would greatly simplify SSI, cutting down on the administrative burdens faced by beneficiaries at little cost to taxpayers.

SSI is meant to provide an income floor for elderly or disabled Americans with low Social Security benefits. Because Social Security is tied to past earnings, people who earned low wages throughout their careers receive meager benefits. This is where SSI steps in: For everyone who is accepted to the program, total income from SSI, Social Security, and other sources is guaranteed to be at least $914 per month. The program is extremely well-targeted to the very poorest individuals: As of 2013, the poverty rate among SSI beneficiaries was 63%, which was more than four times the national average at the time. SSI extends a lifeline to these extremely needy people. In January 2023 alone, SSI provided benefits to nearly 7.6 million disabled or elderly Americans, with the average beneficiary receiving $677 (as a monthly payment).

However, after accounting for what are known as “income disregards,” SSI benefits are reduced by one dollar for every $2 of on-the-job earnings and for every $1 coming from other income sources. Under the program’s ISM test, most food and housing assistance provided to SSI beneficiaries must be counted as other income. For example, if a friend or family member buys dinner or groceries for an SSI recipient, the recipient will have their benefits reduced by the dollar value of the food. The total ISM benefit reduction is capped at one-third of recipients’ monthly SSI payments.

Notably, the ISM test does not apply to other types of purchases (such as medical care or transportation), nor does it apply to food or housing provided by charities or the government. No other safety net program applies a similar test, given the complications associated with tracking food and housing expenses. Unsurprisingly, the ISM test comes with heavy administrative burdens: The Social Security Administration’s instructions on how to assess ISM are approximately 250 single-spaced pages, and many of the most complicated questions during the SSI application process are about food and housing.

In the end, the in-kind benefits test creates more havoc than it is worth: Only about 8 or 9% of SSI recipients have their benefits reduced in any given year, yet problems associated with carrying out the ISM test are one of the leading causes of miscalculated payments. Overall, the ISM test saves taxpayers less than 0.01% of GDP — in other words, it results in a $1 tax cut for every $13,000 of taxpayer income. These meager savings do not justify imposing such administrative nightmares on SSI beneficiaries. By removing food purchases, the Biden administration proposal would effectively limit the ISM test to housing assistance, thereby cutting down on the paperwork and bureaucracy that rob SSI participants of precious time and benefits.

SSI is badly in need of further reform and simplification, but this is clearly a promising first step. And it should be a first step not just towards simplifying SSI, but towards simplifying the safety net more broadly. As PPI has previously noted, the safety net is filled with overlapping, complicated programs that impose excessive administrative burdens on the poor. This reason is one of many that PPI has previously called for a comprehensive regulatory improvement commission aimed at removing unnecessary regulations rather than just letting them pile one on top of the other. As the Biden proposal demonstrates, “simplification” is not necessarily a euphemism for “cuts,” and a simpler safety net can also be a more compassionate one.

Jacoby to Lead PPI New Ukraine Project from Kyiv

Russia’s illegal invasion and brutal occupation of Ukraine will soon enter its second year. The Progressive Policy Institute is marking the occasion by launching a New Ukraine Project to report on the war, its impact on everyday life in Ukraine, and its wider implications for peace and international security.

Directing the project from Kyiv is Tamar Jacoby, a prominent journalist, author, and thought leader widely respected for her work on immigration, the struggles of working class Americans, and public school reform. In addition to her dispatches from the front lines of the conflict, her work will focus on the social, economic, and political reconstruction of Ukraine, as it seeks to take its place in Europe’s free and democratic community.

“Every American has a stake in Ukraine’s war of independence, which in many ways resembles our own break from a different empire,” said PPI President Will Marshall. “We are fortunate to have in Tamar Jacoby an astute witness to the history that is being made on the ground today in eastern Europe.”

See this dispatch from Jacoby just published in The Washington Monthly on what Ukrainians want to know about America’s support for their cause.

“The war in Ukraine isn’t just another regional conflict,” Tamar Jacoby said. “Everything we hold dear as Americans — our fundamental liberal values — hangs in the balance. Can the international order prevent brutal imperialist aggression? How should the West respond to an emerging nation willing to risk everything to embrace democratic ideals? What are and aren’t we willing to do to protect human rights and human dignity? And then, beyond ideals, there’s the actual threat: If we don’t stop Russia in Ukraine, where will the story end — who will Putin blackmail next, with oil or gas or grain or weapons of mass destruction? It’s a privilege to be on the ground witnessing what’s happening and telling the story for American readers.”

“Having Tamar interpret the daily successes and struggles of Ukrainians during this Putin invasion will help Americans appreciate that our commitment to Ukraine needs to go beyond the battlefields and well after the Russians retreat: helping Ukraine create a sustainable democracy is the victory the people of Ukraine deserve and the defeat that will define Putin failures,” said Lindsay Mark Lewis, Executive Director of the Progressive Policy Institute.

This is the third major international project for PPI, with PPI Brussels established in 2018, and the Project on Center-Left Renewal based in the U.K., established in January of 2023.

Tamar Jacoby is currently based in Kyiv, Ukraine. She is the president of Opportunity America, a Washington-based nonprofit working to promote economic mobility, and a former journalist and author. She was a senior writer and justice editor at Newsweek and, before that, the deputy editor of The New York Times op-ed page. Her articles have appeared in The New York Times, The Wall Street Journal, The Washington Post, The Weekly Standard and Foreign Affairs, among other publications. She is the author of “Someone Else’s House: America’s Unfinished Struggle for Integration” and “Displaced: The Ukrainian Refugee Experience.” Her edited volumes include “Reinventing the Melting Pot: The New Immigrants and What It Means To Be American” and “This Way Up: New Thinking About Poverty and Economic Mobility.”

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.

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Find an expert at PPI.

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Media Contact: Aaron White; awhite@ppionline.org

PPI’s Trade Fact of the Week: Currency trading is the largest market ever

FACT: Currency trading is the largest market ever.

THE NUMBERS: Annual currency trading –

2022                     $2,739 trillion
2020                    $2,402 trillion
2013                      $1,956 trillion
2010                     $1,460 trillion
2001                       $452 trillion
1992                        $265 trillion
1970                            $6 trillion

WHAT THEY MEAN:

Two human things are measured in quadrillions. One is energy — about 640 quadrillion annually burnt “BTUs” heat the world’s homes, propel its ships and planes, run its server banks, and water its gardens. The other is money. The Bank of International Settlements’ most recent Triennial Survey (out last December) says that governments, businesses, banks, tourists, and computerized trading programs exchanged $7.5 trillion in currency daily, or $2.739 quadrillion over the year. With all the zeroes, this is “$2,739,000,000,000,000.” Some particulars:

Scale and rate of growth: Annual currency turnover was a modest $6 trillion exchanged mostly for purposes of tourism, debt repayments, and import/export trade (as had been standard practice since the invention of money in the Lydia kingdom in present-day Turkey) just before the abandonment of the gold-based “Bretton Woods” system in 1971. The contemporary ‘floating exchange’ which replaced Bretton Woods, after an interval of some confusion, launched precisely fifty years ago, on March 1, 1973, and has since become the largest market of any sort in human history. Annual currency trading reached $500 trillion in the early 2000s; hit the $1 quadrillion mark in 2008, and reached $2 quadrillion — mainly for hedging and futures markets rather than more traditional purposes — in 2017 or 2018. Assuming no gigantic upheaval in global finance, current trends suggest $4 quadrillion by 2030.

Currencies: U.S. dollars figured in 88.6% of all world currency exchanges in 2022. This is a bit less than the 89.9% rate of 2001, but more than the 84.9% of 2010. The dollar’s use in currency exchange has been pretty stable over the past 20 years, as has that of the euro and yen. (Euro: 32% of transactions in 2001, 30% in 2022; yen: 15% and 17%). Speculation about the Chinese yuan’s rising role remains, well, speculative: Used in 0.5% of exchanges in 2007, the yuan now appears in 1.6% of transactions in 2022 — rising, but about equal to use of the Mexican peso and well below the Aussie dollar.

Trading sites: Having lost its role as reserve-currency issuer in the 1930s, the U.K. found a new one as the central forex trading site and holds it still. City of London banks and firms handle 38% of world currency trades, or about $1 quadrillion worth each year.  New York ranks second with 19%; Singapore, Hong Kong, Tokyo, and Switzerland follow at about 9%, 7%, 4%, and 3% respectively. BiS speculates that Brexit may have slightly reduced the British share of currency trade, with some shift to the United States and Singapore.

To put this in context, blithely ignoring differences between exchanges, value-added output, asset wealth, and so on: $2.7 quadrillion per year is (a) 6 times the estimated $450 trillion value of total world privately held wealth in the forms of real estate, stocks, money, physical possessions, and other assets; (b) 26 times the $104 trillion world GDP of 2022; (c) 100 times the $25 trillion in 2022 goods and services exports, and (c) 400 times the $7 trillion in actually existing physical coins and bills. As to whether this gigantic roar of hedging and futures-trading very significantly raises real-world growth rates or improves global economic efficiency: research appears insufficient.

 

 

FURTHER READING:

BIS’ 2022 Triennial Survey on the $2.7 quadrillion annual/$7.5 trillion daily foreign exchange market

In practical terms, over the last six years the currency markets have worked to raise the value of the dollar vis-à-vis other currencies. Some IMF staff thoughts on the implications

And a similar view from currency scholar Jeffrey Frankel

While Barry Eichengreen looks at the geography of currency trading, and the advantage digital technologies and fiber-optic cables may have given to the City of London

Some reference points: 

A comparative table: Forex vs. wealth, vs. stocks, vs. GDP, vs. trade, etc.* All figures are for 2022:

Annual currency trading:                                                 $2.739 quadrillion

Total privately held world wealth:                                      $464 trillion

Global public & private debt:                                              $235 trillion

World GDP:                                                                           $104 trillion

Total world stock market capitalization                               $93 trillion

Total world stock trading                                                       $61 trillion

Total world goods/services exports:                                    $28 trillion

U.S. GDP                                                                                  $25 trillion

NYSE market capitalization:                                                  $22 trillion

U.S. “M1”**                                                                              $20 trillion

All world tax revenue for governments                                $14 trillion

World currency reserves                                                        $13 trillion

All the money (physical coins & bills) in the world             ~$7 trillion

U.S. currency printed annually                                             $0.3 trillion

*  BIS for currency trading; Credit Suisse for world wealth; IMF for world GDP, world debt, and world currency reserves; Federal Reserve for currency in circulation and U.S. annual currency printing; World Bank for world stock trading and tax revenue, NYSE for market cap.
** M1 includes all U.S. currency, money held in bank accounts and CDs, etc. See here.

How much is “all the money in the world”?

Private wealth: Credit Suisse estimates world household wealth in the form of homes, stock portfolios, condos, bank accounts, land, and so on — at $464 trillion for 2022. This is a bit more than double the $221 trillion of 2012, in nominal terms. No estimates are available for government assets (navies, buildings, national parks, etc.), but “all the money in the world” by this definition might be near $1,000,000,000,000,000.

Government reserves: Governments’ “wealth” may be unknown, but in terms of actual ‘money’ they now hold about $12.8 trillion in reserves. As with currency trading (but not quite as much, and not quite so certainly) most of their holdings are, metaphorically, a big pile of dollars.  Dollars make up $6.44 trillion of the $10.77 trillion the IMF identifies by currency type — 60% of the total, slightly below 62% for 2012 and noticeably less than the 71% in 2000. Euros account for 20%, and the yen and sterling 5% each. The IMF’s financial reserve data.

Circulating money: The Federal Reserve reports that about $2.3 trillion in actual U.S. paper and metal coins is currently in wallets, bank vaults, cash registers, safes, mason jars, and so on.

Some players:

The U.K.’s Financial Conduct Authority regulates the City of London, the world’s largest currency-exchange center.

The U.S. Treasury Department’s semi-annual currency trading reports on currency values and potential manipulations.

And the Treasury Department monitors dollar exchange rates.

And some history:

Currency was the invention of an anonymous fellow early in the 7th century B.C., most likely in the Kingdom of Lydia in modern-day Turkey, home to semi-legendary King Croesus — and quickly copied by neighboring Greece and Persia. A look at the first coins, with a mini-bio of Croesus and some lumpy-looking early Lydian efforts (made of electrum, a mix of gold and silver) stamped with pictures of lions.

The “money-changers” of the Gospels were a consequence of these innovations six centuries later. For a small fee, they swapped Roman, Greek, and Persian coins carried by out-of-town pilgrims for half-shekel coins minted in Jerusalem and Tyre, with exchange rates depending on the quantities of precious metal contained in the coins, enabling pilgrims to pay the modest tax needed to finance Temple operations, and pay for food, shelter, and shopping during their stay. The account in Matthew.

And the U.S. Mint today.

 

 

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank Progressive Economy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007).  He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

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