The Globalization of Production and Income Inequality in Rich Democracies

Source: Matthew C. Mahutga, Anthony Roberts, Ronald Kwon, Social Forces, Advance Articles, May 25, 2017
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From the abstract:
Despite prominent and compelling theoretical arguments linking manufacturing imports from the global South to rising income inequality in the global North, the literature has produced decidedly mixed support for such arguments. We explain this mixed support by introducing intervening processes at the global and national levels. At the global level, evolving characteristics of global production networks (GPNs) amplify the effect of Southern imports. At the national level, wage coordination and welfare state generosity counteract the mechanisms by which Southern imports increase inequality, and thereby mitigate their effects. We conduct a time-series cross-section regression analyses of income inequality among eighteen advanced capitalist countries to test these propositions. Our analysis addresses alternative explanations, as well as validity threats related to model specification, sample composition, and measurement. We find substantial variation in the effect of Southern imports across global and national contexts. Southern imports have no systematic effect on income inequality until the magnitude of GPN activity surpasses its world-historical average, or in states with above-average levels of wage coordination and welfare state generosity. With counterfactual analyses, we show that Southern imports would have led to much different inequality trajectories in the North if there were fewer GPNs, and if the prevailing degrees of wage coordination and welfare state generosity were higher. The countervailing effects of GPNs and institutional context call for theories of inequality at the intersection of the global and the national, and raise important questions about distributional politics in the years to come.

State of Preschool 2016

Source: W. Steven Barnett, Allison H. Friedman-Krauss, G.G. Weisenfeld, Michelle Horowitz, Richard Kasmin, James H. Squires, National Institute for Early Education Research, 2017

From the summary:
The State of Preschool 2016 is the latest edition of our annual yearbook report profiling state-funded prekindergarten programs in the United States. NIEER’s State Preschool Yearbook is the only national report on state-funded preschool programs with detailed information on enrollment, funding, teacher qualifications, and other policies related to quality, such as the presence of a qualified teacher and assistant, small class size, and low teacher-to-student ratio.

This Yearbook presents data on state-funded preschool during the 2015-2016 school year and documents more than a decade of change in state preschool since the first Yearbook collected data on the 2001-2002 school year. The 2016 Yearbook profiles state-funded preschool programs in 43 states, plus Guam and the District of Columbia and provides narrative information on early education efforts in states and the U.S. territories that do not provide state-funded preschool.

Nationwide, state-funded preschool program enrollment reached an all-time high, serving nearly 1.5 million children, 32 percent of 4-year-olds and 5 percent of 3-year-olds. State funding for preschool rose 8 percent to about $7.4 billion, a $564 million increase. State funding per child increased to $4,976, exceeding pre-recession levels for the first time. Six state funded preschool programs met all 10 current quality standards benchmarks. Nine states had programs that met fewer than half; and seven states do not fund preschool at all.

Current benchmarks were designed to help states build programs, focusing on resources and policies related to the structural aspects of public preschool—elements needed for a high-quality program but not fully defining one. This year, NIEER is introducing major revisions to the policy benchmarks for the first time since the Yearbook was launched. The new benchmarks raise the bar by focusing on policies that more directly support continuous improvement of classroom quality. State profiles in the 2016 Yearbook include both current and new benchmark scores…..
Related:
Executive summary
State profiles
Yearbook contents

Paid Family Leave in the United States

Source: Sarah A. Donovan, Congressional Research Service, CRS Report, R44835, May 24, 2017

…. This report provides an overview of paid family leave in the United States, summarizes state-level family leave insurance programs, notes paid family leave policies in other advanced-economy countries, and notes recent federal proposals to increase access to paid family leave. ….

Importance of Individual Account Retirement Plans and Home Equity in Family Total Wealth

Source: Craig Copeland, Employee Benefit Research Institute, EBRI Notes, Vol. 38, No. 7, May 16, 2017

Home equity and retirement accounts—401(k)-type plans and IRAs—account for nearly all the assets that many families have to depend on in retirement outside of Social Security and traditional pension plans, according to new research from EBRI.
Related:
Press release

Pensions v 401(k)s: An Illinois Case Study

Source: Kezmen Clifton, OnLabor blog, May 26, 2017

Illinois’ pension liability is estimated to stand at more than $130 billion. The reason behind Illinois’ ever-growing pension liability is one of debate. Some attribute the deficit to legislators voting on pension bills they didn’t fully understand. Others argue that politicians chose to kick the pension ball down the road to avoid raising taxes or cutting spending on their watch. Still others, like Illinois Governor Bruce Rauner, argue the structure of the pension system itself is to blame: employees change jobs as a way to qualify for more than one pension and many seek raises in their final years as that guarantees them higher payouts during retirement.

While there is much debate about the cause of the deficit, its existence is certain. Despite being in the top 1/3 of the nation’s wealthiest states, Illinois has one of the most poorly funded retirement systems in the country. Illinois has only funded 39 cents for every dollar it has promised to pay out in pensions. The pensions of similarly populated states like New York and Pennsylvania are far better funded, with New York at 89 percent and Pennsylvania at 62 percent, respectively. It is clear that Illinois needs to rethink its current pension scheme. Some groups like Illinois Policy, a conservative think tank, advocate for Illinois to adopt 401(k)s for new government workers, but the idea has not received much traction among state employees. While the traditional debate has been between keeping traditional defined benefit plans like pensions or moving to a defined- contribution plan like a 401(k), there is a lesser explored option as well: the hybrid 401(k)-pension plan. The hybrid plan combines the guaranteed income of a pension while lowering employer contributions with a 401(k)…..

Nursing Home Workers Win Wage Gains with Credible Strike Threat

Source: Leah Fried, Labor Notes, May 26, 2017

After close to three years of negotiations, stickers and leaflets weren’t getting the boss any closer to a fair agreement. The master contract covering 10,000 nursing home workers in Illinois had been expired for two years and extended several times.

Management was insisting on a wage freeze until Illinois overcame its budget impasse and increased Medicaid reimbursements. Long-term workers were languishing at minimum wage, even when their employers had begun offering higher wages to entice new hires.

Meanwhile, staffing was dangerously short. Often a certified nursing assistant was forced to care for 20 or more residents in an eight-hour shift—bathing, feeding, and assisting them at a furious pace. On top of keeping the nursing home clean, a housekeeper had to collect meal trays for hundreds of residents because there weren’t enough dietary aides.

To win a new agreement, it was clear that workers would need to be prepared to strike.

But their local, Service Employees (SEIU) Healthcare Illinois-Indiana (HCII), hadn’t ever waged a strike over its master nursing home contract. In fact, the last time there was a nursing home strike at any of these facilities was in 1979. The local’s previous contract campaigns had been lackluster. Mobilization had been limited to stickers, petitions, and a practice picket.

And giving each nursing home the organizing attention it needed now was a huge challenge. The bargaining unit covers 28 different employers and 103 facilities statewide…..

How Bad Could it Get (Legally)?

Source: Benjamin Sachs, OnLabor blog, May 26, 2017

It’s a good moment to think creatively and expansively about how to revitalize the U.S. labor movement. This important work is underway, with contributions from academics, labor lawyers, union organizers, and others. Substantive debates about the future of labor law and labor organizing now populate the pages of publications ranging from the Yale Law Journal to Boston Review. Much of this writing evidences an appropriate degree of optimism – the pieces assume a future in which, for example, progressive law reform might be possible, or in which workers can regain power through increased use of strikes even in the absence of law reform, or in which fundamental aspects of U.S. political economy (and political ideology) might be transformed. This kind of optimism is necessary to visionary thinking, and it’s badly needed today.

But, I thought it might also be worth writing from the opposite perspective and asking how bad it might really/plausibly get over the next handful of years. Most of us know much of this already, so you might wonder what the point of such a morose exercise would be. The idea is not to wallow. To the contrary, the idea is that putting in one place the major pieces of what could go wrong (legally) over the next few years could help as we continue to imagine and build a better future for the labor movement. As Van Jones put it recently, “hope for the best but expect and prepare for the worst.”

Some caveats. One, and most important, what follows are not predictions, and I do not mean to suggest that these things are likely. Instead, these are thoughts about the kinds of negative developments that seem within the realm of the possible (even though, with respect to every one, I think the better arguments are on the other side). Two, given the limits of my expertise, I focus exclusively on how bad labor law could get, leaving to others the question of how bad things could get on other fronts. Three, I may be wrong in two directions: omitting other possible problems and including things that aren’t plausible. For that reason, we invite follow-on posts that offer either kind of corrective. Four, and finally, it might be worth saying that this exercise goes against my own nature, which, for better or worse, skews optimistic (as I’ve been critiqued for being).

All that said, here’s what seems within the realm of the plausible: ….

The Entire Public Sector Is About to Be Put on Trial

Source: Naomi Walker, In These Times, Views, May 25, 2017

The Right’s assault on public-sector workers is an assault on the public sector itself.

Within the next year, the Supreme Court is likely to rule on the latest existential threat to workers and their unions: Janus v. AFSCME. Like last year’s Friedrichs v. CTA—a bullet dodged with Justice Antonin Scalia’s unexpected death—the Janus case is a blatant attack on working people by right-wing, moneyed special interests who want to take away workers’ freedom to come together and negotiate for a better life.
For years, the Right has been hammering through state-level “right-to-work” laws in an effort to kill public sector unionism; it would see victory in the Janus case as the coup de grace. ….

Workers Need a Bill of Rights

Source: Andrew Strom, OnLabor blog, May 24, 2017

Except for about a month in the summer of 2009 when the Democrats had 60 votes in the Senate, for the entire twenty-first century any proposal to substantially increase workers’ rights at the national level has had to be prefaced by the comment that, “of course, this is not politically feasible now.” But rather than just spending the next four years fending off misguided Republican legislation, I think it’s time to step back and focus on principles that should guide workplace legislation. Toward that end, here are some thoughts on a potential workplace bill of rights.

There might be some other rights that should be included in this list, and maybe folks have ideas about better ways to phrase the various rights. But, I think it would be helpful for the labor movement, worker advocates, and the Democratic party to start talking about this bill of rights in order to refocus our discussion about jobs. The measure of a good job, whether it is in manufacturing or the service sector, should be whether it provides these rights to workers. In addition, we should be thinking about what changes we need to see in our laws to ensure that all workers enjoy these basic rights on the job. Some of these issues can be addressed at the state level, although of course, that would mean that these rights would exist in only a handful of states. Here’s my proposed worker bill of rights – let the debate begin…..

Rainy Day Funds and State Credit Ratings: How well-designed policies and timely use can protect against downgrades

Source: Pew Charitable Trusts, May 2017

From the overview:

…. States generally react to the warnings of S&P and similar agencies in order to protect or enhance their ratings. The higher a state’s credit rating, the lower the cost to repay bonds the state sells to investors to finance construction and renovation of roads, schools, airports, prisons, parks, water projects, and other infrastructure.

Yet research by Pew has found that even in states with the agencies’ highest rating (triple-A), policymakers often are unsure about how best to manage their rainy day funds to earn or keep high credit ratings. As a result, some state officials are reluctant to tap reserves even during recessions for fear of a ratings downgrade.

To offer policymakers advice and insight into the relationship between budget reserves and credit ratings decisions, Pew studied documents and data on state ratings from the three major rating agencies—S&P Global Ratings, Moody’s Investors Service, and Fitch Ratings—and interviewed policymakers, rating agency analysts, and others. The study is part of Pew’s ongoing look at how states are managing their finances since the Great Recession of 2007-09. In previous reports, beginning with Managing Uncertainty: How State Budgeting Can Smooth Revenue Volatility, Pew has offered recommendations on how policymakers can strengthen their state’s financial stability, including prudent design of rainy day funds…..