Author Archives: afscme

CEO compensation has grown 940% since 1978 – Typical worker compensation has risen only 12% during that time

Source: Lawrence Mishel and Julia Wolfe, Economic Policy Institute, August 14, 2019

From the summary:
What this report finds: The increased focus on growing inequality has led to an increased focus on CEO pay. Corporate boards running America’s largest public firms are giving top executives outsize compensation packages. Average pay of CEOs at the top 350 firms in 2018 was $17.2 million—or $14.0 million using a more conservative measure. (Stock options make up a big part of CEO pay packages, and the conservative measure values the options when granted, versus when cashed in, or “realized.”) CEO compensation is very high relative to typical worker compensation (by a ratio of 278-to-1 or 221-to-1). In contrast, the CEO-to-typical-worker compensation ratio (options realized) was 20-to-1 in 1965 and 58-to-1 in 1989. CEOs are even making a lot more—about five times as much—as other earners in the top 0.1%. From 1978 to 2018, CEO compensation grew by 1,007.5% (940.3% under the options-realized measure), far outstripping S&P stock market growth (706.7%) and the wage growth of very high earners (339.2%). In contrast, wages for the typical worker grew by just 11.9%.

Why it matters: Exorbitant CEO pay is a major contributor to rising inequality that we could safely do away with. CEOs are getting more because of their power to set pay, not because they are increasing productivity or possess specific, high-demand skills. This escalation of CEO compensation, and of executive compensation more generally, has fueled the growth of top 1.0% and top 0.1% incomes, leaving less of the fruits of economic growth for ordinary workers and widening the gap between very high earners and the bottom 90%. The economy would suffer no harm if CEOs were paid less (or taxed more).

How we can solve the problem: We need to enact policy solutions that would both reduce incentives for CEOs to extract economic concessions and limit their ability to do so. Such policies could include reinstating higher marginal income tax rates at the very top; setting corporate tax rates higher for firms that have higher ratios of CEO-to-worker compensation; establishing a luxury tax on compensation such that for every dollar in compensation over a set cap, a firm must pay a dollar in taxes; reforming corporate governance to give other stakeholders better tools to exercise countervailing power against CEOs’ pay demands; and allowing greater use of “say on pay,” which allows a firm’s shareholders to vote on top executives’ compensation.

Related:
Press Release

Tax Justice Is Gender Justice

Source: National Women’s Law Center, November 2019

From the abstract:
The tax code sets the rules that shape our economy, reflecting and perpetuating notions of who and what our society values. It’s an opportunity to fight inequality. But today’s tax code contains outdated and often biased assumptions about family structures, marriage, participation in the paid workforce, and more that work together to perpetuate structural barriers against women, families with low incomes, and people of color. The tax code can be a barrier for realizing gender justice – but it can also be a tool. It’s time we take advantage.

Related:
Executive Summary

Reports include:
The Faulty Foundations of the Tax Code
Source: Ariel Jurow Kleiman (University of San Diego School of Law), Amy K. Matsui, and Estelle Mitchell, National Women’s Law Center, November 2019

This paper examines the outdated assumptions and gender and racial biases embedded in the U.S. tax code. It highlights tax code provisions that reflect and exacerbate gender disparities, with particular attention to those that disadvantage women with low incomes, women of color, members of the LGBTQ community, people with disabilities, and immigrants.

Reckoning With the Hidden Rules of Gender in the Tax Code
Source: Katy Milani, Melissa Boteach,Steph Sterling, Sarah Hassmer, Roosevelt Institute & National Women’s Law Center, November 2019

Low taxes for the wealthy and corporations have played a role in enabling – and in some cases encouraging – those with the highest incomes and the most capital to accumulate outsized wealth and power in our economy. Centuries of discrimination and subjugation of women and people of color interact today with widening income inequality, such that white, non-Hispanic men are disproportionately represented among the wealthiest households, while labor and economic contributions from women of color are consistently undervalued. An agenda to advance racial and gender justice must reckon with provisions in our tax code perpetuate and enable these inequities.

A Tax Code for the Rest of Us: A Framework & Recommendations for Advancing Gender & Racial Equity Through Tax Credits
Source: Melissa Boteach, Amy K. Matsui, Indivar Dutta-Gupta, Kali Grant, Funke Aderonmu, Rachel Black, Georgetown Institute on Poverty and Inequality & National Women’s Law Center, November 2019

While the U.S. income tax system is progressive overall, many aspects of the tax code reward wealth-building by the already wealthy and exclude low- and moderate-income families. Given the historical discrimination and ongoing structural barriers that have locked women and people of color out of economic opportunity, such tax provisions not only exacerbate economic inequality, but also amplify gender and racial disparities. This report considers the question: how can our tax code build on the success of the EITC and CTC to better dismantle structural barriers that impede economic security and wealth-building for women and people of color? It ultimately proposes a framework to help policymakers, advocates, and the public evaluate when and how refundable tax credits can advance equity, economic mobility, and opportunity for all.

Tax Increment Financing in Chicago: The Perplexing Relationship Between Blight, Race, and Property Values

Source: Twyla Blackmond Larnell, Davia Cox Downey, Economic Development Quarterly, Volume: 33 issue: 4 November 2019
(subscription required)

From the abstract:
Cities use tax increment financing (TIF) to trigger growth in blighted communities. Critics argue that Chicago’s broad conceptualization of “blight” facilitates the designation of TIF districts that do not resemble conventional notions of blight, bolstering their natural ability to generate capital, thereby exacerbating the gap between wealthy and poor minority spaces. This study examines Chicago’s TIF districts to determine whether blight levels and percentage of non-White residents interact to reduce the effectiveness of TIFs measured as the change in the equalized assessed valuation (EAV) of properties. Using composite indices to measure physical and economic blight, the results of a quantile regression analysis indicate that economically blighted TIFs with predominantly non-White populations outperform other districts. These findings run counter to expectations given that TIFs report high rates of growth in property values, yet they remain substantially blighted. This suggests a need to reconsider change in equalized assessed valuation as the measure of TIF effectiveness given that the “growth” in TIFs does not seem to reflect a higher quality of life for residents.

They Still Just Don’t Get It: The Lessons of the #MeToo Movement Through the Lens of Supreme Court Nominations

Source: MaryAnn Grover, Richmond Public Interest Law Review, Date Written: April 23, 2019

From the abstract:
Many have hailed the #MeToo Movement as a turning point in the way this country discusses sexual assault and sexual harassment, but when looking at the #MeToo Movement through the lens of Supreme Court nominations, it is unclear whether the impact of the Movement will be as far reaching as some imagine. The hearing of Anita Hill, which came before the #MeToo Movement, and the hearing of Dr. Christine Blasey Ford, which came after the #MeToo Movement, perhaps demonstrate that the #MeToo Movement has reached its limit culturally and now institutional change must be the focus in order for the goals of the #MeToo Movement to be fully realized. Looking to the hearing of Professor Hill to analyze what we should have learned, the #MeToo Movement to assess what we thought we learned, and the hearing of Dr. Ford to recognize what we still have to learn about survivors of sexual assault, this Article begins to develop creative solutions to ensure that our institutions change as our society changes, with the ultimate goal of creating a society where no one else has to say #MeToo.

Nudging Early Reduces Administrative Burden: Three Field Experiments to Improve Code Enforcement

Source: Elizabeth Linos, Lisa T. Quan, Elspeth Kirkman, Journal of Policy Analysis and Management, Early View, November 5, 2019
(subscription required)

From the abstract:
In the past decade, public sector organizations around the world have worked to simplify administrative processes as a way to improve user experience and compliance. Academic evidence on administrative burden supports this approach and there is a strong body of research showing that learning costs, compliance costs, and psychological costs help to explain why residents do not always take up programs for which they are eligible. This article considers the role of these types of costs in a different set of resident‐state interactions: compliance with regulations. We present the results of three large field experiments aimed at improving resident compliance with municipal housing codes using targeted behavioral interventions. We find that contacting property owners earlier, redesigning first notices, and proactively communicating with previous violators, can significantly improve compliance by 14.7 percent, 3.3 percent, and 9.2 percent, respectively, with costs savings ranging from 6 to 15 percent of a city’s annual enforcement budget. Our results counterintuitively suggest that sometimes adding steps to an administrative process can reduce the costs associated with the resident‐state interaction.

The Costs of Being Poor: Inflation Inequality Leads to Three Million More People in Poverty

Source: Christopher Wimer, Sophie Collyer, Xavier Jaravel, Columbia University, Center on Poverty and Social Policy and London School of Economics, November 2019

From the summary:
It is widely recognized that income inequality has skyrocketed in recent decades. Incomes at the top of the distribution have grown rapidly, far outpacing income growth at the bottom. Recent research also shows that prices have risen more quickly for people at the bottom of the income distribution than for those at the top —a phenomenon dubbed “inflation inequality.” An implication of this new finding is that we may be under-estimating income inequality and poverty rates in the United States—two national statistics that rely heavily on the annual inflation rate as part of their calculation. In this brief, we utilize an adjusted inflation index that accounts for inflation inequality across the income distribution and re-estimate recent trends in poverty and income inequality from 2004 to 2018. Our adjusted inflation index indicates that 3.2 million more people are classified as living in poverty in 2018, and that real household income for the bottom 20 percent of the income distribution actually declined by more than 7 percent since 2004. These results show that inflation inequality significantly accentuates both the incidence of poverty and income inequality.

Untapped Power: The Strength of Asian American, Native Hawaiian, and Pacific Islander Working People

Source: Asian Pacific American Labor Alliance (APALA) AFL-CIO, November 2019

Asian American, Native Hawaiian, and Pacific Islander (AANHPI) workers are the fastest growing working age population in the United States, overrepresented at the lower and higher ends of the labor market – meaning that our communities experience wide income disparity. And yet AANHPI working people are often overlooked and under organized. As our immigrant and working class communities are under attack, it is increasingly important that the labor movement, community-based organizations, and policymakers take into the unique challenges and needs that AANHPIs face as well as recognize the common issues and experiences that this community shares with all workers.

We wish to impart the urgency with which the labor movement and policymakers must continue to organize and protect AANHPI communities in order to secure safe, healthy, and prosperous livelihoods for all working people and to harness their political potential to drive progressive change. In short, the labor movement stands to grow stronger from organizing AANHPI workers, and AANHPI communities stand to benefit from uniting together and joining the labor movement.

This report takes a look at who AANHPI workers are, what barriers we face, and how advocates, policymakers, and the labor movement can fight for AANHPI communities and all workers.

As unions and the labor movement come under attack, it becomes increasingly important to organize Asian
Americans, Native Hawaiians, and Pacific Islanders — the fastest-growing population in the United States.
There are more than 21 million AANHPIs, comprising roughly 5% of the population. …. In 2017, AANHPIs had a poverty rate of 11.1%. Native Hawaiians and Pacific Islanders had the highest poverty rates at 16.1% and 18.3% respectively. Notably, roughly 3 in 4 (72%) Asian American low-wage workers are immigrants; this is significant as Asian Americans account for over one-quarter (27.1%) of the immigrant population in the U.S. …. In 2018, union members had median weekly earnings of $1,051, which was $191 more than their non-union counterparts. Asian American union workers had median weekly earnings of $1,119, which was 2.5% higher than their non-union counterparts who earned $1,092. The union advantage is even greater for Asian American women, who had median weekly earnings of $1,033, compared to their non-union counterparts who made $929 a week — an 11% difference. ….

Related:
summary

Union workers more likely than nonunion workers to have retirement benefits in 2019

Source: Bureau of Labor Statistics, U.S. Department of Labor, TED: The Economics Daily, October 25, 2019

Ninety-four percent of civilian union workers and 67 percent of nonunion workers had access to retirement benefits through their employer in March 2019. Access means the benefit is available to employees, regardless of whether they chose to participate. Eighty-five percent of union workers and 51 percent of nonunion workers participated in an employer-sponsored retirement benefit plan. The take-up rate—the share of workers with access who participate in the plan—was 90 percent for union workers and 77 percent for nonunion workers.

City Fiscal Conditions 2019

Source: National League of Cities, October 2019

From the summary:
This year’s City Fiscal Conditions research looked at the fiscal conditions and factors across 500+ U.S. cities.

Some key takeaways:
– Almost two in three finance officers in large cities are predicting a recession as soon as 2020
– Cities’ revenue growth stalled in the 2018 fiscal year, but this year’s continued drop indicates mounting pressures on city budgets
– The Midwest is bearing the brunt of declining conditions, the report found. Overall general fund revenues in midwestern cities dipped by 4.4% in fiscal year 2018

Workers’ Compensation Benefits, Costs, and Coverage – 2017 Data

Source: Elaine Weiss, Griffin Murphy, Leslie I. Boden, National Academy of Social Insurance, October 2019

The 22nd report in the series, Workers’ Compensation: Benefits, Costs, and Coverage (2017 Data) provides the only comprehensive data on workers’ compensation benefits, coverage, and employer costs for the nation, the states, the District of Columbia, and federal programs.

From the press release:
Benefits paid to injured workers continued to decline, while covered employment and wages continued to rise, according to data in the new Workers’ Compensation Benefits, Costs, and Coverage (2017 Data) report. Produced annually by the National Academy of Social Insurance (Academy), this report provides the only comprehensive data on workers’ compensation benefits, coverage, and employer costs for the nation, the states, the District of Columbia, and federal programs.

Employee coverage has increased fairly steadily over the past two decades, but employer costs have fallen from just over $1.50 per $100 of covered wages in 1997 to $1.25 in 2017. Worker benefits decreased even more, from $1.17 twenty years ago to $0.80 per $100 of covered wages in 2017. “This year’s report shows that the trends that have dominated the workers’ compensation system for the past three decades – declines in both workers’ benefits and employers’ costs – continue to be sustained,” noted Les Boden, Chair of the Academy Study Panel on Workers’ Compensation Data and co-author of the report…..

Related:
Executive Summary

Read state-specific findings:
Florida
Missouri
Ohio
Wyoming

Sources and Methods