Employment – R&R – Reachout and Rebuild

New York’s Suffolk County Economy: Not so Hot?

David Posnett — Sat, 08 Sep 2018 18:34:14 +0000

Representative Lee Zeldin likes to claim that he has contributed to a “booming” economy resulting in jobs in his district (the eastern part of Suffolk county).

Lets examine this for a minute.

First, jobs

This is the graph of unemployment since the housing crisis (the last major recession) in 2008. While unemployment came down from 10% to just under 5% under Obama, it went to just under 4% under Trump. 5/6 of the recovery (83%), as measured by reduced unemployment, occurred during the Obama years and 1/6 (17%) of the recovery occurred under Trump.

Similar numbers apply to Suffolk county. But what is the job growth in Suffolk county, compared to the rest of the state of New York? Well, it is nothing to brag about. For instance, job growth between Dec 2016 and Dec 2017 on Long Island (Nassau & Suffolk) was 12,500 jobs representing 0.9% job growth. Compared to the rest of the state or to NY City those are measly results: For NY State there were 156,800 new jobs representing 1.6% job growth over the same time period. And if you assess job growth for the period of Dec 2014 through Dec 2017 (the period that Zeldin has been in office), it is 0.934 %. By comparison job growth during the prior 4 years (when Tim Bishop was in office), was 1.425% (Suffolk county total employment numbers).

If job growth had been average on Long Island (equal to the NY State average), we would have had 22,220 new jobs between Dec 2016 and Dec 2017, not 12,500. The shortfall: 22,220 minus 12,500 = 9,720 jobs are in fact jobs we could have had, if we had just “average” job growth. Those are 9,720 jobs we lost.

Second, taxes.

Voters are not stupid. The republican tax cuts benefited primarily businesses and the super rich. The average person in Suffolk county might see a difference in either direction by a few hundred dollars for their federal taxes. The big issue, however, is SALT (State and Local Tax) deductions. These are now no longer fully deductible. And we won’t see the effects until 2019. Here is a simple calculation. If my NY State taxes are 10,000 and my local taxes (realestate/school taxes) about 15,000, for a total of 25,000 SALT deductions, I can still deduct 10,000, according to the new Republican tax plan, so I will have to pay taxes on the remaining 15,000. At a tax rate of 30% that is about $5000 additional taxes. Our taxes in Suffolk county will therefore rise substantially, specially in communities in Western Suffolk where real estate taxes are high. Zeldin tried to weasel out of this, but in the end he supported the Rep. tax bill and did not fight for his constituents. Amazing that he is now listing the new tax law as one of his achievements! Thanks Lee!

Third: Wages

According to the U.S. Bureau of Labor Statistics’ most recent data, average weekly wages in Suffolk and Nassau are close to the national average of $1,109 per week: Suffolk $1,217, Nassau $1,242. But importantly wages have been stagnant and not growing. Slow wage growth indicates that the U.S. economy has not yet fully recovered.

This graph shows lagging employee pay since 2010 while corporate profits are soaring!

From: “Paychecks Lag as Profits Soar, and Prices Erode Wage Gains” NY Times.

Wage stagnation in Suffolk county is real. For instance average weekly wages grew by 0.4% between the 2nd quarter of 2016 and 2017. That compares to 2.3% growth in New York State and 3.2% growth nationally. Suffolk county was ranked 315th in a national survey of comparable counties. This does not compare well with other NY State counties:

Monroe, N.Y.	92
Bronx, N.Y.	114
Kings, N.Y.	148
Oneida, N.Y.	156
Dutchess, N.Y.	168
Erie, N.Y.	189
Orange, N.Y.	189
Westchester, N.Y.	196
New York, N.Y.	215
Queens, N.Y.	215
Richmond, N.Y.	215
Broome, N.Y.	231
Onondaga, N.Y.	247
Saratoga, N.Y.	282
Albany, N.Y.	310
*Suffolk, N.Y.*	*315*
Rockland, N.Y.	336
Nassau, N.Y.	339

Fourth: the stock market

It is astounding that Republicans, like Lee Zeldin, are claiming credit for a soaring stock market. They will mention the tax give-away to businesses (thus increasing profits), the abolition of regulations and hard-nosed trade wars with allies and others. A bull run based on borrowed money and a soaring national deficit seems dangerous. Add the inflation expected from the trade war. Accordingly, the Warren Buffett Indicator predicts a stock market crash in 2018! Perhaps Zeldin and company, should also be credited with the crash, when it happens?

The party of “fiscal hawks” has become a joke. They can not claim to be fiscally conservative or responsible. The national debt now equals $176,000 for each tax payer in the US. Watch the dizzying numbers here! We all know what comes next: sanctimonious statements from Rep. lawmakers about how we need to cut Medicare, Medicaid, Social Security! Oy vey.

Relevant addenda:

1) my friend writes:

It is infuriating that Trump’s only accomplishment was to inherit a strong economy from Obama.

Cynical Republicans then gave a huge tax cut to the wealthy and a little one to the middle class. All conventional economic theory says that that will provide some fiscal stimulus for the economy through at least 2018, but at the cost of ballooning deficits and the inevitable Republican calls to cut Medicare and Social Security. Why are such simple economic ideas so hard to convey to the public?

2) An interesting piece in the NYT demonstrates how essential wages are. Jobs per se, paying so little that you can not survive on them, will not solve the problem of poverty.

Local Economy Dependent on Immigrants

David Posnett — Fri, 25 May 2018 14:24:38 +0000

Recent reports describe increased round up of latinos. Along with suspected “bad guys” ICE is sweeping up many more innocent undocumented workers. This was highlighted by the latest Trump visit to Long Island and Lee Zeldin’s cheer leading. Read more here and here.

Here is the flip slide however: the Long Island Farm Bureau is begging Zeldin to help with temporary work visas to keep their farms open. Landscapers, pool companies, roofers, house cleaners, deck builders, construction crews are absolutely reliant on Latino workers. Here is a relevant article which was published in March 2018.

From: the Southampton Press

BY MICHAEL WRIGHT

For many business owners on the East End, immigrant workers from Central America and South America have become the indispensable backbone of their workforce.

Many firms employ immigrant labor, and some say it’s because of their work ethic.

Business owners across East End trades this week said that if newly aggressive federal deportation policies targeting undocumented immigrants overreach, the effect on the local workforce could threaten their businesses’ ability to operate—and could even drag down the local economy as a whole over time.

Owners and employees of a cross-section of medium-sized businesses in the residential development industry—construction, landscaping and residential painting companies with between 15 and 40 full-time employees—all of whom live in Southampton or East Hampton, spoke this week about their concerns.

None would speak on the record by name, for fear of both legal fallout and becoming the focus of public anger in such a volatile climate, but said that the view of the immigrant community’s importance to the local community is often misunderstood or underestimated by others.

Each of the business owners said that the bulk of their employees are Latino immigrants. Some acknowledged that they are often not certain about a worker’s status, since New York State does not require an employer to verify legal residency of an employee when they file W-2 or 1099 forms linked to a tax identification number. Others said they are aware the majority of their workforce are not legal residents.

But all said that every employee on their crew, documented or not, has a tax ID number or state-issued work permit and pays the full complement of state and federal taxes that any legal resident would pay, and are covered by workmen’s compensation insurance. They said that most other medium or large local companies like theirs have similar arrangements with their employees.

Each also said that, apart from the economic firestorm that would consume their industry if large numbers of immigrants were taken from, or left, the local community, they see most of their employees as upstanding members of the local community: family men, homeowners, devout church-goers and consumers.

Seeing The Need

Most, but not all, of the business owners spoken to said they support Donald Trump and his tough stance on immigration enforcement. They do so in large part because they say they see the impact of companies that, unlike theirs, employ undocumented workers off the booksmaking it difficult to compete with them in the marketplace.

Those who said they support the president’s approach are confident—or at least hopefulthat the administration’s policies would not cost them the most critical components to their business.

“As a business owner, I see both sides of it,” a Southampton-based painting company owner said. “I do the right thing in terms of taxes and insurance, so I have a certain amount of animus toward the guys I see who aren’t doing the right thing and are charging much less and taking business from me.

“But I also see the need,” he added, with a slight sigh. “We created what we have here, and now we need [immigrant workers] to sustain it. It’s hard for me to say what should be done. Except, I guess, I know what needs to be done: The guys who want to work and are paying their taxes and keeping out of trouble, they should be allowed to stay. But they should definitely go after the bad guys.”

Another business owner echoed the sentiment that tougher immigration enforcement should apply only to violent or repeat criminals, not law-abiding people, and said his immigrant employees do, too.

“These are honest, hard-working guys—that is not who they’re going to go after,” a Southampton landscape company owner said of his impression of federal immigration authorities. “They’re only going after the ones who are killing, and the gang members. My guys understand that what the president is talking about is the criminals. And they want the criminals out too.”

Business, Not Greed

Asked why their crews are made up of mostly, if not entirely, immigrant workers, every employer offered a slight variation of the same sentiment: Not because they are cheaper, but because they are the best workers. “White guys, especially the young ones, don’t really want to work all that hard, and when there’s waves they don’t want to work at all, so they just don’t show up,” said one. “I’ve had white guys, black guys, Spanish guys, Russian guys, Polish guys, Irish guys. The Spanish guys show up to work every day, and they work hard. They would work 60 or 70 hours a week, seven days, if they could.”

Each told a series of very similar anecdotes about their travails as employers in finding and hiring non-immigrant workers.

“I started banging nails as soon as I got out of college, and I’d hire my buddies from high school,” recalled a high-end construction company owner based in East Hampton Town. “They’d be smoking pot in the port-apotties, doing blow in the office trailer, or they wouldn’t show up. Then, one year, I hired two Colombian guys. They showed up for work, they didn’t drink—and eventually my all-American crew became an all-immigrant crew.” “I remember my dad’s workers when I was a kid: They were all white, and even then I could tell they were the bottom of the barrel—but that was all you could get back then,” said the painting company owner. “I’ve had two American guys work for me, and they weren’t worth a darn. I get five or 10 Spanish guys looking for jobs every day—nobody of any other race or color has even called for a job.”

A Cottage Industry

Immigrant workers are more than just an expedient business solution to the need for more and more labor in the local economy, one of the businessmen said. They were the foundation that allowed it to rise to a new labor-intensive stratosphere of elegance, ornateness and complexity.

The painting company owner offered that, in the last two decades, the immigrant labor market, particularly among companies not following costly taxation and workman’s comp requirements, allowed the residential development market to grow at an exponentially faster rate and evolve in more labor-dependent ways than it would have otherwise.

“The spec house market was completely dependent on that,” he said of companies staffed by off-the-books immigrant employees. “You take the standard 6,000-square-foot spec house: I have to charge $100,000 to paint that house. But [a spec builder] gets them done for $40,000, because he uses the guys that are paying off the books. If that wasn’t there, all that spec building in Bridgehampton and Water Mill, and all over, that would never have happened.”

Going a step further, the painter said that if the robust supply of immigrant workers were removed or substantially diminished, the demands of the current market could not be met, and that attempts to keep up would likely, over the years, force economic contraction, as services like caring for intricately sculpted landscapes and seemingly endless renovations and expansions of existing homes become more and more expensive.

“Eventually,” he said, “even the rich people are going to say it’s not worth it.”

A Catch-22

The employers labored to cast aside a common misconception about undocumented workers: that they are paid substantially less than legal residents and citizens for the same jobs, and that they do not pay taxes.

Each said their immigrant workers typically make the standard wage for the jobs they do. They acknowledged that there are companies dodging the system but said that most of the recognizable names in the development-related trades in this region are following the letter of the law in regard to employees whose immigration status is clouded.

“These guys take deep pride in paying taxes,” a construction company owner said of his employees. “They want to play by the rules, desperately. If they could pay $10,000 or $15,000 to be able to apply [for legal residency] tomorrow, they would do it in a second. They would buy health insurance in a second—if they could. And they are strong and healthy, they eat well, they work hard and are in shape. They would be paying into the system, not taking from it.”

In 2013, the Social Security Administration issued a report on “unauthorized immigrants” that estimated undocumented but on-the-books workers were paying about $12 billion a year into the Social Security program alone. The report pointed out that the vast majority of those workers would never be eligible to receive the benefits of the program later in life like citizens who paid the same amount in taxes would. Additionally, undocumented residents get no tax refunds.

Three employees of one of the business owners who sat in the company’s office on a recent Friday to explain how they came to be part of the massive undocumented workforce, for their part, said that they are happy to pay taxes and would be willing to pay fines or fees for their past immigration violations if it would give them a path to legal residency. Two said they have already spent many thousands trying to find such a path, and in some cases lost tens of thousands more to unscrupulous attorneys who took their payments up front, in cash, and then vanished.

“I tried to come here legally first,” said Jose, a construction worker. “My brother got here by applying. My seven brothers, we all applied. Only one got a visa.” Jose, who is 29 and a native of Ecuador, said that in his hometown he could work for his father’s masonry businessmaking about $35 a month. “I make more than that in an hour now,” he said.

Another of the workers, an Ecuadorian immigrant named Gallo, said that he pays more than $20,000 a year in taxes and workman’s comp insurance. In 2006, after being arrested by immigration agents while visiting Niagara Falls, he paid an attorney $35,000 to help him apply for legal residency. The man simply never filed the application and vanished with his money.

Since then Gallo has reported annually to an immigration court judge to show that he is fully employed and paying taxes. He worries now, however, that if he reports to the court again, he could be seized and deported. “It’s a Catch-22,” said his boss, who said several employees fear they are in a similar bind. “They’re scared to go to the immigration court like they’ve been doing, to show that they’re doing things properly. But if they don’t go, then they’ll get a deportation warrant put on them. So they could get deported if they don’t go—but if they do go, they could still get deported.”

Two of the three men own homes and have young children who are U.S. citizens. They say that in recent weeks they have grown scared of their future in the United States, even though they have seen no actual evidence of deportations from the community.

One, named John, a former Colombian national soccer team member, said that he worries that if he or he and his wife were to be deported, their mortgage would go into default and be seized by a bank—the tens or hundreds of thousands of dollars already invested in it simply lost.

His son is an American citizen. When he was 3 he was diagnosed with leukemia and relies on medicines now that he could likely not get if the family left the United States together.

“He has to stay here because he has to keep getting his medicine—if I had to leave, what would become of him,” John said. “My son, he is 10. He tells me all the time, ‘Daddy, be careful.’”

Comment:

If you want an emetic, take a look at the vitriol in the comments section of the original article, with comments by anonymous people with telling names like “SlimeAlive”. DP

Jobs? Where are they?

David Posnett — Wed, 02 May 2018 18:08:43 +0000

From: John Tepper Marlin, Ph.D., President, Boissevain Books LLC, Principal, CityEconomist
WHERE ARE THOSE GREAT NEW JOBS FOR LONG ISLAND THAT TRUMP AND ZELDIN PROMISED

These figures were released this morning by the Bureau of Labor Statistics. They are for Nassau and Suffolk Counties. March 2018 compared with March 2017 (the numbers are not seasonally adjusted, so you have to use year-over-year monthly comparisons).

Unemployment	4.2%	4.6%	Up .4 of a percentage point
Payroll Jobs	1,482,557	1,464,134	Down 18,423

YOU CAN BE SURE IF THE NUMBERS WERE GOOD, ZELDIN WOULD BE TRUMPETING THEM. BUT THEY ARE NOT GOOD.

NEWSDAY:

Long Island’s unemployment rate rose to 5.1 percent in February, from 4.8 percent in February 2017, state data released Tuesday show. It was the fifth consecutive year-over-year increase since October.

The rate rose in 10 months of 2017 and has been steadily moving away from what is considered full employment, which is 4 percent or below.

The number of employed residents fell by 9,500 last month, compared with a year earlier, to 1.39 million, the lowest for the month since 2015. The number of unemployed Long Islanders rose by 3,300 to 74,300, the Labor Department said. That was the highest for the month since 2015.

Southampton has the worst jobless rates for the entire island!

Trickle down economics = voodoo economics = fool me once, fool me twice…

Trump Promised to Help Workers — But, Did He Really Mean It? His Justice Department just dropped appeal to save Obama overtime rule

David Posnett — Tue, 05 Sep 2017 21:33:00 +0000

BY JOHN BOWDEN – 09/05/17 12:35 PM EDT 47

The Justice Department announced on Tuesday that it will not defend an Obama-era Labor Department rule that would have extended overtime benefits to more than 4 million workers after a federal judge struck it down last week.

Bloomberg BNA reported on Tuesday that the administration will drop its appeal, filed in December, signaling it agrees with the court decision.

Last week, a federal judge appointed by former President Barack Obamastruck down the rule, saying it improperly focused on workers’ salaries instead of their job description. The rule would have forced employers to pay overtime to most salaried workers earning less than $47,476 annually. The salary cutoff for overtime pay now stands at $23,660.

The judge, Amos Mazzant, initially put the rule on hold last November. It was set to go into place on Dec. 1. The ruling was celebrated by conservative and industry groups such as the Restaurant Law Center, which represents the restaurant industry.

“The Department of Labor under the previous administration overstepped its authority in making changes to the federal overtime rule. Today’s decision to invalidate the rule demonstrates the negative impacts these regulations would have had on businesses and their workers. We will continue to work with [the Department of Labor] on behalf of the restaurant industry to ensure workable changes to the overtime rule are enacted,” the Restaurant Law Center said last week in a statement.

In December, the Labor Department under Obama wrote that it “strongly disagreed” with the judge’s initial hold on the rule. “We strongly disagree with the decision by the court, which has the effect of delaying a fair day’s pay for a long day’s work for millions of hardworking Americans,” the agency said.

“The department’s overtime rule is the result of a comprehensive, inclusive rulemaking process, and we remain confident in the legality of all aspects of the rule.Progressive groups reacted swiftly to the Trump administration’s decision.

In an email, the president of American Bridge accused Trump of trying to “further rig the economy for the rich.” “Donald Trump personally screwed over hundreds of employees by refusing to pay their overtime and now he’s using the Justice Department to slash the paychecks of 4 million hard-working Americans who will not receive the overtime pay that they earn. This is Trump’s latest action that is at odds with his campaign trail rhetoric, and it further shows how his economic agenda is solely designed to further rig the American economy for the rich – including Trump himself – at the expense of American workers,” group president Jessica Mackler wrote.

“The American Dream is moving farther and farther out of reach of our country’s workers and Donald Trump is to blame.”

Millions More Uninsured Could Impact Health Of Those With Insurance, Too

David Posnett — Fri, 14 Jul 2017 14:30:51 +0000

KAISER HEALTH NEWS — REPEAL & REPLACE WATCH

By Julie Rovner July 14, 2017

Neonatal intensive care, trauma care or burn care are among the services that could be hard to access in communities with high uninsured rates.

Much has been written lately about how individuals’ health could suffer if they lose insurance under the health proposals circulating in the U.S. House and Senate. But there is another consequence: creating millions more people without insurance could also impact the health of people who remain insured.

“We know that communities with higher rates of uninsurance have worse access to care for those with Medicare or private insurance,” said John Ayanian, director of the Institute for Healthcare Policy and Innovation at the University of Michigan. And if either of the GOP proposals now under consideration becomes law, he said, “it’s very likely we would go back to some of those same problems we had a decade ago with high rates of uninsurance.”

The Congressional Budget Office has estimated that either the bill passed by the House or the one under consideration in the Senate could result in more than 20 million more Americans without insurance over the next decade.

Ayanian was part of an expert panel from the nonpartisan National Academy of Medicine that examined the implications of being uninsured in a series of studies from 2001 to 2009. An entire report looked solely at the spillover impact of large numbers of uninsured people on those around them. “The Committee believes it both mistaken and dangerous to assume that the persistence of a sizable uninsured population in the United States harms only those who are uninsured,” said the report.

That is mostly because it is difficult for health providers to maintain services in areas with large numbers of patients who cannot pay for care. “Those communities are less attractive for physicians and other health care providers to locate,” said Ayanian. “That affects access to care for everyone,” he said, particularly for critical but high-cost services like trauma care, burn care, and neonatal intensive care.

The potential is not merely theoretical. Hospitals in sparsely populated areas, particularly in states that did not opt to expand the Medicaid program, have been cutting back services like maternity care or closing altogether in recent years. These are the same parts of the country that voted for President Donald Trump by large margins.

The impact is not just on availability of services. A 2007 study from researchers at the University of Pennsylvania in the journal Health Affairs found that in areas with many uninsured people, the quality of care was lower as well. Primary care doctors “reported that the higher the proportion of uninsured people in their community, the less likely they are to be able to refer their patients to high-quality specialists,” found the researchers. “Specialists also reported that the higher the community uninsurance rate, the less able they are to deliver high-quality care to their patients,” the study said.

That spillover effect even extends beyond access to health care itself, according to a new report from The Commonwealth Fund. Researchers from George Washington University found that if the House-passed health bill were to become law, nearly 1.5 million jobs could be lost over the next decade.

“We’re talking about a net funding loss to states of millions of dollars,” said Leighton Ku, the study’s lead author. “What this means is that states will have higher needs, less revenue to pay for services, and at the same time the federal government is putting less money into Medicaid,” he said. “So it all adds up to a great revenue crunch that’s similar to the Great Recession” of the past decade.

While most of the job loss would be in health care, other jobs would be impacted too, he said.

For example, health care workers who lose jobs will then purchase fewer goods and services, affecting the bottom line of local businesses. Health care facilities that were planning to expand might not, affecting the construction industry. And the impact could even cross state lines, said Ku. “We might see fewer people going to Disney World,” he said, because people who lose their jobs would lack money to take vacations.

Kaiser Health News, a nonprofit health newsroom whose stories appear in news outlets nationwide, is an editorially independent part of the Kaiser Family Foundation.

Report: BCRA would mean more than 900K healthcare jobs lost

David Posnett — Mon, 10 Jul 2017 21:49:37 +0000

Posted on HealthDive

Les Masterson

July 7, 2017

Dive Brief:

The Senate’s Better Care Reconciliation Act (BCRA) would result in 1.45 million fewer jobs by 2026, according to a new report by The Commonwealth Fund. Healthcare would take a hard hit with 919,000 fewer jobs.
The Commonwealth Fund predicted an additional 753,000 jobs in 2018, but employment numbers would drop sharply after that. It said every state except Hawaii would have fewer jobs and a weaker economy. States that expanded Medicaid would feel the most pain.
The report came out on the same day that the Bureau of Labor Statisticssaid 37,000 healthcare jobs were added in June, up from 20,600 added in May .

Dive Insight:

The Commonwealth Fund said that job losses and lower economic growth would begin in 2020 and deepen in the following years as more people lose health insurance coverage, if the Senate bill were to become law.

The House’s American Health Care Act (AHCA) would cut a similar number of insured Americans, but the BCRA would harm the economy more, according to the report. The Commonwealth Fund estimates the AHCA would result in nearly 1 million lost jobs.

New York, California and Pennsylvania would lose more than 100,000 jobs each. “Twenty-two million Americans will become uninsured under the Better Care Reconciliation Act, and now this research makes it clear that people will also be at risk of losing their jobs and that states’ economies will suffer,” said Sara Collins, vice president for healthcare coverage and access at The Commonwealth Fund.

One reason for the economic problems resulting from the BCRA is the bill’s Medicaid cuts, which would deepen further after 2026. Also, the BCRA’s tax provisions would result in much lower assistance, especially for older Americans, which will result in people not being able to afford high deductibles and result in fewer people enrolling in health plans. Third, the BCRA would reduce the threshold of the medical care deduction from 10% to 7.5%.

Cuts to healthcare jobs would especially harm the economy. Healthcare has been a major driver of job growth in recent years. The Commonwealth Fund predicts healthcare would lose 30,000 jobs in 2018 under the BCRA. Ultimately, 919,000 healthcare jobs would disappear, which is about 1 of every 22 health jobs.

“While our analysis shows other employment sectors grow initially, by 2026 more than half a million jobs are lost in other sectors of the economy, too,” according to The Commonwealth Fund.

Meanwhile, the Bureau of Labor Statistics released the June jobs report Friday, which said there were 37,000 healthcare jobs added in June, with 26,000 in ambulatory care services and 11,700 at hospitals. So far this year, healthcare job growth has slowed. Healthcare has added 24,000 more jobs on average per month so far in 2017 after adding 32,000 on average per month in 2016.

Healthcare has seen some high-profile layoffs in 2017. For instance, NYC Health + Hospitals cut 476 management positions to save $60 million in the next fiscal year after losing $776 million for the first half of 2017 and Brigham and Women’s Hospital offered voluntary buyouts in April to 1,600 workers.

Also, Memorial Hermann, Summa Health and Hallmark Health all recently announced staffing cuts, which they blamed on declining reimbursements, lower admissions and shrinking operating incomes.

The 37,000 new healthcare jobs in June is positive, but the question is whether that trend remain or will growth slip back down to this year’s average.

The Commonwealth Fund’s report will surely get the attention of economics — and senators. Senate leaders are already trying to figure out ways to tweak the BCRA to get enough conservative and moderate support to pass the legislation. Republicans only have a two-vote majority in the Senate and the current bill doesn’t have enough support for passage.

Uncertainty about what bill — if any — will pass is likely a major factor is slowed healthcare job growth. This latest report about jobs losses if the BCRA becomes law will only deepen the opposition against the bill.

Women working in Trump’s White House only make $0.80 to the man’s dollar

David Posnett — Mon, 03 Jul 2017 23:45:40 +0000

Published 9h ago on July 3, 2017

by Marie Solis

President Donald Trump waves as he arrives on Air Force One

Source: Carolyn Kaster/AP

The country’s gender wage gap goes all the way to the White House, according to a new CNN analysis.

Using the findings from the White House’s annual report to Congress, which was released on Friday, the outlet found women working in President Donald Trump’s White House earn an average salary of roughly $83,000, while their male colleagues earn an average of roughly $104,000.

That disparity works out to women making just $0.80 to the man’s dollar, a pay gap falling just below the national average: As of April’s Equal Pay Day, women made $0.82 for every dollar earned by a man.

However, the White House’s pay gap problem isn’t specific to Trump.

In 2014, the Washington Post reported that then-President Barack Obama hadn’t yet succeeded in closing the gender wage gap in his White House, albeit a much smaller gap than Trump’s. Under Obama, women in the White House earned an average salary of $78,400 to men’s $88,600, adding up to a 13% wage gap, or $0.87.

Trump speaks along with daughter Ivanka during a video conference in the Oval Office in April.

Source: Pool/Getty Images

Still, a hallmark of Obama’s presidency was his dedication to solving the country’s gender wage gap problem. Just a little over a week into his presidency, Obama signed the Lilly Ledbetter Fair Pay Act, equal pay legislation named for a woman who discovered at the end of her 19-year career that she’d been paid less than her male colleagues all along. In 2014, Obama signed an executive order promoting fair pay and safe work conditions, including mandates for paycheck transparency and a ban on forced arbitration in cases of sexual harassment, gender-based discrimination or sexual assault.

In March, Trump revoked the latter Obama-era policy, just days before Equal Pay Day on April 4.

This move, along with Trump’s apparent animus toward other issues affecting women’s lives, means the wage gap could widen under the 45th president. In a December interview with Mic, Fatima Goss Graves, a senior vice president at the National Women’s Law Center, said it’s in Trump’s power to decide if he wants to close it.

“[You can either decide to] change the range of factors that really are leading to lower wages, or you can continue to lean into the things you know cause the problem in the first place,” she said. “That’s the question for the Trump administration: Are they on the side of equal pay [and equal rights] for women?”

The Populist Surge – Analysis from Across the Pond

David Posnett — Sat, 01 Jul 2017 10:03:07 +0000

On June 27th, Martin Wolf in the Financial Times writes:

Why has the appeal of populist ideas grown in western countries? Is this a temporary phenomenon? In the wake of Brexit and the election of Donald Trump, the collapse in support for established political parties in France and the rise of the Five Star Movement in Italy, not to mention the surge of authoritarian populism in central and eastern Europe, these are important questions.

What, first of all, is a populist? The abiding characteristic of populism is its division of the world into a virtuous people on the one hand, and corrupt elites and threatening outsiders on the other. Populists distrust institutions, especially those that constrain the “will of the people”, such as courts, independent media, the bureaucracy and fiscal or monetary rules. Populists reject credentialed experts. They are also suspicious of free markets and free trade. Rightwing populists believe certain ethnicities are “the people” and identify foreigners as the enemy. They are economic nationalists and support traditional social values. Often they put their trust in charismatic leaders. Leftwing populists identify workers as “the people” and the rich as the enemy. They also believe in state ownership of property. Why have these sets of ideas become more potent? Ronald Inglehart of the university of Michigan and Pippa Norris of Harvard Kennedy School argue that the reaction of older and less educated white men against cultural change, including immigration, better explains the rise of populism than economic insecurity.

This is part of the truth but not the whole truth. Economic and cultural
phenomena are interrelated. This study considers immigration a cultural shift.
Yet it can also be reasonably viewed as an economic one. More important, the
study does not ask what has changed recently. The answer is the financial crisis
and consequent economic shocks. These not only had huge costs. They also
damaged confidence in — and so the legitimacy of — financial and
policymaking elites. These emperors turned out to be naked.

This, I suggest, is why Mr Trump is US president and the British chose
Brexit. Cultural change and the economic decline of the working classes
increased disaffection. But the financial crisis opened the door to a populist
surge.

To assess this, I have put together indicators of longer-term economic change
and the crisis, for the G7 leading economies, plus Spain. The longer-term
indicators include the loss of manufacturing jobs, the globalisation of supply
chains, immigration, inequality, unemployment and labour force participation.
The indicators of post-crisis developments include unemployment, fiscal
austerity, real incomes per head and private sector credit (see charts).

The four most adversely affected of these economies in the long term were (in
order) Italy, Spain, the UK and US. Post-crisis, the most adversely affected
were Spain, the US, Italy and the UK. Germany was the least affected by the
crisis, with Canada and Japan close to it.

It is not surprising, then, that Canada, Germany and Japan have been largely
immune to the post-crisis surge in populism, while the US, UK, Italy and Spain
have been less so, though the latter two have contained it relatively
successfully.

Thus the rise of populism is understandable. But it is also dangerous, often
even for its supporters. As a recent report from the European Economic
Advisory Group notes, populism may lead to grossly irresponsible policies. The impact of Hugo Chávez on Venezuela is a sobering example. At worst, it may destroy independent institutions, undermine civil peace, promote xenophobia and lead to dictatorship. Stable democracy is incompatible with a belief that fellow citizens are “enemies of the people”. We must recognize and address the anger that causes populism. But populism is an enemy of good government and even of democracy.

We can tell ourselves a comforting story about the future. The political
turmoil being experienced in a number of large western democracies is in part
another legacy of the financial crisis. As economies recover and the shock
dwindles, the rage and despair it caused may also fade. As time passes, trust
may return to institutions essential to the functioning of democracies, such as
legislatures, bureaucracies, courts, the press and even politicians. Bankers
might even find themselves popular.

Yet this optimism runs into two big obstacles. The first is that the results of
past political follies have still to unfold. The divorce of the UK from the EU
remains a process with unfathomable results. So, too, is the election of
President Trump. The end of US leadership is a potentially devastating event.
The second is that some of the long-term sources of fragility, cultural and
economic, including high inequality and low labour force participation of
prime-aged workers in the US, are still with us today. Similarly, the pressures
for sustained high immigration continue. Not least, the fiscal pressures from
ageing are also likely to increase. For all these reasons, the wave of populist
anger is only too likely to be sustained.

If so, those who wish to resist the rising tide of populism have to confront its
simplifications and lies, as Emmanuel Macron did in France. As he
understands, they must also directly address the worries that explain it.
Cultural anxieties are relatively immune to policy, except over immigration. But the economic anxieties can and must be addressed. Of course, politicians can also do the opposite. That is what is happening in the US. That will not end the populist surge but promote it. This is, no doubt, their intention.

Note: the italics and bold text are mine! Addressing economic anxieties is paramount. We would do well to remember this. D Posnett

The Brownback Tax Cut Experiment Ends in Kansas

David Posnett — Fri, 09 Jun 2017 14:09:15 +0000

Howard Gleckman

June 7, 2017

Just as President Trump is ramping up his push for a major tax cut that he believes will pay for itself through faster economic growth, the Kansas template for that approach has crashed and burned. After four years of below-average growth, deepening budget deficits, and steep spending reductions, the GOP-dominated Kansas legislature has repealed many of the tax cuts at the heart of Governor Sam Brownback fiscal agenda.

It is a lesson unlikely to be missed by congressional Republicans—or Democrats.

Brownback vetoed the legislature’s first attempt to reverse his tax cuts, but two-thirds majorities in both the House and Senate overrode his veto. The measure would boost state taxes by $1.2 billion over two years, in part by raising the top income tax rate from 4.6 percent to 5.7 percent and by once again taxing sole proprietorships, partnerships, and other pass-through businesses. Pressured by Brownback, the legislature had made pass-throughs tax free.

In a worrisome echo of that plan, the Trump Administration says it will propose cutting the federal individual income tax rate on pass-throughs to 15 percent , far below the top current rate on wages of 39.6 percent or Trump’s preferred rate of 35 percent.

Since Kansas enacted tax and spending cuts in 2012 and 2013, Brownback and his allies have argued that this fiscal potion would generate an explosion of economic growth. It didn’t. Overall growth and job creation in Kansas underperformed both the national economy and neighboring states. From January, 2014 (after both tax cuts passed) to April, 2017, Kansas gained only 28,000 net new non-farm jobs. By contrast, Nebraska, an economically similar state with a much smaller labor force, saw a net increase of 35,000 jobs.

While overall employment barely increased and economic activity was lower than other states, Kansas saw a significant increase in the number of individuals with business income. The likely reason: That zero tax rate on pass-throughs.

The tax cuts did produce one explosion, however. The state’s budget deficit was expected to hit $280 million this year, despite major spending reductions. Kansas falls well below national averages in a wide range of public services from K-12 education to housing to police and fire protection, according to an analysis by the Urban Institute’s State and Local Finance Initiative. Under order from the state Supreme Court, the legislature has voted to increase funding for public schools by $293 million over the next two years.

The more troubling lesson for Republicans in Congress: While Brownback was reelected in 2014, his popularity has since plummeted and his approval rating now hovers at around 25 percent, second lowest among all sitting governors. And while the GOP enjoyed tremendous national electoral success in 2016, the party lost seats in the Kansas legislature. At least in one deep red state, the Trump formula of big tax and spending cuts is no longer the path to political success.

In 2012, Brownback called his tax plan a “real live experiment.” It appears to have failed.

Posts and Comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.

The Potemkin Policies of Donald Trump

David Posnett — Fri, 09 Jun 2017 02:49:24 +0000

Published in The Atlantic

DEREK THOMPSON
JUN 7, 2017

The simplest summary of White House economic policy to date is four words long: There is no policy.

John Sommers II / Reuters

It’s “Infrastructure Week” at the White House. Theoretically.

On Monday, the administration announced a plan to spend $200 billion on infrastructure and overhaul U.S. air traffic control. There was a high-profile signing in the East Wing before dozens of cheering lawmakers and industry titans. It was supposed to be the beginning of a weeklong push to fix America’s roads, bridges, and airports.

But in the next two days, Trump spent more energy burning metaphorical bridges than trying to build literal ones. He could have stayed on message for several hours, gathered Democrats and Republicans to discuss a bipartisan agreement, and announced a timeframe. Instead he quickly turned his attention to Twitter to accuse media companies of “Fake News” while undermining an alliance with Qatar based on what may be, fittingly, a fake news story.

It’s a microcosm of this administration’s approach to public policy. A high-profile announcement, coupled with an ambitious promise, subsumed by an unrelated, self-inflicted public-relations crisis, followed by … nothing.

The secret of the Trump infrastructure plan is: There is no infrastructure plan. Just like there is no White House tax plan. Just like there was no White House health care plan. More than 120 days into Trump’s term in a unified Republican government, Trump’s policy accomplishments have been more in the subtraction category (e.g., stripping away environmental regulations) than addition. The president has signed no major legislation and left significant portions of federal agencies unstaffed, as U.S. courts have blocked what would be his most significant policy achievement, the legally dubious immigration ban.

The simplest summary of White House economic policy to date is four words long: There is no policy.

Consider the purported focus of this week. An infrastructure plan ought to include actual proposals, like revenue-and-spending details and timetables. The Trump infrastructure plan has little of that. Even the president’s speech on Monday was devoid of specifics. (An actual line was: “We have studied numerous countries, one in particular, they have a very, very good system; ours is going to top it by a lot.”) The ceremonial signing on Monday was pure theater. The president, flanked by politicians and businesspeople smiling before the twinkling of camera flashes, signed a paper that merely asks Congress to work on a bill. An assistant could have done that via email. Meanwhile, Congress isn’t working on infrastructure at all, according to Politico, and Republicans have shown no interest in a $200 billion spending bill.

In short, this “plan” is not a plan, so much as a Potemkin policy, a presentation devised to show the press and the public that the president has an economic agenda. The show continued on Wednesday, as the president delivered an infrastructure speech in Cincinnati that criticized Obamacare, hailed his Middle East trip, and offered no new details on how his plan would work. Infrastructure Week is a series of scheduled performances to make it look as if the president is hard at work on a domestic agenda that cannot move forward because it does not exist.

Journalists are beginning to catch on. The administration’s policy drought has so far been obscured by a formulaic bait-and-switch strategy one could call the Two-Week Two-Step. Bloomberg has compiled several examples of the president promising major proposals or decisions on everything from climate-change policy to infrastructure “in two weeks.” He has missed the fortnight deadline almost every time.

The starkest false promise has been taxes. “We’re going to be announcing something I would say over the next two or three weeks,” Trump said of tax reform in early February. Eleven weeks later, in late April, the White House finally released a tax proposal. It was hardly one page long.

Arriving nine weeks late, the document was so vague that tax analysts marveledthat they couldn’t even say how it would work. Even its authors are confused: Treasury Secretary Steven Mnuchin has repeatedly declined to say whether the plan will cut taxes on the rich, even though cutting taxes on the rich is ostensibly the centerpiece. Perhaps it’s because he needs more help: None of the key positions for making domestic tax policy have been filled. There is no assistant secretary for tax policy, nor deputy assistant secretary for tax analysis, according to the Treasury Department.

Once again, the simplest summary of White House tax policy is: There is no plan. There isn’t even a complete staff to compose one.

The story is slightly different for the White House budget, but no more favorable. The budget suffers, not from a lack of details, but from a failure of numeracy that speaks to the administration’s indifference toward serious public policy. The authors double-counted a projected benefit from higher GDP growth, leading to $2 trillion math error, perhaps the largest ever in a White House proposal. The plan included hundreds of billions of dollars in revenue from the estate tax, which appears to be another mistake, since the White House has separately proposed eliminating it.

Does the president’s budget represent what the president’s policies will be? It should, after all. But asked this very question, Mick Mulvaney, the director of the Office of Management and Budget, made perhaps the strangest claim of all: “I wouldn’t take what’s in the budget as indicative of what our proposals are,” he said.

This haphazard approach extends to the repeal of Obamacare, which may yet pass the Senate, but with little help or guidance from the president. Trump has allowed House Speaker Paul Ryan to steer the Obamacare-replacement bill, even though it violates the president’s campaign promises to expand coverage and protect Medicaid. After its surprising passage in the House, he directly undercut it on Twitter by suggesting he wants to raise federal health spending. Even on the most basic question of health-care policy—should spending go up, or down?—the president’s Twitter account and his favored law are irreconcilable. A law cannot raise and slash health care funding at the same time. The Trump health care plan does not exist.

It would be a mistake to call this a policy-free presidency. Trump has signed several executive orders undoing Obama-era regulations, removing environmental protections, and banning travel from several Muslim-majority countries. He has challenged NATO and pulled out of the Paris Accords. But these accomplishments all have one thing in common: Trump was able to do them alone. Signing executive orders and making a speech don’t require the participation of anybody in government except for the president.

It’s no surprise that a former chief executive of a private company would be more familiar with the presumption of omnipotence than the reality of divided powers. As the head of his own organization, Trump could make unilateral orders that subordinates would have to follow. But passing a law requires tireless persuasion and the cooperation of hundreds of representatives in the House and Senate who cannot be fired for insubordination. Being the president of the United States is nothing like being a CEO, especially not one of an eponymous family company.

Republicans in the House and Senate don’t need the president’s permission to write laws, either. Still, they too have struggled to get anything done. Several GOP senators say they may not repeal Obamacare this year—or ever. It is as if, after seven years of protesting Obamacare, the party lost the muscle memory to publicly defend and enact legislation.

In this respect, Trump and his party are alike—united in their antagonism toward Obama-era policies and united in their inability to articulate what should come next. Republicans are trapped by campaign promises that they cannot fulfill. The White House is trapped inside of the president’s perpetual campaign, a cavalcade of economic promises divorced from any effort to detail, advocate, or enact major economic legislation. With an administration that uses public policy as little more than a photo op, get ready for many sequels to this summer’s Infrastructure Week.