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PPI on the SOTU: Energy

Posted on by The Progressive Policy Institute

President Joe Biden has achieved remarkable success for U.S. climate policy halfway through his term, and his first State of the Union after the midterms should reflect the accomplishments that Democrats have made in passing the Inflation Reduction Act and Democrats and Republicans both for their roles in the IIJA, CHIPS and Science Act, and the ratification of the Kigali Amendment. But what PPI’s Energy and Climate team wants to see most is what comes next: What are President Biden’s climate plans for the next two years of a divided Congress, for 2024, and beyond? And how will Biden position U.S. energy policy amidst continued turbulence in global markets as Russia’s war in Ukraine drags on?

As hundreds of billions in spending and loans flow out of these new federal programs to firms, households, and state and local governments, President Biden and both parties in Congress should look to finally strike a deal reforming federal and other barriers to the deployment of crucial new clean energy technologies held back by the permitting process, environmental review delays, and inter-jurisdictional conflicts. Biden should also call on Congress to fully fund the energy-related provisions of the CHIPS and Science Act authorizing roughly $54 billion for R&D over the next 5 years through programs at ARPA-E, the NSF, and elsewhere. The 2023 Omnibus bill only included partial funding for these investments in basic science and early-stage energy technologies and only for the coming year; fully funding them for the next 5 years will help the U.S. maintain its position at the cutting edge of the energy transition.

Lastly, Biden’s biggest climate challenge is not domestic but international. As my PPI’s Paul Bledsoe has noted, emissions from China alone are greater than all developed countries combined and still growing. The administration must work with our allies to find more effective means of compelling developing nations to reduce their emissions. Simultaneously, working more closely with allies like the EU, U.K., Japan, and South Korea that lack trade agreements with the U.S. will allow closer cooperation on provisions in the IRA that grant bonuses to countries with existing agreements, like Canada and Mexico. And with Russia’s war against Ukraine ongoing, American LNG exports continue to play a vital role in European and global energy markets by maintaining energy security, offering especially low-methane supplies, and displacing coal-fired generation.

Let’s hope 2023 is a year of continued success for America’s clean energy leadership.

This post is part of a series from PPI’s policy experts ahead of President Biden’s State of the Union address. Read more here. 

PPI on the SOTU: The Future of Tech and Innovation

Posted on by The Progressive Policy Institute

Government action in regard to technology should serve to enhance the vibrant tech economy, supporting American innovation while addressing concerns that are top of mind for people who rely on it every day. The tech sector is a leader in job creation, and has held strong in the face of challenges such as the pandemic and periods of rising inflation, during which the sector was able to keep prices low. In his second State of the Union address, President Biden has the opportunity to reflect on the successes of this industry, while also calling for reform in areas where government intervention is needed to keep Americans safe, such as the protection of their data.

In the past year, the administration has pursued two major pieces of technology policy — one, the CHIPS and Sciences Act of 2022, was a resounding success, while the other, which was the partial subject of a recent op-ed from the President, a data privacy law, remains on the docket for 2023. In his speech, President Biden should commend Congress on the landmark passage of the CHIPS Act. The law pledges $52 billion dollars to invigorate and onshore the crucial semiconductor industry, injecting vital funds into chip fabs and the infrastructure, workforce, and research and development. Reshoring chip fabrication and upskilling the workforce is crucial for the future of innovation.

The President should re-state his commitment to passing strong digital privacy protections for all Americans. In his first State of the Union, Biden indicated his commitment to improving children’s privacy and safety online. Now, the president is calling for “serious federal protections for American’s privacy. That means clear limits on how companies can collect, use and share highly personal data.” The strongest candidate to get privacy done is the American Data Privacy and Protection Act, a bi-partisan privacy bill that would set the standard for privacy protections for all Americans.

This is a moment for President Biden to recognize the value in American technological leadership and look forward to the ways in which our policy regime can uplift the sector on a global stage. With the debates on approaches to internet regulation heating up across the globe, the U.S. must balance the benefits of innovation with regulatory guidelines and protections for everyday Americans in a way that the rest of the world may look to as a model. By securing privacy protections for individuals in this new Congress, we have an opportunity to do just that.

This post is part of a series from PPI’s policy experts ahead of President Biden’s State of the Union address. Read more here. 

PPI on the SOTU: Health

Posted on by The Progressive Policy Institute

As the country continues to grapple with the consequences of the reversal of Roe v. Wade, the landmark Supreme Court case that guaranteed the constitutional right to an abortion for nearly half a century, it is critical for President Biden to reassure all Americans who can get pregnant that his administration will continue to work to restore abortion rights. President Biden needs to respond to Republicans doubling down on restricting and outlawing access to abortion as they ramp up their campaigns for the 2024 election by further expanding access to medication abortion drugs, including Mifepristone. The Biden administration should eliminate the pharmacy and prescriber certification requirements to dispense mifepristone, and assert the authority of the FDA to preempt state law for FDA-approved medications to prohibit states from banning access to medication abortion.

Now that the Biden administration has announced that the Public Health Emergency (PHE) declaration will end on May 11, President Biden needs to reassure Americans that the transition will not affect their access to coverage and affordable care. The PHE declaration that was issued by the Secretary of Health and Human Services in March 2020 provides flexibilities for the federal government to modify or waive certain requirements, including for Medicare, Medicaid, and the Children’s Health Insurance Program. Those who are vulnerable — children and those with chronic illnesses and disabilities — will need more assistance in navigating the administrative process to regain coverage once the PHE declaration ends. President Biden should call for relaxing eligibility requirements that were exclusionary before the PHE declaration was issued by reducing administrative burdens using administrative data and targeting assistance to those groups to keep eligible individuals and families enrolled.

Additionally, various provisions that were authorized by the Public Readiness and Emergency Preparedness (PREP) Act into the COVID-19 PHE declaration are set to expire next year. These provisions permitted pharmacists and pharmacy technicians to administer COVID-19, flu, and all recommended pediatric vaccines without a prescriber order, even in certain states that have laws that limit pharmacies from administering some vaccines to certain populations. If these provisions expire, 25 states where the authority for pharmacist-administered vaccines has not been made permanent will face the consequences of the expiration most acutely as states will return to restricting pharmacists to administer certain vaccines, including the COVID-19 vaccine. President Biden should call on states to adopt and codify the PREP Act declaration expanding pharmacist ability to vaccinate in state law, which governs pharmacist practice, to ensure Americans continue to have greater access to these life-saving vaccines beyond the end of the PHE.

This post is part of a series from PPI’s policy experts ahead of President Biden’s State of the Union address. Read more here. 

PPI on the SOTU: Education

Posted on by The Progressive Policy Institute

We’d like to see President Biden call for reinstating the universal “free and reduced lunch” program that Congress let expire last June. Too many low-income children are hungry at school, and many are incurring debt because they can’t pay for their lunches upfront. The School Nutrition Association estimates that America’s school children have incurred $19 million in debt this year alone. Schoolchildren should not have to choose between empty bellies or empty wallets.

President Biden should also announce he will direct the U.S. Education Department (ED) to monitor the proliferation of school voucher and education savings account (“ESA”) program in the states. Last summer, ED added restrictions to the federal Charter School Program (CSP) on the types of schools that are eligible for federal grants, eliminating all for-profit charter schools. The Biden administration’s effort to restrict the use of the federal money by private education entities should not stop at the public charter schoolhouse door.

One rationale ED offered for the CSP rule change was to encourage more collaboration between traditional district schools and public charter schools. To that end, we would like to see the federal CSP expanded to include autonomous innovation and partnership schools that operate autonomously from a traditional district office, pursuant to a performance contract with the elected school board. They are proving to be a resounding success in states like Texas where they are known as “1882 schools” and in cities such as Denver and Indianapolis, where they are known as innovation schools. Biden should direct ED to establish an innovation category in the CSP to encourage more district-nonprofit partnerships that improve student outcomes.

Finally, we call on President Biden to direct ED to expand the Center of Educational Excellence for Black Teachers Program at Historically Black Colleges and Universities (CEEBT) program, and to lobby Congress to increase its funding. CEEBT is designed to support HBCUs with demonstrable records of graduating skilled, well-prepared, Black teachers. Researchers from Johns Hopkins and American University in 2018 found that having even just one Black teacher in elementary school makes Black children more likely to graduate high school and makes them more likely to enroll in college. With 15 states enacting educational gag orders, many of them centered on race, it’s important for the federal government to dedicate resources to increasing America’s Black teacher corps.

This post is part of a series from PPI’s policy experts ahead of President Biden’s State of the Union address. Read more here. 

RAS Reports: How Peltier et al. v. Charter Day School could affect student gender discrimination

Posted on by The Progressive Policy Institute

On this episode of RAS Reports, the Co-Directors of the Reinventing America’s Schools Project, Curtis Valentine and Tressa Pankovits, sit down to discuss Tressa’s recent op-ed in The Hill concerning Peltier et al. v. Charter Day School, the North Carolina court case about charter schools and school uniforms. This case involves a public charter school in North Carolina that does not allow girls to wear pants or shorts, only skirts and jumper-type dresses.

When asked, the school refused to change their policy and said that boys and girls should be required to dress differently to emphasize chivalry and the dress code is part of a code of conduct where women are “regarded as fragile vessels that men are supposed to take care of”. Parents decried the policy as gender discrimination and sued under the equal protection clause, Title IX and the charter school’s own contractual agreement with the state of North Carolina Board of Education. Tressa argues that this case could act as a “gateway drug” to allowing other publicly funded education to discriminate on the basis of race or gender or disability.

Read Tressa’s opinion piece here.
Follow Tressa on Twitter here.
Follow Curtis on Twitter here.
Learn more about the Reinventing America’s Schools Project here.
Learn more about the Progressive Policy Institute here.

Ritz for the Peter G. Peterson Foundation: Opportunities For Bipartisan Fiscal Policy In 2023

Posted on by The Progressive Policy Institute

By Ben Ritz, Director of PPI’s Center for Funding America’s Future

Bipartisan coalitions of lawmakers joined together to pass more major legislation in the 117th Congress than any other Congress in recent memory, including the biggest investment in American infrastructure in over half a century, proving that bipartisanship in Washington isn’t dead yet. Unfortunately, the net impact of all executive actions and legislation approved over the last two years increased budget deficits by $4.8 trillion over the 10-year window. Although some stimulus was needed coming out of the Covid pandemic recession, this level of spending helped push inflation to its highest level in over 40 years and put our fiscal policy on an even more unsustainable trajectory than it already was.

The Federal Reserve is primarily responsible for restoring price stability, but sound fiscal policy can make it easier for the Fed to bring inflation down without pushing the economy into a recession. Even more important than what fiscal policy does today is the path it sets us on for the future: the Congressional Budget Office projects annual interest payments on the national debt are currently on track to exceed total spending on national defense by 2030 and surpass Social Security as the largest item in the federal budget by 2050. The problem will only get worse if additional deficit spending forces the Fed to raise interest rates even higher.

Read more on the Peter G. Peterson Foundation website.

Marshall for The Hill: Ukraine Dispels the Myth of American Decline

Posted on by The Progressive Policy Institute

By Will Marshall, President of PPI

Russian President Vladimir Putin’s vicious mauling of Ukraine is shattering quite a few grand illusions about the post-post-Cold War world.

For starters, Russia’s failure to defeat its much smaller and poorer neighbor has demolished its image as a military juggernaut. Instead of confirming its status as a great power and pillar of a new, multipolar world order, Putin’s war has exposed Russia as a declining power — at best a junior partner in the new league of autocracies directed from Beijing.

Plagued by old equipment, bad logistics and poor leadership, Russian troops have been outfought by determined Ukrainian defenders. In just under a year, the war has cost Russia “significantly” more than 100,000 casualties, says General Mark Milley, chairman of the U.S. Joint Chiefs of Staff. That’s more in one year than Russia suffered in a decade of war in Afghanistan.

Read more in The Hill.

Hats off to Hochul! NY Governor Demonstrates Courage, Sets Example for Other Democrats

Posted on by The Progressive Policy Institute

Never underestimate the power of New York City’s (NYC) and state teachers unions. For decades, even when the city was desperate for funds to run its schools, it was spending tens of millions to pay hundreds of teachers their full salary and benefits to sit around and do crossword puzzles, engage in other hobbies, or nap. Those teachers were consigned to reassignment centers — also derisively known as “rubber rooms” — because they were so problematic that they had to be removed from the classroom. Still, thanks to the United Federation of Teachers (UTF), and its affiliate, the New York State United Teachers (NYSUT), the school district couldn’t, and still can’t, easily dismiss ineffective or even abusive teachers. Now known as the “Absent Teacher Reserve,” idle UFT members reportedly cost NYC $150 million in 2016.

That example gives context to the courage it took to do what Democratic Governor Kathy Hochul did yesterday when she released her budget proposal. In it, Hochul made good on a campaign promise to do what she could to allow new public charter schools to open in NYC.

Tens of thousands of students — most in communities of color — are on public charter school waiting lists in NYC, but there has been no relief in almost a decade for parents seeking better schools for their children. Since the passage of the state’s charter school law in 1998, the NYSUT and UTF, through their Democratic proxies in the state legislature, have artificially “capped” the number of charter schools permitted in the state, with a smaller subset cap for NYC. The law was amended in 2007, 2010, and 2015 to allow slight increases in charter school numbers, but then, thanks to Democrats’ obeisance to the teachers unions, progress ground to a halt. Charter school expansion has been synthetically halted in NYC for about five years, despite ever-growing, organic demand.

Too many teachers union leaders reflexively oppose public charter schools, not least because the vast majority of charters aren’t unionized. Charters cost unions dues paying members. They also embarrass them when they outperform traditional district schools, as most do in NYC.

Hochul’s budget does not propose doing away with the caps, even though a new poll by the nonprofit Democrats for Education Reform found that almost two-thirds of NYC parents want the cap lifted, including half of Democrats.

But a proposal to eliminate the cap likely would have been a fool’s errand. Assembly Speaker Carl Heastie (D-Bronx), once supportive of charters, couldn’t ascend to the speaker’s chair until he’d won the unions’ backing — and it’s obvious he had to make promises about maintaining the cap to get it. At the same time, Deputy Senate leader Mike Gianaris (D-Queens) has sung the praises of one charter waiting to open in his district, but he hypocritically refuses to even ease the cap because the NYSUT and the UFT are having none of that.

What Hochul did propose is more pragmatic, and hopefully will be more palatable to her legislative colleagues. Her proposal would keep the statewide cap of 460 charters in place — at least for now — but it would eliminate regional caps to make 85 more slots available for new charter schools anywhere in the state — including New York City.

NYC parents who don’t care how the sausage gets made but do care very much about their kids’ education should cheer Hochul on. But they should push themselves to keep an eye on the sausage-making, too. They must ensure their assembly members understand just how much this issue matters to them as the legislative session grinds on. It’s going to be a heavy lift.

And those of us who advocate for public charter schools need to raise our voices too — especially those of us on the Democratic side of the aisle. We need to praise Hochul for doing a hard thing; the right thing. We also need to hold her up as an example of a Democrat who has the courage — and the pragmatism — to understand that while Democrats appreciate union support, that doesn’t translate to permitting them to indefinitely trample constituents’ right to something as basic as seeking a decent public education for their children.

PPI’s Trade Fact of the Week: The U.S. has 13,200 fewer small/medium business exporters since 2016

Posted on by The Progressive Policy Institute

FACT: The U.S. has 13,200 fewer small/medium business exporters since 2016.

THE NUMBERS: U.S. export share of GDP –

2022    11.6%

2016    11.9%

2013    13.6%

 

WHAT THEY MEAN:

A worried look at the American export economy this afternoon, taking as a point of departure the Bureau of Economic Analysis’ first full-year 2022 estimates for American GDP:

(1) Export share of U.S. GDP is down: BEA’s “first estimate” of GDP finds $2.98 trillion in American exports last year, in a $25.5 trillion economy. The export figure combines $2.06 trillion in “goods” (cars, oil, wheat, semiconductors, planes, beef, etc.) with $0.92 trillion in “services” (software downloads, fees for architecture and telemedicine, tourism student tuition, international air cargo earnings, etc.), and made up 11.6% of U.S. GDP. The total, though above the COVID low of 10.2%, remains noticeably below not only the mid-2010s peak (13.6% in 2012, 2013, and 2014) but the 2007-2018 average of 12.6%.

(2) U.S. share of world exports is also down: The World Trade Organization and IMF have not yet published tallies of worldwide exports for 2022. But comparing their figures for 2021 with those of 2016, the WTO’s World Trade Statistical Review report shows that in 2016, the U.S.’ share of the year’s $16.0 trillion in world goods exports was 9.1%, and the U.S.’ share of the $4.8 trillion in commercial services exports was 15.2%. In 2021, the comparable figures were 7.9% of $22.3 trillion in goods and 12.9% of $6.0 trillion in services. Sifting a little more finely, from 2016 to 2021 the American share of world manufacturing exports fell from 8.6% to 7.3%, and of agricultural exports from 10.4% to 9.4%. Or by region, the IMF’s “Direction of Trade Statistics” database reports that in 2016 American factories, farms, and mines supplied 8% of exports to Asia, 33% of exports to Latin America, and 5.3% of exports to sub-Saharan Africa, while (b) in 2021, the figures were 7%, 31%, and 5.1%.

(3) Most recent U.S. export growth in natural resources: Looking more closely at the things Americans were selling, the eleven months of Census Bureau trade data available for 2022 show that nearly half of all U.S. export growth since 2016 — about $290 billion of $610 billion, unless the December figures reveal some unexpected and drastic shift in direction — is in crude oil, natural gas, and refined petroleum. This has reordered the top tier of American exports. Where in 2016 the top five U.S. exports* were airplanes, refined oil, and automobiles, followed by auto parts and integrated circuits; and in 2022 the top five were refined petroleum products, crude oil, and natural gas — together accounting for about $380 billion of the $2.07 trillion in goods exports — with planes and cars now ranked respectively fourth and fifth.

(4) Fewer exporting businesses: And perhaps reflecting this greater concentration of exports in energy, the U.S. export community has shrunk from a mid-2010s peak of 305,000 exporting companies to 290,600 by 2016, and (again with some rebound from a Covid low in 2020), to a preliminary count of 277,500 in 2021.

What to make of this?

Dramatic terms like “inflection point” or “crisis” feel premature. The GDP share of exports is not far below the pre-pandemic level. With growth in 2021 and 2022 heavily driven by federal fiscal stimulus and the post-crisis consumer boom, some erstwhile U.S. exporters may simply have decided to concentrate on local customers for a while. And despite un-robust export figures in the second half of 2022, American manufacturers hired pretty enthusiastically and farmers got reasonably good income. Perhaps, with fiscal stimulus fading and consumers now pulling back, companies will return to exporting and the trade stats will improve in 2023.

On the other hand, perhaps not. If there isn’t yet a case for “drama” and “crisis,” one for “concern” and “guarded pessimism” seems reasonable. In this reading of the trends, policy is taking a toll. On one hand, the tariff increases in 2018 and 2019 mainly fell on industrial inputs, and so to some extent raised costs for U.S. factories and ag producers as well as eliciting foreign retaliations against U.S. exports. On the other, the trade policy environment, especially in Asia, is turning against U.S.-based farms and factories as intra-Asian tariffs fall and technical standards become more compatible through the implementation of the two big regional trade agreements CPTPP and RCEP. All grounds, at least, to look back at the trends of the last five years, and ahead to the next years, with concern.

* At HTS-4 level. Using NAICS-4 the top-five count is slightly different: aerospace, petroleum and coal products, automobiles, pharmaceuticals, and auto parts in 2016; oil and gas, petroleum and coal products, aerospace, pharmaceuticals, and basic chemicals in 2021.

 

 

Further Readings

The Bureau of Economic Analysis’ GDP database, with (among lots else) export and import totals and shares of GDP.

Census “FT-900” series has the basic monthly trade figures, complete through November with the December (and thus full-year 2022) release next Tuesday.

… and the accompanying “Historical Series” with a convenient one-page summary of annual imports, exports, and balances from 1960 through 2021, also (hopefully) to be updated for 2022 on Tuesday.

… and also from Census, the “Profile of Importing and Exporting Companies” releases a count of exporters and importers by size, with state-by-state figures, SMEs, 25 countries, sectors, etc.

World perspective:

The WTO’s World Trade Statistical Review series.

And the IMF’s Direction of Trade Statistics.

And in Asia:

ASEAN announces entry into force for the Regional Comprehensive Economic Partnership, 2021.

P.M. Fumio Kishida reviews Japan’s Asian strategy, with thoughts on the U.S. alliance, nuclear weapons, China relationship, CPTPP, and the potential economic role of the U.S.

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

Maag for The Hill: Affordable Child Care Key to Getting People Back to Work

Posted on by The Progressive Policy Institute

By Taylor Maag, PPI’s Director of Workforce Policy

The start of 2023 presented some good news for America’s economic outlook. In the first week of January, the December jobs report was released, showing unemployment edging down to 3.5 percent with over 200,000 more people employed full-time. But even with this good news, an enduring conundrum remains: our country’s stagnant workforce participation rate.

The workforce participation rate represents the number of people working or actively looking for work. This job report showed that the U.S. labor participation rate is 62.3 percent, which has not changed since the beginning of 2022 and is only 1 percentage point higher than it was at the start of the pandemic. This means roughly 38 percent of Americans who could be working are detached from the labor market because they believe there are no jobs available for them, or they are facing personal challenges that make it hard to retain employment. As a result, these individuals have stopped looking for work altogether, leaving employers desperate for talent and policymakers wondering where everyone went.

Read more in The Hill.

New U.S. Policy on Rare Earths Elements Critical for America’s Future Security and Economic Prosperity, Argues New Innovation Frontier Project Report

Posted on by The Progressive Policy Institute

Today, the Progressive Policy Institute’s Innovation Frontier Project (IFP) released a new paper urging United States policymakers to establish a new framework on domestic rare earth element production, including streamlined permitting, tax reform, and high-impact R&D. Report author Daniel Oberhaus argues this new framework is critical for America’s future economic prosperity and the fight for innovation and economic leadership with China.

“When it comes to establishing a robust American rare earths industry, time is of the essence,” writes Daniel Oberhaus in the report. “…China’s dominance of this sector has been wielded for political leverage in the past with disastrous economic consequences that were felt across the globe. This may very well happen again in the future, but the stakes will be even higher given the increasingly central role that rare earths play in our daily lives.”

The report outlines four policy recommendations for a Rare Earths Elements strategy in the U.S., including:

  • Introducing tax incentives for domestic rare earth elements producers
  • Establishing a federal coordinating body for rare earths elements mine permitting
  • Establishing a federal rare earths elements recycling program; and
  • Prioritizing federal support for rare earths elements alternatives

Read and download the paper here:

Daniel Oberhaus is a science writer based in Brooklyn, New York. He was previously a staff writer at Wired magazine covering space exploration and the future of energy. His first book, Extraterrestrial Languages, is about the art and science of interstellar communication and was published by MIT Press in 2019.

Based in Washington, D.C., and housed in the Progressive Policy Institute, the Innovation Frontier Project explores the role of public policy in science, technology and innovation. The project is managed by Jordan Shapiro. Learn more by visiting innovationfrontier.org.

The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.

Follow PPI on Twitter: @ppi

Find an expert at PPI.

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Media Contact: Aaron White; awhite@ppionline.org

Rare Earths for America’s Future

Posted on by The Progressive Policy Institute
ISSUE BRIEF

There are few materials that are quite as important for America’s future security and economic prosperity as rare earth elements (REEs). These 17 metallic elements are essential inputs for weapon systems, clean energy technologies, and consumer electronics, yet for the past 20 years the United States has been almost entirely reliant on China for sourcing these critical materials. Today, the U.S. produces just 15% of the world’s REEs and exports 100% of mined material abroad — primarily to China — for separation and refining. China, by contrast, mines about 60% of all REEs produced globally and has increased domestic production of REEs by 60% over the last five years alone. The national security implications of China’s dominance of the rare earth supply chain are obvious, but viable solutions to securing America’s rare earth supply are not.

This policy paper provides an overview of the past, present, and future of the REE industry in the United States. Its primary goal is to establish a framework for a sustainable domestic REE industry through streamlined permitting, tax reform, and high-impact R&D. It considers how to mitigate the environmental impact of REE mining, the challenges and opportunities for REE manufacturing and recycling, the hype and hope for unconventional REE sources, and concludes with four recommendations for a U.S. REE strategy, namely:

1. Introduce tax incentives for domestic REE producers
2. Establish a federal coordinating body for REE mine permitting
3. Establish a federal REE recycling program
4. Prioritize federal support for REE alternatives

Although these are not the only pathways to securing a domestic rare earths supply, we believe that these policies are the most feasible and effective solutions available to policymakers today. When it comes to establishing a robust American rare earths industry, time is of the essence. As we’ll explore throughout this paper, China’s dominance of this sector has been wielded for political leverage in the past with disastrous economic consequences that were felt across the globe. This may very well happen again in the future, but the stakes will be even higher given the increasingly central role that rare earths play in our daily lives. The key to avoiding this scenario will be decisive action designed to support the domestic rare earths industry at every step in the value chain from basic research and mining to processing and manufacturing. America was once the global leader in rare earth production and processing, and it can regain its leadership position once again through the intelligent policy decisions we make today.

 

Read the Full Report from the Innovation Frontier Project

PPI’s Trade Fact of the Week: Scandinavia has the world’s highest union-membership rates

Posted on by The Progressive Policy Institute

FACT: Scandinavia has the world’s highest union-membership rates.

THE NUMBERS: Labor union membership as a share of the workforce for OECD countries –

2020    15.8%

2010     17.8%

2000    20.9%

 

WHAT THEY MEAN:

PPI President Will Marshall, writing in 2007 for the online journal Democratic Strategist, imagines some new directions for American labor unions after 25 years of falling membership:

“[New-model unions] could help workers acquire valuable marketable skills and create “virtual hiring halls” to match them to employers. They could also provide services like portable pensions and health insurance, which would smooth workers’ transitions from job to job. And they could experiment with novel concepts like wage or mortgage insurance, which aim at keeping families’ living standards from collapsing when workers lose their jobs. … Modern labor associations could help workers bargain with their employers for a better work-family balance — for flextime, paid leave, telecommuting and part-time jobs with decent benefits. They could operate, in short, like a back-to-the-future update on the old craft unions, which were defenders of quality workmanship as well as workers’ interests.” 

Appealing though this vision may have been (and still might be), no such large-scale transition took place. Instead the trends of the ensuing 15 years looked about the same as those of the previous quarter-century. The Bureau of Labor Statistics’ first systematic survey of union membership in 1983* had reported 11.9 million private-sector workers enrolled in unions, which was 19% of that year’s 92 million private-sector workers. A decade later, in 1993, BLS found 9.6 million union members among 85.5 million private sector workers (11.2%). The 2003 release then reported 8.5 million or 8.2% of 102.6 million; the 2010 and 2015 releases, a sharp financial crisis drop to 7.1 million of 103 million workers (6.9%) and then a recovery to 7.6 million of 113.1 million (6.7%) by 2015.  The COVID pandemic brought another drop, to 7.03 million of 115.8 million private-sector workers (6.1%) in 2021. And last Thursday’s release brought the figures to 2022, with a modest rebound in total enrollment to 7.2 million private-sector union members, or 6.0% of their 120.4 million private-sector worker total. This is the lowest share noted in the BLS release archives and possibly (though not certainly, since data collection methods have changed) the lowest since the 1890s. Looking at “industrial sectors” rather than economy-wide totals, alternatively, since 1983 unionization rates have fallen from 28% to 7.8% in manufacturing, from 40% to 14.5% in transport, and from 41% to 8% in telecommunications.

How does this experience look in an international context? Is the U.S. different, or do American trends resemble those elsewhere? In one sense, labor laws differ widely and overall U.S. union membership rates are below the figures the OECD reports for most European countries. Trends over time, though, look pretty similar. The OECD’s statistics, which cover 37 upper- and middle-income country members, show an overall drop in union membership from 20.9% of workers (combining government and private-sector workers) in 2000 to 15.8% as of 2020.  I.e., a decline slightly slower than the one the BLS reports in the United States, but not a fundamentally different trend. Among individual countries, OECD figures show unionization rates dropping from 24.6% to 16.3% in Germany from 2000 to 2021; from 24.9% to 13.7% in Australia; 23.5% to 13.4% in Poland; 21.5% to 16.8% in Japan; 29.8% to 23.5% in the U.K.; and from 16.5% to 12.5% in Spain.  OECD’s Latin American members are a bit of an exception, with sharply different trends by country:  stable at about 11% in Chile, up from 14% to 20% in Costa Rica, down from 16.5% to 12.4% in Mexico and also down from 12.5% to 9.5% in Colombia.

The similarity across countries suggests that BLS’ annual U.S. releases are picking up something general about work in upper- and middle-income countries. Perhaps, as Marshall was suggesting 16 years ago, this reflects a broad shift away from long careers in single companies and seniority-based promotion, and consequently an erosion of the appeal of traditional collective bargaining-based unionization among workers.

The big exception is in Europe’s far north. Scandinavian unionization rates, though also dropping a bit since 2000, are vastly above those in other countries. Unions continue to enroll more than 60% of workers in Denmark, Sweden, and Finland, are barely lower at 59% in Norway, and are a startling 91% in Iceland. The difference may reflect different approaches. Though Scandinavian unions are obviously concerned with contracts and retirement benefits, they appear to give more weight than unions elsewhere to career service and support policies such as skill development programs, financial support during periods of unemployment, and job placement services enabling workers to move to find new or higher-paying jobs. To some extent this approach recalls Marshall’s ideas 16 years back, suggesting that while they may not have taken root back then, they likely still carry value.

* One partial exception, linked below, is a 1985 report with some figures drawn 1980 survey (14 million union members among 71.4 million private-sector workers, or 20% of the total, though this probably isn’t strictly comparable to the post-1983 reports), and still higher figures from earlier decades though these are definitely not directly comparable.

** Trends in public employee unions are quite different: steady growth from 5.7 million in 1983 to a peak of nearly 8 million in 2012, followed by a drop back to 7.1 million as of 2022.

Further Readings

The Bureau of Labor Statistics’ annual report on union membership, trends in different industries, wage rates for members and non-members, age and sex, etc, in 2022.

And PPI’s Will Marshall on a new model and possible path forward for unions in 2007.

More Data:

BLS for some reason hasn’t posted its 1980s releases, but does have the data from 1992 forward. BLS’ unionization archives.

… and the 1985 BLS report noted above with some early-1980s figures and comparisons as far back as 1945.

Also, a database maintained by Trinity College & Georgia State academics reprints data back to 1973 (though the 1973-1982 figures come from a different survey and aren’t strictly comparable to those of 1983 and afterward).

Points of Comparison:

OECD tracks its 37 members.

The International Labor Organization has a table of recent union membership rates in 129 countries. Iceland is on top with 91% of about 195,000 Icelandic workers, and Venezuela at the bottom with 0.2%. Data collection probably isn’t consistent across countries though, so the figures likely aren’t totally comparable.

And the International Trade Union Congress, an international association of 163 union federations representing 200 million workers in 163 countries.

Points of Comparison (2):

The Canadian experience at first seems a sharp contrast to that of the United States, with unionization rates stable at about 29% or 28% of workers since 2000. The apparent stability conceals a very sharp public/private divergence though, with 70% of Canadian government workers in unions as against a falling 13% of private-sector workers.

World’s most successful union federation? The 14 members of Sweden’s Landsorganisationen i Sverige, despite their federation’s dismaying domain name (www.lo.se), enroll 1.5 million of Sweden’s 5.1 million workers.

Korea’s Trade Union Confederation.

The Australian Council of Trade Unions.

Costa Rica’s Confederación de Trabajadores Rerum Novarum.

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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PPI’s New Skills for A New Economy Project hosts Webinar on Youth Career Development with Expert Panel of Workforce Champions

Posted on by The Progressive Policy Institute

This week, the Progressive Policy Institute’s (PPI) New Skills for a New Economy Project hosted a webinar on the importance of preparing young people for career success. An esteemed panel discussed the policies and practices they are championing in their states and communities, as well as the rising political will to ensure young people learn the skills needed to succeed in the U.S. economy.

Panelists for this webinar included Hon. Jim Rosapepe, Maryland State Senator; Don Fraser of Education Design Lab; and Lateefah Durant of Cityworks DC. The webinar was hosted by Taylor Maag, Director of Workforce Development Policy at PPI. This event was co-sponsored by PPI’s New Skills for A New Economy Project and the Reinventing America’s Schools Project, and The 74.

Watch the event here:

The New Skills for a New Economy Project at the Progressive Policy Institute helps shape policy discussions at the federal and state levels around investments in a robust workforce development system that is fully-funded, modern, industry-responsive, and equips current and future workers with the skills they need to get ahead. The project promotes policy solutions that address the current challenges facing workers’ success and helps the U.S. remain competitive by lifting up new ideas and best practices happening across the country.

The Reinventing America’s Schools Project inspires a 21st century model of public education geared to the knowledge economy. Two models, public charter schools and public innovation schools, are showing the way by providing autonomy for schools, accountability for results, and parental choice among schools tailored to the diverse learning styles of children. The project is co-led by Curtis Valentine and Tressa Pankovits.

The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C., with offices in Brussels and Berlin. 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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Media Contact: Aaron White; awhite@ppionline.org

Amicus brief submitted by PPI highlights potential risks to America’s digital economy 

Posted on by Alyssa Brown

Today, PPI submitted an amicus brief to the Supreme Court in the case of Gonzalez v. Google. The brief highlights the potential risks to America’s digital economy under the circumstances of a ruling against Google, considering the implications of changes to what falls under the liability protections provided to online platforms through Section 230 of the Communication Decency Act. Though there is certainly room for reform to Section 230 to better reflect the harms associated with the modern internet, efforts to do so must tread carefully and be targeted to specific harms to avoid destabilizing the digital economy.

The brief highlights the following points:

1.  “The digital economy, fortified by Section 230, is critical to the American economy.”

The digital economy is an enormous creator of American jobs, thus, significant changes to the fundamental legal regime through which that economy operates risks the stability of a robust industry. This is also a sector that has proven otherwise stable in the face of pandemic shutdowns and periods of high inflation.

2. “Algorithmic recommendation is critical to the digital economy.”

Action against curated algorithms will have impacts that reverberate through the economy. They are the fundamental mechanism behind a variety of business models that empower both online entrepreneurship and the use of access to information for consumers. Potential changes to liability protections for algorithms would also be misguided from a technological standpoint, as algorithms of varying complexity are the means through which all online platforms sort third-party content.

3. “Section 230 reform is warranted, but that reform should be the result of careful, holistic policymaking.” 

Given the significance of online platforms in Americans’ everyday lives, changes to Section 230 must be made with great intentionality. Internet policy should be made by Congress, not the courts. There is a need to address issues posed by dangerous online content, but a catch-all approach may result in significant unintended consequences.

PPI’s full amicus brief can be read here.

Progressive Policy Institute Files Amicus Brief Urging Caution in Section 230 SCOTUS Case

Posted on by The Progressive Policy Institute

Today, the Progressive Policy Institute (PPI) submitted an amicus brief to the Supreme Court of the United States (SCOTUS) in the case of Gonzalez v. Google LLC, written in support of the respondent.

In the amicus brief, PPI argues the digital economy, fortified by Section 230 of the Communications Decency Act, is critical to the American economy, and that the digital economy — which has proven resilient during and after the pandemic — is a key driver of job growth, while holding down inflation. The amicus brief also cautions against altering Section 230 liability protections for the algorithmic recommendations provided by search engines and social networking applications, citing their importance to user experience and online entrepreneurship. Subjecting these companies to liability in this way would harm the digital ecosystem.

“The economic impact of the digital economy, which is supported by Section 230, is enormous,” said Dr. Michael Mandel, Vice President and Chief Economist at the Progressive Policy Institute.

“Anyone who would reform Section 230 must approach that task with the utmost care. Massive advances in Americans’ standard of living and enormous economic gains can be laid at the feet of our digital economy and the protections it has enjoyed. That these protections sometimes enable ugliness amidst all those soaring gains may be reason to reform the digital economy with prudence and a view to the whole — not destroy it,” writes the Progressive Policy Institute in the amicus brief.

Read and download the full text of the amicus brief:

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 PPI on Twitter: @ppi

Find an expert at PPI.

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Media Contact: Aaron White; awhite@ppionline.org