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Articles by Equitable Growth

Revamping U.S. small business rescue programs amid the coronavirus recession

August 27, 2020

Small firms need to be rescued with the same speed as large firms.The coronavirus economic rescue programs enacted by Congress this past spring failed to prevent layoffs and firm bankruptcies among the smallest employers in the United States. Existing resources, such as the Paycheck Protection Program, helped firms that needed a marginal boost to get through the worst of the shutdowns caused by the coronavirus pandemic. But the hardest-hit areas or businesses did not receive the help they needed because of the structure, timing, and delivery mechanisms of rescue aid.

What’s worse is that little data are available to evaluate whether rescue efforts have been equitable for Black and Latinx small business owners. Meanwhile, policy interventions through the Federal Reserve have

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Combating the market power of U.S. corporations over workers and consumers

August 26, 2020

U.S. antitrust laws, as interpreted and enforced today, are inadequate to confront and deter growing market power in the U.S. economy.Recent economic research establishes that the United States suffers from a growing market power problem. Market power, often referred to as monopoly power, means consumers pay more for the goods and services they need. Workers earn less. Small businesses have a harder time succeeding. Innovation slows. Market power exacerbates wealth inequality, too, because those who benefit from monopolies—the high-paid executives and stockholders of corporations—are wealthier, on average, than the consumers, workers, and small businesses who bear monopolies’ costs.

U.S. antitrust laws, as interpreted and enforced today, are inadequate to confront and deter

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Taxing wealth and investment income in the United States

August 25, 2020

The federal income tax does a poor job of taxing income derived from wealth. The root cause of this problem is that the tax code allows taxpayers to defer (without interest) paying tax on investment gains until assets are sold. Moreover, even when assets are sold, the investment gains are taxed at preferential rates. The top federal tax rate on wages and salaries is 37 percent while the top federal tax rate on investment gains is only 20 percent. Finally, if taxpayers can avoid selling assets until they die, the investment gains are wiped out for income tax purposes. The result is a two-tier tax system, where middle-class families pay full freight on their wages while wealthy, disproportionately White families pay reduced rates on their investment income.

Lawmakers in

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Achieving universal paid family and medical leave in the United States

August 24, 2020

Only 18 percent of private-sector workers have paid family leave and 44 percent have paid personal leave through their jobs.The coronavirus pandemic and the recession it caused lay bare a familiar challenge for U.S. workers—balancing family and job responsibilities without access to paid family and medical leave. When a new child arrives, loved ones get sick, or a serious illness strikes, people need time away from work. But even at these times of joy or stress, bills and expenses will keep coming, and families must find a way to cope with financial uncertainty. While some workers can count on their employers to provide them with paid leave, it is rare: Only 18 percent of private-sector workers have paid family leave and 44 percent have paid personal leave through their jobs.

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Building worker power in the United States

August 20, 2020

Union and AARP members rally in New York City on the city hall steps, March 2016.Wages have stagnated for most U.S. workers over the past 40 years while the labor market institutions that promote worker power have faltered in a pro-business and anti-worker policy environment. These two phenomena are two sides of the same coin—productivity decoupled from wage growth results in employers more able to exploit workers to produce more per hour worked while undercutting wages.

Labor market policies, such as minimum wages or premium pay amid the coronavirus pandemic, are not keeping up. Meanwhile, labor laws meant to protect collective action and unionization efforts, guarantee freedom from discrimination, and promote workplace safety are not well-enforced. Furthermore, trends such as

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Improving automatic stabilizers to combat U.S. economic recessions

August 19, 2020

Making recession aid more automatic will allow relief to start quickly, making the recession less severe.The new coronavirus pandemic and the recession it caused show that the typical set of economic policies used to fight recessions in the United States should be designed to automatically turn on and off in a downturn. It is impossible to predict when the economy will fall into a recession and, on the other end, when it will recover. Making recession aid more automatic will allow relief to start quickly, making the recession less severe. It also would commit Congress to stay the course until objective economic criteria are met and the recovery is well on its way.

Without this commitment, aid for the most vulnerable can be caught up in partisan politics and deal-making

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Addressing the U.S. racial economic mobility and inequality divides

August 18, 2020

Intentional policy action is necessary to correct the systemic and institutional barriers facing Black Americans.Economic mobility in the United States has been declining over the past half-century at the same time that economic inequality has been rising. Research by Harvard University economist and former Equitable Growth Steering Committee member Raj Chetty and his co-authors shows that rates of absolute intergenerational mobility have precipitously declined in the country during the latter part of the 20th century. People born in 1940 had about a 90 percent chance of growing up to earn more than their parents, but people born in 1980 had only about a 50 percent chance. Chetty also finds that Black Americans are more likely to experience downward mobility than White Americans,

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Reforming Unemployment Insurance across the United States

August 17, 2020

Unemployed men wait in line to file Social Security benefit claims, circa January 1938.Longstanding problems with the Unemployment Insurance system in the United States are immediately evident amid the coronavirus recession and echo the problems experienced during the Great Recession more than a decade ago. These include:

Administrative failures at state Unemployment Insurance agenciesLack of a permanent Unemployment Insurance program that includes the self-employed and others traditionally left out of the programLow benefit levels that require emergency top-offsThe temporary nature of fixes when recessions hit, which, in turn, requires renegotiations just months after political compromises are reachedThe current disarray in the Unemployment Insurance system is neither a

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Weekend reading: The Unemployment Insurance benefits are not the work disincentive some claim they are edition

July 24, 2020

This is a post we publish each Friday with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth published this week and the second is relevant and interesting articles we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context.

Equitable Growth round-up

One of the most intense debates over the next coronavirus relief package in Congress will be about whether to extend the weekly $600 supplemental unemployment insurance benefit that expires July 31. The argument in favor of ending it, or sharply reducing it, is that it acts as a work disincentive—that people won’t bother returning to work if their

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Factsheet: Unemployment Insurance and why the effect of work disincentives is greatly overstated amid the coronavirus recession

July 21, 2020

The United Artists Theatres in Berkeley, CA., is one of the many venues that was forced to close at the onset of the coronavirus pandemic.Under the Coronavirus Aid, Relief, and Economic Security, or CARES, Act,the Pandemic Unemployment Compensation program added a $600 weekly boost to Unemployment Insurance payments. Despite being one of the most effective policy responses to the coronavirus recession yet, the enhanced payments are set to expire at the end of July. The idea that Unemployment Insurance creates incentives for workers to remain unemployed has emerged as the main argument against extending the additional weekly $600, with critics arguing that generous benefits are “undermining the economic recovery.”

As this factsheet points out, current labor market indicators show

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Experts discuss transformative ideas for 2020 U.S. economic policy debate at Vision 2020 event

July 2, 2020

The June Vision 2020 webinar discussed bold ideas for economic structural change and racial justice.Eliminate banks as the “middleman” for federal anti-recession aid. Cancel all student loan debt. Give workers a say in how their workplaces reopen and empower them to form unions. Provide federal relief to childcare programs to prevent them from shutting down permanently. Get Congress to do its job so the Federal Reserve can get out of the business of making fiscal policy.

These ideas for generating strong, sustainable, and broad-based economic growth and achieving racial justice in the wake of the coronavirus recession were put on the virtual table during a June 25 webinar sponsored by the Washington Center for Equitable Growth. “Vision 2020: Focusing on economic recovery and

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Elevating economic research on racist violence and exclusion in the United States

June 5, 2020

On May 25, 2020, a police officer murdered George Floyd in Minneapolis, Minnesota. This public killing was one of the most recent murders of Black people either by law enforcement or by civilians who faced no immediate consequences for their actions. Earlier in the month, the two men who shot and killed Ahmaud Arbery, a Black man out for a run in Georgia, were finally arrested for the February shooting, but only after national attention and sustained public outrage. The case of Breonna Taylor, an emergency medical technician murdered by police in Louisville, Kentucky as she lay in her own bed, similarly took months to gain national attention. These and so many other tragedies—the lost lives of Tony McDade, David McAtee, and far too many others—underscore the unacceptable view of the

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One year later: Recession Ready and the coronavirus recession

June 1, 2020

Proposals put forth can help support communities, stabilize the economy amid coronavirus recession
One year ago, long before the risks of the new coronavirus and the ensuing recession enveloped our nation, the Washington Center for Equitable Growth, in partnership with The Hamilton Project, released Recession Ready: Fiscal Policies to Stabilize the American Economy. This book advanced a set of evidence-based policy ideas for shortening and easing the adverse consequences of the next recession with the use of triggers that would increase aid to households and states during an economic crisis and only recede when economic conditions warranted. Experts from academia and the policy community proposed six big ideas, including two new initiatives and four improvements to existing

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Coronavirus recession: How to get the U.S. economy back on track

May 26, 2020

Equitable Growth launches new lecture series with inaugural event featuring Claudia Sahm on the economic crisis
Amid our nation’s health and economic crises, government officials must do more. They must use research and evidence-based polices to support people today and strengthen our economic future. The Washington Center for Equitable Growth is dedicated to promoting research that elevates effective and inclusive policies. Our new lecture series will highlight the latest economic research in order to provide policymakers with evidence-backed solutions to advance sustainable, broad-based growth.
Our first lecture in the series on May 19 was online. Claudia Sahm, who joined Equitable Growth 6 months ago as the director of macroeconomic policy, inaugurated this lecture series.

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The latest research on the public health and economic costs and benefits of containing the coronavirus pandemic

April 6, 2020

Scientists around the world are scrambling to find and test anti-viral drugs and a new vaccine for COVID-19, the disease behind the coronavirus pandemic now sweeping the planet. Economists and other social scientists are equally busy attempting to unravel the economic and social consequences of the new coronavirus pandemic. These scholars are looking at a range of issues. Several examine the public health and economic costs and benefits, and the overall efficacy of social distancing. Others explore the links between the epidemiology of the disease and its economic consequences. And others are looking at U.S. historical lessons about the economic impact of the 1918 “Spanish flu” and the political impact of other recent public health scares.
We’ve selected 10 recently published

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Paid caregiving leave: A missing piece in the U.S. social insurance system

March 25, 2020

Amid the ongoing public health crisis from the COVID-19 pandemic, many individuals can expect to be called away from work to care for a sick loved one or a child out of school. To support these workers during the coronavirus recession and beyond, paid family and medical leave is receiving increased attention in the United States by policymakers, employers, media, and the public.

Download FilePaid caregiving leave: A missing piece in the U.S. social insurance system

Family leave encompasses several distinct types of leave, including leave to care for a newborn or newly adopted child (generally referred to as parental leave), as well as leave to care for a family member with a serious illness, whether that be a spouse, domestic

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What does the research say about paid family and medical leave policy design options in the United States?

March 25, 2020

Policymakers have failed to provide Americans with guaranteed paid family and medical leave at the federal level. As a result, working families across the United States must strike a delicate balance: attending to their own medical needs and caregiving responsibilities at the same time as they keep the economy humming through their activities in the workplace. When a new child joins a family, when a serious personal medical need strikes, or when a loved one has an acute need for care, workers need time off from work. To keep the lights on and a roof overhead, they need pay during this time. And when a public health crisis strikes, this need for paid time off for one’s personal health needs and caretaking responsibilities is amplified.

Download FileWhat

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What is paid medical leave and how does it support U.S. workers’ health and the U.S. economy?

March 25, 2020

When U.S. workers fall ill, it can be challenging to balance medical needs and job responsibilities. For short sicknesses, such as a cold or the flu, several days of rest at home might be all that is needed. With more significant illnesses or injuries, however, it may be impossible for a worker to return to the job for several weeks or even months. These workers face a significant dilemma. How can they take time to focus on their health without facing financial hardship? Even in times of illness, bills and expenses continue to add up. For these individuals, paid sick days are not enough to cover needed time off. Paid medical leave provides partial wage replacement to workers who need recovery periods longer than a few days.

Download FileWhat is paid

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Economic experts propose policy responses to coronavirus recession

March 24, 2020

University of California, Berkeley economists Emmanuel Saez and Gabriel Zucman, in cooperation with Economics for Inclusive Prosperity, are hosting an invitation-only online conference today to discuss economic policy responses to the coronavirus recession.
In the days following the conference, Equitable Growth, in cooperation with UC Berkeley, Economics for Inclusive Prosperity, and the presenters, will publish a series of columns summarizing the proposals and discussion.
The discussion will include brief comments from eight economic policy experts, beginning with opening thoughts from Olivier Blanchard, senior fellow at the Peterson Institute for International Economics and the former chief economist of the International Monetary Fund, followed by:
Arindrajit Dube,

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In joint letter, Equitable Growth asks Congress to ‘stanch economic bleeding’ in COVID-19 legislative package

March 19, 2020

Heather Boushey, the president and CEO of the Washington Center for Equitable Growth, along with the leaders of three other Washington-based economic think tanks—the Center for American Progress, the Economic Policy Institute, and the Roosevelt Institute—told U.S. congressional leaders in a letter today that legislation to “stanch the economic bleeding” caused by public health actions to contain the COVID-19 virus must include not only direct cash payments but also substantial increases in programs for families most directly affected as well as other steps to support people, businesses, and the overall U.S. economy.
With economic activity across the nation shutting down, the four think tank leaders said that workers, families, and small businesses will continue to suffer significant

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Weekend reading: Working to close racial gaps in economics, the workforce, and education edition

February 28, 2020

This is a post we publish each Friday with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth published this week and the second is relevant and interesting articles we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context.
Equitable Growth round-up
We need more black women economists in the United States, argues Claudia Sahm in her most recent column covering the Federal Reserve. Not only is there just one black woman economist working at the Federal Reserve Board, but black women also make up a miniscule percentage of undergraduate economics students and recent Ph.D.s. This lack of diversity in the profession

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Weekend reading: Vision 2020 release edition

February 21, 2020

This is a post we publish each Friday with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth published this week and the second is relevant and interesting articles we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context.
Equitable Growth round-up
Equitable Growth this week released a book of 21 essays with innovative, evidence-based, and concrete ideas to shape the policy debate throughout this election cycle and for the next administration. The book, titled Vision 2020: Evidence for a Stronger Economy, covers a wide range of economic issues—including taxes, macroeconomics, racial and environmental justice,

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Equitable Growth introduces book of innovative policy ideas for 2020

February 18, 2020

The Washington Center for Equitable Growth today is publishing a collection of 21 essays, with innovative, evidence-based, and concrete policy ideas to shape the 2020 policy debate. The essays, which will be introduced at an event in Washington, DC, cover a wide range of economic issues, including taxes, macroeconomics, racial and environmental justice, labor market reform, and antitrust policies.
The new book, Vision 2020: Evidence for a Stronger Economy, builds on last fall’s Equitable Growth conference of the same name and features leading voices from academia tackling the most pressing economic issues facing Americans today.
Recent transformative shifts in economic thinking illustrate how inequality obstructs, subverts, and distorts broadly shared economic growth. Undoing the

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Weekend reading: Addressing racial gaps across the economy edition

February 14, 2020

This is a post we publish each Friday with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth published this week and the second is relevant and interesting articles we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context.
Equitable Growth round-up
A new Equitable Growth working paper looks at job displacement—a form of job loss reflecting economic structural changes rather than individual job performance—and its disparities by race over the past 40 years in the United States. The study, Kate Bahn explains in a blog post on the research, is the first academic study of black-white disparities in displacement

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Weekend reading: State of the Union’s inequality edition

February 7, 2020

This is a post we publish each Friday with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth published this week and the second is relevant and interesting articles we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context.
Equitable Growth round-up
Ahead of this week’s State of the Union address by President Donald Trump, Equitable Growth released a series of graphs highlighting the way inequality restricts, subverts, and obstructs widespread economic growth in the United States—and how big-picture numbers, such as Gross Domestic Product or the unemployment rate, hide how this inequality is actually affecting

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The State of the Union speech should not ignore inequality that obstructs, subverts, and distorts the U.S. economy

February 4, 2020

When President Donald Trump delivers his State of the Union address to Congress tonight, he will undoubtedly devote a significant portion of his speech to the U.S. economy. He will tout the low unemployment rate, the continuing growth of Gross Domestic Product and jobs, and rising stock markets.
Some of these metrics, such as jobs and unemployment, are incomplete measures for how average Americans are faring in the economy, given that wages are not growing commensurate with a tight labor market. GDP and the stock market are not at all useful. Since the 1980s, economic growth in the United States has not been broadly shared, with nearly all of the additional income going to the wealthy. And stock ownership is skewed significantly to those at the top of the income and wealth ladders.

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Weekend reading: Studying the Fed edition

January 31, 2020

This is a post we publish each Friday with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth published this week and the second is relevant and interesting articles we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context.
Equitable Growth round-up
The most important economic decision taken this week may have been made not by Congress or the executive branch, but by the Federal Reserve’s Federal Open Market Committee, argues our Director of Macroeconomic Policy Claudia Sahm in the debut of her new column. The connection between the Fed and its decisions and U.S. workers and their wages is stronger than you

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Examining the links between rising wage inequality and the decline of unions

May 31, 2018

The correlation between unions and economic inequality is well-documented, but has the decline of unions led to increasing inequality, or can this be explained by skill-biased technical change? As Equitable Growth Economist Kate Bahn writes in a new column for Slate, new research published via the National Bureau of Economic Research finds that “while education and skills training matter to worker productivity, they’re not sufficient to ensure economic security without workers’ power to bargain for better wages too.”
Princeton University economists Henry Farber, Daniel Herbst, and Ilyana Kuziemko, and Columbia University economist and Equitable Growth grantee Suresh Naidu used survey data compiled from a variety of historical sources to explore rising and declining union density

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Event recap: Research on Tap—Gender wage inequality

May 4, 2018

Last week, the Washington Center for Equitable Growth hosted the third installment of its “Research on Tap” conversation series. As the name implies, “Research on Tap” is a space for drinks, dialog, and debate. The event followed the release of Equitable Growth’s newest report, “Gender wage inequality: What we know and how we can fix it,” by Senior Fellow at the National Academy of Social Insurance, or NASI, Sarah Jane Glynn. The program brought together leading academics, policymakers, and advocates for an informal discussion about the causes of gender pay inequality; the economic consequences for individuals, families, and the broader U.S. economy; and the range of potential policy solutions.
Special guest Congresswoman Lois Frankel (D-FL-21), co-chair of the Bipartisan

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Equitable Growth’s Jobs Day Graphs: April 2018 Report Edition

May 4, 2018

Earlier this morning, the U.S. Bureau of Labor Statistics released new data on the U.S. labor market during the month of April. Below are five graphs compiled by Equitable Growth staff highlighting important trends in the data.

1.
The prime employment rate held steady at 79.2 percent in April. This statistic is a good predictor of wage growth, so look to it when thinking about when wages will pick up.

2.
Looking at multiple measures of wage growth shows that it’s accelerating, but unlikely to shoot upward anytime soon.

3.
The share of the unemployed who’ve been out of work for more than 15 weeks ticked up in April, but the trend over the recovery is down. Those unemployed for 27 weeks or more were 22.8 percent of the unemployed in April 2017. They

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