YELLEN: We're Not There Yet
Business Insider - August 22, 2014, by Myles Udland - Federal Reserve Chair...
Business Insider - August 22, 2014, by Myles Udland - Federal Reserve Chair Janet Yellen is speaking at the Kansas City Fed's economic symposium at Jackson Hole.
Yellen's remarks are focused on the labor market, which she said still hasn't recovered from the financial crisis.
Among Yellen's notable comments include the sluggish pace of wage growth.
First, the sluggish pace of nominal and real wage growth in recent years may reflect the phenomenon of 'pent-up wage deflation,'" Yellen said. "The evidence suggests that many firms faced significant constraints in lowering compensation during the recession and the earlier part of the recovery because of 'downward nominal wage rigidity' — namely, an inability or unwillingness on the part of firms to cut nominal wages."
Yellen added that given the labor market outlook, "There is no simple recipe for appropriate policy in this context, and the FOMC is particularly attentive to the need to clearly describe the policy framework we are using to meet these challenges."
Yellen said that despite strengthening indicators in the labor market, she still sees "significant" underutilization of labor resources.
Here's the full text of Yellen's remarks:
In the five years since the end of the Great Recession, the economy has made considerable progress in recovering from the largest and most sustained loss of employment in the United States since the Great Depression.1 More jobs have now been created in the recovery than were lost in the downturn, with payroll employment in May of this year finally exceeding the previous peak in January 2008. Job gains in 2014 have averaged 230,000 a month, up from the 190,000 a month pace during the preceding two years. The unemployment rate, at 6.2 percent in July, has declined nearly 4 percentage points from its late 2009 peak. Over the past year, the unemployment rate has fallen considerably, and at a surprisingly rapid pace. These developments are encouraging, but it speaks to the depth of the damage that, five years after the end of the recession, the labor market has yet to fully recover.
The Federal Reserve's monetary policy objective is to foster maximum employment and price stability. In this regard, a key challenge is to assess just how far the economy now stands from the attainment of its maximum employment goal. Judgments concerning the size of that gap are complicated by ongoing shifts in the structure of the labor market and the possibility that the severe recession caused persistent changes in the labor market's functioning.
These and other questions about the labor market are central to the conduct of monetary policy, so I am pleased that the organizers of this year's symposium chose labor market dynamics as its theme. My colleagues on the Federal Open Market Committee (FOMC) and I look to the presentations and discussions over the next two days for insights into possible changes that are affecting the labor market. I expect, however, that our understanding of labor market developments and their potential implications for inflation will remain far from perfect. As a consequence, monetary policy ultimately must be conducted in a pragmatic manner that relies not on any particular indicator or model, but instead reflects an ongoing assessment of a wide range of information in the context of our ever-evolving understanding of the economy.
The Labor Market Recovery and Monetary Policy
In my remarks this morning, I will review a number of developments related to the functioning of the labor market that have made it more difficult to judge the remaining degree of slack. Differing interpretations of these developments affect judgments concerning the appropriate path of monetary policy. Before turning to the specifics, however, I would like to provide some context concerning the role of the labor market in shaping monetary policy over the past several years. During that time, the FOMC has maintained a highly accommodative monetary policy in pursuit of its congressionally mandated goals of maximum employment and stable prices. The Committee judged such a stance appropriate because inflation has fallen short of our 2 percent objective while the labor market, until recently, operated very far from any reasonable definition of maximum employment.
The FOMC's current program of asset purchases began when the unemployment rate stood at 8.1 percent and progress in lowering it was expected to be much slower than desired. The Committee's objective was to achieve a substantial improvement in the outlook for the labor market, and as progress toward this goal has materialized, we have reduced our pace of asset purchases and expect to complete this program in October. In addition, in December 2012, the Committee modified its forward guidance for the federal funds rate, stating that "as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee's 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored," the Committee would not even consider raising the federal funds rate above the 0 to 1/4 percent range.2 This "threshold based" forward guidance was deemed appropriate under conditions in which inflation was subdued and the economy remained unambiguously far from maximum employment.
Earlier this year, however, with the unemployment rate declining faster than had been anticipated and nearing the 6-1/2 percent threshold, the FOMC recast its forward guidance, stating that "in determining how long to maintain the current 0 to 1/4 percent target range for the federal funds rate, the Committee would assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation."3 As the recovery progresses, assessments of the degree of remaining slack in the labor market need to become more nuanced because of considerable uncertainty about the level of employment consistent with the Federal Reserve's dual mandate. Indeed, in its 2012 statement on longer-run goals and monetary policy strategy, the FOMC explicitly recognized that factors determining maximum employment "may change over time and may not be directly measurable," and that assessments of the level of maximum employment "are necessarily uncertain and subject to revision."4 Accordingly, the reformulated forward guidance reaffirms the FOMC's view that policy decisions will not be based on any single indicator, but will instead take into account a wide range of information on the labor market, as well as inflation and financial developments.5
Interpreting Labor Market Surprises: Past and Future
The assessment of labor market slack is rarely simple and has been especially challenging recently. Estimates of slack necessitate difficult judgments about the magnitudes of the cyclical and structural influences affecting labor market variables, including labor force participation, the extent of part-time employment for economic reasons, and labor market flows, such as the pace of hires and quits. A considerable body of research suggests that the behavior of these and other labor market variables has changed since the Great Recession.6 Along with cyclical influences, significant structural factors have affected the labor market, including the aging of the workforce and other demographic trends, possible changes in the underlying degree of dynamism in the labor market, and the phenomenon of "polarization"--that is, the reduction in the relative number of middle-skill jobs.7
Consider first the behavior of the labor force participation rate, which has declined substantially since the end of the recession even as the unemployment rate has fallen. As a consequence, the employment-to-population ratio has increased far less over the past several years than the unemployment rate alone would indicate, based on past experience. For policymakers, the key question is: What portion of the decline in labor force participation reflects structural shifts and what portion reflects cyclical weakness in the labor market? If the cyclical component is abnormally large, relative to the unemployment rate, then it might be seen as an additional contributor to labor market slack.
Labor force participation peaked in early 2000, so its decline began well before the Great Recession. A portion of that decline clearly relates to the aging of the baby boom generation. But the pace of decline accelerated with the recession. As an accounting matter, the drop in the participation rate since 2008 can be attributed to increases in four factors: retirement, disability, school enrollment, and other reasons, including worker discouragement.8 Of these, greater worker discouragement is most directly the result of a weak labor market, so we could reasonably expect further increases in labor demand to pull a sizable share of discouraged workers back into the workforce. Indeed, the flattening out of the labor force participation rate since late last year could partly reflect discouraged workers rejoining the labor force in response to the significant improvements that we have seen in labor market conditions. If so, the cyclical shortfall in labor force participation may have diminished.
What is more difficult to determine is whether some portion of the increase in disability rates, retirements, and school enrollments since the Great Recession reflects cyclical forces. While structural factors have clearly and importantly affected each of these three trends, some portion of the decline in labor force participation resulting from these trends could be related to the recession and slow recovery and therefore might reverse in a stronger labor market.9 Disability applications and educational enrollments typically are affected by cyclical factors, and existing evidence suggests that the elevated levels of both may partly reflect perceptions of poor job prospects.10 Moreover, the rapid pace of retirements over the past few years might reflect some degree of pull-forward of future retirements in the face of a weak labor market. If so, retirements might contribute less to declining participation in the period ahead than would otherwise be expected based on the aging workforce.11
A second factor bearing on estimates of labor market slack is the elevated number of workers who are employed part time but desire full-time work (those classified as "part time for economic reasons"). At nearly 5 percent of the labor force, the number of such workers is notably larger, relative to the unemployment rate, than has been typical historically, providing another reason why the current level of the unemployment rate may understate the amount of remaining slack in the labor market. Again, however, some portion of the rise in involuntary part-time work may reflect structural rather than cyclical factors. For example, the ongoing shift in employment away from goods production and toward services, a sector which historically has used a greater portion of part-time workers, may be boosting the share of part-time jobs. Likewise, the continuing decline of middle-skill jobs, some of which could be replaced by part-time jobs, may raise the share of part-time jobs in overall employment.12 Despite these challenges in assessing where the share of those employed part time for economic reasons may settle in the long run, the sharp run-up in involuntary part-time employment during the recession and its slow decline thereafter suggest that cyclical factors are significant.
Private sector labor market flows provide additional indications of the strength of the labor market. For example, the quits rate has tended to be pro-cyclical, since more workers voluntarily quit their jobs when they are more confident about their ability to find new ones and when firms are competing more actively for new hires. Indeed, the quits rate has picked up with improvements in the labor market over the past year, but it still remains somewhat depressed relative to its level before the recession. A significant increase in job openings over the past year suggests notable improvement in labor market conditions, but the hiring rate has only partially recovered from its decline during the recession. Given the rise in job vacancies, hiring may be poised to pick up, but the failure of hiring to rise with vacancies could also indicate that firms perceive the prospects for economic growth as still insufficient to justify adding to payrolls. Alternatively, subdued hiring could indicate that firms are encountering difficulties in finding qualified job applicants. As is true of the other indicators I have discussed, labor market flows tend to reflect not only cyclical but also structural changes in the economy. Indeed, these flows may provide evidence of reduced labor market dynamism, which could prove quite persistent.13 That said, the balance of evidence leads me to conclude that weak aggregate demand has contributed significantly to the depressed levels of quits and hires during the recession and in the recovery.
One convenient way to summarize the information contained in a large number of indicators is through the use of so-called factor models. Following this methodology, Federal Reserve Board staff developed a labor market conditions index from 19 labor market indicators, including four I just discussed.14 This broadly based metric supports the conclusion that the labor market has improved significantly over the past year, but it also suggests that the decline in the unemployment rate over this period somewhat overstates the improvement in overall labor market conditions.
Finally, changes in labor compensation may also help shed light on the degree of labor market slack, although here, too, there are significant challenges in distinguishing between cyclical and structural influences. Over the past several years, wage inflation, as measured by several different indexes, has averaged about 2 percent, and there has been little evidence of any broad-based acceleration in either wages or compensation. Indeed, in real terms, wages have been about flat, growing less than labor productivity. This pattern of subdued real wage gains suggests that nominal compensation could rise more quickly without exerting any meaningful upward pressure on inflation. And, since wage movements have historically been sensitive to tightness in the labor market, the recent behavior of both nominal and real wages point to weaker labor market conditions than would be indicated by the current unemployment rate.
There are three reasons, however, why we should be cautious in drawing such a conclusion. First, the sluggish pace of nominal and real wage growth in recent years may reflect the phenomenon of "pent-up wage deflation."15 The evidence suggests that many firms faced significant constraints in lowering compensation during the recession and the earlier part of the recovery because of "downward nominal wage rigidity"--namely, an inability or unwillingness on the part of firms to cut nominal wages. To the extent that firms faced limits in reducing real and nominal wages when the labor market was exceptionally weak, they may find that now they do not need to raise wages to attract qualified workers. As a result, wages might rise relatively slowly as the labor market strengthens. If pent-up wage deflation is holding down wage growth, the current very moderate wage growth could be a misleading signal of the degree of remaining slack. Further, wages could begin to rise at a noticeably more rapid pace once pent-up wage deflation has been absorbed.
Second, wage developments reflect not only cyclical but also secular trends that have likely affected the evolution of labor's share of income in recent years. As I noted, real wages have been rising less rapidly than productivity, implying that real unit labor costs have been declining, a pattern suggesting that there is scope for nominal wages to accelerate from their recent pace without creating meaningful inflationary pressure. However, research suggests that the decline in real unit labor costs may partly reflect secular factors that predate the recession, including changing patterns of production and international trade, as well as measurement issues.16 If so, productivity growth could continue to outpace real wage gains even when the economy is again operating at its potential.
A third issue that complicates the interpretation of wage trends is the possibility that, because of the dislocations of the Great Recession, transitory wage and price pressures could emerge well before maximum sustainable employment has been reached, although they would abate over time as the economy moves back toward maximum employment.17 The argument is that workers who have suffered long-term unemployment--along with, perhaps, those who have dropped out of the labor force but would return to work in a stronger economy--face significant impediments to reemployment. In this case, further improvement in the labor market could entail stronger wage pressures for a time before maximum employment has been attained.18
Implications of Labor Market Developments for Monetary Policy
The focus of my remarks to this point has been on the functioning of the labor market and how cyclical and structural influences have complicated the task of determining the state of the economy relative to the FOMC's objective of maximum employment. In my remaining time, I will turn to the special challenges that these difficulties in assessing the labor market pose for evaluating the appropriate stance of monetary policy.
Any discussion of appropriate monetary policy must be framed by the Federal Reserve's dual mandate to promote maximum employment and price stability. For much of the past five years, the FOMC has been confronted with an obvious and substantial degree of slack in the labor market and significant risks of slipping into persistent below-target inflation. In such circumstances, the need for extraordinary accommodation is unambiguous, in my view.
However, with the economy getting closer to our objectives, the FOMC's emphasis is naturally shifting to questions about the degree of remaining slack, how quickly that slack is likely to be taken up, and thereby to the question of under what conditions we should begin dialing back our extraordinary accommodation. As should be evident from my remarks so far, I believe that our assessments of the degree of slack must be based on a wide range of variables and will require difficult judgments about the cyclical and structural influences in the labor market. While these assessments have always been imprecise and subject to revision, the task has become especially challenging in the aftermath of the Great Recession, which brought nearly unprecedented cyclical dislocations and may have been associated with similarly unprecedented structural changes in the labor market--changes that have yet to be fully understood.
So, what is a monetary policymaker to do? Some have argued that, in light of the uncertainties associated with estimating labor market slack, policymakers should focus mainly on inflation developments in determining appropriate policy. To take an extreme case, if labor market slack was the dominant and predictable driver of inflation, we could largely ignore labor market indicators and look instead at the behavior of inflation to determine the extent of slack in the labor market. In present circumstances, with inflation still running below the FOMC's 2 percent objective, such an approach would suggest that we could maintain policy accommodation until inflation is clearly moving back toward 2 percent, at which point we could also be confident that slack had diminished.
Of course, our task is not nearly so straightforward. Historically, slack has accounted for only a small portion of the fluctuations in inflation. Indeed, unusual aspects of the current recovery may have shifted the lead-lag relationship between a tightening labor market and rising inflation pressures in either direction. For example, as I discussed earlier, if downward nominal wage rigidities created a stock of pent-up wage deflation during the economic downturn, observed wage and price pressures associated with a given amount of slack or pace of reduction in slack might be unusually low for a time. If so, the first clear signs of inflation pressure could come later than usual in the progression toward maximum employment. As a result, maintaining a high degree of monetary policy accommodation until inflation pressures emerge could, in this case, unduly delay the removal of accommodation, necessitating an abrupt and potentially disruptive tightening of policy later on.
Conversely, profound dislocations in the labor market in recent years--such as depressed participation associated with worker discouragement and a still-substantial level of long-term unemployment--may cause inflation pressures to arise earlier than usual as the degree of slack in the labor market declines. However, some of the resulting wage and price pressures could subsequently ease as higher real wages draw workers back into the labor force and lower long-term unemployment.19 As a consequence, tightening monetary policy as soon as inflation moves back toward 2 percent might, in this case, prevent labor markets from recovering fully and so would not be consistent with the dual mandate.
Inferring the degree of resource utilization from real-time readings on inflation is further complicated by the familiar challenge of distinguishing transitory price changes from persistent price pressures. Indeed, the recent firming of inflation toward our 2 percent goal appears to reflect a combination of both factors.
These complexities in evaluating the relationship between slack and inflation pressures in the current recovery are illustrative of a host of issues that the FOMC will be grappling with as the recovery continues. There is no simple recipe for appropriate policy in this context, and the FOMC is particularly attentive to the need to clearly describe the policy framework we are using to meet these challenges. As the FOMC has noted in its recent policy statements, the stance of policy will be guided by our assessments of how far we are from our objectives of maximum employment and 2 percent inflation as well as our assessment of the likely pace of progress toward those objectives.
At the FOMC's most recent meeting, the Committee judged, based on a range of labor market indicators, that "labor market conditions improved."20 Indeed, as I noted earlier, they have improved more rapidly than the Committee had anticipated. Nevertheless, the Committee judged that underutilization of labor resources still remains significant. Given this assessment and the Committee's expectation that inflation will gradually move up toward its longer-run objective, the Committee reaffirmed its view "that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after our current asset purchase program ends, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored."21 But if progress in the labor market continues to be more rapid than anticipated by the Committee or if inflation moves up more rapidly than anticipated, resulting in faster convergence toward our dual objectives, then increases in the federal funds rate target could come sooner than the Committee currently expects and could be more rapid thereafter. Of course, if economic performance turns out to be disappointing and progress toward our goals proceeds more slowly than we expect, then the future path of interest rates likely would be more accommodative than we currently anticipate. As I have noted many times, monetary policy is not on a preset path. The Committee will be closely monitoring incoming information on the labor market and inflation in determining the appropriate stance of monetary policy.
Overall, I suspect that many of the labor market issues you will be discussing at this conference will be at the center of FOMC discussions for some time to come. I thank you in advance for the insights you will offer and encourage you to continue the important research that advances our understanding of cyclical and structural labor market issues.
Source
Zara accused of creating culture of customer discrimination in new report
Mahita Gajanan, The Guardian, 06.22.2015 Black customers at Spanish fashion retailer Zara...
Black customers at Spanish fashion retailer Zara’s New York stores have been disproportionately identified as potential thieves, a significant proportion of employees surveyed by the Center for Popular Democracy have claimed in a new report released on Monday.
A survey of 251 employees and a round of focus groups conducted by the union-allied workers’ rights campaign group claims there is a practice within Zara to label suspicious customers or potential thieves with the code words “special orders”. Once a “special order” was identified and his or her location radioed to employees’ headsets, an employee would follow that customer around, the report claims.
Forty-three percent of the respondents did not answer questions referring to “special orders” or said they did not know the term.
But out of the 57% that did respond to that question, 46% claimed black customers were called special orders “always” or “often”, compared with 14% who said the same about Latino customers and 7% about whites.
Employees quoted in the survey claimed special orders were identified by “dressing a certain way” and were “mostly African American”, according to the CPD. One employee told the group he felt “that black customers were targeted when it came to stealing”, the report said.
One black employee claimed that when he had come in to pick up a check one day wearing a hooded jacket he was identified as a special order and prevented from entering a back office.
Connie Razza, CPD’s director of strategic research, said the code words used at Zara had now changed from “special orders” to a request for “customer service” to go to the location of the suspicious customer.
The report also claims that employees of color face unequal conditions within the company’s eight New York City stores.
“I was expecting some level of discrimination, but the degree of disparity with workers getting raises and hours that vary so dramatically was surprising,” said Razza.
The report claims:
Black employees are more than twice as dissatisfied with their hours as white employees.
Darker-skinned employees were least likely to be promoted, and received harsher treatment from managers.
Lighter-skinned employees of color and white employees experienced better treatment within the company, with higher status assignments, more work hours and a stronger likelihood of being promoted.
Many of the employees interviewed felt there was favoritism within the company based on race.
Razza said that while the retail industry was known for unpredictable working schedules and low wages, the situation was “even worse for black employees”.
The report, compiled from surveys conducted between February and April, claimed employees said that managers showed favoritism, and “many of the employees interviewed felt that favoritism is based on race”.
Such favoritism, they said, can have an impact on promotions, the distribution of work hours and management evaluation and treatment, the report claimed.
Of the 251 employees surveyed, 130 identified as Hispanic, 59 as black, 34 as white, 12 as Asian and 11 as mixed race. Employees were also identified by their skin color on a scale of one to four, with one indicating very light skin and four indicating dark skin. There are approximately 1,500 Zara employees in New York, suggesting one-sixth were surveyed.
“We found darker skinned employees were least likely to be promoted, and received harsher treatment from managers,” Razza said.
In some instances, the report claims, managers told employees not to take the survey. On at least one occasion, managers called the police on one of the employees taking the survey, the CPD claims.
A spokesperson for Zara USA denied any of the claims were accurate.
“Zara USA vehemently refutes the findings of the Center for Popular Democracy report, which was published without any attempt to contact the company,” the spokesperson said in a statement to the Guardian.
“The baseless report was prepared with ulterior motives and not because of any actual discrimination or mistreatment,” the statement went on. “It makes assertions that cannot be supported and do not reflect Zara’s diverse workforce. Zara USA believes that the report is completely inconsistent with the company’s true culture and the experiences of the over 1,500 Zara employees in New York City.
“We are an equal opportunity employer, and if there are individuals who are not satisfied with any aspect of their employment, we have multiple avenues for them to raise issues that we would immediately investigate and address.”
Referring to the claims about black customers being disproportionately identified with the code words “special orders”, it said: “We are a global multicultural company serving valued customers across 88 countries, and do not tolerate discrimination of any form.”
In a later statement, a Zara USA spokesperson added: “The expression ‘special order’ is a term used to designate a common situation in which associates are requested to enforce customer service and zone coverage on the floor. It does not designate a person or group of people of any category.”
Referring to claims about discrimination in promotions, the spokesperson said: “In its most recent round of internal promotions at Zara USA, approximately half were Hispanic or African American employees. In addition, approximately half of all hours are regularly allocated to Hispanic or African American employees. These facts clearly demonstrate that diversity and equal opportunity are two of the company’s core values.”
According Zara, approximately half of all Zara USA’s employees are Hispanic or African American.
The report arrives on the heels of a $40m discrimination lawsuit filed earlier this month by Ian Miller, who was general counsel for Zara USA Inc from 2008 until this March. According to the lawsuit, Miller – who is Jewish, American and gay – said he was excluded from meetings, given smaller raises than co-workers and subjected to racist, homophobic and antisemitic remarks because he did not fit the company’s “preferred profile” of Christian, Spanish and straight.
Miller also claimed his harassers were protected from punishment by company founder Amancio Ortega Gaona. He sued Zara, his former supervisor Dilip Patel and former Zara USA CEO Moíses Costas Rodríguez, under various New York state and city laws prohibiting pay discrimination, wrongful discharge, retaliation and hostile work environments.
Razza claimed discrimination pervaded the whole company.
“It’s a corporate culture that’s very problematic,” she said. “The lawsuit brings to light the depth that discrimination pervades Zara USA. Given the revelations of the lawsuit, we felt it was very important to reflect that it happens across all levels.”
The lawsuit and report follow a number of occasions during which Zara was criticized for selling items with racially insensitive designs. A bag embroidered with swastikas was pulled from stores after customers complained in 2007. In 2013, Zara sold necklaces with figurines in blackface.
Last August, the retailer was the subject of a backlash from customers for two different shirt designs — one striped and emblazoned with a gold star that resembled uniforms worn by Jewish victims in Nazi concentration camps and the second a white T-shirt displaying the words “White is the New Black”.
There is a recent history of controversies over alleged racism in the New York retail sector. In 2013, Macy’s and Barneys, two of New York’s most famous department stores, faced investigation from the state attorney general after several customers accused the stores of racially based discrimination.
Macy’s and Barneys both came to settlements for $650,000 and $525,000, respectively, in August 2014.
Razza said the CPD focused on Zara because of the company’s concentration in New York City and recent organization efforts by workers for fair wages at Zara.
Source: The Guardian
Senator Flake's Journey to Defying Trump on Supreme Court Nominee
Senator Flake's Journey to Defying Trump on Supreme Court Nominee
Something happened to U.S. Republican Senator Jeff Flake between being cornered in a Capitol elevator on Friday as two...
Something happened to U.S. Republican Senator Jeff Flake between being cornered in a Capitol elevator on Friday as two women shouted at him about sexual assault and, hours later, cutting a momentous deal with Democrats to defy President Donald Trump.
Read the full article here.
Freedom To Thrive: Criminalization, Policing, and Mass-Incarceration: Interview with Jennifer Epps-Addison - Audio
Freedom To Thrive: Criminalization, Policing, and Mass-Incarceration: Interview with Jennifer Epps-Addison - Audio
Listen to a discussion with Jennifer Epps-Addison about The Center for Popular Democracy's new report, Freedom To Thrive: Criminalization, Policing, and Mass-Incarceration.
Its Integrity Questioned, SUNY Institute Retreats From Politically Tinged Study
The Chronicle of Higher Education - April 28, 2014, by Paul Basken - The State University of New York’s Nelson A....
The Chronicle of Higher Education - April 28, 2014, by Paul Basken - The State University of New York’s Nelson A. Rockefeller Institute of Government is backing away from a politically divisive report critical of a worker’s-rights law, admitting that the industry-financed analysis has multiple major flaws that undermine its central finding.
The report, published in February, criticizes New York State’s so-called Scaffold Law, which holds contractors and property owners legally liable for on-site injuries and accidents. The analysis suffers from "really big weaknesses," said the institute’s director, Thomas L. Gais, who added that he considers the report as not officially a product of his institute. The key analytical section of the report "is just really awful," he said.
The Rockefeller Institute prides itself as a provider of unbiased and empirical policy analysis. Defenders of the Scaffold Law, however, have complained that the institute tainted itself by accepting an $82,000 payment from a business group with construction-industry supporters to produce the report.
The report is "junk" and "fundamentally biased," said the Center for Popular Democracy and the New York Committee for Occupational Safety and Health, two groups representing unionized workers and immigrants.
The case has shined a spotlight on the question of whether universities and their research institutes, as declining public financing leaves them increasingly reliant on private-sector support, are able to provide policy makers with objective technical advice.
There are hundreds of such institutes at universities around the country, and it’s often possible to "predict the policy outcomes from where their support comes from," said Sheldon Krimsky, a professor of urban and environmental policy and planning at Tufts University who writes about bias in research.
A ‘Quality-Control Issue’
Mr. Gais, a social scientist who has led the Rockefeller Institute for four years, adamantly denied there was any bias in the report on behalf of the Lawsuit Reform Alliance of New York. The alliance has long opposed the Scaffold Law, but Mr. Gais said he never expected to get any repeat business from the industry-affiliated group. "We got the money no matter what we wrote," he said.
The report instead suffered from what Mr. Gais called a "quality-control issue," in which a relatively new institute researcher, Michael R. Hattery, delivered it to the Lawsuit Reform Alliance without its being thoroughly reviewed at the institute.
Another major problem with the 89-page report, Mr. Gais said, lies with a section that uses a flawed statistical analysis to make the "counterintuitive" argument that New York’s worker-safety law actually leaves workers less safe.
That section’s author, R. Richard Geddes, an associate professor of policy analysis and management at Cornell University, also has drawn criticism within his own institution. At least two members of the labor-studies department at Cornell wrote newspaper op-eds criticizing Mr. Geddes’s work.
One, Richard W. Hurd, a professor of industrial and labor relations, wrote that Mr. Geddes had "misused sophisticated statistical techniques and produced inaccurate results." Lee H. Adler, an instructor of labor and employment law at Cornell, wrote that the episode reflects more than a century of attempts by business leaders to deprive workers of the fundamental right to sue.
Mr. Geddes emotionally denounced the criticism in an interview with The Chronicle, saying he had absolutely not been influenced by the source of money and describing his work as a state-of-the-art analysis of who actually gets injured on construction sites in New York State.
"I find that offensive, I find that deeply offensive, that they said my work is biased, after we spent hours and hours collecting the best data we could find," Mr. Geddes said.
A Valid Concern
Among its arguments, the report compares worker-injury records in New York and Illinois, which repealed a similar worker-protection law in 1995. The study found that both accident rates and costs declined in Illinois after repeal.
The labor groups said the study’s shortfalls included a failure to take into account situations where higher union-membership rates would encourage workers to report accidents, and workplaces where greater percentages of immigrants might depress reporting statistics.
Mr. Geddes said the critics bore the responsibility of showing how such factors would substantially have affected the report’s conclusions. Mr. Hattery said he also stood by the report but recognized that the possible effect of those omissions was a valid concern that should be assessed in future studies.
Mr. Geddes said he recognized some drawbacks in a system where academic institutes rely more heavily on private supporters. "It has made it harder because people without any evidence at all, any support, are attacking, are saying you’re biased," he said. "I find that profoundly offensive."
Mr. Hattery, however, said he welcomed the process now unfolding. "I don’t at all resent or have a problem with these kinds of questions’ being asked," he said. "When you think you have integrity and are humble and a good conscience, you’re probably in trouble."
Source
Activists Rally in Front of Federal Reserve, Calling for End to ‘Economic Racism’
The St. Louis American - March 5, 2015, by Rebecca Rivas - African-American residents are sick and tired of hearing...
The St. Louis American - March 5, 2015, by Rebecca Rivas - African-American residents are sick and tired of hearing about an economic recovery that does not apply to them, said Derek Laney, an organizer for Missourians Organizing for Reform and Empowerment.
In St. Louis, the unemployment rates for the black community remains triple the rate of white residents, 14.1 percent compared to 5.7 percent for whites, he said. However, some economists claim that the economy is rapidly approaching full employment.
“Is there only one set of the population that matters?” he said. “And if they are alright, we’re all alright? That’s something we can’t accept.”
Today (March 5,) activists attempted to ask James Bullard, the president of the Federal Reserve Bank of St. Louis, those same questions. At noon, a coalition of community-based organizations, faith leaders, elected officials, labor unions, and service organizations gathered in front of the bank in downtown St. Louis City, as a part of the national Fed Up Campaign (whatrecovery.org). They pointed to a new report released this month that details the difficulties for African-American families to find living wage employment. The report is titled, “Wall Street, Main Street, and Martin Luther King Jr. Boulevard: Why African Americans Must Not Be Left Out of the Federal Reserve’s Full-Employment Mandate.”
In response to the protest, a St. Louis Fed spokewoman stated in an email to the St. Louis American: “We are aware of the protest at the St. Louis Fed and respect people’s right to protest peacefully.”
The coalition asked Bullard to prioritize full employment and rising wages for all communities. Laney said as the economy starts to recover, some are calling for the Fed to raise interest rates to prevent wages from rising – which would severely impact families still struggling to recover from the Great Recession. Tomorrow, the St. Louis Fed will release new numbers regarding unemployment, and in mid-March its leaders will meet to discuss its policies. Laney said they hoped the action today will help “shape those discussions.”
The report emphasizes that the Federal Reserve is responsible for keeping inflation stable, regulating the financial system and ensuring full employment.
“These mandates reflect the tension between the interests of Wall Street on the one hand and Main Street and Martin Luther King Jr. Boulevard on the other,” the report states. “As a general matter, corporate and finance executives want to limit wage growth— or, as they call it, ‘wage inflation’—and to maximize their future profits from lending money.”
The report argues that in past decades, the Federal Reserve resolved this tension in favor of banks and corporations, intentionally limiting wage growth and keeping unemployment excessively high.
“The Fed’s policy choices over the past 35 years have led to increased inequality, stagnant or falling wages, and an American Dream that is inaccessible to tens of millions of families—particularly Black families,” it states.
Since the Ferguson movement began, local and national leaders have emphasized the need to address the “structural racism” in the region.
“Economic racism cannot be delinked from racism by law enforcement and other governmental entities,” according to the coalition’s statement. “However, James Bullard has been silent on issues of economics and their impacts on communities of color in the region over the past seven months. Today, we are bringing these issues to his front door.”
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Activist Ady Barkan says despite loss in Arizona, every seat is up for grabs
Activist Ady Barkan says despite loss in Arizona, every seat is up for grabs
Activist Ady Barkan, who is fighting ALS, is starting a new fight - to get people to vote. He’s asking people to “Be A...
Activist Ady Barkan, who is fighting ALS, is starting a new fight - to get people to vote. He’s asking people to “Be A Hero” and vote for candidates who protect healthcare. Ady tells Ali Velshi that with all the challenges he faces that if he can get out and vote, everyone can.
Watch the video here.
Influence, the power to change
Influence, the power to change
Clad in a “Stand With Black Women” shirt, Mercedes Fulbright, the Texas State Coordinator at Local Progress, commanded...
Clad in a “Stand With Black Women” shirt, Mercedes Fulbright, the Texas State Coordinator at Local Progress, commanded attention during her engagement entitled, Deserving and Entitled; Engaging in Public Policy to Empower People, as part of the annual Speaking Truth To Power community activism seminar at Friendship West Baptist Church, June 29.
Read the full article here.
Show mothers you care with predictable work schedules
Show mothers you care with predictable work schedules
This past Mother's Day, I didn't want a fancy brunch. I didn't want flowers or a big box of chocolates. I want...
This past Mother's Day, I didn't want a fancy brunch. I didn't want flowers or a big box of chocolates. I want something that you won't find on any Hallmark card: a job with a predictable schedule.
For the past few years, unpredictable hours have been the single biggest obstacle to a real work-life balance for me and for thousands of other working moms across Oregon. That is why I'm fighting for a state bill that would start to stabilize hours and provide relief.
Read the full article here.
Language access order faces hurdles in implementation
Epoch Times – August 5, 2013, by Genevieve Belmaker - New York State residents with limited English language...
Epoch Times – August 5, 2013, by Genevieve Belmaker - New York State residents with limited English language proficiency still face problems with access to government services, according to a new study.
More than 2 million people in New York State have limited English proficiency (LEP), according to Make the Road New York (MRNY), an immigrant advocacy organization that has partnered with The Center for Popular Democracy to complete the study.
Despite the number of people with LEP and the 2011 executive order 26 issued by New York State Governor Andrew Cuomo for better provision of services, they still face many barriers accessing services.
Cuomo’s order requires that all state agencies that have direct public contact translate vital documents into the state’s top six LEP languages. The order also requires that interpretation and transportation services be provided in native languages if needed. But the study found two years later, that requirement has still not been fully implemented.
“There’s a growing number of cases where they are asking people to bring someone [for interpretation],” said Cornelia Brown, founder and executive director of the Multicultural Association of Medical Interpreters. “The one exception might be the Child Protective Services.”
Brown, who was speaking as part of a Monday, Aug. 5 conference call about the report, added that in many cases LEP people are asked to bring their own interpreters with no arrangement for reimbursement of any cost incurred.
In general, the report states that despite New York State’s indisputable position as a national leader in pro-immigrant policies, a “significant amount of work remains to be done to dismantle language barriers at government agencies that dispense key benefits and services.”
Some of the report’s key findings include that the majority of LEP New York State residents don’t get translated documents when trying to get access to state benefits and interpretation services. Despite the implementation shortfalls, most people who got translated materials or interpretation services said it was helpful.
To gather the data, MRNY and The Center for Popular Democracy worked with partner organizations across New York State starting in the spring of 2012 to survey LEP individuals in New York City, Long Island, Albany, Central New York and Buffalo.
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2 days ago
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