An Update to the Economic Outlook: 2018 to 2028

Source: Congressional Budget Office, publication no. 54318, August 13, 2018

From the summary:
In CBO’s updated projections, real gross domestic product (GDP) grows by 3.1 percent in 2018 and by 2.4 percent in 2019 before slowing in the following years.

CBO regularly updates its economic forecast to incorporate changes in the agency’s methodology and to ensure that the projections reflect recent economic developments and current law. This report presents the agency’s latest economic forecast, which includes the following key projections of real (inflation-adjusted) gross domestic product (GDP) and other factors:
• In 2018, real GDP is projected to grow by 3.1 percent.
• Growth of actual output is expected to outpace the growth of its maximum sustainable amount through the rest of 2018 and 2019, creating excess demand in the economy.
• Excess demand will put upward pressure on prices, wages, and interest rates over the next few years.
• From 2023 to 2028, real GDP is projected to grow by about 1.7 percent each year.

Are there health benefits of being unionized in late career? A longitudinal approach using HRS

Source: Jacques Wels, American Journal of Industrial Medicine, Early View, First published: 28 June 2018

From the abstract:
Objective:
To assess whether unionization prevents deterioration in self‐reported health and depressive symptoms in late career transitions.

Methods:
Data come from the Health and Retirement Study (N = 6475). The change in self‐perceived health (SPH) and depressive symptoms (CESD) between wave 11 and wave 12 is explained using an interaction effect between change in professional status from wave 10 to wave 11 and unionization in wave 10.

Results:
The odds of being affected by a negative change in CESD when unionized are lower for unionized workers remaining in full‐time job (OR:0.73, CI95%:0.58;0.89), unionized full‐time workers moving to part‐time work (OR:0.66, CI95%:0.46;0.93) and unionized full‐time workers moving to part‐retirement (OR:0.40, CI95%:0.34;0.47) compared to non‐unionized workers. The same conclusion is made for the change in SPH but with odds ratios closer to 1.

Conclusion:
The reasons for the associations found in this paper need to be explored in further research.

Inside Trump’s Judicial Takeover

Source: Andy Kroll, Rolling Stone, August 19, 2018

How conservative operatives and Senate Republicans are helping the president pack the courts at a record pace. ….

…. As of this writing, Trump has put 26 new judges onto the appellate courts, more than any other chief executive at this point in the presidency. He has also nominated over 100 district-court judges and gotten 26 of those picks confirmed. These judges are overwhelmingly young, ideological and now set to serve lifetime appointments. And then, of course, there’s Justice Neil Gorsuch, Trump’s first pick for the Supreme Court, and Judge Brett Kavanaugh, the president’s second Supreme Court nominee, who stands a strong chance of confirmation. …..

….. What unites these judges is the radical legal doctrine of originalism — that the text of the Constitution should be understood only as it was intended when written more than 230 years ago. Originalism was long seen as a fringe philosophy; taken to its logical extreme, an originalist reading of the Constitution could mean a country without same-sex marriage, federal child-labor laws or the Americans With Disabilities Act. Today, however, originalism is the dominant legal philosophy on the right and the litmus test for any judge appointed by President Trump. …..

The Effects of Sexism on American Women: The Role of Norms vs. Discrimination

Source: Kerwin Kofi Charles, Jonathan Guryan, Jessica Pan, University of Chicago, Becker Friedman Institute for Economics Working Paper No. 2018-56, July 12, 2018

From the abstract:
We study how reported sexism in the population affects American women. Fixed effects and TSLS estimates show that higher prevailing sexism where she was born (background sexism) and where she currently lives (residential sexism) both lower a woman’s wages, labor force participation and ages of marriage and childbearing. We argue that background sexism affects outcomes through the influence of previously internalized norms, and that estimated associations regarding specific percentiles and male versus female sexism suggest that residential sexism affects labor market outcomes through prejudice-based discrimination by men, and non-labor market outcomes through the influence of current norms of other women.

Union lobbies Congress to mandate an eight-hour workday, Aug. 20, 1866

Source: Andrew Glass, Politico, August 20, 2018

On this day in 1866, the newly organized National Labor Union called on Congress to mandate an eight-hour workday. The coalition of skilled and unskilled workers, farmers and reformers pressured Congress to enact labor reforms. It dissolved in 1873 following an ill-advised venture into third-party politics in the 1872 presidential election.

Although the NLU failed to persuade Congress to shorten the workday, its efforts heightened public awareness of labor issues and increased public support for labor reform in the 1870s and 1880s.

The Knights of Labor, a powerful advocate for the eight-hour day in the 1870s and early 1880s, proved more effective. By 1886, the Knights counted 700,000 laborers, shopkeepers and farmers among its members. Under the leadership of Terrence V. Powderly, the union discouraged strikes and advocated restructuring society along cooperative lines…..

How to Undo Janus: A User-Friendly Guide

Source: Aaron Tang, University of California, Davis – School of Law, Date Written: June 27, 2018

From the abstract:
This short white paper explains how progressive states can undo the disruptive effect of the Supreme Court’s decision invalidating public union fair share fees in Janus v. AFSCME, Council 31.

Put succinctly, lawmakers can amend state law to permit government employers to reimburse unions for their bargaining-related expenses directly. Such an amendment would be revenue neutral for government employers and unions, and it would result in a net increase in take home pay for public sector workers (on the order of $200 per year for an unmarried worker making $50,000).

The paper describes how this approach would work, considers major objections, and proposes model legislation for lawmakers to consider. A more detailed discussion of all of the issues implicated by this proposal can be found in a full-length companion article entitled, Life After Janus.

Unions and Nonunion Pay in the United States, 1977-2015

Source: Patrick Denice, Jake Rosenfeld, Sociological Science, August 15, 2018

From the abstract:
We provide the most extensive investigation into the connection between union power and nonunion worker pay to date. Leveraging nearly four decades of Current Population Survey (CPS) data on millions of U.S. workers, we test whether private sector union density, measured at the occupation and occupation region levels, helps raise average wages among unorganized private sector workers. We find stable and substantively large positive effects of private sector union strength on nonunion private sector workers’ wages, especially for men. These results are robust to the inclusion of controls for the risk of automation, offshoring, the related rising demand for skill, overall employment levels, industry, and the strength of public sector unions. Disaggregating the results by occupation reveals positive and substantively large union spillover effects across a range of occupations, including those not transformed by automation, offshoring, or rising skill demands. These disaggregated results also indicate that occupational segregation limits the positive spillover effects from unions to nonunion women workers: in highly organized occupations, nonunion women benefit, but there are comparatively few women in these segments of the labor market.

CEO compensation surged in 2017

Source: Lawrence Mishel and Jessica Schieder, Economic Policy Institute, August 16, 2018

What this report finds: This report looks at trends in chief executive officer (CEO) compensation, using two different measures. The first measure includes stock options realized (in addition to salary, bonuses, restricted stock grants, and long-term incentive payouts). By this measure, in 2017 the average CEO of the 350 largest firms in the U.S. received $18.9 million in compensation, a 17.6 percent increase over 2016. The typical worker’s compensation remained flat, rising a mere 0.3 percent. The 2017 CEO-to-worker compensation ratio of 312-to-1 was far greater than the 20-to-1 ratio in 1965 and more than five times greater than the 58-to-1 ratio in 1989 (although it was lower than the peak ratio of 344-to-1, reached in 2000). The gap between the compensation of CEOs and other very-high-wage earners is also substantial, with the CEOs in large firms earning 5.5 times as much as the average earner in the top 0.1 percent.

The surge in CEO compensation measured with realized stock options was driven by the stock-related components of CEO compensation (stock awards and cashed-in stock options), not by changes in salaries or cash bonuses.

Because the decision to realize, or cash in, stock options tends to fluctuate with current and potential stock market trends (as people tend to cash in their stock options when it is most advantageous to do so), we also look at another measure of CEO compensation, to get a more complete picture of trends in CEO compensation. This measure tracks the value of stock options at the time they are granted. By this measure, CEO compensation rose to $13.3 million in 2017, up from $13.0 million in 2016.

By either measure, CEO compensation is very high relative to the compensation of a typical worker—and an earner in the top 0.1 percent.

CEO compensation has grown far faster than stock prices or corporate profits. CEO compensation rose by 979 percent (based on stock options granted) or 1,070 percent (based on stock options realized) between 1978 and 2017. The corresponding 637 percent growth in the stock market (S & P Index) was far lower. Both measures of compensation are substantially greater than the painfully slow 11.2 percent growth in the typical worker’s compensation over the same period and at least three times as fast as the 308 percent growth of wages for the very highest earners, those in the top 0.1 percent….