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5/2 Manufacturing Event Summary

Posted on May 3, 2012September 18, 2024 by The Progressive Policy Institute

The Progressive Policy Institute would like to thank everyone who attended our economic policy forum on “Manufacturing in the Age of the App Economy”, which took place on Wednesday, May 2.

Michael Mandel, Jared Bernstein, Leo Hindery and Louis Uchitelle discussed the critical role manufacturing plays in today’s app-fueled economy. While there was certainly lively debate regarding the best tools and policy options available, the consensus that emerged was that the federal government must refocus and redouble its efforts to promote American manufacturing and make it more competitive. By creating a smart manufacturing agenda for the 21st century, we can add balance to our economy and put America back on the sustainable path of producers, not consumers.

An explicit jobs target is the first concrete step towards achieving that goal. PPI believes we should aim to boost manufacturing employment up to 15.5-16 million, a level last reached in 2001. The employment spillover effects of manufacturing are also significantly larger than commonly thought, so more manufacturing jobs would create more jobs elsewhere as well. With unemployment still unacceptably high, the imperative to act has rarely been more clear.

PPI EVENT: Manufacturing in the Age of the App Economy

Posted on May 3, 2012September 18, 2024 by The Progressive Policy Institute

The Progressive Policy Institute hosted an economic forum to discuss the critical role of manufacturing in the era of the app economy.

PPI Chief Economic Strategist Michael Mandel presented the findings of his new paper, “Manufacturing in the Age of the App Economy: How Many Factory Jobs Should We Aim For?”, co-authored with PPI economist Diana G. Carew.

The panel included Michael Mandel, Jared Bernstein, Leo Hindery and Louis Uchitelle, who discussed the critical role manufacturing plays in today’s app-fueled economy. There was debate regarding the best tools and policy options available, and the consensus that emerged was that the federal government must refocus and redouble its efforts to promote American manufacturing and make it more competitive. By creating a smart manufacturing agenda for the 21st century, we can add balance to our economy and put America back on the sustainable path of producers, not consumers.

Download “Manufacturing in the Age of the App Economy: How Many Factory Jobs Should We Aim For?”

[audio:https://www.progressivepolicy.org/wp-content/uploads/2012/04/ppi_Manufacturingintheappeconomy-050212.mp3|titles=ppi_Manufacturingintheappeconomy 050212]

Date:
Wednesday, May 2, 2012
9:30 – 11 a.m.

Featured Panelists:
Michael Mandel, Chief Economic Strategist, Progressive Policy Institute
Jared Bernstein, Senior Fellow, Center on Budget and Policy Priorities
Leo Hindery, Managing Director, Intermedia Partners
Louis Uchitelle, Economics Writer, The New York Times

Location:
The Mayflower Hotel, Chinese Ballroom
1127 Connecticut Ave. NW, Washington, DC

Trying to Shed Student Debt

Posted on May 3, 2012 by The Progressive Policy Institute

PPI Economist Diana Carew’s work on the rising burden of student debt for young college grads was cited in the Wall Street Journal:

In the past decade student debt has surged as tuition and enrollment climbed. At the same time, college graduates’ earnings have declined. The average debt load of all new graduates rose 24%, adjusted for inflation, from 2000 through 2010, to $16,932, says the Progressive Policy Institute, a left-leaning think tank in Washington. Over the same period, the average earnings of full-time workers ages 25 to 34 with no more than a bachelor’s degree fell by 15% to $53,539.

Read the entire article here.

Manufacturing in the App Economy

Posted on May 2, 2012 by The Progressive Policy Institute

We live in a world where the communications sector is driving the recovery and receiving much attention. We believe that this is the most important ongoing development in the American economy, offering the potential for long-term transformation.

But while very important, a boom in communications isn’t enough, alone, to achieve balanced and sustainable growth. We need every sector of the economy, including manufacturing, to contribute. With this in mind, the Obama Administration has taken the positive step of proposing a series of policy measures that would encourage domestic manufacturing.

In this spirit, we undertake an audacious question: In this era of apps and social media, what is a reasonable long-term goal for manufacturing employment?

We first show that manufacturing has larger job spillovers than commonly thought, based on new calculations. Next, we estimate the employment consequences of eliminating the trade gap in manufactured non-oil goods, a desirable long-term goal, without reducing our standard of living.

Assuming such a balancing, we find that the U.S. should aim to add roughly 3.5-4 million direct and indirect manufacturing jobs over the long run, raising total manufacturing employment to about 15.5-16 million, or 2001 levels. This bold effort would ease the job drought and offer millions of Americans a path to the middle class. What’s more, we would be producing more at home, while borrowing less from the rest of the world.

Achieving this admittedly aspirational goal would come at a relatively small price: we calculate that overall economy-wide prices would have a one-time rise of only 1.8-2.0%, spread out over the time it takes to close the trade gap. To put this in context, the inflation rate for gross domestic purchases has averaged well over 2% annually over the past ten years. So closing the trade gap would raise prices by less than one-year’s inflation.

Read the entire report here

Good News for College Grads (and the Economy)

Posted on May 1, 2012September 18, 2024 by The Progressive Policy Institute

Finally, there is some good news for college grads. New data from the National Association of Colleges and Employers (NACE) shows the median starting salary for the class of 2012 is 4.5% higher than their peers grading just a year earlier. That translates into a starting annual salary of $42,569, compared to $40,735 for the class of 2011. And since inflation (minus food and energy) increased 2.4% over the last year, the benefit to college grads in the class of 2012 is real.

A lot has been said about the growing pile of student debt college grads are facing, and how policymakers can find ways to alleviate the burden. But that’s just part of the struggle college grads are facing – as PPI noted in a study released earlier this year, the fact grads are becoming less able to repay this debt is just as important as the debt itself. What’s missing from the discussion on college grads is a solution that addresses this double whammy: right as the cost of going to college and debt per student is rising, real earnings have been falling. In fact, PPI found real earnings of young college grads aged 25-34 working full-time declined 15% over 2000-2010.

Continue reading “Good News for College Grads (and the Economy)” →

The Government Investment Drought Continues

Posted on April 30, 2012September 18, 2024 by The Progressive Policy Institute

Sometimes things are not what we think they are. The conventional notion is that government has become more important under President Obama, while the private sector has stagnated. Yet in some ways the data tell a different story. Take a look at this chart:

The top (blue) line shows that private nonresidential investment has rebounded smartly since early 2009, when President Obama took office. Residential investment first dropped, and then mostly came back.

Continue reading “The Government Investment Drought Continues” →

Why Bash Innovative Google?

Posted on April 27, 2012September 18, 2024 by The Progressive Policy Institute

Let me get this straight. The communications boom is finally reviving the U.S. economy. There’s an incredible wave of startup activity and excitement around smartphones, mobile apps, broadband wireless. Jobs are being created, and the economy feels alive again. Sounds like a great time to be celebrating our success, doesn’t it?

Yet the Federal Trade Commission has apparently decided that it’s a good time to go after Google, one of the key leaders of the communications revolution. And, oh yes, incidentally one of the most innovative companies in the world. Are these guys serious?

According to a front page story in the NYT this morning, “[f]ederal regulators escalated their antitrust investigation of Google on Thursday by hiring a prominent litigator, sending a strong signal that they are prepared to take the Internet giant to court.” The story went on to say “the core question is whether power was abused.”

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Spectrum: The Faster the Better

Posted on April 25, 2012September 18, 2024 by The Progressive Policy Institute

PPI has long held the position that quickly reallocating spectrum to the most efficient users– big and small –is essential for the continued growth of the wireless communications sector.

This stance was echoed last week at a hearing on the upcoming spectrum auction held by the House Subcommittee on Technology and Innovation. At the hearing, “Avoiding the Spectrum Crunch: Growing the Wireless Economy through Innovation,” industry experts and policymakers agreed that the upcoming auction needs take place as soon as possible at the risk of wireless communications companies running out of spectrum.

In his opening remarks, Subcommittee Chair Ben Quayle reiterated the importance of efficiently using available spectrum, saying “The U.S. wireless industry has been experiencing exponential growth…like the “app” market that we never envisioned a few years ago…As spectrum has become more crowded, it is necessary to ensure that it is being used as efficiently as possible, and that we have the policies in place to encourage industry’s continued investment and growth.”

Continue reading “Spectrum: The Faster the Better” →

PPI EVENT: The Economic Implications of the Wireless Boom

Posted on April 23, 2012September 18, 2024 by The Progressive Policy Institute

The Progressive Policy Institute will host an economic forum to discuss the economic implications of the wireless boom.

Roger Entner, founder of Recon Analytics, will explain the findings of his recent paper, “The Wireless Industry: The Essential Engine Of Us Economic Growth,” to a policy panel that includes, AT&T’s Jim Cicconi, PPI Chief Economist Michael Mandel and Professor Thomas Hazlett of George Mason University.

Date:
Tuesday, May 1, 2012
9:30 – 11 a.m.

Featured Speaker:
Roger Entner, Founder, Recon Analytics

Roundtable:
Jim Cicconi, Senior Executive Vice President, External and Legislative Affairs, AT&T
Thomas Hazlett, Professor of Law & Economics, George Mason University
Michael Mandel, Chief Economic Strategist, Progressive Policy Institute

Location:
National Press Club, Murrow/White/Lisagor Room
529 14th Street NW Washington, D.C. 20045

Register for this event

If you have any questions, please contact 202-525-3926.

Space is limited. RSVP required.

PPI Battleground Home Values Index

Posted on April 20, 2012September 18, 2024 by The Progressive Policy Institute

PPI’s monthly look at home values in 16 potential 2012 battleground states–our Battleground Home Values Index–stayed flat in February 2012. Median home prices in these states have fallen an average of 16% since the last election, or $29,525. While prices no longer seem to be falling, they haven’t yet risen either. Given the state of the housing market for the past two years, no news is good news.

Why the Instagram Purchase is Good News for App Economy Jobs

Posted on April 20, 2012September 18, 2024 by The Progressive Policy Institute

The $1 billion purchase by Facebook of Instagram, a start-up with a hot mobile photo app, was played up by the New York Times as a way for Facebook to stave off competition–”eat the new start-up before it eats you, or before a competitor grabs it.”

However, there’s another way to think about the Instagram purchase. Facebook just sent a strong signal to potential entrepreneurs and venture capitalists: If you have a good idea for an app, or can find someone with a good idea for an, you can get very rich very quickly by being acquired by a Facebook, or a Google, or a Microsoft. All of a sudden starting or financing a new company, with plenty of new employees, looks a lot more appealing.

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Home Economics: Second Thoughts on Second Homes and the Mortgage Interest Deduction

Posted on April 19, 2012September 18, 2024 by The Progressive Policy Institute

Mitt Romney caused quite a stir earlier this week when reporters overheard the presumptive GOP presidential nominee tell donors, “I’m going to probably eliminate for high income people the second home mortgage deduction.”

While Romney could probably personally stand to lose a break on his second home (not to mention third, fourth, etc…), the idea is not one that should be casually tossed about.

In fairness to Governor Romney, he’s not alone in thinking that eliminating the mortgage interest deduction for second homes is a budgetary and political win-win. But consider the following data:

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The Great Squeeze: It’s Not Just College Grads

Posted on April 18, 2012September 18, 2024 by The Progressive Policy Institute

There’s been a lot of press lately about how young college grads are struggling. And they are – especially younger grads who have seen their real earnings drop 15% over the last decade.

But that’s missing a big part of the story. You see, when college grads struggle, that trickles down to all levels of educational attainment.

While the economy has officially been in “recovery” for almost three years, we are still about six million jobs short of when the recession began in 2007. But just because we’re short on jobs doesn’t mean the number of available workers decreased alongside it. In fact, the opposite is true – with natural population growth, the number of available workers across all levels of educational attainment continued to rise, for workers aged 25 and older.

Now we all know someone with a college degree generally makes a more desirable job candidate than a non-degree holder – after all, that’s the selling point of going to college (and a big factor behind the $1 trillion in outstanding student debt). So in the competition for the 2.2 million jobs that have been created since the recession officially ended, guess who loses? Answer: Those without education beyond high school.

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Occupational Licensing: How A New Guild Mentality Thwarts Innovation

Posted on April 2, 2012 by The Progressive Policy Institute

The late economist Mancur Olson would have been a fan of Jonathan Ames. Ames is the creator of the HBO series Bored to Death as well as the eponymous protagonist, an aspiring novelist who moonlights as a private investigator. Olson may have enjoyed the ensuing hijinks, but he would have seen a larger economic lesson in the show.

In his classic book, The Logic of Collective Action, Olson demonstrated that small groups are usually more efficient and effective at achieving collective ends than large groups. Despite the narrower interests they represent, small groups find it easier to engage in coordinated behavior and achieve group ends, even when those ends may work against the interests of the larger society. Today, this “logic of collective action” can be seen in the spread of professional and occupational licensing. Whereas in the 1950s only five percent of the American workforce was subject to such licensing, it currently stands at nearly one-third. What this means is that, to enter certain professions and occupations, individuals must attain minimum levels of education and training and, often, pass exams to demonstrate their competency to practice.

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Home Economics: Obama Ups Game on Housing Crisis

Posted on March 29, 2012September 18, 2024 by The Progressive Policy Institute

In the last six months, President Obama has rolled out a series of proposals to address America’s still ailing housing markets. Elevating housing on the White House priority list is a welcome if belated development—one PPI called for in a major conference on new housing solutions we cosponsored last fall.

To assess the administration’s new proposals, we should start by clearly defining the central problem that must be solved. Contrary to media accounts, it’s not foreclosures, abandoned homes or underwater borrowers. These are all symptoms of a deeper malady: declining home prices. So the question we should ask is whether the President’s new flurry of ideas will move the needle on prices.

Continue reading “Home Economics: Obama Ups Game on Housing Crisis” →