EPI News

“Right-to-work” hurts private-sector pension coverage

EPI Research and Policy Director takes new position at Rockefeller Foundation

EPI is sad to announce the departure next week of Dr. John Irons, our Research and Policy Director during the past four and a half years.  Dr. Irons has accepted an appointment by the Rockefeller Foundation to head a new, multi-year project on jobs and employment.

Dr. Irons, who previously taught economics at Amherst College and worked at the Federal Reserve Board of Governors, the Brookings Institution, OMB Watch, and the Center for American Progress, is a macroeconomist, an expert in budget and tax policy, and a talented writer and blogger.

Irons was a skillful leader at EPI.  While overseeing the Institute’s entire research effort, he created EPI’s budget team, which in collaboration with Demos and The Century Foundation, produced Investing In America’s Economy: A Budget Blueprint for Economic Recovery and Fiscal Responsibility, a plan to produce a sustained recovery and shared prosperity while being fiscally responsible.  Under Irons’ direction, EPI’s budget team has published scores of papers on the causes and impact of the recession, the need for public investment and stimulus, the economic benefits and job creation from improved transportation and communications infrastructure, and the potential damage from balanced budget gimmicks and tax cuts for the wealthy.

Dr. Irons testified before Congress on numerous occasions while at EPI, appeared frequently in the national media, and provided advice and counsel to a wide range of organizations, from the Coalition on Human Needs to the Bowles-Simpson commission.

John has been a wonderful colleague and mentor for EPI’s staff.  We — and the entire progressive policy community in Washington — will miss John, though we wish him success in New York and in his new position.

“Right-to-work” hurts private-sector pension coverage

Policymakers across the nation continue to repeat the false claim that ‘right-to-work’ legislation spurs job growth and boosts state economies, most recently in Indiana. In a commentary that appeared in this week’s Nation, EPI research associate Gordon Lafer bemoaned the increase of these faulty job-creation assertions “now being repeated, almost word for word, in Indiana.” Proponents of ‘right-to-work’ legislation claim that “without RTW, Indiana is driving away one-third of all potential new employers” despite the dearth of evidence or data “to substantiate such claims.”

Not only have ‘right-to-work’ laws been found to reduce wages while not stimulating job growth in states that adopt them, this week’s Economic Snapshot shows Right-to-Work (RTW) is associated with a significant reduction in private-sector pension coverage. Private pension coverage in Indiana is currently greater than in 21 of 22 RTW states but will likely decrease if the state legislature passes the RTW law.

A wide range of people and organizations have turned to EPI to rebut these spurious claims, including the Rachel Maddow Blog, Think Progress, Huffington Post, and even the National Football League Players Association.

From the Maddow Blog:  “About that third of opportunities the governor says slip away from Indiana’s grasp: it’s worth noting that Indiana Republicans aren’t naming the businesses. They just keep saying it’s a third. As you can see from the Economic Policy Institute chart below, the union rights Indiana is about to kibosh don’t seem to have hurt the state.” [In response to a recent ad that said Indiana’s lack of ‘right-to-work’ legislation decreases job growth in the state by a third]

NFL Players Association:The facts are clear—according to a January 2012 Economic Policy Institute briefing report (“Working Hard to Make Indiana Look Bad”), “right-to-work” will lower wages for a worker in Indiana by $1,500 a year because it weakens the ability of working families to work together, and it will make it less likely that working people will get health care and pensions.”

And The Huffington Post: “The NFLPA cited a report by the liberal Economic Policy Institute that says the right-to-work bill would lower wages for both union and non-union workers in Indiana by about $1,500 annually. The bill would also make it more difficult for workers to secure health care and a pension, the report argued.”

Nearly three years of a job-seekers ratio above 4-to-1

Tuesday’s Job Openings and Labor Turnover data release from the Bureau of Labor Statistics marked two years and 11 months—152 weeks—that the Job-seekers ratio has been above 4-to-1, dropping slightly to 4.2-to-1 in November.

“As the job-seekers ratio shows, what’s happening is not that millions of workers have become lazy, unskilled, or unproductive; it is that there are not enough jobs available,” said EPI labor economist Heidi Shierholz in her analysis of the report. “With the Congressional Budget Office projecting an unemployment rate of 8.5 percent at the end of this year, continuing federally funded unemployment insurance benefit extensions through 2012 would extend a lifeline to the families of millions of long-term unemployed workers, and generate spending that would support well over half a million jobs,” she concluded.

Shierholz’ analysis was cited by a number of media outlets, including Mother Jones, MSNBC, and Daily Kos.

EPI in the News

From the Associated Press: “If the participation rate had stayed the same, more people would have been competing for jobs, and the unemployment rate in December could have been as high as 9.5 percent, said Heidi Shierholz.”

American Prospect: “But the bad news is that though the trend is in the right direction, the progress is glacial.  As Heidi Sherholz of the Economic Policy Institute (EPI) reports, the deficit of jobs needed to keep up with the normal growth of working age population is still upwards of ten million.”

And The Atlantic: “Growth remains more tortoise than hare, by a longshot. There are still 13 million Americans out of work. The unemployment rate, even with its recent drops, is an ugly 8.5 percent. As Heidi Shierholz, an economist at the liberal Economic Policy Institute, noted Friday, “at December’s growth rate, it would still take about seven more years — until around 2019 — to fill the gap and get back to the pre-recession unemployment rate.”

  • Speaking with Derek Kravitz of the Associated Press, EPI’s Algernon Austin explained how the slashing of state budgets and disappearance of state jobs is disproportionately affecting black workers, even those with higher education, because “college-educated African-Americans are disproportionately represented in state and local government jobs.