# Phenomenal World

## CONTINGENT REFORM

The Earned Income Tax Credit (EITC) is the country's largest anti-poverty program. In 2018, over 20 million filers received 63 billion in EITC refunds. Because of its bipartisan popularity and its secure position in the tax code, with no distinct administrative unit managing its payouts, it is also at the center of several substantial anti-poverty programs recently floated in the House and Senate. These proposals variously expand and modify the EITC, often in concert with the Child Tax Credit, in order to offer a more robust benefit. A look into the history of the EITC reveals that, at its formation, the credit was an unlikely candidate for a major anti-poverty vehicle. In a CONGRESSIONAL RESEARCH SERVICE paper, MARGOT KRANDLE HOLLICK lays out its legislative history, showing that its 1972 introduction by Senator Russell Long was an intervention against proposed guaranteed income programs, and that "the bill had originally included a provision that would have required states to reduce cash welfare by an amount equal to the aggregate EITC benefits received by their residents." From the paper: "The origins of the EITC can be found in the debate in the late 1960s and 1970s over how to reform welfare—known at the time as Aid to Families with Dependent Children (AFDC). Some policymakers were interested in alternatives to cash welfare for the poor. Some welfare reform proposals relied on the 'negative income tax' (NIT) concept. The NIT proposals would have provided a guaranteed income to families who had no earnings (the 'income guarantee' that was part of these proposals). For families with earnings, the NIT would have been gradually reduced as earnings increased. Influenced by the idea of a NIT, President Nixon proposed in 1971 the 'family assistance plan' (FAP) that 'would have helped working-poor families with children by means of a federal minimum cash guarantee.' Senator Russell Long, then chairman of the Senate Finance Committee, did not support FAP because it provided 'its largest benefits to those without earnings' and would, in his opinion, discourage people from working. Instead, Senator Long proposed a 'work bonus' plan that would supplement the wages of poor workers. Senator Long stated that his proposed 'work bonus plan' was 'a dignified way' to help poor Americans 'whereby the more he [or she] works the more he [or she] gets.'" Link to that paper. • A 1999 Brookings paper by historian Dennis Ventry also examines the unique political history of the EITC, writing that its emergence appealed to legislators as "both an anti-poverty and an anti-welfare program." Link. • Brian Steensland's excellent book The Failed Welfare Revolution: America's Struggle Over Guaranteed Income Policy surveys this history in depth. Link. And link to a 2006 paper that preceded its publication, on cultures of "worth" and anti-poverty programs. • A 2015 Duke Law Review Note titled "Earned Income Tax Credit: Path Dependence and the Blessing of Undertheorization," examines "the credit’s path-dependent past, which has resulted in a present-day EITC that manifests a diverse, uncoordinated assortment of policy purposes." Link. • The above-linked recent proposals have focused on expanding the program's breadth, but retain in some form the "phase-in" structure originally proposed by Long, which excludes non-waged workers from claiming the return. Link to a (previously shared) critique of this structure—and work-tied benefits more broadly—by Matt Bruenig. Link to an also previously shared paper by JFI Fellow Max Kasy, which proposes expanding the EITC into a universal benefit. • Our colleagues at the Economic Security Project have developed a proposed "Cost of Living Refund," which tackles several important issues with the EITC. It includes proposals for monthly disbursements and expanding eligibility to un-waged care work. Link to the project's website, which hosts research and model legislation. ### May 20th, 2019 ## Flower Meadow in the North ## TANGLED PATHS ### First steps to mapping the non-Title-IV education landscape Title IV of the Higher Education Act of 1965 permits certain postsecondary institutions to be eligible for federal financial aid funds. A wide variety of programs are Title IV eligible: public, private, for-profit, vocational. Yet there are also a vast number of non-Title-IV (NT4) programs, offering credentials, certifications, and various forms of training—and neither the Department of Education, nor any other body, collects unified data on all these programs. How many students attend them? What subjects are they learning? What are their outcomes? There's only been one recent paper that's made a serious attempt to understand the scale of NT4 programs. In a 2012 working paper, Stephanie Cellini and Claudia Goldin calculated that NT4 institutions educate 27% of students enrolled in for-profit institutions each year (670,000 enrollments). A 2017 paper by Jessie Brown and Martin Kurzweil for the American Academy of Arts and Sciences attempts to map the alternative postsecondary landscape, including "certificate programs; work-based training; skills-based short courses; MOOCs; and competency-based education programs." That paper finds that these programs are growing: “While each of these alternatives has roots that reach back decades if not longer, for a number of reasons, alternatives have increased in size, diversity, and importance in recent years, and are likely to continue to grow. Though the length and cost of alternative programs vary, most last for less than two years and cost significantly less than a four-year degree, the cost of which continues to rise rapidly… A characteristic feature of all the programs discussed is their flexibility to align directly with specific employer needs and competencies in skill-based fields. Despite these reasons for their appeal and likely growth, evidence of the efficacy and value of these alternatives—for students and taxpayers—is still thin.” As the debate over the skills gap continues and the cost of college soars, the obscurity in which these programs operate becomes increasingly untenable. Link to that paper. • Brown and Kurzweil work includes three recommendations for policymakers, including recommendations to create a robust data system and quality assurance scheme. George Washington University has just launched the Non-Degree Credential Network project to begin building out research and data. Link. • Andrew Reamer's 2018 list of credential info aggregators brings into relief the diversity of the programs as well as the chaotic state of the information about them. Link. • In a March letter, we featured work by Xu and Trimble on a closely related topic: what are the outcomes of students who participate in certificate programs? Link to that letter, link to their paper. • A 2016 paper by Santa Falcone examines US certificate programs at Title IV schools from 1980-2013, and includes some relevant education history: "This growth period [1870-1910] also brought into existence private, external, independent university ratings agencies. These agencies successfully used coercion and incentives on higher education institutions to develop more standardized admissions, instruction, and accreditation criteria to counter the lack of any existing academic standards." Link. • A 2013 paper by Rosenbaum and Rosenbaum covers occupational colleges and certificate programs (with, again, a focus on Title IV institutions). Link. ### August 19th, 2019 ## Tennis Court ## DETERMINED MOVEMENT ### Energy production and political institutions The role of labor (with some notable exceptions) has been relatively marginal in debates over how to decarbonize the economy. But given the growing number of clean energy jobs (and some recent labor news), it is reasonable to predict that any large-scale shifts in the nature of energy production will be accompanied by large-scale shifts in the nature of energy work and the labor relations that define it. In his 2011 book Carbon Democracy, Columbia University professor TIMOTHY MITCHELL explores the political history of energy production. The wide-ranging study spans history from the industrial revolution to the Arab Spring, and charts the relationship between carbon-based energy production and various forms of governance. Among the arguments at the core of the book is Mitchell's identification of the emergence of democratic labor institutions within the structure and position of coal mines during industrialization—a position that was weakened in the transition to oil. From the book: "Between 1881 and 1905, coal miners in the United States went on strike at a rate of about three times the average for workers in all major industries, and at double the rate of the next-highest industry. The rise of mass democracy is often attributed to the emergence of new forms of political consciousness, and the autonomy enjoyed by coal miners lends itself to this kind of explanation. There is no need, however, to detour into questions of a shared culture or collective consciousness to understand the new forms of agency that miners helped assemble. Strikes became effective, not because of mining's isolation, but because of the flows of carbon that connected chambers beneath the ground to every factory, office, home, or means of transportation that depended on steam or electric power. Changes in the way forms of fossil energy were extracted, transported and used made energy networks less vulnerable to the political claims of those whose labor kept them running. Unlike the movement of coal, the flow of oil could not readily enable large numbers of people to exercise novel forms of political power." Link to the book preview, link to a 2009 article that preceded its publication. • For more on labor dynamics in industrial Britain, see Robert Steinfeld's 2010 book Coercion, Contract, and Free Labor in the Nineteenth Century, and Suresh Naidu and Noah Yuchtman's 2012 paper on coercive contract enforcement in coal and other industries. Link to the first, link to the second. • A 2012 review of Mitchell's book by Matt Stoller: "Globally, the switch from coal to oil was a fight about labor. You can’t understand modern democratic or third world political structures without understanding energy, and particularly, coal and oil." Link. • A book on the role of Mexico's oil fields in labor disputes during the Mexican revolution, by Myrna I. Santiago. Link. • A Next System report by Johanna Bozuwa imagines a network of democratically-run energy projects as the core of a "just transition." Link. ### May 13th, 2019 ## Reality Slays Art ## PREMATURE PROGRESS ### New patterns in deindustrialization As economies across Europe and in the United States have become more knowledge-based, urban-centered, and tech-driven, people in manufacturing reliant regions have seen declining life expectancies, stagnating real incomes, and minimal job growth. In recent years, social scientists have been grappling with the interconnected political, economic, and social effects of deindustrialization. But this literature is almost entirely confined to Europe and the U.S. In a new paper, DAVID KUNST broadens the scope of this research using a novel dataset on manufacturing employment by occupation in developing countries. He studies the labor market effects of 'premature deindustrialization,' finding a general decline in the hiring capacity of manufacturing sectors and a genuine risk from automation in emerging markets. The study comes to four conclusions: "First, it is mostly unskilled jobs that have disappeared, and also the wage premium of workers with little formal education in manufacturing relative to other industries has declined. Second, the disappearing jobs have been among the most formal both relative to other industries, and to the manufacturing average. Third, premature deindustrialization has been driven by occupations which are intensive in tasks that are vulnerable to an increasing adoption of ICT. Fourth, the phenomenon pertains most clearly to middle income countries, as low income countries have been spared from premature job losses. 250 years after the beginning of the Industrial Revolution, it appears that manufacturing is losing its ability to employ unskilled workers more productively than other industries. Developing countries, abundant in unskilled labor, lose their comparative advantage in producing an increasing range of manufactured goods. Hence, future growth in developing countries may have to rely more on improvements in 'fundamentals' such as education and governance, and policy makers need to focus on a broader range of sectoral policies than in the past." Link to the full paper. • The notion of 'premature deindustrialization' was developed by Dani Rodrik in 2015. In that paper, Rodrik argued that "countries are running out of industrialization opportunities sooner and at much lower levels of income compared to the experience of early industrializers" and suggested that "early deindustrialization could well remove the main channel through which rapid growth has taken place in the past." Link. • In a 2017 report, Carol Graham, Sergio Pinto, and John Juneau II map the "geography of desperation" in the United States: "In general, minorities scored worse on all of the variables in states where there are proportionately fewer minorities, such as Washington State and Kansas. These include Maine, Wisconsin, North Dakota, and Florida. Poor whites, meanwhile, tended to score lower across the board in the Appalachian states, and then poorly in many of the Midwestern and Western heartland states." Link. Two more reports from Brookings offer suggestions for place-based policies in the U.S. to counter these effects. Link, link. • David Clingingsmith and Jeffrey G. Williamson study the causes behind Indian deindustrialization from 1750-1860. Unlike literature which attributes the decline to growing competition in textile production from Britain, the authors find that the dissolution of Mughal hegemony and deteriorating climate conditions better account for the shift. Link. ### May 6th, 2019 ## Hidden Structures ## RESERVE GUARDS ### Labor and discipline in the economy As inequality has grown in salience as a political issue and object of research over the past decade, increasing numbers of social scientists are mapping the distribution of power and access throughout society. This new attention joins longstanding work that maintains, among other things, that free economic relations are accompanied by unequal property relations, involuntary employment, and an institutional framework to assure against incomplete contracts. In a 2004 paper, Samuel Bowles and Arjun Jayadev argue that these dynamics are actively reproduced by guard labor: a section of the labor force whose primary function is to discipline other workers. Bowles and Jayadev find that all governments allocate a significant portion of their labor force towards these ends. Moreover, they find a strong correlation between the proportion of the labor force devoted to guard labor and domestic levels of economic inequality: "The differences in the extent of guard labor among countries are substantial, ranging from a tenth of the labor force in Switzerland to over a fifth in the U.K and the U.S. Broadly, three groups are evident. Social Democratic countries which display low levels of guard labor, English-Speaking countries which display high levels of guard labor (with substantial supervision), and Southern European economies which exhibit unusually high unemployment rates and thus, large amounts of guard labor. The composition of guard labor differs substantially among the nations, especially in the proportions of the two largest components: supervision and unemployment. The top four in guard labor—Spain, the U.K., the U.S. and Greece—for example, devote about a fifth of their labor force to supervision and unemployment combined. But the U.S. is distinctive, with less than half the amount of unemployment as either Spain or Greece and 50 percent more supervisory labor. A comparison between the English speaking countries suggests a similar story. The U.S displays between 90 and 50 percent more supervisory labor than Canada, Australia and New Zealand, but about 50 percent less unemployment than these countries." Link to the paper, link to a 2014 Times op-ed by Bowles and Jayadev. • Drawing a comparison between unregulated American labor markets in the Gilded Age and those of the present, Suresh Naidu and Noam Yuchtman find that "the unregulated labour market generated militant and coercive labour movements and employer organizations, and led to increased allocation of resources toward the domestic policing and military capacities of the US government." Link. • "Between 2007 and 2017, the U.S. added more than twice as many guards as teachers," mapped by Richard Florida. Link. • From the article’s footnotes, a debate over the relationship between military capacity and economic development: In his 2000 book, Kenneth Pommeranz argued that England’s military capabilities explain why the industrial revolution took place there rather than in other rapidly growing economies like those of the Yangzi Delta; by contrast, Robert Brenner and Christopher Isett’s 2002 paper holds that greater reliance on markets compelled English elites to "allocate their resources so as to maximize their rate of return." Link to the first, link to the second. ### April 29th, 2019 ## Green Power ## MODELED WISDOM ### Modeling policy levers for housing affordability in urban centers In nearly every major urban center, housing affordability is in crisis. Since the 1960s, median home value has risen by 112% across the country, while median owner incomes rose just 50%. For renters, especially since 2008, the problem is increasingly acute:nearly half of renters (over 20 million people) pay over 30% of their income on rent. In New York City, nearly two-thirds of all residents are renters (half of whom are rent-burdened), and the politics of housing policy remain correspondingly fraught. In a recent paper, researchers JACK FAVILUKIS, PIERRE MABILLE, and STIJN VAN NIEUWERBURGH at Columbia Business School develop a dynamic stochastic spatial equilibrium model to quantify the welfare implications of various policy tools. Calibrating the model to New York City, the authors examine the interactions between funding and affordability policies to chart a possible path forward. From the paper: "Policy makers are under increasing pressure to improve affordability. They employ four broad categories of policy tools: rent control (RC), zoning policies, housing vouchers, and tax credits for developers. Each policy affects the quantity and price of owned and rented housing and its spatial distribution. It affects incentives to work, wages, commuting patterns, and ultimately output. Each policy affects wealth inequality in the city and in each of its neighborhoods. While there is much work, both empirical and theoretical, on housing affordability, what is missing is a general equilibrium model that quantifies the impact of such policies on prices and quantities, on the spatial distribution of households, on income inequality within and across neighborhoods, and ultimately on individual and city-wide welfare. Consistent with conventional wisdom, increasing the housing stock in the urban core by relaxing zoning regulations is welfare improving. Contrary to conventional wisdom, increasing the generosity of the rent control or housing voucher systems is welfare increasing." Link to the paper, and link to a press release from Columbia Business School. • Data for Progress analyzed housing proposals from the leading 2020 candidates. Link to the reports, and link to an updated version of Senator Warren's proposal. • A report from last spring by authors Peter Gowan and Ryan Cooper advocates for an across-the-board expansion of social housing in the United States. Link. • Tangentially related, a JFI letter from last year highlighted thinking and proposals around the implementation of a land value tax. Link. ### April 20th, 2019 ## Gesture Dance ## EXPLICIT SPHERE ### Wage boards, climate targets, and employment security Just as universal basic income has its corollaries in more moderate policies like Earned Income Tax Credits (EITC) and Child Tax Credit (CTC) reform, a federal jobs guarantee (estimated by some measures to total nearly543 billion in the first year) has organizational corollaries in collective bargaining institutions. Among them, wage boards have received renewed attention both by researchers and politicians in the United States. Distinct from trade unions, wage boards serve to centralize bargaining at the firm level through proportionate representation by employers, employees, and policymakers. Within the German context, they have been found to increase productivity and reduce social inequality. Unlike other policies aimed at mitigating income and wealth disparities, wage boards are virtually costless to implement.

Existing literature on codetermination has focused on its economic impacts. In a recent article, ROBERT SCHOLZ and SIGURT VITOLS broaden the inquiry to the sphere of corporate social responsibility (CSR). Using an original measure for the strength of codetermination institutions, they test whether wage boards influence the likelihood of firms to adopt socially conscious practices:

"Codetermination strength is strongly and positively related to all three of the substantive types of CSR we examine, the adoption of targets for emissions reduction, the publication of a CSR report and commitment to employment security. This suggests that worker representatives are selective with regard to the policies they support: they appear less likely to support symbolic than substantive forms of CSR.

We also shed light on the debate in comparative CSR literature regarding the adoption of CSR policies in coordinated market economies like Germany. All five policies examined are of the ‘explicit’ variety, adopted voluntarily by companies. They are often supposed to be most prevalent in liberal market economies like the USA and the UK where the need for business legitimacy is greatest… Our results suggest that worker representatives are also an important factor in explaining the spread of some types of explicit CSR policies to coordinated market economies."

• The development of codetermination in Germany and Sweden has been the subject of numerous academic debates. Peter Swenson’s widely cited account concludes that codetermination was the product of a persistent “cross-class alliance.” By contrast, Walter Korpi’s “power-resource” interpretation argues that these institutions reflect a “distributive conflict and partisan politics based in social class.” Link to an article which lays out the first analysis, and link to one which presents the second.
• A more recent paper by legal scholar Ewan McGaughey argues that codetermination in Germany was the result not of legal compulsion, but of the strength and unity of the German labor movement.[Link](http://eprints.lse.ac.uk/61593/1/The codetermination bargains the history of german corporate and labour law.pdf).
• Support for wage boards is growing among the American public, according to David Madland.Link to his analysis of the most recent public poll, his policy proposal, and coverage of the proposal on Vice.
• To understand the degradation of collective bargaining models across European economies, see Lucio Baccaro and Chris Howell’s most recent book, Trajectories of Neoliberal Transformation. See especially chapters 6 and 8, which discuss the pressures faced by bargaining institutions in Germany and Sweden. Link.

## FISSURED CHURN

### Reexamining claims about automation and labor displacement

Current UBI discussions emerged out of concerns over the role of human beings in a machine-dominated labor market. In 2013, a paper by Oxford University professors Carl Benedikt Frey and Michael Osborne claimed that 47% of US jobs were at risk of long term automation. The statistic circulated widely, prompting fears of widespread unemployment. The debate over these predictions is complex: those who deny any threat from automation often point to near-full employment, and risk overlooking the proliferation of low-paying and precarious jobs; while those who forecast mass unemployment risk assuming that technological development necessarily leads to labor displacement.

In a 2018 paper, legal scholar BRISHEN ROGERS argues that fears of a robot takeover misapprehend the real dynamics in the labor market:

"In a period of technological upswing, with companies rapidly installing robotics and other automation devices, we would also see significant increases in labor productivity. In fact, productivity growth has recently been the slowest as at any time since World War II. What’s more, productivity change in the manufacturing sector—where automation is easiest—has been especially tepid lately, at 0.7 percent over the last decade. On a related note, levels of 'occupational churn,' or the net creation of jobs in growing occupations and loss of jobs in declining occupations, are also at historic lows.

Even more striking, if firms expected artificial intelligence to be a major source of productivity in the near future, they would surely be investing in information technology and intellectual property. But they aren’t. Computers and software constituted 13.5 percent of the value of companies’ investments from 2000-2007, as the internet was coming into wide use. Over the last decade, that rate declined to 4.8 percent. These differences strongly suggest that there is nothing inevitable about precarious work or economic inequality. Hotel work, food services, janitorial work, and retail work have become precarious over the past twenty years because companies in those sectors forcibly de-unionized and/or 'fissured' away their workers to subcontractors or franchisors, thereby denying them effective access to many legal rights."

• An MIT Technology Review from 2018 surveyed the predictions of every paper published on job losses due to automation. The results: "There is really only one meaningful conclusion: we have no idea how many jobs will actually be lost to the march of technological progress." Link.
• "...even those occupations which are contracting due to technological change will continue to provide plenty of job openings over the next two decades. The challenge lies in improving the quality of these jobs going forward." Paul Osterman anticipates Rogers' arguments in a column from 2017. Link.
• Another recent paper by Brishen Rogers (to which we previously linked) continues the thread: "Based on a detailed review of the capacities of existing technologies, automation is not a major threat to workers today, and it will not likely be a major threat anytime soon." Link.
• Daron Acemoglu and Pascual Restrepo published two papers on automation and employment: the first uses industry level data to observe changes in the task content of production. The second argues that automation has been primarily concerned with reducing the need for labor, with insufficient attention being paid to socially productive investment. Link to the first, link to the second.
• Frank Levy on the relationship between automation-induced job losses and the rebirth of populist politics. Link.
• From EconFIP, a research brief on automation, AI, and the labor share. Link.

## NONSTANDARD SHARE

### Young workers and the "gig economy"

The emergence of companies like Uber and Taskrabbit has prompted commentators across legal, economic, and policy research spheres to pronounce the beginning of a new era of work, marked by the prevalence of technologically mediated casual work arrangements.

A new report published by AARON MEDLIN and HYE JIN RHO at the Center for Economic and Policy Research casts doubt on these bold claims. Using data from the BLS 2017 Contingent Worker Supplement, it analyzes the preponderance of nonstandard work arrangements for workers between the ages of 21 and 25.

From the report:

"A majority of young workers, ages 21–25, with and without a college degree, are in standard work arrangements. Between 2005 and 2017, the share of young workers in standard work arrangements with a college degree increased from 94.1 to 95.4 percent. Contrary to common expectations, young workers are more likely to hold such jobs compared to the workforce as a whole. Furthermore, data from BLS show that only 1.0 percent of young workers engaged in electronically mediated (gig) work in May 2017.

The much-hyped growth of the gig economy cannot be found in the 2017 survey of nonstandard work arrangements. Even young workers overwhelmingly opted for employment in traditional jobs. Most pressing are the problems of low wages, lack of benefits, and less than full-time hours for all workers without a college degree, but especially young workers without a college degree. These are the labor market policy issues that should be on the table."

• In an earlier report co-authored by CEPR and EPI, Eileen Appelbaum, Arne Kalleberg, and Hye Jin Rho analyze the degree of nonstandard employment for older workers, aged 55-65 and 65+: "Older workers are more likely to be independent contractors than any other age group in both 2005 and 2017. However, the share of all older workers who are independent contractors declined from 10.8% of those ages 55–64 and 18.3% of those ages 65+ in 2005, to 9.3% and 16.2%, respectively, in 2017." Link.
• "In any conference on the future of work, Uber and the gig economy deserve at most a workshop, not a plenary." Lawrence Mishel's 2018 analysis found that Uber wages averaged \$11.77 an hour, and that total hours worked in the gig economy "represent a very small share of total hours worked in the overall economy." Link.
• While part time, temporary, and casual labor may be declining, work induced precarity remains a prominent feature of the contemporary global landscape. For a substantive overview of the nature and development of precarious work, see Guy Standing's 2011 book, The Precariat. Link.

## REMUNERATE EXPANSE

### Social reproduction and basic income proposals

The most visible discourse on universal basic income focuses squarely on the labor market. Unconditional cash transfers are understood above all as a potential policy solution to wage stagnation, rising inequality, and labor displacement. This framework, which responds to rising income inequality in general, can be construed as a response to the decline of the family wage.

In a 2017 paper published as part of a forum on UBI in Global Social Policy journal, PATRICIA SCHULZ discusses uncompensated care work and enumerates the ways a basic income could signal a departure from forms of social protection tied to the gendered wage and its analogs in safety net programs:

"In industrialized countries, work organization, labor legislation, and social security systems developed progressively based on the model of the male breadwinner. Therefore, as most social security systems are based on contributions linked to remunerated work, the inferior income of women, their restriction to part-time jobs, as well as the interruptions in their careers due to care responsibilities will directly impact the level of social protection they can expect in case of old age, disability, illness, and so on, as well as expose them to dependency on a partner and/or the welfare state. It remains a huge political challenge to overcome the resistance against delinking social protection and remunerated work, even when the latter tends to become more and more uncertain.

A UBI would be the continuation of previous efforts to ensure that every person has a right to basic economic security, everywhere on the planet, women as well as men."