Category Archives: Economy

The Effect of the Economy On the Nonproft Sector

Source: GuideStar, June 2010

A survey of public charity and private foundation employees was conducted online from June 14, 2010, until June 28, 2010. Te purposes of the survey were to explore how charitable organizations fared during the first five months of 2010 and to try to gauge the effect of the downturn in the economy on the American nonprofit sector. There were 7,014 usable responses, 6,434 (92 percent) from public charities and 580 (8 percent) from private foundations.

It has been, and continues to be, a difficult financial environment for nonprofits. About 40 percent of respondents have seen further declines in contributions in the first five months of 2010 at the same time that a majority (63 percent) have seen an increase in demand for their services. Even organizations that have stopped the bleeding are concerned.
2010 State of the Sector Survey Full Results
Source: Nonprofit Finance Fund, 2010
In Their Own Words: Voices from the 2010 State of the Sector Survey
Source: Nonprofit Finance Fund, 2010

Sustaining Organizing: A Survey of Organizations During the Economic Downturn

Source: DataCenter and the National Organizers Alliance, June 2010

From the summary:
At the 2010 US Social Forum NOA and the DataCenter released Sustaining Organizing: A Survey of Organizations During the Economic Downturn, an analysis of a survey conducted with 203 organizations engaged in community organizing and movement building work. The study looks at the impact of the recession on our work and resources.

The DataCenter and the National Organizers Alliance are conducting the Sustaining Organizing Study to document the impact of the economic downturn on organizing and movement building organizations. There already have been many studies and reports that have documented the impact on the non-profit sector as a whole. One study found that 9 in 10 organizations will not break even this year and that only 16% expect to cover their operating expenses in 2009 and 2010. Almost half of organizations are planning to manage the downturn through program reduction or elimination and staff or salary cuts. Our study aims to uncover how the downturn is affecting organizing and what strategies and best practices are being used to sustain the work through this period.

The Severe Crisis of Jobs in the United States and California

Source: Sylvia A. Allegretto, Center on Wage and Employment Dynamics, Policy Brief, August 2010

Te economy needs jobs, jobs, jobs and more jobs–this is not news to the 25 million unemployed and underemployed workers who continue to bear the hardships of the Great Recession. Workers have grown weary and families once bending are now breaking under the strain. Te severe crisis of jobs in the United States and, particularly, in California seems to be lost as austerity dominates the policy dialogue in Washington, DC. In California, another round of cuts and anti-stimulus measures are under- way and they will move the state further away from recovery. Te downturn has hit the state especially hard and given its size and importance in the U.S. economy it is hard to imagine a robust recovery without the Golden State.

The onset of what was to become the Great Recession started in December 2007. Job losses were at first mild but then fell of a cliff the latter half of 2008 coinciding with the bursting of the housing bubble and the resultant implosion of many financial institutions. Situating this labor market in a historical context provides important insights and perspective into the current situation and what we may expect. This paper documents the fallout from the Great Recession by detailing key labor market statistics–the realities are harsh and should give pause to those advocating for economic austerity. A massive jobs bill and aid to struggling states should be top priority.

Understanding the Economy: State-by-State Snapshots

Source: U.S. Congress Joint Economic Committee, July 2010 (based on June Data)

From the summary:
The U.S. Congress Joint Economic Committee released the July installment of its “Understanding the Economy: State-by-State Snapshots” series, which provides easy access to the major economic indicators in all 50 states and the District of Columbia in the areas of jobs, unemployment, personal earnings and housing (click here to read the Executive Summary).

Key economic statistics for each state include:

• Jobs created or lost since the start of the recession;
• Jobs saved or created by the Recovery Act;
• Unemployment rates;
• Per capita earnings; and,
• The condition of the housing sector.

See also:
July 2010 – Mid-Year Report

State and Local Government Employment are Down Since the Start of the Recession

Source: Donald J. Boyd and Lucy Dadayan, Nelson A. Rockefeller Institute of Government, Data Alert, August 10, 2010

Friday’s July employment report from the Bureau of Labor Statistics showed that total employment in the nation declined by 131,000 jobs. The decline was driven by a combination of very weak growth in the private sector (+71,000 jobs), a large decline in federal government employment (-154,000) primarily reflecting the departure of 143,000 temporary Census 2010 workers, and a decline of 48,000 in state and local government jobs.

How the Great Recession Was Brought to an End

Source: Alan S. Blinder – Gordon S. Rentschler Memorial Professor of Economics, Princeton University, and Mark Zandi – Chief Economist, Moody’s Analytics, July 27, 2010
The U.S. government’s response to the financial crisis and ensuing Great Recession included some of the most aggressive fiscal and monetary policies in history. The response was multifaceted and bipartisan, involving the Federal Reserve, Congress, and two administrations. Yet almost every one of these policy initiatives remain controversial to this day, with critics calling them misguided, ineffective or both. The debate over these policies is crucial because, with the economy still weak, more government support may be needed, as seen recently in both the extension of unemployment benefits and the Fed’s consideration of further easing.

In this paper, we use the Moody’s Analytics model of the U.S. economy–adjusted to accommodate some recent financial-market policies–to simulate the macroeconomic effects of the government’s total policy response. We find that its effects on real GDP, jobs, and inflation are huge, and probably averted what could have been called Great Depression 2.0. For example, we estimate that, without the government’s response, GDP in 2010 would be about 11.5% lower, payroll employment would be less by some 8½ million jobs, and the nation would now be experiencing deflation.

Improving Home-Care Services, Creating Jobs

Source: Nancy Folbre, New York Times Economix Blog, July 26, 2010

Most Americans, even if they have jobs themselves, care about those who can’t find jobs. Recent polls report that a strong majority consider it a higher priority to help the unemployed than to reduce the federal deficit.

Most Americans also care about the well-being of the most vulnerable members of our community – individuals with disabilities, the frail elderly and children growing up in poverty. That’s why we have programs like Medicaid, Medicare and Head Start. Unfortunately, many states, unable to raise the revenue they need, are cutting spending on such programs.

Maybe we could improve home-care services by providing more federal support for jobs in this sector of the economy.

At least two specific proposals along these lines, based on very different designs, have been put forward.

Economic Security at Risk

Source: Jacob S. Hacker, Gregory A. Huber, Philipp Rehm, Mark Schlesinger, Rob Valletta, July 2010

The Economic Security Index (ESI), sponsored by the Rockefeller Foundation, measures the share of Americans who experience at least a 25% drop in their available family income whether due to a decline in income or a spike in medical spending or a combination of the two, and who lack an adequate financial safety net to catch them when they fall. A higher ESI therefore indicates greater insecurity, much as a rising unemployment rate signals a faltering economy.

Data are available for the ESI from 1985 through 2007, with projections for the most recent years (a less complete form of the index is available back to the late 1960s).

The ESI looks at actual economic losses, not at who fears or is vulnerable to them. The threat of such losses is real and growing for all Americans.

According to ESI:
– Financial insecurity has increased.
In 1985, 12.2 percent of Americans experienced a major economic loss sufficient to classify them as insecure in the ESI. During the recession of the early 2000s, this had risen to 17 percent. In 2007, before the current downturn, the picture had improved (13.7 percent), but measured insecurity remained higher than in the 1980s. Because the economic downturn after 2007 was substantial, we project the ESI forward based on the 1985-2007 experience. These projections suggest that in 2009, the level of economic insecurity experienced by Americans was greater than at any time over the past quarter century, with approximately one in five Americans (20.4 percent) experiencing a decline in available household income of 25 percent or greater.

– The extent of economic security varies substantially across the population but has risen for virtually all groups.
Economic Insecurity: The Long View
Source: Michael Powell, New York Times Economix Blog, July 23, 2010

Budgets, Bonds and Basketball

Source: Penelope Lemov, Governing, July 15, 2010

When it comes to raising money and spending it, states and localities face formidable political obstacles.
Public Rejects Variety Of Options For Fixing State Budgets
Source: Pew Research Center, June 28, 2010
New Fiscal Year Brings More Grief for State Budgets, Putting Economic Recovery at Risk
Source: Erica Williams, Phil Oliff, Ashali Singham and Nicholas Johnson, Center on Budget and Policy Priorities, June 29, 2010

School Districts’ Perspectives on the Economic Stimulus Package

Source: Nancy Kober, Center on Education Policy, July 15, 2010

From the summary:
In the spring of 2010, CEP surveyed a nationally representative sample of school districts to learn about their fiscal situation and how the funds provided under the American Recovery and Reinvestment Act (ARRA) have impacted them over the last year. CEP found that the federal funds helped districts save or create teaching jobs and stabilize budgets, but that most districts expected to layoff teachers in the 2010-11 school year. The report also addresses districts’ efforts to carryout ARRA’s four reform areas, district uses of State Fiscal Stabilization Funds and supplemental Title I and IDEA funds, and problems faced by districts in implementing ARRA.
See also:
Press release