DOCSLIB.ORG

The Future of the Minimum Wage, As Part of an Effort to Improve the Quality of Work

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
The Future of the Minimum Wage, As Part of an Effort to Improve the Quality of Work The future of the minimum wage Becca Gooch, Joe Dromey, Gail Irvine and Douglas White February 2021 Learning and Work Institute Patron: HRH The Princess Royal | Chief Executive: Stephen Evans A company limited by guarantee, registered in England and Wales Registration No. 2603322 Registered Charity No. 1002775 Registered office: 4th Floor Arnhem House, 31 Waterloo Way, Leicester LE1 6LP Published by National Learning and Work Institute 4th Floor Arnhem House, 31 Waterloo Way, Leicester LE1 6LP Company registration no. 2603322 | Charity registration no. 1002775 www.learningandwork.org.uk @LearnWorkUK @LearnWorkCymru (Wales) All rights reserved. No reproduction, copy or transmission of this publication may be made without the written permission of the publishers, save in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency. 2 About Learning and Work Institute Learning and Work Institute is an independent policy, research and development organisation dedicated to lifelong learning, full employment and inclusion. We research what works, develop new ways of thinking and implement new approaches. Working with partners, we transform people’s experiences of learning and employment. What we do benefits individuals, families, communities and the wider economy. Stay informed. Be involved. Keep engaged. Sign up to become a Learning and Work Institute supporter: www.learningandwork.org.uk/supporters About Carnegie UK Trust The Carnegie UK Trust works to improve the lives of people throughout the UK and Ireland, by changing minds through influencing policy, and by changing lives through innovative practice and partnership work. The Carnegie UK Trust was established by Scots–American philanthropist Andrew Carnegie in 1913. www.carnegieuktrust.org.uk Acknowledgements Particular thanks to all those who participated in or supported us to organise research for this project. It could not have happened without you. We would also like to thank the project advisory group for sharing their expertise throughout the project: ▪ Be the Business ▪ Confederation of British Industry ▪ Federation of Small Businesses ▪ Institute of Fiscal Studies ▪ IPPR ▪ Joseph Rowntree Foundation ▪ Living Wage Foundation ▪ Low Pay Commission ▪ Recruitment and Employment Confederation ▪ Resolution Foundation ▪ Trades Union Congress ▪ Trust for London 3 Contents Foreword 4 Executive summary 5 Introduction 8 The impact of the minimum wage so far on pay, 12 employment and poverty The potential impact of increasing the minimum 18 wage Future paths for the minimum wage 24 Support for employers 24 Age gradation in the minimum wage 26 Devolution and the minimum wage 29 Good work 32 Skills and training 36 Enforcement and compliance 37 Social security 38 Conclusion 39 4 Foreword For the last five years, the Carnegie UK Trust has led a programme on the theme of ‘Fulfilling Work’. We have sought to understand its key determinants and identify the policy and structural changes required to make good quality work available to many more people, improving the wellbeing of individual workers, local communities and society as a whole For successive UK governments, the minimum wage has been a totemic policy of commitment to supporting good work. Establishing and continually raising a wage floor signals to citizens that they are right to expect a baseline of economic security through their labour. The UK’s minimum wage has been an enduring policy success story, which commands strong public support and commitment across the political spectrum. But as our report shows, increasing the minimum wage only goes part of the way towards helping working people out of poverty, with costs of living and cuts in social security limiting the wellbeing gains of a rising wage floor. We are also conscious that increasing the minimum wage only goes part of the way towards the ambition of a society with better work for all. Pay is a fundamental component of good work, with the idea that work should allow us to provide for ourselves and our families core to our social contract. However, we must also recognise that work that is, for example, unsafe, insecure or lacking opportunities to progress or express your views has a negative impact on wellbeing for individuals, communities and society. Tackling these challenges requires further action in conjunction with the vital task of raising the minimum wage. This report chronicles the successes and limitations of minimum wage policy over recent years. It charts a sustainable path towards future minimum wage increases - because although the pandemic has had a severe economic impact and many businesses are struggling, low paid workers need and deserve a pay rise. Finally, it sets out other actions that the UK Government should take to contribute towards a society with more good work and a stronger social safety net that protects low paid workers from falling into poverty. We hope our recommendations will be considered carefully by government. We are grateful to have been able to work with the Learning and Work Institute on this project, Thank you to Joe Dromey, who came to us with the initial idea, and to Becca Gooch and Jerome Finnegan for all their work throughout. We have also benefitted hugely from the insights of our project Advisory Group members throughout the research process. As Chair of that Group, I offer my thanks. Finally, and most importantly, we are grateful to all those who gave their time to participate in and to help organise the research upon which this report is based. The work would not have been possible without you. Douglas White, Head of Advocacy, Carnegie UK Trust 5 Executive summary The minimum wage has been one of the most successful policies of recent decades. This report – the final in a series – explores the impact of the minimum wage over the last two decades, and sets out a path for the future of the minimum wage, as part of an effort to improve the quality of work. Pay is an important aspect of good work. Our previous reports showed that decent pay, which provided enough to live on, was seen as a foundational element of good work, and that pay was particularly valued by low paid workers. The introduction of the minimum wage helped to significantly reduce extreme low pay1, and more recently, the increase in the wage floor through the introduction of the National Living Wage (NLW) has helped reduce low pay2. Despite initial concerns, this has been achieved with little if any negative impact on employment, and international evidence suggests that even ambitious minimum wage policies can boost incomes without costing jobs. While it has been successful in tackling low pay, the minimum wage has done little to tackle in-work poverty, which has grown over the last decade driven both by rising cost of living and cuts in social security support. Following rapid increases to the wage floor in the last five years, the UK government has set a bold target to increase the NLW to two thirds of median hourly pay by 2024, with the stated objective of ending low pay in the UK. This could significantly boost pay for many workers at the bottom end of the income distribution, with a particular impact on women, part time workers, older and younger workers, and on industries characterised by low pay. The coronavirus crisis makes delivering on this ambition much more challenging. Significant increases in the wage floor will now need to be delivered during a period when unemployment is likely to remain high. We set out a series of recommendations for the government on the future of the minimum wage: - The government should maintain the commitment to increasing the NLW to two thirds of median hourly pay by 2024. In working toward this goal, government should continue to be guided by the recommendations of Low Pay Commission, which provides a highly effective, evidence-based, social partnership model for informing minimum wage policy. - Employers should be supported to adapt to a higher wage floor in order to help minimise job losses. This should include a temporary reduction or rebalancing of 1 Where hourly pay is below 50% of the median 2 Where hourly pay is below 66% of the median 6 employer National Insurance Contributions, focused on low paid workers, as well as targeted support to sectors with a higher proportion of low paid workers. - While there remains a case for age gradation in the minimum wage in order to minimise the risk of youth unemployment, the NLW should be extended to workers aged 21 and over. Subject to youth employment and guided by the LPC, a single, higher Youth Minimum Wage should be introduced for workers aged below 21, to simplify the system and boost pay for younger workers. - We recommend that further research is undertaken to consider the challenges, opportunities and feasibility of differentiated subnational or regional minimum wages where local areas, nations or regions could set a higher minimum wage, in consultation with the LPC. - While pay is a foundational element of good work, increasing the minimum wage alone won’t address other areas of job quality. There is a risk that a higher wage floor may lead to some employers taking measures that undermine aspects of job quality, such as increasing job intensity or using insecure contracts. A higher wage floor could also mean more bunching of workers at or near the wage floor, making progression more challenging. Future minimum wage policy must be situated within a broader good work agenda. Government should consider the impact of increasing the minimum wage on other aspects of job quality, and take measures to promote good work more broadly. This should include promoting sectoral collective agreements in sectors characterised by low pay and poor job quality.
Load more

Recommended publications
  • The Gender Unemployment Gap
    NBER WORKING PAPER SERIES THE GENDER UNEMPLOYMENT GAP Stefania Albanesi Ayşegül Şahin Working Paper 23743 http://www.nber.org/papers/w23743 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 August 2017 We thank Raquel Fernandez, Franco Peracchi, Gille St. Paul, and participants at ESSIM 2014, the NBER Summer Institute 2012, Columbia Macro Lunch, the Society of Economic Dynamics 2011 Annual Meeting, the Federal Reserve Board’s Macro Seminar, Princeton Macro Seminar, USC Macro Seminar, SAEE-Cosme Lecture, and the St. Louis Fed Macro Seminar for helpful comments. We thank Josh Abel, Grant Graziani, Victoria Gregory, Sam Kapon, Sergey Kolbin, Christina Patterson and Joe Song for excellent research assistance. The views expressed in the paper are those of the authors and do not necessarily reflect those of the Federal Reserve Bank of New York, the Federal Reserve System, or the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications. © 2017 by Stefania Albanesi and Ayşegül Şahin. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source. The Gender Unemployment Gap Stefania Albanesi and Ayşegül Şahin NBER Working Paper No. 23743 August 2017 JEL No. E24,J16,J21 ABSTRACT The gender unemployment gap, the difference between female and male unemployment rates, was positive until the early 1980s. This gap disappeared after 1983, except during recessions, when men’s unemployment rate has always exceeded women’s.
    [Show full text]
  • The Future of the Minimum Wage: the Employer Perspective
    The future of the minimum wage The employer perspective Becca Gooch, Joe Dromey and David Southgate August 2020 Learning and Work Institute Patron: HRH The Princess Royal | Chief Executive: Stephen Evans A company limited by guarantee, registered in England and Wales Registration No. 2603322 Registered Charity No. 1002775 Registered office: 4th Floor Arnhem House, 31 Waterloo Way, Leicester LE1 6LP Published by National Learning and Work Institute 4th Floor Arnhem House, 31 Waterloo Way, Leicester LE1 6LP Company registration no. 2603322 | Charity registration no. 1002775 www.learningandwork.org.uk @LearnWorkUK @LearnWorkCymru (Wales) All rights reserved. No reproduction, copy or transmission of this publication may be made without the written permission of the publishers, save in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency. 2 About Learning and Work Institute Learning and Work Institute is an independent policy, research and development organisation dedicated to lifelong learning, full employment and inclusion. We research what works, develop new ways of thinking and implement new approaches. Working with partners, we transform people’s experiences of learning and employment. What we do benefits individuals, families, communities and the wider economy. Stay informed. Be involved. Keep engaged. Sign up to become a Learning and Work Institute supporter: www.learningandwork.org.uk/supporters Acknowledgements The future of the minimum wage project is supported by the Carnegie UK Trust. We would like to thank the Carnegie UK Trust for making this work possible, and Douglas White and Gail Irvine in particular for their support.
    [Show full text]
  • The Job Opportunity Approach to Full Employment
    A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Forstater, Mathew Research Report Public employment and economic flexibility: The job opportunity approach to full employment Public Policy Brief, No. 50 Provided in Cooperation with: Levy Economics Institute of Bard College Suggested Citation: Forstater, Mathew (1999) : Public employment and economic flexibility: The job opportunity approach to full employment, Public Policy Brief, No. 50, ISBN 0941276651, Levy Economics Institute of Bard College, Annandale-on-Hudson, NY This Version is available at: http://hdl.handle.net/10419/54324 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu PPB No.50 2/18/99 3:16 PM Page a1 The Jerome Levy Economics Institute of Bard College Public Policy Brief Public Employment and Economic Flexibility The Job Opportunity Approach to Full Employment Mathew Forstater No.
    [Show full text]
  • World Employment and Social Outlook Trends 2020 World Employment and Social Outlook
    ILO Flagship Report World Employment and Social Outlook Outlook and Social Employment World – Trends 2020 Trends X World Employment and Social Outlook Trends 2020 World Employment and Social Outlook Trends 2020 International Labour Office • Geneva Copyright © International Labour Organization 2020 First published 2020 Publications of the International Labour Office enjoy copyright under Protocol 2 of the Universal Copyright Convention. Nevertheless, short excerpts from them may be reproduced without authorization, on condition that the source is indicated. For rights of reproduction or translation, application should be made to ILO Publications (Rights and Licensing), International Labour Office, CH-1211 Geneva 22, Switzerland, or by email: [email protected]. The International Labour Office welcomes such applications. Libraries, institutions and other users registered with a reproduction rights organization may make copies in accordance with the licences issued to them for this purpose. Visit www.ifrro.org to find the reproduction rights organization in your country. World Employment and Social Outlook: Trends 2020 International Labour Office – Geneva: ILO, 2020 ISBN 978-92-2-031408-1 (print) ISBN 978-92-2-031407-4 (web pdf) employment / unemployment / labour policy / labour market analysis / economic and social development / regional development / Africa / Asia / Caribbean / Europe / EU countries / Latin America / Middle East / North America / Pacific 13.01.3 ILO Cataloguing in Publication Data The designations employed in ILO publications, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the International Labour Office concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers.
    [Show full text]
  • Dependent Self-Employment: Trends, Challenges and Policy Responses in the EU
    Employment Policy Department EMPLOYMENT Working Paper No. 228 2017 Dependent self-employment: Trends, challenges and policy responses in the EU Colin C Williams Frédéric Lapeyre Development and Investment Branch, Employment Policy Department EMPLOYMENT Employment Policy Department EMPLOYMENT Working Paper No.228 2017 Dependent self-employment: Trends, challenges and policy responses in the EU Dependent self-employment: Colin C Williams Frédéric Lapeyre Development and Investment Branch Employment Policy Department Copyright © International Labour Organization 2017 Publications of the International Labour Office enjoy copyright under Protocol 2 of the Universal Copyright Convention. Nevertheless, short excerpts from them may be reproduced without authorization, on condition that the source is indicated. For rights of reproduction or translation, application should be made to the Publications Bureau (Rights and Permissions), International Labour Office, CH-1211 Geneva 22, Switzerland. The International Labour Office welcomes such applications. Libraries, institutions and other users registered in the United Kingdom with the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP [Fax: (+44) (0)20 7631 5500; email: [email protected]], in the United States with the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923 [Fax: (+1) (978) 750 4470; email: [email protected]] or in other countries with associated Reproduction Rights Organizations, may make photocopies in accordance with the licences issued to them for this purpose. ISSN: 1999-2939; 1999-2947 (web .pdf). First published 2017 The designations employed in ILO publications, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the International Labour Office concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers.
    [Show full text]
  • Environmental Policy, Full-Employment Models, and Employment: a Critical Analysis
    NBER WORKING PAPER SERIES ENVIRONMENTAL POLICY, FULL-EMPLOYMENT MODELS, AND EMPLOYMENT: A CRITICAL ANALYSIS Marc A. C. Hafstead Roberton C. Williams III Yunguang Chen Working Paper 24505 http://www.nber.org/papers/w24505 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 April 2018 We thank Resources for the Future’s Carbon Pricing Initiative for financial support, and seminar participants at the AERE Summer Meeting, the Paris School of Economics, and Resources for the Future for helpful comments. Portions of the work were also supported by the USDA National Institute of Food and Agriculture (Hatch project 1009838). The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications. © 2018 by Marc A. C. Hafstead, Roberton C. Williams III, and Yunguang Chen. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source. Environmental Policy, Full-Employment Models, and Employment: A Critical Analysis Marc A. C. Hafstead, Roberton C. Williams III, and Yunguang Chen NBER Working Paper No. 24505 April 2018 JEL No. E24,H23,J64,Q52,Q58 ABSTRACT This paper assesses the use of full-employment computable-general equilibrium (CGE) models to predict the labor-market effects of environmental policy. Specifically, it compares the predictions of a standard full-employment CGE model with those of a new search-CGE model with labor- search frictions and resulting unemployment (but that is otherwise identical to the full- employment model).
    [Show full text]
  • The Public Employment Service in the United States
    Over the last decade, labour market policy in the United States has been undergoing a period of significant restructuring. In the face of welfare reform initiatives, persistent unemployment and declines in real income SERVICE EMPLOYMENT PUBLIC THE among some groups (particularly the less skilled), and continued economic expansion, there is pressure on the public employment service (PES) to improve effectiveness. But, it must also come to terms with resource limitations. How have reforms fared so far – what seems to be working well or not so well? Which of the new approaches may require revision in the event of an economic downturn? Where might adjustments lead to improved D effectiveness? While considering such questions, this publication provides an in-depth look at the PES and IN THE TTHHEE PPUUBBLLIICC recent policy initiatives in the United States. Areas of concern about recent reforms are outlined and options for STATES UNITED making policies more effective are presented. EEMMPPLLOOYYMMEENNTT C SSEERRVVIICCEE IINN TTHHEE UUNNIITTEEDD SSTTAATTEESS E OECD (81 1999 02 1 P) FF 200 ISBN 92-64-17011-1 9:HSTCQE=V\UVV\: O -99 File: $1$DIA3:[PAGER.SAVE.PUB]COPYR–1623E.;8 REGNIER Seq: 1 Page: Free: 4140D Next: 0D VJ: J1:1 6-JAN-00 10:22 OECD, 2000. Software: 1987-1996, Acrobat is a trademark of ADOBE. All rights reserved. OECD grants you the right to use one copy of this Program for your personal use only. Unauthorised reproduction, lending, hiring, transmission or distribution of any data or software is prohibited. You must treat the Program and associated materials and any elements thereof like any other copyrighted material.
    [Show full text]
  • Versus Federal-State System. a Variety of Proposals for Strengthening
    DOCUMENTRESUME ED 029 957 VT 007 884 By-Haber. Wi !UK Kruger. Daniel The Role of the United States Employment Servicein a Ci)anging Economy. Studies in Employment and Unemployment. Upjohn (W.E.) Inst. for Employment Research, Kalamazoo. Mich. Pub Date Feb 64 Note-129p. Available from-W.E. Upjohn Institute for Employment Research. 1101Seventeenth Street. N.W.. Washington. D.C. 20036 (without charge) EDRS Price MF-S0.75 HC-S6.55 Descriptors-Agencies. *Agency Role. Employment Programs. tmployment Services.Federal Legislation. Federal Programs. Federal State Relationship. *Historical Reviews. Job Placement.Job Training, Labor Market. Manpower Utilization. *Organizational Change. Program Administration.Program Improvement. Vocational Counseling Identifiers-United States Employment Service. USES . This monograph examines the developments whichhave Influenced the United States EmploymentServiceduringthe 30 yearsofitshistory.sincethe Wagner-Peyser Act of 1933. The maior social andecohomic developments, the enabling legislation. and the issues and problems regardingthe proper role of that service are discussed. Some of the historical roots of employmentservice concepts are traced as far back as 1834. The various services available Throughthe Employment Service suchas pladement counseling, labor market information and research. industrial services. training, and othersare described and the rationale for their existence is presented. Some of theproblems and issues analyzedare: (1) for whom is the Employment Service intended.(2) relationships with colleges and universities. (3) relationships with private employmentagencies. and (4) federalization versusfederal-state system. A variety of proposalsfor strengthening and improvement are presented along witha critical discussion of the proposals. Seven specific suggestions for improvementare advanced in the areas of: federal leadership. finance, evaluation. personnel. localoffice operations. community support.
    [Show full text]
  • Setting the Record Straight: How Record Employment Has Changed the UK, Resolution Foundation, January 2019
    REPORT Setting the record straight How record employment has changed the UK Stephen Clarke & Nye Cominetti January 2019 [email protected] +44 (0)203 372 2960 @resfoundation resolutionfoundation.org Resolution Foundation | Setting the record straight 2 Acknowledgements Acknowledgements ONS crown copyright This work contains statistical data from ONS which is Crown Copyright. The use of the ONS statistical data in this work does not imply the endorsement of the ONS in relation to the interpretation or analysis of the statistical data. This work uses research datasets which may not exactly reproduce National Statistics aggregates. Download This document is available to download as a free PDF at: https://www.resolutionfoundation.org/publications/setting-the-record-straight-how-record-employment-has-changed-the-uk Citation If you are using this document in your own writing, our preferred citation is: S. Clarke & N. Cominetti, Setting the record straight: How record employment has changed the UK, Resolution Foundation, January 2019 Permission to share This document is published under the Creative Commons Attribution Non Commercial No Derivatives 3.0 England and Wales Licence. This allows anyone to download, reuse, reprint, distribute, and/or copy Resolution Foundation publications without written permission subject to the conditions set out in the Creative Commons Licence. For commercial use, please contact: [email protected] January 2019 @resfoundation Resolution Foundation | Setting the record straight 3 Contents Contents
    [Show full text]
  • Moving from Unemployment Checks to Paychecks: Assessing the President’S Proposals to Help the Long-Term Unemployed
    MOVING FROM UNEMPLOYMENT CHECKS TO PAYCHECKS: ASSESSING THE PRESIDENT’S PROPOSALS TO HELP THE LONG-TERM UNEMPLOYED HEARING BEFORE THE SUBCOMMITTEE ON HUMAN RESOURCES OF THE COMMITTEE ON WAYS AND MEANS U.S. HOUSE OF REPRESENTATIVES ONE HUNDRED TWELFTH CONGRESS FIRST SESSION OCTOBER 6, 2011 Serial No. 112–HR08 Printed for the use of the Committee on Ways and Means ( U.S. GOVERNMENT PRINTING OFFICE 76–191 WASHINGTON : 2012 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 VerDate Mar 15 2010 07:58 Oct 16, 2012 Jkt 076191 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 I:\WAYS\OUT\76191.XXX GPO1 PsN: 76191 wwoods2 on DSKR6SHH1PROD with WAYS & MEANS COMMITTEE ON WAYS AND MEANS GEOFF DAVIS, Kentucky, Chairman ERIK PAULSEN, Minnesota LLOYD DOGGETT, Texas RICK BERG, North Dakota JIM MCDERMOTT, Washington TOM REED, New York JOHN LEWIS, Georgia TOM PRICE, Georgia JOSEPH CROWLEY, New York DIANE BLACK, Tennessee CHARLES W. BOUSTANY, JR., Louisiana JON TRAUB, Staff Director JANICE MAYS, Minority Staff Director ii VerDate Mar 15 2010 07:58 Oct 16, 2012 Jkt 076191 PO 00000 Frm 00002 Fmt 0486 Sfmt 0486 I:\WAYS\OUT\76191.XXX GPO1 PsN: 76191 wwoods2 on DSKR6SHH1PROD with WAYS & MEANS C O N T E N T S Page Advisory of October 6, 2011 announcing the hearing ........................................... 2 WITNESSES PANEL 1: The Honorable Ron Wyden, Senator from the State of Oregon ....................... 6 The Honorable Jim Renacci, Representative from the State of Ohio .............
    [Show full text]
  • Employment Growth and Progress Toward Full Employment Marc Labonte, Specialist in Macroeconomic Policy ([email protected], 7-0640) November 28, 2014 (IN10187)
    CRS Insights Employment Growth and Progress Toward Full Employment Marc Labonte, Specialist in Macroeconomic Policy ([email protected], 7-0640) November 28, 2014 (IN10187) Job growth was slow to pick up following the recession that ended in June 2009. The economy did not begin to consistently add jobs each month until October 2010, more than a year into the expansion. For the next two years, employment growth was inconsistent from month to month. Since the second half of 2012, the economy has added an average of 205,000 jobs per month. More than 200,000 jobs have been added each month since February 2014. Figure 1 illustrates that the increase in employment since October 2010 compares favorably with the previous expansion but falls short of the pace set during expansions in the 1980s and 1990s. This comparison would make the current recovery look somewhat less favorable if expressed instead as a percentage of the labor force because the labor force has grown since these expansions occurred. Figure 1. Average Monthly Employment Growth (January 1980-October 2014) Source: Congressional Research Service (CRS) calculations of U.S. Bureau of Labor Statistics (BLS) data. Note: 2014 data illustrate the monthly average for the first 10 months of the calendar year. The economy lost 8.7 million jobs as a result of the 2007-2009 recession—more than in any other recession since the Great Depression. The economy did not surpass the level of employment attained at the peak of the previous expansion until May 2014. Thus, most of the employment growth during this expansion has only made up lost ground.
    [Show full text]
  • Prospects for Shifting the Phillips Curve Through Manpower Policy
    ROBERT E. HALL* Massachusetts Institute of Technology Prospects for Shifting the Phillips Curve through Manpower Policy THE CONTEMPORARYPHILLIPS CURVE measuring the tradeoff between in- flation and unemployment in the United States is so unfavorable that many economists and most policy makers have reached the conclusion that no combination of inflation and unemployment permitted by the curve is ac- ceptable. The recent policy of the United States has responded to this prob- lem mainly through the imposition of controls on prices and wages. Few economists regard these controls as a satisfactory solution in the long run to the problem of achieving low rates of unemployment at tolerable levels of inflation. There is substantial agreement in the profession that the funda- mental cause of the unfavorable Phillips curve is in the failure of labor mar- kets to operate properly. My purpose in this paper is to examine critically the prospects for a long-run attack on inflation and unemployment through treatment of the fundamental causes of the problem. Policies with this goal that operate directly in the labor market are known collectively as man- power policy. Economists are far from agreement about the precise reasons for the failure of labor markets to perform adequately. In my earlier paper, "Why Is the Unemployment Rate So High at Full Employment?"' I reviewed * The researchreported here was supportedby the ManpowerAdministration of the U.S. Departmentof Labor and by the National Science Foundation. Neither agency is responsiblefor the opinions expressedhere. I am grateful to Zvi Body and to Steven Shavell for assistance,as well as to membersof the Brookingspanel for comments.
    [Show full text]