Author Archives: afscme

Fortifying Main Street: The Economic Benefit of Public Pension Dollars in Small Towns and Rural America

Source: Dan Doonan, Maryna Kollar, Nathan Chobo, Tyler Bond, National Institute on Retirement Security, March 2020

From the summary:
As many small towns and rural communities across America face shrinking populations and slowing economic growth, a new report finds that one positive economic contributor to these areas is the flow of benefit dollars from public pension plans. In 2018, public pension benefit dollars represented between one and three percent of gross domestic product (GDP) on average among the 1,401 counties in 19 states studied.

These findings are detailed in a new study, Fortifying Main Street: The Economic Benefit of Public Pension Dollars in Small Towns and Rural America.

This new report finds that public pension benefit dollars also account for significant amounts of total personal income in counties across the nineteen states studied. For all 1,401 counties in this study, pension benefit dollars represent an average of 1.37 percent of total personal income, while some counties experience more than six percent of total personal income derived from pension dollars.

The report’s key findings are as follows:

  • Public pension benefit dollars represent between one and three percent of GDP on average in the 1,401 counties studied.
  • Rural counties and counties with state capitals have the highest percentages of populations receiving public pension benefits.
  • Small town counties experience a greater relative impact both in terms of GDP and total personal income from public pension benefit dollars than rural or metropolitan counties.
  • Rural counties experience more of an impact in terms of personal income than metropolitan counties, whereas metropolitan counties experience more of an impact in terms of GDP than rural counties.
  • Counties with state capitals are outliers from other metropolitan counties, likely because there is a greater density of public employees in these counties, most of whom remain in these counties in retirement.
  • On average, rural counties have lost population while small town counties and metropolitan counties have gained population in the period between 2000 and 2018, but the connection between population change and the relative impact of public pension benefit dollars is weak.

The Gender Wage Gap: 2019 Earnings Differences by Race and Ethnicity

Source: Ariane Hegewisch, Zohal Barsi, Institute for Women’s Policy Research, Fact Sheet, C489, March 10, 2020

From the summary:

The gender wage gap in weekly earnings for full-time workers in the United States narrowed marginally between 2018 and 2019. In 2019, the ratio of women’s to men’s median weekly full-time earnings was 81.5 percent, an increase of 0.4 percent since 2018, when the ratio was 81.1 percent, leaving a wage gap of 18.5 percent, compared with 18.9 percent in 2018 (Figure 1). Women’s median weekly earnings for full-time work were $821 in 2019 compared with $1,007 for men. Adjusting for inflation, women’s median earnings increased by 2.2 percent compared with 2018; men’s earnings increased by 1.7 percent.

Another measure of the wage gap, the ratio of women’s and men’s median annual earnings for full-time, year-round workers, was 81.6 percent in 2018 (data for 2019 are not yet available). An earnings ratio of 81.6 percent means that the gender wage gap for full-time, year-round workers is 18.4 percent.

Unlike the gender earnings ratio for full-time year-round workers, the ratio for weekly earnings excludes self-employed workers, does not include earnings from annual bonuses, and includes workers who work only part of the year. Both earnings ratios are for full-time workers only. When all workers with earnings are included, the gap in earnings is much larger because women are more likely than men to work part-time or take time out of paid work to manage childrearing and other caregiving work. Over a 15 year period women workers’ earnings were just 49 percent—less than half—of men’s earnings, a wage gap of 51 percent in 2001-2015.

Nurse Aide Retention in Nursing Homes

Source: Nicholas G Castle, PhD, Kathryn Hyer, PhD, MPP, John A Harris, MD, MSc, John Engberg, PhD, The Gerontologist, Advance Access, March 6, 2020
(subscription required)

From the abstract:
Background and Objectives: The association of nurse aide retention with three quality indicators is examined. Retention is defined as the proportion of staff continuously employed in the same facility for a defined period of time.

Research Design and Methods: Data used in this investigation came from survey responses from 3,550 nursing facilities, Certification and Survey Provider Enhanced Reporting data, and the Area Resource File. Staffing characteristics, quality indicators, facility, and market information from these data sources were all measured in 2016. Nurse aide retention was measured at 1, 2, and 3 years of employment. The quality indicators examined were a count of all deficiency citations, quality of care deficiency citations, and J, K, L deficiency citations. Negative binomial regression analyses were used to study the associations between the three different retention measures and these three quality indicators.

Results: The 1-, 2-, and 3-year nurse aide retention measures were 53.2%, 41.4%, and 36.1%, respectively. The regression analyses show low levels of retention to be generally associated with poor performance on the three deficiency citation quality indicators examined.

Discussion and Implications: The research presented starts to provide information on nurse aide retention as an important workforce challenge and its potential impact on quality. Retention may be an additional staffing characteristic of nursing facilities with substantial policy and practice relevance.

Millennial State & Local Government Employee Views on Their Jobs, Compensation & Retirement

Source: Kelly Kenneally, Tyler Bond, National Institute on Retirement Security (NRIS), February 2020

From the summary:
A new issue brief finds that Millennials working in state and local government are satisfied with their jobs and intend to stay with their employers so long as their benefits are not cut.

Millennial State & Local Government Employee Views on Their Jobs, Compensation & Retirement provides a deeper analysis of NIRS’ November 2019 opinion research report, and it drills down to examine the views of Millennials working in state and local government.

This nationwide poll finds that 84 percent of Millennials working in state and local government say they are satisfied with their job. This high job satisfaction comes despite sentiment that they could earn a higher salary in the private sector. Most Millennials in state and local government (80 percent) believe they could earn a higher salary working in the private sector, and only about one on four see their salary as very competitive.

The research also finds that state and local Millennial employees (85 percent) say that they plan to stay in their job until they retire or can no longer work. But, Millennials’ job loyalty would alter if their benefits were changed. Some 78 percent say their healthcare benefits is one reason they chose a position in the public sector, and 77 percent say they would be more likely to leave their job if this benefit were cut. A high number of these Millennials (84 percent) say that a pension benefit is the reason they stay in a state and local government job. These Millennials say that cutting their pension benefits would make them more likely to leave their state or local government job (71 percent).

Examining the Nest Egg: The Sources of Retirement Income for Older Americans

Source: Frank Porell, Tyler Bond, National Institute on Retirement Security (NRIS), January 2020

From the summary:
A new report finds that a large portion (40 percent) of older Americans rely only on Social Security income in retirement while only a small percentage of older Americans (seven percent) receive income from Social Security, a defined benefit pension, and a defined contribution account. Retirement income from these three sources is widely considered to be the ideal situation to ensure retirement security, particularly for the middle class. Retirees with these three sources of income are far less likely to face poverty and economic hardship.

These findings are contained in a new report from the National Institute on Retirement Security (NIRS), Examining the Nest Egg: The Sources of Retirement Income for Older Americans. The report is co-authored by Tyler Bond, NIRS manager of research, and Dr. Frank Porell, University of Massachusetts Boston professor emeritus.

The analysis also finds that without income from Social Security in 2013, the number of poor older U.S. households would have increased by more than 200 percent to 11 million households. Absent income from defined benefit pensions, the number of poor older households would have increased by 19 percent to more than four million households in 2013. Defined contribution plans, however, are less powerful at keeping older households out of poverty than pensions and Social Security because fewer near-poor households have assets in 401(k)-style defined contribution accounts and income from those accounts provided a smaller portion of total income. Without income from defined contribution accounts, the estimated number of poor older households would have increased by five percent.

Incentivizing the Missing Middle: The Role of Economic Development Policy

Source: Carlianne Patrick, Heather M. Stephens, Economic Development Quarterly, OnlineFirst, Published February 28, 2020
(subscription required)

From the abstract:
The shrinking middle class and increasing income polarization in the United States are issues of concern to policy makers and others. Economic development incentives are a key policy tool used at the state and local levels to promote local economic growth, and, presumably, provide employment opportunities. However, these incentives may have unintended consequences that may be contributing to the decline of the middle class. The authors combine detailed industry-level detail on incentives with proprietary county-level industry employment data and two methods for defining middle-class industries. Using an instrumental variable approach, the authors estimate how differential economic development policies affect middle-class jobs. The authors find evidence that incentivizing creative-class and high-wage industries may be contributing to the hollowing out of the middle class. Without hurting employment in other industries, targeting working-class and middle-wage industries alleviates this trend, while reducing incentives on creative-class and high-wage industries could help increase working and middle-class employment.

Macroeconomic Feedback Effects of Medicaid Expansion: Evidence from Michigan

Source: Helen Levy, John Z. Ayanian, Thomas C. Buchmueller, Donald R. Grimes, Gabriel Ehrlich, Journal of Health Politics, Policy and Law, Vol. 45 no. 1, February 2020
(subscription required)

From the abstract:

Context: Medicaid expansion has costs and benefits for states. The net impact on a state’s budget is a central concern for policy makers debating implementing this provision of the Affordable Care Act. How large is the state-level fiscal impact of expanding Medicaid, and how should it be estimated?

Methods: We use Michigan as a case study for evaluating the state-level fiscal impact of Medicaid expansion, with particular attention to the importance of macroeconomic feedback effects relative to the more straightforward fiscal effects typically estimated by state budget agencies. We combine projections from the state of Michigan’s House Fiscal Agency with estimates from a proprietary macroeconomic model to project the state fiscal impact of Michigan’s Medicaid expansion through 2021.

Findings: We find that Medicaid expansion in Michigan yields clear fiscal benefits for the state, in the form of savings on other non-Medicaid health programs and increases in revenue from provider taxes and broad-based sales and income taxes through at least 2021. These benefits exceed the state’s costs in every year.

Conclusions: While these results are specific to Michigan’s budget and economy, our methods could in principle be applied in any state where policy makers seek rigorous evidence on the fiscal impact of Medicaid expansion.

The Role and Importance of Individual Retirement Accounts

Source: John G. Kilgour, Compensation & Benefits Review, OnlineFirst, Published February 12, 2020
(subscription required)

From the abstract:
What are now called “traditional IRAs” (Individual Retirement Accounts) were created by the Employee Retirement Income Security Act of 1974. Roth IRAs were added in 1997. Employer-sponsored Simplified Employee Pensions–IRAs were added in 1978 and Savings Investment Match Plans for Employees–IRAs (and 401(k)s) in 1996. Together IRAs hold $8.8 trillion in assets, one third of the total $27.1 trillion in all retirement plans. This article examines the role and importance of IRAs in the U.S. retirement system and the development of the different types of IRAs and their interaction with each other.

Uyghurs for sale: ‘Re-education’, forced labour and surveillance beyond Xinjiang

Source: Vicky Xiuzhong Xu, Danielle Cave, Dr James Leibold, Kelsey Munro & Nathan Ruser, Australian Strategic Policy Institute, 2020

From the summary:
….This report examines three case studies in which Uyghur workers appear to be employed under forced labour conditions by factories in China that supply major global brands. In the first case study, a factory in eastern China that manufactures shoes for US company Nike is equipped with watchtowers, barbed-wire fences and police guard boxes. The Uyghur workers, unlike their Han counterparts, are reportedly unable to go home for holidays (see page 8). In the second case study of another eastern province factory claiming to supply sportswear multinationals Adidas and Fila, evidence suggests that Uyghur workers were transferred directly from one of Xinjiang’s ‘re-education camps’ (see page 18). In the third case study, we identify several Chinese factories making components for Apple or their suppliers using Uyghur labour. Political indoctrination is a key part of their job assignments (see page 21)…..

In all, ASPI’s research has identified 83 foreign and Chinese companies directly or indirectly benefiting from the use of Uyghur workers outside Xinjiang through potentially abusive labour transfer programs: Abercrombie & Fitch, Acer, Adidas, Alstom, Amazon, Apple, ASUS, BAIC Motor, BMW, Bombardier, Bosch, BYD, Calvin Klein, Candy, Carter’s, Cerruti 1881, Changan Automobile, Cisco, CRRC, Dell, Electrolux, Fila, Founder Group, GAC Group (automobiles), Gap, Geely Auto, General Electric, General Motors, Google, H&M, Haier, Hart Schaffner Marx, Hisense, Hitachi, HP, HTC, Huawei, iFlyTek, Jack & Jones, Jaguar, Japan Display Inc., L.L.Bean, Lacoste, Land Rover, Lenovo, LG, Li-Ning, Marks & Spencer, Mayor, Meizu, Mercedes-Benz, MG, Microsoft, Mitsubishi, Mitsumi, Nike, Nintendo, Nokia, The North Face, Oculus, Oppo, Panasonic, Polo Ralph Lauren, Puma, Roewe, SAIC Motor, Samsung, SGMW, Sharp, Siemens, Skechers, Sony, TDK, Tommy Hilfiger, Toshiba, Tsinghua Tongfang, Uniqlo, Victoria’s Secret, Vivo, Volkswagen, Xiaomi, Zara, Zegna, ZTE.

Related:
China Uighurs ‘moved into factory forced labour’ for foreign brands
Source: BBC, March 1, 2020

Thousands of Muslims from China’s Uighur minority group are working under coercive conditions at factories that supply some of the world’s biggest brands, a new report says. The Australian Strategic Policy Institute said this was the next phase in China’s re-education of Uighurs. China has already detained about a million Uighurs at internment camps, punishing and indoctrinating them. Officials say the camps are aimed at countering extremism. The ASPI report comes after a senior Chinese official told reporters in December that members of the minority group being held in the camps had now “graduated”.