Economics

This is an excellent, concise explanation from Brad DeLong of one of the seeming paradoxes of parenting—despite being a highly skilled occupation, it doesn't pay well (or, pretty much, at all):

... looking after children is (a) physically demanding, (b) emotionally wearing, (c) mentally challenging, (d) easy to do badly with small lapses of attention, and yet (e) badly remunerated. In this it differs from nearly all other occupations that fit one or more of (a) through (d), which are relatively well paid because getting the work done is important and few people can do it well. But looking after children is different—very many people can do it well, not because it is easy to do but because it is one of our core human competences: we are driven to learn how to do it well at a deep, basic, powerful level to an even greater degree than we are driven to learn how to throw rocks to hit small moving animals. Thus looking after children is different from skilled occupations—it pays poorly because the supply of people who can do it is not small. And looking after children is different from unskilled occupations--it is hard to do because it is (a) physically demanding, (b) emotionally wearing, (c) mentally challenging, (d) easy to do badly with small lapses of attention.

One way to deal with this problem would be the medieval guild model, which still functions today in the professions, ie, restrict entry by requiring extensive training and certification for parenting; the number of people who could do most lawyering well is much larger than the existing poor of lawyers, but they have banded together to restrict entry to the profession. Since this seems unlikely to fly with regard to parenting, a better approach would be to publicly subsidize parenting to a greater extent than we do now.

Anne Alstott's proposal to create "caretaker resource accounts" is one of the more interesting attempts to address this issue:

With the creation of caretaker resource accounts, the caretaker parent of every child under age 13 would be given an annual grant of $5,000, which the parent could use to pay for child care, (his or her own) education, or (his or her own) retirement savings in the current year or in any future year. Each participant would receive an equal share of public resources per year, and each would decide for herself (or himself) how to divide the funds among the three alternative uses. The program would expand parents' options to give them maximum freedom to shape their own lives as they think best. Parents differ in their values, talents, and aspirations, and they would use their caretaker resource accounts in different ways—which is precisely the point.

....

The $5,000 voucher is significantly more generous than existing child-care subsidies. Tax subsidies for child care provide at most $1,500 to $1,800 per year, and they assist only a subset of families, excluding the poorest. They also vary by family income, sometimes arbitrarily. Working-class families can earn too much to qualify for the child-care subsidies for former welfare recipients and yet too little to benefit much from those for middle-class workers.

More immediately feasible are reforms like paid parental leave, turning the child tax credit into true child allowance, like those that exist in nearly all wealthy nations, and increasing support for public institutions like universal pre-K that would reduce child care costs.

The NYT's Steven Greenhouse, author of the new book, The Big Squeeze: Tough Times for the American Worker, is blogging at TPM Cafe this week. In his initial post, he argues that "working-class voters want what Harry Truman was promising: A Fair Deal, or at least a Fairer Deal":

.... In talking with workers--be they software engineers or hotel housekeepers, factory workers or freelancers--I often sensed a frustration, even an anger, that unfairness has muscled aside fairness in America in recent decades and especially in recent years, and it goes far beyond stratospheric C.E.O. salaries. ....

....

Workers of course recognize there is no magic wand to make unfairness disappear, but my interviews around the country convinced me that workers are nonetheless eager for political leaders to take some serious steps to ease the big squeeze.

Make jobs less stressful--For many Americans, wages are so low that they need to work two jobs, and many women with children under three are working fulltime to help their families make ends meet. As my book explains, all of this is making it devilishly difficult to balance job and family. The United States is the only industrial nation that doesn't guarantee paid sick days, paid maternity leave or even paid vacation to its workers.

....

Increase opportunity and mobility--Many Americans who are not in the country club set worry that they won't be able to send their children to college, making it harder for their kids to move up in the world. ....
The college system is so skewed that at the nation's top 146 colleges, just 10 percent of the students come from the bottom half of households by income, and just 3 percent from the bottom quarter. Many working-class voters view America's promise of equal opportunity as largely an empty promise, and many are eager for government (and college administrators) to do far more to make college accessible and affordable for their children.

Ease the pain caused by globalization--Many workers rail against free-trade agreements because they see that globalization has destroyed many factory jobs and helped hold down wages, and they are searching for something, anything, to blame. While most workers recognize that globalization, offshoring and imports are inescapable facts of modern life, many would love to see the nation's political leaders do some high-visibility jawboning to discourage companies from reflexively moving jobs overseas, just as President John F. Kennedy once did some powerful jawboning to discourage the nation's steelmakers from raising their prices.

Many workers want better life preservers to prevent those hurt by globalization from being pulled under. Retraining programs for those who lose jobs to globalization are often poorly funded and poorly managed--and those programs are available only to laid-off factory workers, not laid-off software engineers and other white-collar workers whose jobs are offshored to India or other countries.

Strengthen the social safety net--After the Great Depression dragged down millions of Americans, Franklin Roosevelt, Congress, corporate America and organized labor built an impressive safety net of good wages, good health insurance, good pensions and strong job security. But nowadays with job security disappearing and many workers losing health coverage and pensions, the safety net has been falling apart. Many workers complain that it is hugely unfair that they and their children often lose health coverage when they lose their jobs. Little wonder that two-thirds of Americans say they want Washington to enact universal health coverage, even if means increasing taxes.

....

The retirement savings system is broken and badly needs fixing. In The Big Squeeze, I recommend creating a new universal savings system, like Germany's, that would be built on top of Social Security and would guarantee virtually every worker enough to retire on.

From my interviews across the country, I got the sense that many working-class voters would be delighted if this year's presidential candidates adopted a great Republican's--Teddy Roosevelt's--version of the Fair Deal: "Our aim is to promote prosperity and then to see that prosperity is passed around."

Mark Thoma explains:

.... If we had included, say, infrastructure spending as part of the initial stimulus package, then the effects would kick in on a sustained basis over time rather than as a one-time hit as with the tax cuts. Thus, this type of spending could have provided the continuous stimulus Shiller is calling for. And if we are wrong and there is no recession, how big a problem is that? Well, what's so bad about building new infrastructure repairing what we already have, don't we need to do that anyway? With a stronger economy, wouldn't it be easier to pay for it? Insurance that also has investment value seems like a good bet to me. ....

Two prominent economists came out against deficit hawkery today. Perhaps this is the beginning of something. Larry Summers in the Financial Times:

Second, Congress should move promptly to pass further fiscal measures to respond to our economic difficulties. The economy would be in a far worse state if fiscal stimulus had not come on line two months ago. The forecasting community is having increasing doubts about the fourth quarter of this year and beginning of the next as the impact of the current round of stimulus fades. With long-term unemployment at recession levels, there is a clear case for extending the duration of unemployment insurance benefits. There is now also a case for carefully designed support for infrastructure investment, as financial strains have distorted the municipal credit markets to the point where even the highest-quality municipal borrowers are, despite their tax advantage, paying more than the federal government to borrow. There are legitimate questions about how rapidly the impact of infrastructure spending will be felt. But with construction employment in free fall, there will be a need for stimulus tied to the needs of less educated male workers for quite some time. Fiscal stimulus measures must be coupled to budget process reform that provides reassurance that, once the crisis passes, the fiscal policy discipline of the 1990s will be re-established.

And Brad DeLong:

A chain is only as strong as its weakest link, and it seems pointless to work to strengthen the Democratic links of the chain of fiscal advice when the Republican links are not just weak but absent. Political advisers to future Democratic administrations may argue that the only way to tie the Republicans’ hands and keep them from launching another wealth-polarizing offensive is to widen the deficit enough that even they are scared of it.
They might be right. The surplus-creating fiscal policies established by Robert Rubin and company in the Clinton administration would have been very good for America had the Clinton administration been followed by a normal successor. But what is the right fiscal policy for a future Democratic administration to follow when there is no guarantee that any Republican successors will ever be “normal” again? That’s a hard question, and I don’t know the answer.

Granted, Summers repudiation is heavily qualified, and DeLong's is grounded in political considerations. But this beggar will not be a chooser. So I'll be keeping a list of reformed deficit hawks, Keynsians, and other economists who don't think the next administration should make deficit reduction a high priority, immediately or ever. Call it, in the spirit of Greg Mankiw's Pigou Club, the Keynes Club.

Hereby establishing The Keynes Club, chartered June 30th, 2008, the presiding officers and members:

Brad DeLong (founding member)
Lawrence Summers (founding member)

The graph below, from a post by Andrew Gelman, plots 48 states (sans Alaska, Hawaii, and DC) by the average economic and social ideology of adults within them. (I made a few minor design changes to Gelman's original graph, including adding the lines to divide the graph into four quadrants, but the data plots and scale are the same.) The more liberal a state in both dimensions, the closer it is to the bottom left corner (Massachusetts is the most liberal); the more conservative, the closer it is to the top right (Idaho is the most conservative).

A few interesting things to note: New Hampshire and Maine are both represented by two Republican Senators, yet both are in the Liberal/Liberal quadrant; my home state, Minnesota, is often perceived as a sort of Vermont of the midwest, but on economic issues, it skews slightly conservative (as does Wisconsin); Montana is one of seven Liberal Econ/Social Conservative states, which makes one wonder why Sen. Max Baucus (D-MT) tends to be a Social Liberal and Economic Conservative.

From a speech by Barack Obama in Albuquerque yesterday:

....

I’ll also stand up for paid leave. Today, 78 percent of workers covered by FMLA don’t take leave because it isn’t paid. That’s just not fair. You shouldn’t be punished for getting sick or dealing with a family crisis. That’s why I’ll require employers to provide all of their workers with seven paid sick days a year. And I’ll support a 50-state strategy to adopt paid-leave systems, and set aside $1.5 billion to fund it. I have a clear plan to expand paid leave and sick leave, Senator McCain doesn’t, and that’s a real difference in this election.

And at a time when folks are struggling with the rising price of everything from gas to groceries, I’ll provide working women with immediate relief. While Senator McCain wants to continue the Bush tax cuts for the wealthiest Americans who don’t need them and didn’t ask for them, I’ll pass a middle class tax cut of $1,000 for each working family. This will deliver tax relief for over 70 million working women. And we need to help folks at the bottom of the ladder. Almost 60 percent of Americans who benefited from raising the minimum wage were women. I won’t leave any working people behind. That’s why, unlike Senator McCain, I’ll index the minimum wage to inflation so that it goes up each year to keep pace with rising costs.

We can’t afford an economy where folks keep working harder for less. We can’t let the women in our workforce get paid even less for doing the same work. And we can’t keep pushing more and more of the burden on to the backs of working parents who are struggling to balance their jobs and their family. Because what binds us together, what makes us one American family, is that we stand up and fight for each other's dreams, and for the dreams of all of our children.

....

Michael Kazin and Julian Zelizer, argue in today's WaPo that "the party faithful agree on the basic outlines of a new social contract" for a post-industrial society:

....

The new agenda focuses on protecting middle-class families from the insecurities of the global economy. In their primary campaigns, both Barack Obama and Hillary Clinton advocated proposals to help citizens whose economic welfare has been threatened by the rising costs of health care and education, the slide in the housing and stock markets, the challenges of retirement, and global warming.

Obama speaks of strengthening families by putting "the rungs back on that ladder to the middle class," giving "every family the chance that so many of our parents and grandparents had." He calls for a tax credit to offset the Social Security tax and expanding the earned-income tax credit and the Family and Medical Leave Act. Obama also favors two big programs that no Democrat before him could realize: a national health plan that would cut costs and cover every citizen; and a sizable tuition grant to college students who sign up for national service.

The emphasis on protecting middle-class families reflects a major historical shift. During the 1930s and '40s, liberals struggled to create a vibrant middle class out of the industrial wage-earners who had immigrated to the United States and rural people of all races who lacked electricity and jobs. New Deal programs focused on workingmen and depressed regions. The National Labor Relations Act legitimized unions and boosted the purchasing power of the working class. The Rural Electrification Administration and the Tennessee Valley Authority enabled Southern communities to participate fully in the modern manufacturing economy. Social Security gave support to the elderly, lessening the burden on their children. The GI Bill gave a generation the ability to purchase a home and get a college education.

In the 1960s, Democrats turned to expanding the middle class. John F. Kennedy and LBJ sought to increase the number of Americans who could enjoy the economic and social benefits of a booming economy. The rights revolution made it possible for African Americans, Latinos and women from all backgrounds to compete for most of the same jobs as white men. Medicare and Medicaid provided new health benefits for the elderly and the poor.

Now, Democrats are grappling with insecurities faced by entire families, that institution conservatives always claim to represent. The past three decades have produced growing economic inequality and a shrinking middle class. Younger Americans no longer expect to enjoy as good a life as their parents did. Wage-earners fear for the future of their jobs and incomes. No family is secure.

....

Kazin, a historian at Georgetown, wrote a great history of the language of populism, The Populist Persuasion, back in the 1990s. His nuanced conclusion in that book is worth revisiting:

.... [Populism's] assertion of resentments based on class and status may be a barrier to constructing a new type of universalism—what the eco-anarchist Murray Bookchin calls "the ability to voice broadly human concerns." .... Yet the desire to transcend populism is also shortsighted. It ignores the very persistence of the language, rooted in the gap between American ideals and those institutions and authorities whose performance betrays them. That continuity occurs for a good reason. At the core of the populist tradition is an insight of great democratic and moral significance. No major problem can be seriously addressed, much less nudged on a path toward solution, unless what an antebellum politician called the "productive and burden-bearing classes"—Americans of all races who work for a living, knit neighborhoods together, and cherish what the nation is supposed to stand for—participate in the task ....

To move any closer toward redistributing wealth and revitalizing mass democracy, intellectuals have to take part in social movements that knit such people together. Without silencing the spirited voices of gender and racial community that emerged from the 1960s, we have to help chisel away the hardened self-righteousness that has grown up around such identities. Otherwise we risk spending the future as spectators to the endless competition between spindoctors and copywriters, captives to anyone who seems to make the old rhetoric sing again, if only for one acceptance speech or third-second spot. Such passivity is a cultural disease, and some form of populism is needed to cure it.

When a new breed of inclusive grassroots movements does arise, intellectuals should contribute their time, their money, and their passion for justice. They should work to stress the harmonious, hopeful, and pragmatic aspects of populist language and to disparage the meaner ones—without forgetting that evangelical zeal cannot be expunged from our culture. Like the American dream itself, populism lives too deeply in the fears and expectations of American citizens to be trivialized or replaced. We should not speak solely within its terms, but, without it, we are lost.

Adam Cohen in yesterday's NYT on the 75th anniversary of the National Industrial Recovery Act and the minimum wage:

....

This week marks the 75th anniversary of the National Industrial Recovery Act — which Roosevelt signed June 16, 1933, at the end of his famous first 100 days — and of the federal minimum wage. It was a grudging, almost accidental win, and the road since then has been rocky. Advocates for low-income workers have had a hard time keeping the minimum wage at a reasonable level and passing other laws necessary to fulfill the original goal: ensuring that people who work hard can achieve a reasonable standard of living.

....

The Supreme Court declared the NIRA unconstitutional, but the idea of a federal minimum wage had taken hold. In 1938, Congress passed the Fair Labor Standards Act — which a more progressive Supreme Court upheld — creating a mandatory federal minimum wage.

The new law was enormously effective: within a year, it brought millions of low-paid workers up to a wage of 30 cents an hour. It also had major weaknesses, notably that it was not indexed to inflation. Congress has to raise it, which leaves low-income workers at the mercy of politics.

....

The minimum wage can play a vital role in lifting hard-working families above the poverty line. But as Roosevelt understood, it is also about something larger: what kind of country America wants to be. “A self-supporting and self-respecting democracy,” he said in the Congressional message that accompanied the Fair Labor Standards Act, can plead “no economic reason for chiseling workers’ wages.”

One way to think about the debate over the Wal-Mart economy is in narrow cost-benefit terms: do the benefits of the low prices provided by America's largest private employer exceed the costs of low wages and benefits? But I think the better way to think about it is in Rooseveltian terms: do we want to be a country of low retail prices, low wages, and Gilded Age inequality?

This story, from yesterday's USA Today, is one of the better recent pieces of reporting on the economy and inequality that I've seen. Here's the opening framing paragraphs and an excerpt from later on in the piece:

Work hard, play by the rules and tomorrow will be better than today. That implicit promise has been at the core of the American Experience through good times and bad.

But now, whipsawed by plummeting home values, $4-a-gallon gas, rising food prices and gyrating financial markets, Americans increasingly fear that the national bargain has unraveled, that their once-steady march toward affluence has derailed. In a new USA TODAY poll, 54% of those surveyed say their standard of living is no better today than five years ago.

....

Writer James Truslow Adams was the first to coin the term "American Dream," writing in 1931 that it was "that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement."

Amid the darkest days of the Depression, with the unemployment rate then heading toward 20%, Adams' ideal seemed more illusion than aspiration.

However, once the nation had escaped the clutches of economic collapse and world war, his vision was realized.

In a period that economists now refer to as the golden age, rich and poor alike prospered. From the end of World War II in 1945 to 1973, those at the bottom of the income charts actually advanced a bit faster than those at the top, in what Harvard University economists Claudia Goldin and Lawrence Katz labeled "growing together."

In recent years, however, most of the economic gains have gone to those at the top.

....

I generally subscribe to the relatively positive progressive view of Obamanomics, but today's announcement that Rubinista Jason Furman is joining the Obama team as their economic policy director does give me pause. At TPM Cafe, Steve Clemons notes:

Furman manifests the interests and perspective of perhaps the leading neoliberal force in politics today, Robert Rubin. Furman could make a good case that his views may differ here and there, but my sense is that he's an essential spear-carrier of Rubinomics.

.... it's clear that Furman is no Dean Baker or Robert Blecker or Jared Bernstein—all important economists who have been far more right as of late than the Rubin crowd in anticipating the stress points in globalization, the housing bubble, trade, and the like.

You can say that again. After Circuit City laid off more than 3,000 workers because they were "paid too much"—between $10 and $20 an hour—Furman had this to say to the NYT's David Leonhardt:

The flexibility of the American labor force seems to be one reason that recessions have become less frequent and unemployment is less of a problem here than in Europe, notes Jason Furman, a leading Democratic economist. In this country, fast-growing companies can hire new workers without worrying that they are making a 30-year commitment.

While this is a good rehash of what had been the orthodox view on Europe, it was comprehensively dismantled in an important 2006 paper by David Howell, Dean Baker Andrew Glyn and John Schmitt.

In the popular press and in a surprising number of professional papers, “Europe” is often portrayed as a single entity characterized by high unemployment and strong social protections, in contrast to the much better performing and relatively unregulated labor markets of the U.S. and other Anglo-Saxon economies. This conventional view greatly misrepresents the facts.

Howell and Co. found "little evidence to suggest that changes in the strength of these protective labor market institutions can explain either the success of the [countries in Europe touted as economic] “success stories” or the continued high unemployment of the four large continental European countries."

And here's Furman in Wal-Mart: A Progressive Success Story, a paper he wrote in 2005:

... Wal-Mart is a progressive success story. By acting in the interests of its shareholders, Wal-Mart has innovated and expanded competition, resulting in huge benefits for the American middle class and even proportionately
larger benefits for moderate-income Americans.

....

... the “Wal-Mart economy” is not about an economy in which corporations are squeezing workers. It’s about an economy in which the return to skills is rapidly growing, and technological change, among other forces, is leading to increased inequality. ....

Let's hope Furman doesn't still hold this view about inequality—a conventional one that a growing number of mainstream economists see as outdated. (For an example of economists who held the conventional view, but now place more emphasis on the role of economic institutions like unions, see this paper by MIT's Frank Levy and Peter Temin.)

To be fair, Furman did important defensive work that helped beat back the conservative plan to privatize social security, and he, like Rubin, believes that we need a strong system of social insurance. I'd just like to see some indication that he'll fight as hard inside the campaign (and a potential Obama Administration) for policy changes that restore and build the kind of institutions, like unions and universal health care, that are needed to strengthen and expand the middle class in today's economy—and, just as importantly, places a higher priority on achieving these improvements than on deficit reduction.

What Obama needs is a unity ticket in the economic policy department—an economics advisor on the paid campaign staff at the same level as Furman who represents the progressive economic policy wing that, as Clemons put it, "has been far more right of late." Now that would be some change I can believe in.

Update: Also worth reading on this topic, Todd Tucker, Ezra Klein, and the Nation's Chris Hayes. Hayes, who was on a conference call with Furman, paraphrases Furman as saying "Obama's economic plan is much more focused on tax cuts than investment." Tucker notes, correctly, that some of the other mainstreamers mentioned as unpaid advisors, like Alan Blinder, have become more progressive on some issues, like trade, as of late. Finally, Ezra Klein is positive, explaining:

... I think this is a good move for Obama. Jason has the political skills and policy contacts to run an effective economic shop. But if the question is why Obama didn't hire a more progressive economist like Dean Baker or Jared Bernstein or Joseph Stiglitz, the answer seems pretty simple: Despite some primary pandering in Ohio, Obama isn't that progressive on economic issues.

Returning home from a month of traveling, mostly overseas, I find myself with a sense of, to borrow from Yankees' great Yogi Berra, "deja-vu all over again." When I left, U.S. Sen. Barack Obama was in Raleigh celebrating his victory in the state's primary, and today, he is back in Raleigh to give an invitation-only talk about economic issues. The difference is that Obama now is is the Democratic Party's presumptive presidential nominee.

The news that Obama is coming back to North Carolina has triggered all sorts of comments and analysis focused on the electoral wisdom of his visit. Why would he visit a state that hasn't voted for a Democratic presidential candidate since 1976? Does this mean that U.S. Sen. John McCain is weak? Is this part of some grand electoral plan?

Yet this horse-race analysis overlooks just how dysfunctional American presidential politics has become. Why should the fact that a presidential candidate is visiting one of the nation's most-populous states news in and of itself?

Regardless of the outcome in November, the presence of Obama in North Carolina (hopefully this will not be his only visit) is a good thing. Ideally, Obama's economic speech today will expose voters, both those who attend in person and those who learn about it through media outlets, to a progressive economic vision that normally isn't raised in North Carolina. And even if North Carolina ultimately backs McCain (a very probable outcome), multiple appearances -- both in person and through ads -- on the part of Obama could help set changes in motion that would alter the dynamics of future elections, just as has happened in neighboring Virginia. If Obama has the resources to invest in a "red" state like North Carolina, why should he pass up on an opportunity to help widen the playing field for progressive politics?

I especially like this point from Todd's post:

... for my money, the brouhaha is not over the white working class but over the working class. Parts of the Democratic Party have been searching for ways for decades to not have to deal with class, and have typically combined some outreach to the wealthy on the basis of their wealth, and other groups on the basis of their identity. Subtract these groups, and you're left with the WWC, which, yes, happens to be white, but its exclusion from the foregoing electoral schema is primarily on the basis of its class. So appealing to working class folks of any race on the basis of their class gets lost.

I'd add that when the media portrays blacks in class terms, they're generally portrayed as poor rather than working class. Similarly, when most liberal advocacy groups (other than unions) think of blacks and Latinos (or women, particularly lone mothers, for that matter) in class terms, they tend to think of them as "poor people" or as "recipients" of various public programs. For the media and many liberal groups, it seems like the working class is the white (and male) working class.

As an example, take a look at the website of the well-intended domestic anti-poverty campaign Half in Ten. Of the various images used on the site, there is only one of a white man and only one of someone in obvious work clothes. And guess what, they're the same image—a white guy in a hard hat, the archetypical image of the working class. By contrast, the one image of a black man shows him protesting (both images are reproduced side-by-side below). Where did they get these images? A Nixon '68 campaign ad? (Similarly and surprisingly, given the source, stereotypical, there are two images of white women, one holding a child (mommy!), the other, an elderly woman in a wheelchair (the really old mommy who you never call, you never write!)).

One of the reasons I find the popular conflation of the working class and white working class very odd is that blacks and Latinos are more likely than whites to identify as working class. As the chart at the top of this post shows, a majority of blacks and Mexican-Americans identify themselves as working class when asked to select among four classes. While whites are more likely to identify themselves as middle class than working class, blacks are almost twice as likely to id as working class than as middle class, and Mexican-Americans are more than twice as likely to do so.

Any successful bottom-up campaign for economic justice will need to resonate with, and bring together, working class Americans of all races. One of the few national figures I can think of who has called explicitly for such a coalition is Senator Jim Webb. As Elizabeth Drew notes in the current issue of NYRB:

in his writings, as well as in his new book, Webb has argued that a combination of blacks and the Scots-Irish working class could form an electoral majority. He argues that they have similar grievances: lack of adequate education and health care, job training and job opportunities; and that both have been put upon or neglected by the elites. To him, the basic issue is more one of class than of race.

Via Economist's View, this is from an interesting interview with economist Christopher Ruhm, who has done extensive research on work-life issues, including parental leave:

... I found ... that in the presence of parental leave requirements, women were more likely to be employed. There are a lot of reasons why you would expect that to be true. The most obvious one is the notion of job protection. If you don't have to quit your job to take leave, careers outside of the home become more attractive to women.

It's not entirely obvious, however, that it had to work that way. You can imagine the opposite outcome. Employers might have been encouraged to discriminate against women because women are more likely to actually take the leave, for instance. But there was pretty strong evidence that you did find increased employment-to-population ratios for mothers — a larger percentage of mothers became employed. Yet, I also found that if the leaves got sufficiently long, there was some possible negative effect on wages. In some European countries, you're talking about leave lengths that can equal a few years.

....

I used the same dataset and I looked at health outcomes for children, mainly infant mortality rates — deaths in the first year. I also looked at neonatal fatalities, which is death of the baby in the first 30 days, versus post-neonatal fatalities, which is death in the rest of the first year. Then I extended the analysis out to age 5.

The results were quite striking and consistent with what I would have expected. In the first 30 days, you didn't see much of a reduction in infant mortality, most likely because neonatal deaths are unrelated to how much leave the parents are taking after the birth. It has more to do with what type of hospital care you're getting or whether the baby is born with a congenital defect of some kind. But in the post-neonatal period and after that, you see reductions in infant mortality correlated with parental leave mandates.

The main findings from a new EPI briefing paper on income volatility by Jacob Hacker and Elisabeth Jacobs:

The instability of family incomes has risen substantially over the last three decades. Although the precise magnitude of the increase depends on the approach to measuring income variance that is used, we estimate that short-term family income variance essentially doubled from 1969-2004. Much of the rise in income volatility occurred prior to 1985, and volatility dropped substantially in the late 1990s. It has, however, risen in recent years to exceed its 1980s peak.

The proportion of working-age individuals experiencing a large drop in their family income (50% or greater) has climbed more steadily—from less than 4% in the early 1970s to nearly 10% in the early 2000s. The probability of large income drops varies predictably with the business cycle. Yet it has also trended strongly upward over time. For instance, the 2001 recession, which was mild in macroeconomic terms, was associated with a higher chance of large income drops than the recession of the early 1980s, which was the worst economic downturn since the Great Depression.

There is an important distinction between family income (total earnings, asset income, and transfer income for all members of a family) and individual earnings. While the instability of individual male workers' earnings rose sharply between the 1970s and 1980s, it has been more or less stable since then, trending up and down with the business cycle through the 1980s and 1990s, and rising again in the early 2000s. This basic trend—a rise in earnings variability in the 1970s, little clear trend from the early 1980s to the late 1990s, and an upswing in the early 2000s—has been confirmed by numerous analyses, including a recent study by the Congressional Budget Office (CBO). Moreover, this same basic pattern can be seen in data from both the survey-based Panel Study of Income Dynamics (PSID) (which is used in this brief) and the administratively collected Continuous Work History Sample (CWHS) of the Social Security Administration (used by the CBO).

Contrary to assertions in the popular press, women's increased workforce participation has not been a major factor contributing to the rise in family income volatility. Female earnings have, if anything, become more stable since the 1980s. Male workers have experienced a larger and more sustained rise in earnings instability. Because men's earnings account for a larger percentage of total household income than do women's earnings, on average, rising instability in male earnings helps account for the increase in family income volatility. In short, the stabilizing influence on family income of the decrease in female earnings instability is overwhelmed by the rise in men's earnings instability.

In addition to the increase in male earnings variability, other likely causes of rising family income volatility include the growing variability of cash transfers and the limited cushioning effect of having a second earner in the household. Although the evidence is limited, there is reason to believe that a second family earner is less of a benefit in terms of income protection today than it was prior to the 1990s. Indeed, in 2004, if a male worker's earnings fell, on average his spouse's earnings fell as well, exacerbating, rather than offsetting, the loss.

While less educated and poorer Americans have less-stable family incomes than their better-educated and wealthier peers, the increase in family income volatility affects all major demographic and economic groups. Indeed, Americans with at least four years of college experienced a larger increase in family income instability than those with only a high-school education over the past generation, with most of the rise occurring in the last 15 years.

Finally, levels of family income volatility appear to be extremely high. Family income drops of 50% or greater affected nearly one in 10 non-elderly adults during the early 2000s. Meanwhile, earnings in the United States are also quite variable. The CBO's recent analysis of earnings variance using the CWHS suggests that around 15% of workers experience a drop in their earnings of 50% or greater every year—a level comparable to what we find using the PSID.

If enacted into law, Senator Webb's legislation to expand GI Bill educational benefits for active duty veterans likely would be the most important progressive economic and social policy victory of the current session of Congress. The legislation would provide about $5 billion a year in educational benefits and income supplements to post-9/11 vets.

Webb's proposed expansion has received relatively little attention from advocates in the areas of education and training, youth, economic justice, and racial justice, even though the legislation would probably do more to help the constituencies these groups see themselves as representing than any other legislation likely to pass this year. African-Americans, who serve in the US Armed Forces at a rate far in excess of their share of the population, would benefit disproportionately from GI Bill expansion. About half of the active-duty force are 17-24 years old, and many of them serve relatively short stints in the military.

As a resolute anti-imperialist and opponent of many of our current and past military adventures, I wish we had a much smaller military, and that all of the billions going down the drain in Iraq were being used to better educate all Americans. But I'm also a pragmatist and populist, one who sees expanding the GI Bill as a step forward for economic and racial justice.