Mishel, Shierholz & Schmitt on Wage Inequality, A Story of Policy Choices

Economists Lawrence Mishel, Heidi Shierholz and John Schmitt have published a new paper in New Labor Forum titled Wage Inequality: A Story of Policy Choices about the causes of wage stagnation and wage inequality in the United States.

Full PDF here.

CEPR on Union Advantage for Black Workers

By Janelle Jones and John Schmitt

Since at least the early 1970s, and likely earlier, unionization rates for black workers have been higher than for other racial groups in the United States. As sociologists Jake Rosenfeld and Meredith Kleykamp (2012) have recently written, the labor movement has been “a remarkably inclusive institution vital for its economic support of African American men and women.” Nevertheless, the share of unionized black workers has been falling almost continuously since the early 1980s, reflecting a trend also seen in the workforce as a whole. In this report, we review the most recent data available to examine the impact of unionization on the wages and benefits paid to black workers. These data show that even after controlling for factors such as age and education level, unionization has a significant positive impact on black workers' wages and benefits.The union advantage is particularly strong for black workers with lower levels of formal education.

Read the rest here.

United States: A No Vacation Nation

A new Report by CEPR researchers Rebecca Ray, Milla Sanes, and John Schmitt has come out. As noted before by Juli Schor in the classic The Overworked American, Americans are working harder and not making more money.

From the introduction:

This report reviews the most recently available data from a range of national and international sources on statutory requirements for paid vacations and paid holidays in 21 rich countries (16 European countries, Australia, Canada, Japan, New Zealand, and the United States). In addition to our finding that the United States is the only country in the group that does not require employers to provide paid vacation time, we also note that several foreign countries offer additional time off for younger and older workers, shift workers, and those engaged in community service including jury duty. Five countries even mandate that employers pay vacationing workers a small premium above their standard pay in order to help with vacation-related expenses. Most other rich countries have also established legal rights to paid holidays over and above paid vacation days. We distinguish throughout the report between paid vacation ― or paid annual leave, terms we use interchangeably ― and paid holidays, which are organized around particular fixed dates in the calendar. Our analysis does not cover paid leave for other reasons such as sick leave, parental leave, or leave to care for sick relatives.

Read the full report here.

Newspeak, Europe and economics

The German representative on the board of the European Central Bank (ECB), Jörg Asmussen, says that the debate on growth versus austerity is the "wrong debate" since "we [who?] need both." Of course what he means by growth measures is labor market reforms, meaning more flexibility to fire workers (yes with more than 20% of unemployment in Greece and Spain, and double digits for the eurozone it seems that firing workers is really hard in the old continent). That would supposedly reduce the cost of workers, i.e. lower wages, and, as a result firms will hire more workers, even if nobody is buying their goods. And you wonder why things are the way they are in Europe?

PS: For a debunking of the idea that labor market flexibility is necessary for full employment, or that labor market protections cause unemployment, read this paper.