Union membership trends and challenges

Source: Canadian Union of Public Employees (CUPE), October 3, 2016

The face and composition of Canadian unions, including CUPE, have undergone major changes in recent decades and will continue to do so in the coming decade.

• In 1990, 60 per cent of Canadian union members were male and were still a majority as recently as a decade ago. Today, 53 per cent are female and if recent trends continue that number will reach 60 per cent by 2030.
• Unionization rates have dropped most for younger men and men 
in general. They’ve stayed relatively stable for women overall, with the 
rate decline for younger women 
being offset by a rise for older women.
• Figures aren’t available on the number of racialized or Aboriginal union members, but they are likely increasing their overall share.
• Twenty years ago, there were more union members working in manufacturing than any other sector. 
Now manufacturing ranks as the fourth largest sector, well below union members in education who account for double their numbers and members in health care and social services who are almost three times more numerous.

The Shop Steward’s Guide to Counseling and Representing Pregnant Workers

Source: Labor Project for Working Families, AFL-CIO, SEIU, A Better Balance, and the Center for WorkLife Law at the University of California, Hastings College of the Law, 2016

…This manual provides shop stewards the tools they need to effectively represent pregnant workers. It provides practical tips for counseling them about critical workplace issues. It explains the laws and common contractual provisions that may assist pregnant women who have been discriminated against or who need reasonable accommodations to continue working while maintaining a healthy pregnancy. And it provides guidance on grieving contractual violations on behalf of pregnant workers. Last, it provides contact information for organizations that can provide free advice if you need more information.

The laws and contractual provisions discussed in this manual provide legal rights, but pregnant workers benefit from these protections only when they are enforced. It’s the job of the shop steward to empower workers and demand employer compliance. This manual is meant to guide you in educating pregnant workers and enforcing their hard-won rights….

Collective Bargaining Database

Source: Labor Project for Working Families, 2016

The Labor Project has updated their collective bargaining database with over 1,100 pieces of work and family language. Here’s the link for the new database and examples of model language for Paid Sick Days.

Contents include:
Assistance Services and Training Related Issues
Child Care
Definition of Family
Dependent Care
Elder Care
Fair Schedules and Flexible Work Options
Family Sick and Other Leave

State Tax Subsidies for Private K-12 Education

Source: Carl Davis, Institute on Taxation and Economic Policy (ITEP), October 2016

From the introduction:
One of the most important functions of government is to maintain a high-quality public education system. In many states, however, this objective is being undermined by tax credits and deductions that redirect public dollars for K-12 education toward private schools. Twenty states currently divert a total of over $1 billion per year toward private schools via special tax credits and deductions. These tax subsidies are essentially backdoor voucher programs, or “neovouchers,” as they use the tax code to provide what amount to private school vouchers even when traditional voucher programs are unpopular with the public or outright unconstitutional.

Because of the ways that state and federal tax law interact, the subsidies offered in ten of these states turn the concept of a charitable “donation” on its head by offering upper-income taxpayers a risk-free profit on contributions they make to fund private school scholarships. In these cases, even taxpayers who would not ordinarily be interested in contributing to private schools may find the incentive too strong to ignore. Some states have seen an entire year’s allotment of tax credits claimed within days, or even hours, of being made available as wealthy taxpayers seek to capture their share of the profits associated with convoluted “neovoucher” systems. In effect, states that have encountered political or constitutional obstacles to spending public dollars on private schools have instead set up a system that allows wealthy taxpayers to enjoy a profit by facilitating such spending on the state’s behalf.

This report explains the workings, and problems, with state-level tax subsidies for private K-12 education. It also discusses how the Internal Revenue Service (IRS) has exacerbated some of these problems by allowing taxpayers to claim federal charitable deductions even on private school contributions that were not truly charitable in nature. Finally, an appendix to this report provides additional detail on the specific K-12 private school tax subsidies made available by each state.

A look at the future of the U.S. labor force to 2060

Source: Mitra Toossi, U.S. Bureau of Labor Statistics, Spotlight on Statistics, September 2016

From the summary:
In the next 50 years, demographic changes will significantly alter the U.S. population and labor force. These changes include an aging and more diverse population that will continue growing, but at a slower rate. These changes will impact the growth of the U.S. economy and its ability to create goods and services.

The growth of the labor force is directly related to the growth of the population and changes in the labor force participation rate. A significant part of the changes in labor force growth results from changes in the population. The labor force participation rate has declined substantially since its peak in 2000, for both demographic and economic reasons.

In this Spotlight, we look at projected long-term trends in the growth, size, and composition of the labor force.

Will Pensions and OPEBs Break State and Local Budgets?

Source: Alicia H. Munnell and Jean-Pierre Aubry, Center for Retirement Research at Boston College, SLP#51, October 2016

The brief’s key findings are:
The analysis looks at the costs of pensions, OPEBs, and debt service for all states and the largest counties and cities.
Costs assume a 6-percent discount rate and an adequate amortization schedule, and are compared to own-source revenue.
The good news is that the total cost burden appears under control in many jurisdictions, but a handful face an enormous challenge.

Capital Taxation in an Age of Inequality

Source: Edward D. Kleinbard, USC Gould School of Law, USC CLASS Research Paper No. CLASS16-27, September 13, 2016

From the abstract:
The standard view in the U.S. tax law academy remains that capital income taxation is both a poor idea in theory and completely infeasible in practice. But this ignores the first-order importance of political economy issues in the design of tax instruments. The pervasive presence of gifts and bequests renders moot the claim that the results obtained by Atkinson and Stiglitz (1976) counsel against taxing capital income in practice.

Taxing capital income is responsive to important political economy exigencies confronting the United States, including substantial tax revenue shortfalls relative to realistic government spending targets, increasing income and wealth inequality at the top end of distributions, and the surprising persistence of dynastic wealth. It also responds to a new strand of economic literature that argues that “inclusive growth” leads to higher growth.

A flat-rate (proportional) income tax on capital imposed and collected annually has attractive theoretical and political economy properties that can be harnessed in actual tax instrument design. As a proportional tax, it applies at the same marginal and effective rates to both income and losses, thereby preserving the symmetry on which rests the theoretical analysis of returns to risk. A progressive consumption tax, by contrast, abandons this, and in doing so can burden the returns to waiting. Moreover, a flat-rate capital income tax is a progressive tax in application: because only high-ability taxpayers or those who are the beneficiaries of gifts and bequests can afford to defer consumption indefinitely, the increasing “tax wedge” on savings over time introduces a measure of top-bracket progressivity along the margin of time. In other words, what some see as the fatal flaw of capital income taxation in fact is a feature, not a bug.

The separation of a taxpayer’s income into capital and labor components, and the application of separate rate schedules to each, are hallmarks of “dual income tax” instruments, of the sort explored in practice most comprehensively by several Nordic countries. Building on earlier work on dual tax systems and capital income tax structures, I propose a novel and reasonably accurate flat rate tax on capital income that builds on well-understood tax policies, that achieves integration between corporate and investor income, and that successfully distinguishes capital from labor income. I term this tax instrument the Dual Business Enterprise Income Tax, or Dual BEIT. Its virtues also include minimizing the relevance of the realization doctrine, eliminating distinctions across different forms of capital investment, and offering business enterprises a profits (consumption) tax environment in which to operate.

To make the project more tractable, the two themes just advanced – the why and the how of the Dual BEIT – are each the subject of a separate paper. This is the “why” paper. Together, the two demonstrate that the Dual BEIT satisfies theoretical concerns, once those are filtered through the political economy imperatives of the quotidian world, and is straightforward to implement and administer.

Child Poverty, the Great Recession, and the Social Safety Net in the United States

Source: Marianne P. Bitler, Hilary Williamson Hoynes, Elira Kuka, National Bureau of Economic Research (NBER), NBER Working Paper No. w22682, September 2016
(subscription required)

From the abstract:
In this paper, we comprehensively examine the effects of the Great Recession on child poverty, with particular attention to the role of the social safety net in mitigating the adverse effects of shocks to earnings and income. Using a state panel data model and data for 2000 to 2014, we estimate the relationship between the business cycle and child poverty, and we examine how and to what extent the safety net is providing protection to at-risk children. We find compelling evidence that the safety net provides protection; that is, the cyclicality of after-tax-and-transfer child poverty is significantly attenuated relative to the cyclicality of private income poverty. We also find that the protective effect of the safety net is not similar across demographic groups, and that children from more disadvantaged backgrounds, such as those living with non-Hispanic black or Hispanic, single, or particularly immigrant household heads-or immigrant spouses, experience larger poverty cyclicality than non-Hispanic white, married, or native household heads with native spouses. Our findings hold across a host of choices for how to define poverty. These include measures based on absolute thresholds or more relative thresholds. They also hold for measures of resources that include not only cash and near cash transfers net of taxes but also several measures of medical benefits.

Teaching, Teachers Pensions and Retirement Across Recent Cohorts of College Graduate Wome

Source: Maria Donovan Fitzpatrick, National Bureau of Economic Research (NBER), NBER Working Paper No. w22698, September 2016
(subscription required)

From the abstract:
Labor force participation rates of college-educated women ages 60 to 64 increased by 20 percent (10 percentage points) between 2000 and 2010. One potential explanation for this change stems from the fact that fewer college-educated women in the more recent cohorts were ever teachers. This occupational shift could affect the length of women’s careers because teaching is a profession where workers are covered by defined benefit pensions and, generally, defined benefit pensions allow workers to retire earlier than Social Security. I provide evidence supporting the hypothesis and show that older college-educated women who worked as teachers do not experience increases in labor force participation as large as their counterparts who never taught.

2016 Public Pension Funding Study

Source: Rebecca A. Sielman, Milliman, White Paper, September 2016

From the introduction:
The Milliman Public Pension Funding Study annually explores the funded status of the 100 largest U.S. public pension plans. We report the plan sponsor’s own assessment of how well funded a plan is. We also recalibrate the liability for each plan based on our independent assessment of the expected real return on each plan’s investments. This process enables us to independently determine funded status without reflecting any bias or lag that may exist in the plan sponsor’s own return expectations.
– As of June 30, 2016, the aggregate funded ratio is estimated to be 69.8%, as markets took back some of the gains from 2012 to 2014 and discount rates declined
– Plan sponsors continue to reduce interest rate assumptions in the expectation that returns over the coming decades will be lower
– The difference between the average sponsor-reported assumption of 7.50% and our independently determined assumption of 6.99% is the highest we have seen, indicating that pressure to reduce interest rate assumptions is unlikely to abate